Hello reader, welcome to the latest issue of HX Weekly!

Each week we bring you a new edition of HX Weekly that includes three distinct sections.

In the first section, Thoughts on the Market, we'll offer insights into current economic and market news.

In the second section, HX Daily Redux, we'll revisit investing concepts, tactics, and more from past issues of HX Daily.

And in the third section, Market Wizard’s Wisdom, we’ll share thoughts, quotes, and theories from the greatest investing minds of all time.

Now, let's dive in!

Happy Thanksgiving! Today we are re-sharing Enrique’s article he wrote for Paradigm’s Truth and Trends last Thanksgiving, enjoy!

Thoughts on the Markets

Happy Thanksgiving From Out West

In the spirit of the holiday, I want to share with you one of my Thanksgiving traditions…

Trekking through my home territory of the American West.

There’s nothing like being in Arizona. This past week, I’ve been hitting various canyons.

Through all my travels, I’ve never encountered a place that comes close to the American West — it’s magical.

Here’s one of my favorite pictures from yesterday’s hike…

Maybe it’s just my hometown bias talking.

But there’s something about the West’s immense stillness and beauty that allows me to reflect on my chosen path while reconnecting with my roots…

Some people will say that you should keep your business and your personal life separate. We all know that’s not really how life works, though.

Even in trading, it’s impossible to separate your personal background and psychological makeup from what you must learn (or unlearn!) to become a great trader.

You may have already heard some highlights of my story before. But allow me to reintroduce myself…

I was born half a century ago in Salt Lake City, Utah to an immigrant mother and a father whose family had a long history in the American West.

My mother fled her home country Uruguay during a military dictatorship in the 1960s.

Her father was the CEO of one of the major utilities and telecommunications companies in the country, as well as a founder of a major opposition political party.

My uncle was jailed for seven years during the period of political conflict. He went into prison with almost 200 others, and less than a dozen made it out.

My mother came from a great family but was stuck in the United States and unable to return because of the conflict.

My father, on the other hand, came from quite a different background.

He was born in Black Hills, South Dakota. His mother was of Scotch-German descent from a poor family in Nebraska with 12 (!) sisters.

My grandfather came from one of the founding families of the state of New Mexico, a mixture of Spanish and native people that had been there since the late 1600s.

My father had a very tough upbringing. My grandfather was an alcoholic and would abandon the family for long periods of time.

At 11 years old, my father quit school to help support his brothers but was struck with rheumatic fever a year later almost killing him.

He had six brothers, and by the time he was 40 years old, three of them had already died from alcoholism, drug abuse and AIDS.

His story was truly one of the American West and the struggles involved.

The honest story is that my parents got together so that my mother wouldn’t get deported and thrown into prison upon her return.

From the very beginning, it was a tough relationship. They were from vastly different worlds and my father also struggled with alcohol.

Like his father before him, he would disappear when he got a paycheck. Sometimes he’d go off and sell our car for drinking money (he bankrupted my mother twice doing this).

Eventually, though, my mother’s incredible strength persevered.

She was able to separate from him and build her own career in health care, working as one of the founders of the first state-run health care systems in the United States.

Most importantly, she instilled in me several important characteristics that define me to this day…

Perseverance. The importance of hard work. Open-mindedness. The ability to learn and adapt to my environment. Optimism.

I could (and probably will) write an entire note on each of these ideas. They are what have made me who I am today — and what enabled me to become a great trader.

My mother gave me the gift of life, but she gave me so much more than that with her outlook on everything.

When I think about what I’m thankful for this Thanksgiving, this is what comes to mind.

I am thankful that she was able to get us through our difficulties. But these core values are my greatest gift.

They are a gift I must pass on to my friends, my colleagues, my children, and now to you.

These characteristics are what we all need to learn to be great at trading and investing — skills that must be honed.

I am also thankful for the opportunity to share these values with you and help you on your journey to success.

Have a great Thanksgiving. Now let’s get ready to make some money!

For our HX Daily Redux, we want to share a piece we wrote from August 2024 in response to the concern surrounding Google with the DOJ Antitrust suit. We think this is relevant given the stellar performance in the stock.

Our thesis that we did not think this would hurt Google long-term has held true. Just this last June we were pounding the table on how Google is a screaming buy. The stock has since performed AWESOME, up over 90%.

Here is that article..

HX Daily Redux

Reader Question - The DOJ Google Antitrust Suit

Earlier this week, a federal judge ruled in favor of the US Department of Justice (DOJ)’s claim that Google had acted improperly and in a monopolistic fashion.

“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” US District Judge Amit Mehta wrote in Monday’s opinion. “It has violated Section 2 of the Sherman Act.”

Almost a half dozen readers asked us what this means. This surprised us, and we don’t often answer questions about individual stocks. Given the interest, however, we decided it made sense to address this situation.

What does this really mean for Google? And Apple? And you?

First, let’s describe what exactly is going on here in an easy-to-understand fashion.

Google has negotiated contracts worth billions of dollars with key companies in the mobile telephone business. Mostly Apple and Samsung. These contracts position them as the “default” search provider on those phones.

This means that when you go use your phone to do an internet search – unless you actively go in and change the settings – you will automatically use Google for the search.

How many of you have ever gone in and changed the default search engine?

We are guessing that the answer is not many of you. We know that we haven’t.

Part of that is because we think Google is great. We are happy with the product.

The way to think about this deal is that the mobile handset companies own a piece of real estate. Think of it as a neighborhood with many houses (applications) and there is a street going into the neighborhood.

Google pays them a bunch of money so that their house will be at the front of the street, and everyone can see it.

Could another search engine (like Microsoft’s Bing) pay Apple and Samsung to have their house at the front of the street?

Absolutely. We are sure the handset companies will sell that spot to whoever is willing to pay the most money.

There are also no real arguments that Google is a bad search engine. In fact, the judge acknowledged that Google is recognized as the best search engine.

It is unclear how consumers are being harmed. We don’t pay for search engines.

So - what exactly is the problem?

Our view is that the “problem” is that politicians like to score points with the public by going against big technology. Whether there is harm to consumers or illegal activity is beside the point.

Why did the judge agree? At this point, much of our judiciary has become as politicized as the rest of our government.

Some argue that this judgment will be as monumental as past judgments that broke up monopolies like AT&T and Standard Oil.

We don’t think so.

What happens if Apple and Samsung make the default browser access non-exclusive? An open auction like sports rights.

It would be hard to argue then that other companies do not have access and are being disadvantaged.

We think that this will go into appeals for years, and eventually, sometime in two to five years, you will read about a settlement that is inconsequential to Google as a whole.

Remember that another administration may not pursue the same aggressive path as the current one.

Even if we are wrong about the eventual outcome, our legal process ensures that it will not happen quickly.

Do we think this judgment matters to Google?

In the next six to twelve months – we do not. We also do not think it will matter beyond that, but our view is that the focus with the stock should be on the earnings and that investors will forget about this quickly.

Market Wizard’s Wisdom

The Old School - Leon Cooperman

When I came to work on Wall Street three decades ago, my timing was excellent.

It was right at the start of what I call the “Hedge Fund 2.0” period. What does that mean?

This means that I was part of the second generation of hedge fund managers who benefitted from the industry's growth. Before my generation, though, there was another famous one.

Hedge funds first were invented back in the 1930s by Alfred W. Jones. You can read our piece on him here.

For the next fifty years, though, they were rare. There weren't many of them, nor did they have much capital under management.

This began to change in the 1980s and early 1990s with the emergence of some of the most well-known hedge fund greats—investors like George Soros, Julian Robertson, Paul Tudor Jones, and many others.

One of those who is less well-known amongst regular investors is Leon Cooperman.

Cooperman grew up in the South Bronx and joined Goldman Sachs after graduating with an MBA from Columbia Business School. He spent over two decades there and eventually headed up their efforts, creating a wealth management business.

In 1991, after many years at Goldman, he resigned as a partner and the CEO of Goldman Sachs Asset Management to create his own private investment partnership – Omega Advisors, Inc.

Over the next twenty-five years, he became a billionaire through savvy investing.

You may recognize his name (and face) from his many boisterous appearances on CNBC over the years. Lee doesn't lack opinions!

We have met several times in passing, although I'm not sure he would recognize me. Every time he is on CNBC, I turn everything else off to hear his insights. He truly is an "OG" of the hedge fund industry.

Here are some of his simple and powerful insights. Enjoy.

This is one of our favorite quotes because it is so straightforward.

What becomes most successful on Wall Street usually begins with smart analysts and investors identifying a powerful trend. As that trend builds, the stocks go higher and higher and attract more attention.

The truly smart investors understand there is a time to take profits. They are also savvy about identifying when trends begin to change.

Very seldom do the most intelligent investors own these stocks when they crash.

Lee has many opinions. He also has a lot to be proud of with what he has done in his career as an investor and philanthropist.

His greatest strength, though, is his humility.

It is always one of the characteristics that has impressed me the most with him. A willingness to admit he is wrong and learn from his mistakes—a characteristic we could all use.

Not every BULL market will end the same, but Lee highlights three trends that are pretty good at killing them.

He leads with the one that most often kills them – growth is TOO good.

Higher-than-expected (and trending) economic growth can create huge gains in stocks. It also creates excesses that inevitably lead to many losses for investors who aren't flexible enough.

Throw on higher inflation and overreaction by the Federal Reserve, and you have a cocktail for a full-on BEAR market. Heed Lee's words carefully because this is how it will happen again.

He talks about how it is not about being the smartest in the game but one of the hardest working. It is also about surrounding yourself with super-intelligent folks who can help you figure it all out.

The part that is the least understood by inexperienced investors is how LUCK still plays a role in the process.

Remember, it is about probabilities and not certainties. Prepare to survive the worst of times, and you will be around to benefit from the best of times.

We think every investor should have this one tattooed on them!

Easy to read, simple to understand, and SO hard to execute.

We hope that you’ve enjoyed this week’s issue of HX Weekly…

Do you have any thoughts, questions, or feedback? Tell us more in the comment section or at [email protected].