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March Madness!

Just little more than one week of March has ended and college NCAA basketball "March Madness" bracket of 68 teams is not even published. Yet given the events of last few days, it feels like we are already into March Madness. Let's recap some of the events of last few days.
  • Republican president announcing tariffs on Steel and Aluminum. Isn't GOP supposed to be party of "free trade" and isn't America the beacon of "free trade" lecturing all other nations?
  • Resignation of senior economic advisor Gary Cohn - that was not surprise when he lost "tariff" brawl in white house.
  • Elon Musk supporting Trump policy of tariffs with justification that China has 25% duty on American made cars and US has only 2.5% on Chinese made cars (to this point, I agree that there is major imbalance in tariffs between US and China)
  • Trump exempting Canada and Mexico and promising to exempt many countries who will play to his tune. I read Australia is next on his list. So slowly many countries will get exemption and Trump will use this as negotiating tactic. IMO, not bad if that is his real intention to get better deal for America.
  • Oscars had its lowest viewership in many years - not surprising since most people have not seen movies nominated for best picture. Hope academy fixes this by nominating "Black Panther" next year.
  • Rumors of Chip Wars. Bigger fish trying to buy smaller fish (before it becomes big). Intel pursuing BRCM which is pursing QCOM which is buying NXP. What an interesting chain!
  • And biggest madness was North Korean Leader Kim inviting President Trump for face-to-face meeting and Trump accepting the invitation for such a meeting in May! Is this really happening? Given what we know about President Trump and his non-conventional approach to Presidency, I am sure it is happening. 
  • And let's not even mention someone suing Trump etc. That's normal business!
Now you know why it feels like March Madness. How are markets reacting to all of these events? As I mentioned in my recent blogs, fear of inflation or tariff wars were overblown but did created volatility and opportunities. Upward trend to markets is very much intact and after testing correction levels in Feb, some of the excesses may be out and it may be all clear for resuming upward trend again. In particular tech and biotech are hot sectors - FANG stocks are reaching all time highs - in particular AMZN and Netflix. Similarly Gene-therapy (ONCE, RGNX, QURE, VYGR, BOLD) and Gene-editing (CRSP, NTLA and EDIT) are reaching all time highs due to their potential of changing the way diseases will be cured in next decade. There are many trials which are still in phase 1 or yet to start. If these trials are successful and these therapies get approved over next few years, these stocks could provide multi-fold returns. However be very careful investing in these because for every successful bio-tech company, there are at least 20 failed ones!

On international women's day, special shoutout to women CFO and their achievements - there are 58 women CFO in Fortune 500 companies and given what likes of Amy Hood (Microsoft), Ruth Porat (Alphabet) and Kelly Kramer (Cisco) have achieved since becoming CFOs (results are reflected in their companies valuation), more companies should be recruiting women CFOs. Thanks to all of them.

Enjoy the real NCAA March Madness!

/Shyam

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