Thanks for reading my Diary today, all week and for the last 28 years!

Off to see my famous artist sister Debbie Kass’ latest art opening in NYC (Enough Already is the name of one of her pieces).

Be safe

Professor Galloway's No Mercy No Malice..."Project 2028: Housing".

You don't find out who's been swimming naked until the tide goes out.

- Warren Buffett

When the market was making new highs and share price momentum was positive, I cautioned that technicians looking at the rear-view mirror were universally bullish — and that market and fundamental caution were in order.

The emerging poor fundamentals (slowing economic growth and slugflation) were ignored by investors as fear of missing out and elevated animal spirits were in full force with the tide rolling in.

Meanwhile Warren Buffett was criticized (as he was in 1999) for accumulating record amounts of cash at Berkshire Hathaway BRK.A BRK.B and ignoring the amazing run in Magnificent Seven equities.

I was one of the only ursine voices around. After all, the tide was moving in as price momentum -- in part the byproduct of equity inflows and company buybacks -- was uber positive. This thrilled the cockles of the heart of CNBC "talking heads" and at other business news outlets in which contributors seemed to know everything about price but know nothing about value.

Hubris became the watchword, while risk discipline and extended valuations were materially ignored. Strategists fell over themselves by raising S&P 500 price targets.

Fundstrat's Tom Lee was lionized as a market seer -- becoming a modern day Joe Granville.

In mid-January, our Comments Section, Twitter and Fin TV were crowded by a universal enthusiasm with regard to large-cap technology, mainly the Magnificent Seven. Meta Platform's META shares rose by a consecutive and record three weeks in a row.

At that time I cautioned that the tide may be about to roll out. I argued that:

* The Mag7 and other "generational compounders" were extremely overvalued (68 columns on Nvidia NVDA supported my view of the world's leading equity).

* Investors/traders were disregarding reward vs. risk, particularly in AI hyperscalers (MSFT, GOOGL, META et al) and that there was no "margin of safety".

* January 2025 should be compared to January 1973 -- a possible peak of Mag7 to the end of the "Nifty Fifty" era.

* Despite the protestations of the bullish cabal, the market was not broadening out and the Russell Index was not crowing.

* The PT Barnum of cyrpto (at the time bitcoin was the trading community's favorite asset class making new highs in price), Michael Saylor, was being praised in the business media (who through softballs in interviews as they did with Sam Bankman-Fried one month before FTX was declared bankrupt) - just when MSTR's shares from falling from $550 to under $300. At the same time I was critical of the hot lava of love by the Administration's new found discovery of crypto - replete with grift and conflicts of interest.

* The S&P (at the time +4%), may be at the top end of my +5% to -10% to -15% expected 2025 range.

Now, after the Gold Rush, technicians are almost universally turning negative as equities and bitcoin fall in tandem. 

Lessons Learned

Keep the above observations in mind when evaluating the value of technical input (and others) at market and key asset inflection points (both at tops and bottoms!).

Always stay disciplined, consider reward vs. risk, seek a "margin of safety" and do your own analysis and homework.

Above all keep your portfolios and children away from those without investment process, who makes decision on gut/feel and have a knowledge base miles long but only inches deep.

Buy low, sell high.

Below, interesting from Treasury Secretary Scott Bessent. He claims there is no Trump put. We will see. It probably exists, but lower than many thought. But I am uncertain and it is unprovable.

Regardless, he deserves a lot of credit for doing what he thinks is right, and right for the longer-term benefit of everyone, as opposed to doing something for political or other reasons, that help over the short term, and in a narrow way. 

One can argue about what exactly should be done, but it is clear something needs to be done, so he really does deserve credit for trying to drive structural change, for the right reasons.

The economy, and markets (both equity and debt) have been on "heroin" for a long time, since Greenspan. You can quit cold turkey, or you can do it slowly. If you look at the numbers and what is happening, this is actually still a very very very SLOW withdrawal from the heroin. But to the equity markets, it feels like we are quitting cold turkey. 

That is how people have been conditioned, since Greenspan. People believe equities somehow are risk-free securities that give one a risk-free 25% annual return. They even felt that from the point (and valuations) they were just at. They go up 30%, and then down 6%, one would think the world has ended? Since 2008 and money printing round 1, the S&P has gone from 800 to 5600. Since Covid (2020), and money falling from the sky, the market has gone from 2600 to 5600. Equities in fact are risk-bearing securities. When people forget that, it is unhealthy. You cannot have an economy that depends on equities to function. 

Bessent has it right. If you have good policy, equities will go up. Trying to force equities up in other ways does not make the economy healthy. Good policy should be the lever, equities should not. This problem started with Greenspan. 

 Asked about whether President Donald Trump would shift his policy moves in order to prop up the stock market, the Treasury chief said that there is no such Trump “put,” as stock analysts say. “There’s no put,” he said. “The Trump call on the upside is, if we have good policies, then the markets will go up.”

Bessent Warns of ‘Detox Period’ for Economy, Touts Trump ‘Call’

Post Script on My Recent Cyrpto Reserve Comments 

This crypto strategic reserve announcement was quite the big wet fart. But at least we are done with it, and the donors are satisfied, and can shut up. It is a nothing. We basically already had the confiscated stuff sitting in a reserve. I guess one could argue now they are saying they won’t sell, but it wasn’t being sold anyway, which is why we still have it. 

Either way it is going to end up being sold. It will either be stolen, because the government is too incompetent to secure it, or a future administration will sell it. It should be sold. No reason for the government to sit on this. But if that is the worst case, at least it ends now. The donors got their PR, but nothing else. 

The U.S. government should not be in the business of speculating on stuff. If they feel they have extra money, send it to me and let me speculate. Sovereign wealth funds are also for countries with a surplus, and nothing else to do with the money.

I have moved to large Amazon AMZN at $193.02

On plane. 

A conclusive breakdown of support.

Doing nothing.

"Price is what you pay, value is what you get."

"You don't find out who's been swimming naked until the tide goes out."

- Warren Buffett

When the market was making new highs and share price momentum was positive I cautioned that technicians (discussed daily in my "Charting The Technicals" columns) looking at the rear-view mirror were universally bullish — and that market and fundamental caution were in order.

The emerging poor fundamentals (slowing economic growth and prickly inflation —"slugflation," inconsistent and ill-reasoned monetary and fiscal policy) were ignored by market participants as FOMO and elevated animal spirits were in full force with the tide rolling in.

Meanwile Warren Buffett was criticized (as he was in 1999) for accumulating record amounts of cash at Berkshire Hathaway BRK.A BRK.B and ignoring the amazing run in Magnificent Seven equities.

I was one of the only ursine voices around — after all, the tide was moving in as price momentum (in part the byproduct of equity inflows and company buybacks) was uber positive, thrilling the cockles of the heart of CNBC "talking heads" and at other business news outlets in which contributors seemed to know everything about price but know nothing about value.

Hubris became the watchword while risk discipline and extended valuations were materially ignored. Strategists fell over themselves by raising S&P 500 price targets.

Fundstrat's Tom Lee was lionized as a market seer - becoming a modern day Joe Granville.

In mid- January our Comments Section, twitter and Fin TV were crowded by a universal enthusiasm with regard to large cap technology (the Mag7). META's shares rose by a consecutive and record three weeks in a row.

At that time I cautioned that the tide may be about to roll out:

* That the Mag7 and other "generational compounders" were extremely overvalued (68 columns on Nvidia supported my view of the world's leading equity).

* I argued that investors/traders were disregarding reward v risk, particularly in AI hyperscalers (MSFT, GOOGL, META et al) and that there was no "margin of safety".

* I compared January 2025 to January . 1973 - a possible peak of Mag7 to the end of the "Nifty Fifty" era.

* Despite the protestations of the bullish cabal, the market was not broadening out and the Russell Index was not crowing.   

* The PT Barnum of cyrpto (at the time bitcoin was the trading community's favorite asset class making new highs in price), Michael Saylor, was being praised in the business media (who through softballs in interviews (as they did with SBF one month before FTX was declared bankrupt) - just when MSTR's shares from falling from $550 to under $300. At the same time I was critical of the hot lava of love by the Administration's new found discovery of crypto - replete with grift and conflicts of interest.

* I surmised that the S&P (at the time +4%), may be at the top end of my +5% to -10% to -15% expected 2025 range.

Now, after the Gold Rush, technicians are almost universally turning negative as equities and bitcoin fall in tandem. (Read today's technical comments below)

Lessons Learned

Keep the above observations in mind when evaluating the value of technical input (and others) at market and key asset inflection points (both at tops and bottoms!).

Always stay disciplined, consider reward v risk, seek a "margin of safety" and do your own analysis and homework.

Above all keep your portfolios and children away from those without investment process, who makes decision on gut/feel and have a knowledge base miles long but only inches deep.

Buy low, sell high.

Charting the Technicals

Bonus — Here are some great links:

Today's Number Is 5

The Most Oversold Market in the World

The Market Is Overreacting to Policy Uncertainty

It Might Be TIme to Get Into Semis

* Sold the gap higher on the jobs report...

* Will be the $572 retest if it comes, but I will likely be in the air!

In early trading I added to my SPY and QQQ long rentals at $572.99 and $488.86, respectively.

On the solid jobs report (which should be the last), I sold out of all of my trading long rentals:

* SPY $576.07

* QQQ $492.02

TerrAscend Corp. (TSNDF) is a leading cannabis multiple state operator.

All cannabis equities are speculative but for the reasons mentioned in my Daily Diary over the last two months, the industry's upside reward vs. downside risk may have finally turned profoundly positive. While it is unclear that rescheduling and regulatory reform are in the offing over the near term, it is likely inevitable, in our view.

As for TerrAscend, the shares trade at only $0.41/share (size accordingly!) and at a market capitalization of only $146.4 million and have the potential to be a 5-bagger in the years ahead (and in the fullness of time). This is an investment and not a trade.

TerrAscend, as noted by in the above tweet by my friend and cannabis expert Anthony Varrell, is starting to separate itself from the pack.

Fourth-quarter results were ahead of internal forecasts (in some measure because of the implementation of a company-wide ERP system delivering a meaningful reduction in general expenses of nearly $3.6 million in Q4 2024). This led to the tenth consecutive quarter of positive operating cash flow and the sixth consecutive quarter of positive free cash flow.

TerrAscend is forecasting that selling general and administrative expenses will be shaved by $10 million in the current fiscal year.

New Jersey (#1 in state) and Maryland were regional highlights for the company. The company's large cultivation presence in Pennsylvania augurs well if adult recreational use is passed, which is being supported by Governor Shapiro.

Importantly, unlike many of its debt-ridden (and illiquid) brethren, this cannabis company does not face a debt maturity cliff as most of TerrAscend's debt matures in late 2028 (having attractively refinanced $140 million in Q3 2024). As a result, this cannabis company is well-positioned to acquire state dispensaries and to execute transformational mergers and acquisitions (and expand its sales footprint). These transactions will likely be cash flow and earnings accretive. Its acquisition pipeline is "robust" with multiple opportunities.

It can also buy back stock. Here is what Executive Chairman Jason Wild said on this subject on last night's conference call:

"2024 represented marked just the fifth year anniversary of our operating in the U.S. If you said to methen that we would report $74 million in quarterly revenue, over 50% gross margins and positive cash flow I would have been pleased. If you then told me the stock today would be down by more than -90% from where it was pre revenue in the U.S. I am not sure I would have believed you. I would have been very disappointed. And I am very disappointed. To that point in August the company announced our first ever $10 million buyback demonstrating our confidence in the future and our committment to enhancing shareholder value. Considering improved operating performance in our existing businesses, strength of balance sheet, $150 million of owned real estate (with no sales/lease backs), the potential for Pennsylvania to convert to adult use and greenfield expansion opportunities we believe our equity is significantly more undervalued now than last August. We intend to act on that belief in the coming days."

I have gotten to know TerrAscend and its management team over the last few years. The team is sober, disciplined and focused.

I will have a more thorough analysis of TSNDF in the next week or so but I would advise doing your own homework. Start by reviewing the company's Q4 2024 EPS release and listening to the company's Q4 conference call. 

I continue to hold a trading long rental in the indices as noted late yesterday afternoon:

Taking Rentals

With the oscillator moving to a larger oversold and (SPY) on support ($572-ish), I took the following long trading rentals in the indices:

* SPY $571.86

* QQQ $487.47

Mar 6, 2025 3:35 PM EST

I am flying out of town at around 11 a.m.

It's a three-hour flight but I will try to post in the air.

The S&P Short Range Oscillator has risen from -4.00% to -4.83%. That is a deeper oversold.

Wolf Street howls about the Fed's balance sheet.