Kevin Smith

Record valuations, fiscal imbalances, tight credit spreads, hawkish Fed, deteriorating breadth and negative free cash flow at hyperscalers create a setup for a larger market drop. Tail risk protection via S&P 500 puts is attractive because volatility is cheap. Tight credit spreads also make blowout strategies appealing, such as put options on high yield ETFs.

A steep value opportunity emerged in biotech after COVID, with many companies trading below cash. The sector finally began to recover late last year and still has a lot of upside. Biotech is a good diversifier and benefits from rotation out of pure tech, supported by deep fundamental analysis from a PhD biochemist.