CORRECTED: Latest Positions Part 1: Driverless, Space, Defense, Bubbles

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, including a couple Trade Alerts.

The markets are in a major volatile phase here with any daily candle stick chart with giant candlesticks forming for the last three or four weeks at least. 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. Move slow out there. Don’t be in a rush to get back to all-time highs in your own portfolio if you’re not at them right now. Building wealth takes time and the markets will have many ups and downs in weeks, months and years ahead as we build.

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.

Longs –

• 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 (8)
  • Physical gold bullion & coins (7)

(Driverless Revolution) –
TSLA Tesla (7) – Tesla has pulled back almost 40% from the $900 price that someone paid just over one month ago.  That has made it slightly more compelling than it was then, but it is still not a great risk/reward for new investors.   If/when it becomes the next trillion dollar company, that represents only a 85% upside for someone taking on a new position in it.  Frankly, as we have seen recently, Tesla could drop another 30-40%.  In the prior latest positions that I sent out, TSLA was trading at 12x next year’s sales estimates.  Now it is down to 9x which is still not cheap for a company with 25-30% gross margins.  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.  That is why I am holding and not adding to the position right now.

(The Space Revolution)-

SPCE Virgin Galactic (6+) – As you can probably tell, I have become a little disillusioned with Chamath Palihapitiya recently.  Along with one of his SPACs (Clover Health) that he helped bring public coming under scrutiny, he has also taken to twitter to post shirtless selfies and even calling himself “the next Warren Buffet” in a Bloomberg interview a couple weeks ago.  Now he has sold all of his personal stake in Virgin Galactic to free up capital to use on new investments.  That’s ok.  We don’t need him.  As you know, I think that the Space Revolution is the place to be.  SPCE is one of the leading plays in that revolution.  With that said, Virgin Galactic is still a venture capital type play.  It’s still overvalued in many ways, especially with no revenue and recent problems with test flights.  Just like with TSLA and their revolution in EVs two years ago, I am even more excited about the Space Revolution and because of that I am not selling SPCE.
VACQ Rocket Lab aka Vector Acquisition Corp (8) – Around the hedge fund we call this company “VACQ Very Much” (get it?).  I am excited that we have been able to get into this particular space company.  If it comes down from here I will be making it a very big position in both my personal account and the hedge fund.  Rocket Lab is already sending stuff (and getting paid for it) into space and there are very few companies currently doing that.  Their next launch which they dub “They Go Up So Fast” is scheduled to deliver seven satellites to orbit later this month.  Included in that payload is a satellite for another space company that I’m currently working on (I told you before that Rocket Lab is a space platform).

(Defensive names)–

CPB Campbell’s (6) –  I’m bored to death of this stock.  When we bought it in the low 30’s the dividend was amazing.  Even here in the high 40’s, its 3.2% dividend is still pretty good.  But this thing is still kind of an eyesore.  Everytime I see it in the portfolio, I think about selling it.

GLD Gold ETF (7+) – With yields in the bond and treasury markets rising, tensions and volatility rising in the stock market and Bitcoin and other cryptos still on fire, gold is almost an afterthought to most market participants.  I like to buy sectors when they are afterthoughts as long as they have a setup for higher prices ahead when people no longer consider them afterthoughts.  It is possible that gold gyrates and stagnates around these levels for years to come, but I think that is unlikely.  But even if that happens, I think gold could still outperform other asset classes even if it stays flat for the next two to three years.

BTC Bitcoin (7-)–  Here is what I wrote about Bitcoin in the previous Latest Positions.  “Well, here’s the long-awaited break above $20,000. I trimmed a little bit of the bitcoin futures (BRR) that I own in the hedge fund today when they hit $21,000 (the futures trade at a light premium to bitcoin). Other than that, this 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.”  The only thing I would change is the $20,000 number is now $50,000.

DBA Agriculture ETF (7+) – I don’t think higher inflation and the higher interest rates that it is starting to force into the markets is a short-term trend. Too many trillions of cat dollars are out of the bag from too much stimulus and borrowing from the governments around the world will likely help continue to drive near-term inflation trends higher.  And higher inflation/higher interest rates over the long-term are likely to start to be driven higher because of the problem that China’s urban middle class revolution has likely peaked and is not going to help drive deflation in the global system any longer. So I’ll continue to ride some TLT puts along with my DBA longs and I’ll continue to look for other ways to get in front of likely higher inflation/higher interest rates trends.