Meet Steve Hsu
For those unfamiliar with Steve Hsu, he is one of America's most impressive polymaths. He earned a bachelors degree from Caltech when he was only 19. Here he is with one of his professors, the great Richard Feynman.
Hsu went on to earn a PhD in physics, and is currently a physics professor at Michigan State University. He also started and sold an Internet company, and founded a genomics company, where he applies some of the original research he has done into human genetics.
I suspect being the son of Chinese immigrants colors his view of America relative to China, but nevertheless, when someone of Hsu's talents speaks, he's worth listening to. In a post on X on Monday, Dr. Hsu explained why he thinks America as entered the "looting and grifting" phase of "late stage imperial decline".
I've shared Hsu's post in full below. Following that, we'll close with a brief note on three trades we have teed up for later today.
Why I Am Pessimistic About America
A longtime reader asked me why I'm pessimistic about "midwits" in US government, politics, and policy. My answer follows below.
In my view we're in late stage imperial decline. This is the "looting and grifting" stage, and it's very rare for really talented people to want to go into government - they're much more likely to be found in tech startups or maybe in academic labs or at hedge funds. There is no Kissinger or even Hermann Kahn or George Kennan in public service.
It's not the structure of the US system, it has more to do with the vibes of this era. PRC [The People's Republic of China] is in a totally different phase - lots of kids there want to work hard to build their Nation and still believe in heroic ideals.
This follows the general pattern of imperial growth and decline: The Fate Of Empires.
In my lifetime, the US passed through what Glubb called the Age of Affluence, and is beginning the Age of Decline.
Money replaces honour and adventure as the objective of the best young men. Moreover, men do not normally seek to make money for their country or their community, but for themselves. Gradually, and almost imperceptibly, the Age of Affluence silences the voice of duty. The object of the young and the ambitious is no longer fame, honour or service, but cash. Education undergoes the same gradual transformation. No longer do schools aim at producing brave patriots ready to serve their country. [ Or to discover great things for all mankind! ] Parents and students alike seek the educational qualifications which will command the highest salaries.
The 21st century American reality (the Age of Decadence):
Yeah, I calculated the NPV [Net Present Value], and, you know, it's just not worth it for me. I really believe in your project, though. And, I share your passion. Good luck.
On A More Optimistic Note
If Trump wins in November, and enlists the talents of Elon Musk and others to turn things around, it will be interesting to see if Steve Hsu turns optimistic on America.
In the meantime, I am optimistic about three trades teed up for later today (these are all current Portfolio Armor top names; our top names have returned 21.22%, on average, over the next six months, since December of 2022):
A mega cap releasing earnings this week. This stock has excellent fundamentals (Chartmill gives it an 8 out of 10) and technicals (10 out of 10). Zacks is slightly less bullish about its earnings than Wall Street, but Estimize is more bullish than Wall Street, as it has been over the last four quarters. In each of those four quarters, the company’s actual earnings have been higher than Estimize’s estimate. This one seems like a coin flip to me, but with our trade, our potential upside will be 2x our potential downside.
A midcap with excellent technicals (10 out of 10) and middling fundamentals (5 out of 10).
A small cap with middling technicals (5 out of 10) and fundamentals (5 out of 10), but a valuation rating of 8 out of 10, because it’s trading at less than 0.8x tangible book value. This is the most interesting of the three to me, because it’s very rare that a company trading below book value ends up in our top ten.
My subscribers and I have bullish options trades teed up on all three, with expirations ranging from the end of this week for the first one, to several months out for the third one.
If you'd like a heads up when we place them, feel free to subscribe to our trading Substack/occasional email list below.
If you'd like to stay in touch
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