Stock markets tried hard to rally this morning at the open. They’ve been fading a bit lower back to flat now a half hour into the trading day. Meanwhile, bitcoin dropped below $6000 over night, now down 70% from its highs just eight months ago when I published my “The Great Cryptocurrency Crash” book. I’m not making any moves just now, but we did have a heckuva Live Q&A Chat this morning! Here’s the transcript.
Q. Cody, do you see a year end rally like an analyst suggesting 3200 on the S&P 500…or do you think the markets get spooked and tank due to mid term election fears ? Thanks.
A. Are those my only two choices? Feet to fire guess, I’d bet the S&P 500 is around 2800 at year end, about flat from its price today. Between now and year end though, I’d guess the S&P 500 gets close to 2600 and maybe up to 2900. I do not think election fears will have anything to do with those swings though.
Q. Hi Cody, I believe you rated real estate an 8 in your latest positions. Would you consider global warming a factor in deciding where to make real estate investments? Thanks!
A. I should probably downgrade my rating for real estate overall. Indeed, I recently bought the office I work in here in Ruidoso (I’ll send out a Trade Alert about that this week). But we’re also looking to sell a rental house we own in Alto, as I think it looks like a good time to sell that real estate asset as we continue to adjust our own household’s own risk/reward and asset/cash balances in light of the extra demands and concerns that come with having a medically fragile child. I can’t say that global warming is a factor in my real estate analysis per se.
Q. Reading into Facebook’s supposed interest in Stellar’s platform got many thinking. Facebook as a world banking system! They already have an insurmountable network built out (2.5 billion DAU) which could possibly double or more long term if banking/payment capabilities would be attached. Imagine if all it takes for someone to have banking access to the entire world in the future will be just the creation of a FB or subsidiary account. This would be the catalyst to make $FB, the most valuable company in the world. Antitrust, and the like, would come hard after them, because they could theoretically control the worlds commerce without much build-out. Just some integration into their existing ecosystem. Even collaboration between Visa, MA and banks would not reach FB’s existing penetration.
A. Deep thoughts tying in cryptocurrency/blockchain and tech stocks and social media. Hard to argue with your conclusion that if a company, in this case Facebook, could create a global banking system built on a transparent blockchain platform like Stellar (would they call it Facebank?), that it would probably become the most valuable company in the world. But if/when Facebook or Google or Apple or Alibaba start creating such a system, the others would jump in to compete as would Microsoft and JPM and Wal-Mart and who knows who else…there’d probably be two or three major private blockchain banking systems that would dominate — not just one. But the whole concept is another Revolution Investing reason to own some of our long-held Revolution Investing stocks.
Q. Cody…with BTC still hanging around 6k and yet to starts its move to 2k or below as you anticipate….wont XLM be trading under 10 cents with BTC going to 1-2k level ?
A. Probably. Like I’ve said all along, I plan/hope to actually build my tiny cryptocurrency basket up to being at least a small cryptocurrency basket if/when these things are down 90%+ and when everybody truly hates/derides the concept of cryptocurrency.
Q. Hey Cody, any thoughts on CTRL? I saw that they brought Charlie Kindel on board from amazon recently. I’m worried that as amazon makes its smart home appliances more user friendly demand for CTRL’s services will drop.
A. First off, I have to say that I have a soft spot for Control4 because when they were just a couple years old, back in like 2005, they reached out to me and offered to wire up my new Soho office in NYC with their (at the time) latest Control4 system. It was pretty sweet, but as I recall it stopped working when the building got hit by lightning or something and I soon after took the anchor job on TV and closed that office. That said, I like your logic and am thinking that CTRL could be a good short candidate as a victim of The Voice Revolution. I personally just bought a new streaming device (https://www.peachtreeaudio.com/decco125-sky-amplifier-with-dac.html) and speakers for my office and certainly don’t need Control4 to access the new stereo system. On the other hand, it looks like Control4 is trying to embrace The Voice Revolution and maybe they can become a de facto standard integrator of disparate smart devices in the smart home in The Voice Revolution. CTRL is trading at 2.4x next year’s revenue estimates (analysts are looking for 10% topline growth) and at only 20x next year’s earnings estimates. So it’s not wildly expensive in a wildly expensive stock market. So I’m not sure I’ll do anything with CTRl. But that is some serious detailed analysis for you off the top of my head!
Q. You expect GLD to potentially rally 20% within the next year – what does that translate the Gold spot price into ? Thanks.
A. I could see gold getting above $1400 in the next year or two.
Q. Hi Cody, Hope all is well with you and your beautiful family. What do you think about some axgn down here? Thanks.
A. AXGN’s still trading at 12x next year’s sales and is far from cheap still. That said, you know I still like the company’s long-term Revolutionary growth potential so I continue to hold the shares that I didn’t trim. Remember we bought this stock when it was at $4! So here at $36, I’m still not ready to buy any back just yet.
Q. Hi Cody. I know you haven’t had good things to say about AMD and management (old management I assume) but don’t you think the turnaround is real? Lisa Su is legit and looks like one heck of a CEO.
A. I’m disappointed in myself for having been so bearish on AMD while it’s been on this big run and turnaround. We’ve ridden NVDA for a 9-fold increase in the last couple years, and NVDA is AMD’s clearest competitor — and the one that I think is the best-in-class. So I probably won’t be buying AMD anytime soon, but I’m going to issue a formal mea culpa today for having been so bearish on AMD the last couple years. Mea culpa, sorry.
Q. Cody, whats your 5-10 year target on TWTR?
A. I don’t do “Price targets” because then you’ll end up selling out of a stock when it gets there. But I could see TWTR at $100-150 in 5 years and $200-250 in ten years.
Q. Cody: ROKU? Are they revolutionary or are they Fitbit?
A. Roku’s business is a much higher margin business long-term as subscriptions and software and ads become a bigger part of its business. That makes it not a Fitbit. But I’m not sure it’s a Revolutionary kind of company that can change the world like some of our stocks!
Q. It seems like a good time to add to Sedg?
A. I can think of worse ideas, but I’m not adding to my own SEDG position just now.