Rate Cut Winners

The Thesis: People will continue to have hearts, and they would generally prefer those hearts to beat correctly.

Current Price: ~$95.50 | Target: $125.00+

The Vibe: Growth at a Reasonable Price (GARP), which is a finance term for "buying something good after everyone else panic-sold it."

1. The "Robots Inside You" Angle

If you are a medical device company, your main problem is that biology is messy and difficult. The solution, historically, has been to hire a doctor to poke things with a sharp stick. Boston Scientific’s solution is to build very expensive, very complicated sticks that are essentially robots.

The specific robot everyone is excited about is called FARAPULSE. It uses something called "Pulsed Field Ablation" (PFA), which is a fancy way of saying "zapping the heart with electric fields to stop it from fluttering." The old way of doing this involved burning the tissue (radiofrequency) or freezing it (cryo), both of which have the unfortunate side effect of occasionally damaging things you would prefer to keep, like the esophagus. Not that I know where the esophagus is but, and I am not making this up, I am pretty sure my mom told me to never show my esophagus to a stranger.

But anyway, FARAPULSE just deletes the bad cells without cooking the good ones. It is arguably the biggest leap in cardiac tech since, I don't know, the pacemaker?

This has led to 63% growth in their electrophysiology division, which is the division that deals with "electricity in the body."

The stock is down from its highs (~$109) because markets are efficient and sometimes efficient markets decide that a company growing double-digits in a monopoly-like tech sector should be cheaper for no reason.

2. The "Money Costs Money" Angle

Medical device companies are what finance people call "capital intensive," which means they spend a lot of money. When interest rates come down—as they are projected to do in 2026—this is delightful.

The Rotation: When bond yields fall, asset managers have to find growth somewhere else. Usually, they find it in "companies that sell life-saving technology at high margins."

3. The "Smart Money" Floor

Wall Street analysts have a median price target of $125, which implies a ~30% upside. More importantly, 93% of the stock is owned by institutions. Although the P/E is high, I am a buyer right now at these levels.

The Trade

You are buying a dip in a company that has (1) a technological moat in heart surgery, (2) a tailwind from the Federal Reserve, and (3) a valuation that suggests the market briefly forgot that heart disease is a growth industry.

If you’re looking for asymmetric upside in 2025, MindMed is a name you buy with both hands.

This is not a hype trade. MindMed is a late-stage clinical biotech attacking massive, underserved markets like anxiety and depression with psychedelic-derived compounds that are already deep in the FDA process. Its lead program targets generalized anxiety disorder, a condition affecting tens of millions of people, with outcomes that traditional SSRIs have failed to solve. That alone puts MindMed in rare air within the psychedelics space.

Now layer in the macro shift. For the first time in decades, the political, regulatory, and cultural winds are aligned. Robert F. Kennedy Jr., the Department of Veterans Affairs, and the current Food and Drug Administration leadership have all signaled openness, if not outright support, for psychedelic-assisted therapies. This matters. Psychedelics do not need cultural acceptance anymore. They need regulatory execution, and that door is now open.

Add to that the broader signal sent when Donald Trump rescheduled cannabis. That move wasn’t about marijuana. It was about acknowledging that decades-old drug policy was wrong. Psychedelics are next in line.

MindMed is positioned exactly where capital wants to be when policy shifts become reality. It is liquid, institutionally owned, and focused on FDA-approved medicines, not fringe experimentation. When sentiment flips, capital doesn’t chase ideas. It chases vehicles that can scale.

This is one of those moments.

Psychedelics are moving from taboo to treatment. MindMed is already there.

Wells Fargo (WFC) is well positioned to benefit from potential rate cuts in 2026 because lower interest rates typically stimulate loan demand, improving volume across mortgages, consumer lending, and business credit. While rate cuts can pressure net interest margins, Wells Fargo offsets this with scale, improving efficiency, and diversified fee income. Importantly, the bank holds substantial loan loss reserves, built during higher-rate and tighter credit periods. As rates decline and credit conditions stabilize, these reserves can be released or reduced, directly boosting earnings and the bottom line. Combined with easing funding costs and improved borrower health, WFC has multiple levers to turn a rate-cut cycle into renewed profit growth.

You hear a lot of incredible stories in Silicon Valley.

An electronic compact disc is coming that can deliver perfect sound and movies. Have you heard of the Internet? Compaq is offering a computer that will sit on your laptop! Have you any idea how Google is going to make money? Steve jobs is building a smart phone! Is he out of his mind? Elon Musk is building an electric car with a 250-mile range. Hey, I heard about this thing called “artificial intelligence.”

So I listened very carefully the other day when I friend of mine told he had scored the real estate deal of the century.

His house had sat on the market like dead wood for a year and a half priced at $4.0 million. It was a very nice 5,000 square foot Italian villa type home with a huge garden and a fantastic 360-degree view.

Then out of the blue, a cash buyer aid he wanted to rent the house for a year for the spectacular over-the-market rent of $20,000 a month, plus all utilities. Then, he offered to pay 10% over the asking price, or $4.4 million to buy the house outright and would pay $400,000 in cash for the option to do so, payable immediately.

My friend, puzzled but ecstatic, asked why he was going about buying a home in this way. The buyer answered that he had some stock options from his company that he didn’t want to cash in for a year. His profession? He had a PhD in artificial intelligence.

That set the alarm bells off in my head.

I pulled out a paper map of the San Francisco Bay Area and drew a circle around the house within one hour driving time to reduce the number of potential candidates. Then I called a seasoned technical analyst and asked him which big California stock had a chart that was just about to breakout to the upside. He didn’t hesitate.

Apple!

It all makes so much sense. Apple is one company behind in artificial intelligence that has the most money to do something about it. All they have to do is buy a ready-made AI company like perplexity and it will be out front. The shares will race to $260. I then calculated how high Apple shares would have to rise to justify the enormous premium for my friend’s house. I hit bang on $260.

And this is the reason why Apple is crazy like a fox. There are in fact seven separate AI’s under construction at a cost of $1 trillion. What is they over build? Then the big winner will be the company that hasn’t built at all. Apple will be able to buy all the processing power it needs second-hand for pennies on the dollar.

I am therefore buying the Apple (AAPL) December 2026 $230-$240 at-the-money vertical Bull Call spread LEAPS at $5.00 or best

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

These LEAPS are illiquid, so you are going to have to play around with prices to get a position. Start at $5.00, then increase to $5.20, $5.40, $5.60 and so on. Don’t pay more than $6.50 or these will get expensive. It is easier to do this on days when the stock market is down.

This is a bet that Apple (APPL) will not fall below $240 by the December 18, 2026 option expiration in 16 months. Apple shares have to rise only $8.43 to hit the upper strike in this LEAPS.

To learn more about the company please visit their website at https://investor.apple.com/investor-relations/default.aspx

Notice that the day-to-day volatility of LEAPS prices is miniscule, less that 10%, since the time value is so great and you have a long position simultaneously offset by a short one.

This means that the day-to-day moves in your P&L will be small. It also means you can buy your position over the course of a month just entering new orders every day. I know this can be tedious but getting screwed by overpaying for a position is even more tedious.

Look at the math below and you will see that an $8.41 rise in (AAPL) shares will generate a 100% profit with this position, such is the wonder of LEAPS. That gives you an implied leverage of 11.9:1. LEAPS stand for Long Term Equity Anticipation Securities.

(AAPL) doesn’t even have to get to a new all-time high of $260 to make the max profit in this position. It only has to get back to $240 where it traded in March before the meltdown.

Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.

Here are the specific trades you need to execute this position:

Buy 1 December 2026 (AAPL) $230 calls at………….………$33.00
Sell short 1 December 2026 (AAPL) $240 calls at…………$28.00
Net Cost:………………………….………..………….….....$5.00

Potential Profit: $10.00 - $5.00 = $5.00

(1 X 100 X $5.00) = $500 or 100% in 16 months.

FOR EVERY LINE BREAK INSERT
Everyone’s obsessing over oil like it’s the only geopolitical trade that exists, but that’s too in the box. Oil is loud, crowded, and already priced before retailers could even begin to invest. Nutrien is the smarter play because it sits one layer deeper in the system - Food. You can survive high oil prices with subsidies, reserves, and policy games; you cannot survive broken food supply chains. Fertilizer is non-negotiable, and Nutrien controls a massive chunk of that pipeline. When fertilizer supply tightens, prices don’t politely adjust... They spike. Farmers panic, governments intervene and the companies that can actually produce at scale win. Unlike oil, which is politically weaponized and violently cyclical, fertilizer demand is brutally consistent: Crops either get fed or yields collapse. Nutrien also wins structurally because it’s vertically integrated, diversified across nutrients, and strong enough to outlast smaller players when things get messy. Oil trades are crowded momentum trades; Nutrien is a pressure-point trade. Oil grabs headlines, fertilizer quietly dictates inflation, food prices, and social stability. If oil sneezes, markets react. If fertilizer breaks, countries do. That’s why Nutrien isn’t just a “commodity stock”, it’s a control valve in the global system. It’s boring in the best way possible, cash-flowing, dividend-paying, and positioned where the real long-term stress is building. While everyone’s chasing the obvious oil narrative, Nutrien is the overlooked backbone trade that benefits whether geopolitics cool off or spiral further. That’s the edge - Seeing what actually matters before the crowd does.

The Trade Desk (TTD) provides a platform for programmatic advertising, enabling advertisers to buy digital ad space in an automated way. In September 2025, TTD launched Koa AI, a "co-pilot" for marketers that helps optimize ad performance and spending.



Applying the Elliott Wave Principle (EWP), we find that TTD exhibited five (blue) waves (I, II, III, IV, V) from its 2016 IPO to its high in 2021. We refer to it as Cycle 1 in EWP terms. Since then, it has moved in three (blue) waves (ABC) lower, which is corrective price action. Meanwhile, at current levels, it has retraced approximately 74.6% of the previous five-year rally. A typical target for a 2nd wave: Cycle 2.

Besides, the technical indicators (TIs) are
1) At excellent low-risk/high-reward levels (CMF), compare with July ‘22 and March ‘25.
2) Positive diverging (RSI5): downward momentum is weakening.

Thus, although TTD can reach the C=0.618x to C=0.764x target zone at 16-30, the EWP count and TIs suggest the downside is nearing an end, and a new rally (Cycle 3) to new all-time highs can commence.

Note that we’re discussing long time frames here: years. Since C1 lasted five years and C2 has taken over a year, we can expect C3 to last 8-10 years. This is an opportunity for individuals who can hold their breath for more than 3 minutes, tolerate some discomfort, and keep an eye on “the price”. As we say, “big gains come from big time frames…” Assuming C2 bottoms out around $30 and C3 is the typical 1.618× C1 Fibonacci extension, we can expect a price target of approximately $30 + 1.618 × $140 = $256. Thus, the downside risk is $5-$20 from current levels, but the upside reward is approximately $225. A 1:10 to 1:45 risk/reward ratio.

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If you’re targeting a value play with a low relative price-to-earnings (P/E) ratio, Merck & Co. (MRK) stands out as a compelling candidate entering January 2026. This veteran pharmaceutical giant currently trades at a mid-teens P/E — significantly below the broader market average — and is considered undervalued relative to peers.

Why Merck Has Rally Potential

1. Low Valuation with Earnings Support
Merck’s forward P/E sits in the low-teens range, around ~13x, which is low compared to many S&P 500 stocks and especially compared with high-growth tech names trading above 20x–30x. The combination of stable earnings and low valuation makes it attractive for value investors rotating back into beaten-down sectors.

2. Strong Earnings Fundamentals
Merck benefits from a diversified portfolio of pharmaceutical products and a robust R&D pipeline. Revenues and earnings have been supported by key drugs, and analysts view recent price weakness as a temporary valuation gap rather than a structural decline. Moderate Buy analyst consensus and projected upside reinforce this view.

3. Defensive Strength Amid Market Uncertainty
In volatile markets, healthcare stocks like Merck often outperform broader indices due to steady demand for medicines and vaccines. This defensive characteristic dovetails with value investing trends that typically emerge in early-year rotations from high-valuation growth into lower-valuation, cash-generating stocks.

4. Dividend Stability
Merck also pays a reliable dividend — attractive for investors seeking income and total return potential as sentiment improves.

Risks to Consider

Healthcare regulation and drug pricing pressures can dampen sentiment.

Pipeline outcomes are inherently binary, with drug trial results affecting near-term performance.

Bottom Line: Merck’s low P/E, defensive earnings profile, and moderate buy consensus position it as a solid value candidate for a January rally and potential broader upside in 2026.

Lower interest rates create a favorable environment for capital-intensive tech companies, and Broadcom stands out as a prime beneficiary as January commences. The company's strategic pivot toward AI infrastructure has transformed its growth profile, with AI revenue reaching 20 billion dollars in fiscal 2025, up 65 percent year-over-year and representing over half of semiconductor sales.

Broadcom's diversified business model combines high-margin semiconductor solutions with sticky enterprise software from its VMware acquisition. As borrowing costs decline, enterprise IT spending typically accelerates, directly benefiting both segments. The VMware integration has delivered strong results, with infrastructure software generating 27 billion dollars in revenue and 78 percent operating margins in fiscal 2025. Free cash flow hit a record 26.9 billion dollars, supporting continued capital returns and R&D in custom AI accelerators for hyperscale customers.

The stock offers a compelling combination of growth and income, having raised its dividend for 15 consecutive years to an annual 2.60 dollars per share, currently yielding approximately 0.8 percent at a share price of 343.77 dollars. Valuation remains reasonable relative to AI peers, trading at a discount despite comparable growth trajectories and a recent 16 percent pullback from its December 2025 peak. AVGO is strongly positioned for a rally in January, driven by multiple expansion as rate cuts provide a tailwind, and robust data center demand shows no signs of slowing down.