The Oracle of Know-maha
When you have inside information, it's almost impossible to lose a trade.
The Oracle of Know-maha is not the same person as the Oracle of Omaha. The Oracle of Omaha is Warren Buffett. Though that is Buffett’s most famous nickname, it isn’t the only one. As a crypto proponent, I sort of like Sociopathic Grandpa From Omaha just as much. I don’t know if Buffett has ever traded inside information. But I think the Oracle of Know-maha probably has done it twice this summer alone. Who is the Oracle of Know-maha?
It’s Paul Francis Pelosi.
What Did The Oracle Know?
Frank is credited with managing the Nancy Pelosi fortune. Again, a fortune that is valued at nine figures according to opensecrets.org; not bad for a modest civil servant. Back in July, Frank dumped a seven figure position in Nvidia (NVDA) stock at $165.
That trade, while a loss for the Pelosis, saved them hundreds of thousands of dollars in additional losses had they held the Nvidia position. Good for them. Is there any reason to give it side eye? You be the judge…
Let’s put aside the notion that the government telling a domestic company not to do business with foreign customers is, at best, questionable policy. It’s amazing to me that the Nvidia position was likely put on in an attempt to front run the US chip bill and then taken off to front run the US government telling Nvidia who the company can and can’t sell products to.
Can we stop these people from trading yet? The Federal Reserve finally stopped allowing senior officials from front running their monetary policy decisions after getting enough shit for Robert Kaplan’s blatant disregard for integrity. It’s passed time for members of congress and their families to be held to the same standard. We certainly can’t trust the SEC to do anything about breaking securities law. That agency is too busy shaking down small timers at Coinbase (COIN).
It’d be marvelous if those in congress were using their positions to work for the people rather than enriching themselves. Perhaps we can elect some fresh faces who want to put a stop to this? I’m not holding my breath.
More on Nvidia
The Oracle of Know-maha certainly doesn’t like NVDA anymore. But does that mean we should entertain buying the dip? Personally, I’m not touching it. There’s actually a cryptocurrency component to this stock that may not be currently appreciated. In my recent coverage of HIVE Blockchain (HIVE) for Seeking Alpha, I laid out the problems Ethereum miners (ETH-USD) are now up against when the Ethereum moves from Proof-of-Work (mining reward) to Proof-of-Stake (staking reward) later this month:
For Ethereum miners, this is particularly problematic because ETH mining is still done with GPUs rather than with the ASIC machines required by most other PoW networks. Ethereum miners can't simply switch to securing Bitcoin because their machines aren't capable of profitably mining it.
Essentially, the Ethereum mining machines are no longer needed to secure the Ethereum network and there isn’t much else they can be used for in the crypto world. This is problematic for Nvidia specifically because Nvidia has been a large supplier of those GPU chips that are no longer necessary. From a valuation perspective, NVDA is still really rich even after a large selloff:
On a scale of 1 (sell) through 5 (buy), SA’s Quant score for NVDA is 2.88. Not great. I’m sure Frank knew all of this before he bought it earlier this summer though…
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice.