Here is Part 1 of 5 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position.
Back in April, I wrote: “The many charts that had become hockey sticks are now looking sort of like the rocky mesas in northern New Mexico with a slope down potentially ahead. Many good companies’ stock prices have come down some 30-50% in the last week or two and that means there have been some buying opportunities developing as I’ve noted in the past week too. But be careful out there. I’m not sure we’re going to see the recent all-time highs for many stocks that are now probably in bear market territory.”
There are literally thousands of non-S&P 500 stocks that have now fallen 70% or more since their highs earlier this year. A lot of speculative money has been wiped out of the stock market and I continue to find some select opportunities to buy some Revolutionary stocks at what could turn out to be very reasonable valuations. Note that I lowered the investment rating for real estate down to a 7/10 from the 8/10 that I had kept it at for the last decade or so. I think real estate prices are going to stagnate and/or decline in many parts of the country over the next five to ten years, but I still think real estate in general, especially land, is a great investment long-term.
The ratings for each stock go from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.” The positions that are bolded are those that I consider to be “core” holdings and am unlikely to ever sell out of them entirely.
- Forever assets and other permanent holdings –
- Media, hedge fund and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
- Real estate, including the office I work out of, some land and the ranch I live on in NM (7)
- Physical gold bullion & coins (8)
- (Driverless Revolution) –
- TSLA Tesla (7) – In the prior Latest Positions update, I’d noted that: “We are clearly in an EV bubble right now. Tesla is not as wildly overvalued as some of the fake and/or fraudulent EV companies out there.” The EV bubble has popped and most EV stocks are down 70% or more from the levels at which they were trading earlier this year. Meanwhile, Tesla has actually rallied 20% or so since April although Tesla’s still 20% below its all-time high from earlier this year. The move from radar-assisted driverless technology to straight vision driverless technology has been a bit surprising, but Elon’s probably onto the right idea, if I had to bet. And we have made a long-time successful bet on his technological approaches as he’s proven himself right so many times in the past. If Tesla cracks the driverless code before anybody else, the stock will go up another 5-fold from here.
- (The Space Revolution)-
- SPCE Virgin Galactic (6+) – Virgin Galactic has proven how hard it is to get into (almost) space but after finally getting not just a successful test flight but also successfully sending Richard Branson up into (almost) space, they’ve finally at least got their technology proven out and ready for commercial use. You might have noticed that over the weekend, our former holding, Astra, failed to get their latest attempt at sending a rocket to space. And as the CEO tweeted, “…Space may be hard…” Long-time followers know that I wanted Virgin Galactic to do a secondary earlier this year when their stock hit $60 and their market cap would have supported a billion dollar raise for their balance sheet. The company has finally done the secondary though the way they handled it, announcing it immediately after the stock popped on Richard’s flight and in the midst of the SPAC bubble crashing, has not helped the stock. But the cash is what’s important to the long-term success of the company, not the current stock price.
- RKLB (Formerly the symbol was VACQ) Rocket Lab (8) – While the aforementioned Astra hasn’t been able to get their launches going, Rocket Lab keeps plowing along and sending up more satellites for their customers (and themselves). Most recently, the company completed another successful launch on July 29 and has another one scheduled. The ‘Love At First Insight’ mission will be Rocket Lab’s 22nd Electron launch overall and fifth mission of 2021. ‘Love At First Insight’ is the first in a rapid succession of scheduled Electron launches from September through October that represent the company’s fastest launch turnarounds to date. We’ve been, as I was worried we might be, early so far on getting into The Space Revolution, but as I look at the potential risk/reward to most tech stocks vs a company like Rocket Lab with its proprietary technology in a burgeoning trillion dollar space economy, I find myself wanting to buy more Rocket Lab. I have a pretty big position already though and I will make it a huge position if the stock gets closer to $8. I’m looking for 100-baggers that change the world as they grow — I think Rocket Lab and other companies in The Space Revolution are the perhaps the best positioned for that kind of potential return.
- Osprey (Black Sky, symbol currently SFTW) (8) – Black Sky BlackSky lost two satellites that were on a recent failed launch by Rocket Lab, but the company has more satellites headed to the sky and it remains on track to have a constellation of 23 high-resolution satellites by the end of 2023, capable of monitoring the most important locations on Earth every 60 minutes from dawn to dusk. The valuation of Black Sky will be $1.1 billion after the merger and with the company looking to double revenues this year and next, we’re looking at a stock trading at about 8 times 2022 revenues and 4 to 5 times 2023 revenue. Black Sky’s gross margins are likely to be above 70% or more and that means this stock could end up looking very cheap if they grow the way they expect over the next five years.
- Genesis Park (RedWire, symbol currently GNPK (8) – Redwire is a supplier to the Space industry and already does $120 million in revenue, looking for 30% topline growth this year and they company expects that growth to accelerate over the next couple years, taking sales to $1.4 billion in 2025. With much lower gross margins than the aforementioned Black Sky, this stock rightly trades at a discount to SFTW, with GNPK currently being valued at 5x 2021 revenues and “only” at 3.5x 2022 revenues. If the company can actually deliver $1.4 billion in sales in 2025 at 35% gross margins, we’d probably be looking at earnings of $200 million or so. Throw a 10 to 15 multiple on those earnings and you’d be looking at a $2 billion market cap or a stock trading probably around $40 or so in four years or so.
- SpaceX (9) – I figure I should include SpaceX in the Latest Positions round up because even though it’s a private company that my hedge fund has invested in that most retail investors can’t get into, it’s by far the leader in The Space Revolution and I want to start keeping a record of my analysis and ratings for the company. My initial rating on SpaceX is a 9/10 because, again, they are by far the leader in the most obvious and largest potential marketplace in which to invest for the next ten to twenty years, The Space Revolution.
- (Defensive names)–
- GLD Gold ETF (7+) – Nobody wants gold. It’s the butt of jokes when I talk to retail investors and even to some hedge fund managers. But I tend to think that when the alt-coin bubble crashes (90% of the cryptos out there right now are likely headed to $0 in the next two to three years) that gold will be taken seriously as a store of value once again. I’ve owned both bitcoin and gold for many years and plan to continue owning both in the hedge fund and in my personal life.
- BTC Bitcoin (7-)– I’ve said since 2013 that bitcoin is and remains the de facto standard cryptocurrency of the world and therefore remains the currency most likely to replace the US dollar as the world’s reserve currency in coming years. I’d mentioned in the last few months that I’d look to buy more bitcoin if it drops below $30,000 and I did so when it did so a few weeks back. I’m sitting tight on the bitcoin now and would look to buy more again below $30,000 and would likely trim some above $50,000.