April was a choppy month for the markets.
Trump’s tariff announcements on Liberation Day incited a massive influx of investor fear and uncertainty – which always wreaks havoc on markets.
If you’ve been following along in The Bleeding Edge, senior analyst Nick Rokke and I have been keeping you updated on the situation as it has unfolded in issues such as Why Stocks Are Down and the Truth About Tariffs and Tariffs Are Here – And the Market’s Reaction Has Been Swift…
In case you missed these updates, there are really only a couple of things you should take away from the situation.
First, as we predicted before the worst of the April volatility struck, this market setback isn’t permanent.
As we’ve been saying, these have been temporary pullbacks on the path to growth and some incredible upside.
That’s why we’ve been advising that we stay calm and consider adding to your positions in high-quality growth stocks and digital assets at the prices on offer right now, while panicky investors have been running for the hills and basically handing over their capital to hedge funds and other institutional capital.
We are still very bullish in the long term. In fact, as Nick wrote you earlier this week in The Bleeding Edge – Three Signs the Market Has Bottomed, we have some very strong reasons to believe the worst of the lows from this bout of market chaos is likely behind us.
Here at Brownstone, we’ve maintained from the beginning that this pullback would be temporary.
It wasn’t caused by economic weakness. It wasn’t because companies slashed earnings forecasts. It was about a single issue: the uncertainty about tariffs.
Which meant once trade agreements start getting inked, as we predicted they would, the market would likely resume its uptrend. And last week brought some of the most encouraging signs yet that negotiations are moving in the right direction…
Perhaps the biggest development was news surrounding a potential bilateral trade agreement (BTA) with India. Last week, India’s Prime Minister Narendra Modi met with Vice President JD Vance. They have announced plans to “more than double bilateral trade to $500 billion.”
This just reinforces what we’ve been saying… these tariffs were never about stopping trade – they were about increasing it. Specifically, they were about tearing down unfair barriers that other countries had erected against U.S. goods.
More good news – the strength of the U.S.’ position in these negotiations has been evident as U.S.-China trade tensions show signs of easing and markets have leveled. And markets today are rallying following the stronger-than-expected U.S. jobs report, with the Dow and S&P 500 surging on the news.
That said, we don’t want you to think that this means the matter is settled and the market shocks are behind us.
If anything, the market whiplash from the sudden rise on the tail of last month’s sharp swings shows that the short-term volatility is far from over. And I’ve been saying since November, when President Trump was reelected, to expect a good amount of turbulence in 2025 as Trump implements sweeping changes in economic, fiscal, and geopolitical policy…
I want to reassure you that we’ll stay on top of monitoring the situation as it unfolds, and President Trump’s policies and tariff plans continue to play out. We’re still in the muck and morass of trade negotiations. And as we hear more news on that, it’s going to continue to shock the markets.
It’s also important to keep in mind that Trump’s plans don’t stop at these trade negotiations. This is just the beginning.
That’s why I developed a strategy for taking advantage of the waves of short-term volatility coming down the line as Trump makes good on all he promised in his campaign.
My team and I are leveraging the power of artificial intelligence to help us pinpoint these dips and profit from the downswings.
It’s been very successful, as some of our members have written in…
Hi Jeff, we’re enjoying a streak of winners in the Deep Access portfolio! As I write, two investments are up over 100%, and one is up 80%.
– Joshua H.
Jeff,
I started with buying just one contract on the first two options, but quickly realized that this is a winning strategy, so I upped the number on all subsequent options. Net of fees, on 8 closed positions, my gain is over $11k on average purchase amount of $1,571.38. Of course, most of that was on the recently closed VAL put option. Still, every position has had a gain.
Thank you and stay the course!
– Robert Y.
On March 21, I bought 10 contracts in my account for $3.27 and 5 contracts in my wife’s account for $3.23. I sold to close my 10 for $9.64, a net profit of $6,370 on a $3,263 investment.
My 10 sold almost instantly, but my wife’s never sold. After the close of market, I created a new limit order for $9. If that sells, it will bring her a net profit of almost $2,900.
$9,255 is pretty good huntin’ for 21 days.
Nice work! And a tip of the hat to Deep Access!
Keep ‘em coming!
– Gary D.
I love this Deep Access; I made $2,280 in less than 3 weeks on the Valaris trade. Keep them coming!
– Richard K.
If you’d like to learn more, I’m hosting an emergency briefing next Wednesday, May 7, at 8 p.m. ET.
I’ll get into this volatility we’re experiencing – including the next market shock that’s coming – as well as how you can take advantage of these swings rather than sitting on the sidelines waiting for them to pass.
You can go here to instantly add your name to the guest list.
Now, on to this week’s AMA…
Hi Jeff,
I recently made a bet with a friend that in five years robots will be able to replace a plumber and repair toilets, perhaps even our own personal home robot will be able to tackle the task? I hope I am right, otherwise, I stand to lose $1000. What do you think? Did I place a great bet, or will I be out a grand?
And what other types of jobs will be assisted or fully replaced by Robo-technicians? Thanks for your insight!
– Stella R.
Hi Stella,
I love your optimistic and tech-forward thinking…. You’re definitely applying the concepts of exponential advancement in technology to project the future.
Let’s apply some logic to your bet and think this through. There are a few things that a humanoid, or humanoid robot, needs to be able to perform plumbing:
So, will a humanoid robot have these three things within five years? Let’s take a Tesla Optimus Gen 3 humanoid robot for example.
Optimus is about 5’8” and 160 pounds, capable of lifting 150 pounds (deadlift) and carrying 45 lbs. Equally important, its latest design is a new “hand” that has 22 degrees of freedom (shown below). This is a major upgrade from the Gen 2 model, which only had 11 degrees of freedom.
Source: Tesla
With 22 degrees of freedom, its capabilities are very close to the human hand, which has 27 degrees of freedom. The kind of dexterity, fine motor skills, and strength of Optimus will be sufficient for plumbing tasks like dealing with faucets, unclogging drains, and dealing with toilets.
As for intelligence and reasoning, the current frontier AI models like Grok 3 are already demonstrating the ability to think and problem-solve using a chain of thought methodology, enabling a humanlike approach to diagnosing and solving a problem.
We’re going to see some radical advancements on this front within the next 12 months. As readers know, I’m not shy about my prediction that the first artificial general intelligence (AGI) will be invented within a year.
And plumbing-specific knowledge is actually the easiest of the three to solve for. Any general-purpose robot designed for the home will be trained on thousands of hours of video and thousands of pages of information on plumbing. It will have the knowledge to repair the kinds of basic plumbing issues that you are suggesting in your bet.
So, to answer your question specifically… My bet is on you. I believe that within just two years, an Optimus humanoid robot will be capable of the kinds of plumbing applications you’re referencing around the home. Within five years, my answer is absolutely!!!
There is only one caveat that you might want to specify in your bet. I don’t think that a humanoid robot will be capable of a really complex plumbing job, like the rerouting of pipes in a home, within that time frame. There’s too much information that it wouldn’t have to solve a problem like that, and heavy demolition would also be required.
The reality is that a humanoid robot will be fully capable of performing most maintenance tasks around the house that we do today or hire handymen to do.
Nice bet. You’re going to come out on top.
Jeff,
I very much enjoy reading The Bleeding Edge reports. I hope you have us investors that subscribe to your newsletters positioned to take full advantage of the incredible opportunities on the near horizon.
I have been reading your articles about the race to AGI. You have shown how different AI entities have performed on certain tests. What exactly does the finish line look like that will determine the winner? Is it achieving one certain goal or the ability to master certain tasks, etc.?? Would you please provide us with the details that will determine the winner of the AGI race?
Thank you.
– James V.
Hi, James. Thanks for writing in.
Readers may remember I already made my call in The Bleeding Edge – The Everything App that xAI will be the one to win the race to artificial general intelligence, and I believe 2026 will be the year it achieves it.
As for what’s waiting at the finish line, I’ve written about benchmarks for measuring artificial general intelligence in other issues, and quite recently in The Bleeding Edge – Measuring General Intelligence…
In 2019, a well-known software developer designed the Abstract and Reasoning Corpus for Artificial General Intelligence (ARC-AGI) benchmark to measure how well an AI can acquire new skills on unknown tasks.
The benchmark (test) was designed in such a way that would not advantage large corporations that could simply train larger and larger models on even larger training sets. These are problems that humans can solve naturally while remaining extremely challenging for an AI.
[…]
Up until [the end of 2024], no AI came anywhere near achieving 100%. Not even close.
But something huge happened over the holidays. The day after Google announced Gemini 2.0, OpenAI announced its “o3” model[…] And it just about blew the roof off the ARC-AGI benchmark.
See the chart below, in the upper right quadrant…
Source: ARC Prize
OpenAI’s o3 High model scored a breakthrough 87.5% on this general intelligence test.
This is absolutely crazy.
And the chart below shows the significance of this latest development.
Source: Arc Prize
The chart shows the path of AIs improving on various AI benchmarks as they progress to human capability levels.
We can see that many of the benchmarks in blue have already exceeded human capabilities. And we can also see that we’ve just seen an inflection point in the ARC-AGI benchmark, as a result of these latest developments – indicated in the yellow line.
There’s only one conclusion that we can draw… We’re not going to have to wait much longer before we achieve AGI.
While I do believe that the ARC-AGI benchmark, and its future iterations, will be one of the more important benchmarks, it won’t be the only one. My guess is that the industry, or one industry body, will define a suite of benchmarks/tests that will be required to pass to claim AGI has been achieved.
Some in the industry are already whispering that we’re there now, but that’s not the case. But we are getting very close. And I suspect that an industry benchmark will be created for the physical capabilities of an AGI (i.e., a manifested AI in a humanoid form). Such a test will be designed to demonstrate an embodied AGI capable of navigation and utility in the real world.
It would be nice and simple if there were just one test or benchmark that everyone agreed upon, but I doubt it will be that simple. It will most likely be controversial. Critics will almost certainly claim that AGI wasn’t achieved, and others will demonstrate that it has been.
Because the benchmarks for “proving” artificial general intelligence will be varied and numerous, it’ll only compound that issue. What one group considers sufficient to prove artificial general intelligence won’t satisfy another group or individual’s standards of achievement.
But there is one thing that I’m sure of: you’ll hear about it from me when it happens, and I’ll do my best to explain why.
Taking a bigger picture view, however, I don’t really see AGI as a singular event. And as I’ve said before, it won’t just be one company that achieves it. Many will follow after the first breakthrough.
What’s more important is what the development of AGI will do for society and how it will lead to a productivity and innovation boom unlike anything we’ve ever seen in history.
Jeff,
Like so many Unlimited members have expressed, it was great to have you return. Your depth and breadth of experience and knowledge, as well as your insights, make it all worthwhile. My question is, Hyliion, they seem to have a unique answer to energy needs, including these massive data centers.
I agree with you about modular nuclear reactors as the long-term solution. Hyliion has an interesting fuel-agnostic system that could help power requirements in the short term for data centers and other industrial and military needs. Looking forward to your insights.
– Richard W.
Thanks Richard,
I agree with you, a modular solution like Hyliion could potentially provide additional on-site power generation where a utility isn’t able to provide enough.
I’m not very familiar with this company and haven’t done a full analysis, but I did take a quick look.
Hyliion is in the very early stages of deploying its Karno 200 kW power generator. In fact, the company claims that its goal is to deliver 10 of these units to early adopters by mid-2025.
Karno 200kW Power Generator | Source: Hyliion
The Karno is capable of burning hydrogen, natural gas, propane, methanol, ammonia, diesel, and apparently more than 20 different kinds of fuels.
Keep in mind, this technology hasn’t been commercialized yet.
And the commercial timing of the 2-megawatt (MW) product, which is what would potentially be used for data centers, hasn’t been announced yet.
At a higher level, Hyliion went public via a reverse merger with a SPAC in 2020. And as we can see in the chart below, after the initial hype, the public offering has been pretty much a disaster, with shares now trading around $1.57.
Hyliion has very low gross margins, is deeply unprofitable, and is still trading at more than 12 times annual projected sales for 2025. While it has about $120 million in cash as of the end of last year, it used almost $80 million in 2024 and is projected to burn through another $60 million this year.
Hyliion will definitely need to raise additional capital within the next 12 months to stay afloat, which means dilution to existing shareholders. It’s a long way before it starts generating free cash flow, and at 12 times sales, it is way overvalued.
I don’t have enough information to have an opinion on the company’s technology, as it hasn’t been commercially deployed yet. But knowing what is public, this is a very risky stock.
It looks like the company has an earnings announcement on May 14, so you might want to listen in and see what the latest update reveals.
Jeff,
I was dismayed to see you say that you were concerned about the excessive particulate generation due to the greater use of brakes to get regenerative braking. EVs use the motor as a generator when they slow down, and thus negate the use of the brakes. Most EVS and hybrids go many thousands of miles longer between brake jobs than do IC vehicles. I’m sorry to say that your failure to know this basic fact gives me pause as to accepting any of your other statements on subjects with which I may not be familiar.
– Dave H.
I’m not certain what you mean by “the particulate pollution caused by the excess use of brakes on an EV (due to regenerative braking).” If the car is driven in the same manner, regenerative braking will produce LESS particulate pollution from wear of the brake pads. Regenerative braking uses the rotating wheels as electric generators to transfer the car’s energy of motion back into electrical charge in the battery. That requires less use of the friction brake pads against the rotating wheel.
But you may mean that because EVs have more torque available, EV drivers tend to drive in a more aggressive manner, with more braking, which may often require the assistance of the friction pads, as well as wear out the tires faster. However, I doubt such a manner of driving overcomes the inherent advantage of less particulate pollution from regenerative braking.
– David F.
As a longtime reader of Bleeding Edge, I’ve to expect to learn new facts every day that have been well researched. You state things so emphatically that I have come to accept them as fact….until today, when you explain how regenerative braking causes excess particulates in the air due to excessive use of the brakes. I’m sure I won’t be the only one to point out that regenerative braking barely uses the brakes but turns the motor into a generator while using the kinetic energy of the vehicle to power that generator and return energy to the battery. I have 30,000 miles on my Rivian, and the brakes look like new. Hoping I don’t have to resort to fact-checking…
– Russell M.
Gentlemen,
I sincerely appreciate you writing in about this topic. When I wrote about this topic, I debated on how much information/data to share or leave out, and I just didn’t think it would be a very interesting topic for readers, so I oversimplified the topic. My mistake, so let’s dig in a bit deeper.
And before I do, I have to say that I was skeptical on this topic of EVs producing more particulate pollution than comparable internal combustion engine vehicles… until I read the research.
Some recent research published this February, Life Cycle Assessment comparison of electric and internal combustion vehicles: A review of the main challenges and opportunities, made some interesting points, namely:
This information caused me to dig deeper, and I discovered some additional research, which was equally interesting: Regional emission analysis of light-duty battery electric vehicles.
This research demonstrated that ICEs actually have lower particulate matter generation in 70% of U.S. states, which was a number that really surprised me.
It’s important to note that both research papers are full life cycle analyses from manufacturing through vehicle operations. From my perspective, that’s the analysis that matters.
As we can see in the chart below, the EV categories consistently exceed that of ICE cars, both 2020 models and forecasted 2050 models, with a much wider range of variability.
The reason that EVs are producing more particulate pollution than comparable ICEs is threefold:
I was surprised to learn this, but it actually makes perfect sense.
And I’m sorry for glossing over the issue on particulate pollution. I’m glad that you wrote in about this topic.
That’s all for this week’s AMA. If you have a question or concern for me or any of my team, you can reach us right here.
Have a great weekend,
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
