10,000 Kicks, Residential Real Estate, Tesla Upcoming Earnings, Selling WBA, Radio Appearances And More
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” – Bruce Lee
Here’s the transcript from this week’s Live Q&A Chat. You can also listen to a couple radio interviews I did this morning where we covered the impact of the Israel Gaza war on the markets and economy and we talked about The AI Revolution.
Q. What are your top 5 buys right now?
A. My top 5 buys right now, in alphabetical order are: Bitcoin (BTC, BITO, etc), Instacart (CART), Robinhood (HOOD), Cloudflare (NET), Netflix (NFLX).
Q. What are your largest five positions right now?
A. My five largest positions in the hedge fund are, in alphabetical order: RobinHood (HOOD), Rockwell (ROK), Google (GOOG), Tesla (TSLA), Uber (UBER).
Q. Cody, how would you rate residential real estate going forward? Large drop still to come or you think most markets have bottomed? Thanks.
A. Maybe just a muddling along and a slow grind to lower/more affordable prices in most places for residential real estate. Maybe not a large drop or a bottom here.
Q. Cody, What are your thoughts/expectations regarding TSLA earnings due next week?
A. I expect a slight miss on earnings and revenues vs consensus. But I expect the market will focus more on commentary about pricing and delivery schedule for the Cybertruck. I expect to hear that the low-end Cybertruck will sell for $45,000 and the highest end Cybertruck will sell for $85,000 and that deliveries will start in December. I expect Elon to say that he expects to build 2-300,000 Cybertrucks next year and to confirm that the company still has more than 2 million orders (and that maybe 60% of those are actual real orders). We’ll want to listen for updates on the new machine-learned Full Self-Driving technologies and when people like me who confirm that we want the latest Beta version of FSD will get it (maybe by year-end?). Any updates on the Tesla Optimus Robot and timing of release for that would be a surprising positive catalyst for the stock too.
Q. I noticed you took a starter in Instacart CART. how would you rate it currently 1-10?
A. Instacart is a good product (groceries delivery, mostly) and customers are very loyal. The stock is trading at about 25x next year’s earnings, 2x next year’s revenues and has 70% gross margins with topline growth near 10% for next year. It’s very cheap looking out at 3 to 5 year Price to Profit at these valuations. I’d rate it about 7+/10 Revolution Investment Rating right now.
Q. Every year, I seem to miss great opportunities after tax loss selling and the subsequent January Effect. Last year offered tremendous opportunities. Have you ever considered putting together a seasonal basket? TY!
A. I do typically buy some beaten down, hated names in December when others are selling them to lock in tax losses, often artificially exacerbating the sell-off in those names. I guess they are a de facto basket when I do that. I’ll be sure to highlight any names we buy at the end of this year if/when we do.
Q. Follow up: Cody, to Q What are your thoughts/expectations regarding TSLA earnings due next week. Your answer sounds like it has a positive bias…assuming that that things you expect to hear are actually announce. Is this correct? Would you say that you are anywhere near pounding the table on TSLA?
A. I do think there’s a good chance that Tesla has a good week after its earnings report but I can’t say I’m pounding the table on the name right here right now. If it got hit hard after earnings, I’d probably be a buyer and a table-pounder again.
Q. Earlier in the chat you said the new Tesla truck would sell between 45-85,000. how does that compare to the price for the new RIvian 2 trucks that are supposed to come out in 2025?
A. Rivian’s talked about a $40,000 to $60,000 price range for the Rivian 2, but I don’t know if they’ll make the 2025 target time line.
Q. What do you think? No recession, mild recession or hard landing/tougher recession in 2024?
A. Mild recession, feet-to-fire.
Q. With earnings coming up, who do see as a big shock for an earnings beat, and a big shock for an earnings miss?
A. Hmm, feet-to-fire guesses here: NFLX as a shocking earnings beat. Seagate and/or AMD as a shocking earnings miss. Be careful trying to game that kind of stuff though!
Q. DALN has settled bit after spike in early september. what would be your current rating on the name?
A. 7/10 right now. Bryce and I plan to go meet the management team and board and learn more in November.
Q. Thoughts on BLDE that has gone straight down since recommendation? why no more recommendation of purchases at these levels?
A. I bought a little bit of BLDE for the hedge fund yesterday at the open. Still a pretty small position though.
Q. You were once impressed with CRWD, but correctly concerned with its valuation (100 points higher). Is it back on the radar?
A. Yes, it’s a great name and it’s always on our radar. It’s still not cheap per se, but it’s gotten cheaper for sure.
Q. Hi Cody. Do you currently hold/considering any positions in SMCI?
A. I’ve looked at it before and couldn’t quite get comfortable in buying it. We’re still working on it and will let you know if we ever do buy it (or short it for that matter).
Q. Cody, besides DALN & WBA any interests in other beaten down dividend stocks or REITs?
A. I’m moving on from WBA slowly but surely. Consider this a Trade Alert and a mea culpa from me on that one. We are always looking at beaten down stocks and occasionally run screens on high dividend names but they’re often high dividend stocks for a reason.
That’s a wrap. Thanks all!
I leave you with a picture of me holding our new 10,000 Days Dojo Flag with an amazingly relevant quote from the great Bruce Lee. I designed and ordered it after Tesla designed their D1 chip for their Dojo supercomputer.
