Mission 48.24 Target

The Briefing Room

After Week 46’s correction of 2.3% on the S&P 500, we saw a nice push back toward the $600 level, though initial rejection occurred. A similar pattern unfolded on the NASDAQ, which rejected the $515 level and subsequently fell by 3.65%. Meanwhile, the Russell 2000 made a push to $240 but quickly receded, testing the breakout price of $225 before returning to the $240 highs.

To follow up on a previous Agent Report , I believe we are witnessing a broadening out of the market, with the Russell 2000 beginning to outperform at a magnitude of 2.7:1.

From a microeconomic perspective, there are numerous small-cap names that remain under-reported by analysts within the $IWM. A standout example is $FTAI, which has quietly rallied +286%. In its latest quarterly earnings report, this $17B company posted an impressive $219M EBITDA, showcasing its strong operational momentum.

This past week, gold reclaimed the $2,700/oz level, a positive sign following the sharp decline seen in the prior week. Goldman Sachs reiterated its $3,000 price target for the commodity, citing several key factors:

- Federal Reserve rate cuts, which reduce the opportunity costs of holding gold.

- Tariffs, highlighting gold’s role as an inflation hedge.

- Steady demand from central banks.

I wholeheartedly agree with this sentiment and the reasoning for gold’s price increase. These dynamics align well with broader macroeconomic trends and the continued diversification of investor portfolios.

Visiting Past Intelligence

Here’s the “Debrief: Revisiting Past Intel” section of your Agent Report, structured and formatted with the key insights and stock tickers highlighted for emphasis:

For several issues now, I’ve leveraged the Target Acquisition approach to spotlight charts showing potential updates and, at times, price targets. In this issue, the Intelligence Revisit focuses on why past predictions worked out and what we can learn moving forward.

If you compare the price charts of $CRWD and $DELL, they look strikingly identical. This brings to mind the trader jargon: “stairway up, escalator down.” It’s a phrase often used to describe market movements, reflecting the psychological and behavioral dynamics of participants.

Let’s revisit these cases:

1. CrowdStrike ($CRWD):

• The July 19, 2024 Outage marked a significant turning point for $CRWD, one of the nation’s leading cybersecurity companies. The incident—where their systems were hacked and later broke down—resulted in an estimated $10B in losses. Ironically, the business that promised security failed to secure itself.

• Following this debacle, $CRWD’s stock price plunged 40%+ in the week that followed.

• Reflecting on this moment, it reminds me of Chipotle’s ($CMG) infamous E. coli outbreak when I was in high school. The initial scandal led to a sharp sell-off, but over time, the market recognized that $CMG was still a solid business, and the stock eventually reached new highs.

• Similarly, I believe $CRWD will recover. The market will likely forget this setback as the company rebuilds trust, potentially leading to an even more bullish stance in the long term.

2. Dell Technologies ($DELL):

• $DELL’s chart mirrors $CRWD in its “staircase up” movement. Following the July chip slump, the stock has shown a consistent recovery as the chip-providing sector stabilizes. This resilience highlights $DELL’s strong fundamentals and its ability to weather sector-wide challenges.

• Both companies—$CRWD and $DELL—are set to report earnings this Tuesday after market close. Based on current trajectories, I see a strong possibility of explosive price reactions for these two names.

Key Takeaways:

• $CRWD demonstrates the market’s ability to forgive and forget when underlying fundamentals remain strong.

• $DELL highlights resilience in a recovering sector, with a pattern that suggests continued upside potential.

• Both names could experience notable price movements post-earnings, given their current setups. I wonder if $SMCI (Detailed in Yellow Chart Pattern below) will be able to recover such as the other names and essentially create the same pattern we are seeing here after their accounting scandal and potential Stock Market delisting

Stay tuned for updates in future reports, as these narratives continue to evolve.Food for thought, brought to you by the Agent. 

Novum Cognitio: Robinhood ($HOOD) – A New Player in the Spend Narrative

In this issue, I want to introduce Robinhood ($HOOD) as a stock that has recently caught my attention. Despite my reservations about their front-running partnership with Citadel, I acknowledge that this function provides essential liquidity to the markets—a necessary component of efficient trading. As a relatively active capital manager, I might not use Robinhood’s suite of products personally, but setting aside my preferences, I see a strong business model with significant growth potential.

Breaking Barriers in a Dinosaur-Dominated Industry

Robinhood has emerged as a disruptor in a space historically dominated by legacy institutions. Consider the recent consolidation we saw when TD Ameritrade sold ThinkorSwim and their accounts to Charles Schwab, burdened with red tape, lengthy terms and conditions, and approval bottlenecks. Robinhood bypasses these inefficiencies by offering a streamlined, fast, and user-friendly experience tailored to a demographic conditioned for instant gratification.

Its innovative UI/UX design transforms intimidating financial concepts—like managing a 401(k)—into something that feels accessible, even fun, with gamified elements like confetti when users make trades. This ability to iterate quickly and resonate with younger, retail investors gives Robinhood an edge in capturing market share from traditional brokerage firms.

Morgan Stanley’s Upgrade: A Game-Changer

Robinhood’s momentum was further bolstered by Morgan Stanley’s recent upgrade to “Overweight”, accompanied by a price target increase from $24 to $55. Analyst Michael Cyprys highlighted key drivers for this optimism:

• Revenue Growth Post-Election: Sustained retail trading, growing crypto support, and a revival in market enthusiasm (“animal spirits”) are expected to boost revenues.

• M&A Activity and Broader Offerings: Robinhood’s acquisition of an RIA custody platform (explained below) demonstrates its commitment to expanding Total Addressable Market (TAM) and capturing more wallet share.

• Discounted Valuation with Strong Upside: Despite shares being up over 100% YTD, the current valuation remains attractive given the company’s rapid pace of innovation and long-term growth potential.

Breaking Down Key Concepts

1. Total Addressable Market (TAM): In this context, TAM represents the total amount of money Robinhood could make if every potential user—both retail and institutional investors—used its platform. This highlights the company’s growth runway as it expands into new areas.

2. RIA Custody Platform: This refers to Robinhood’s acquisition of a platform that caters to Registered Investment Advisors (RIAs)—professionals who manage other people’s money. By offering custody services, Robinhood gains access to a more traditional market segment, enabling it to attract advisors and their clients.

The Spend Narrative

I’m also considering including $HOOD in the broader spend narrative, as its growth aligns with themes of rising consumer engagement in financial markets. The ability to capture both retail and institutional dollars ensures Robinhood can thrive even as market dynamics evolve.

Final Thoughts

Robinhood represents a rare combination of innovation and adaptability in a market historically slow to change. With its ability to iterate quickly, an expanding TAM, and bullish endorsements from leading analysts, $HOOD is a compelling stock to watch—and potentially add to your portfolio.

Target Acquisition

The Field Report

Milton Friedman’s thoughts on capitalism and greed…😮‍💨

“Acquire empirical knowledge & apply it with integral focus”

Thank you for your time

Nedrick H.M

EquityAgent ∫︎