A Few Trade Alerts Plus Chip Export Restrictions, Space FOMO, and Investing With Passion
Let’s start with a few quick trade alerts: we trimmed about 10% of our ROK position plus a little SNOW and some UBER.
Now, here’s the transcript from this week’s live Q&A chat. And don’t forget to follow us on Twitter @TradingWithCody! Please Follow us on our LinkedIn Page and Connect and Follow Cody here.
Q. Based on your recent trade alerts, it seems like you have been leaning bearish. Our recent buys are at lows when some stocks are hitting new highs. What is the percentage of all the shorts to your longs? Thank you.
A. In my personal account, I don’t have any shorts or puts right now, as I’ve mentioned before. In the hedge fund, we have a lot of puts and quite a few shorts, making the portfolio quite hedged and almost flat on the net long/short exposure. As for our recent purchases, we did send out Trade Alerts about buying more TSLA at $160 a few weeks ago before it rallied more than $100 from those levels and RIVN when it was below $12 at that same time. We sent out a Trade Alert about buying more RKLB below $4 in early May. All of those stocks are much higher than they were when we sent out the Trade Alerts. Most of our Trade Alerts in June have mentioned buying some puts.
Q. Can you please provide your thoughts on the US tightening chip export restrictions?
A. It’s important that the US doesn’t allow China to have access to our best technologies and I don’t think China can ever truly engineer on their own the kind of tech revolutions that we do in the US all the time. It’s not good for NVDA’s sales growth near term to have China blacklisted, but longer term, it’ll help keep the US out of war with China if China knows we can destroy them with technology if China gets too aggressive on the world stage. The US should also be less aggressive on the world stage by the way.
Q. Seems like INTC is delivering by opening chip plants in a lot of countries. What is your info and would investing more now be wise? I have long-dated calls Jan 2025 already up 100% Thanks.
A. It’s not a sure thing that Intel displaces/catches up with TSM on this chip fab business but I think they can do it as I’ve said for a long time now. I’m not buying more right now but I have made a big bet on INTC already.
Q. Cody: Next 10% move for QQQ is up or down?
A. How about a 5-8% pullback and then a sideways-to-up market over the next year or two?
Q. Looks like lots of folks in this chat bought some SMR. Any insight on what’s causing the stock to decline? Has our thesis remained the same? If so, this feels like a buying opportunity?
A. No change to the thesis or the fact that this stock will probably take a few years to really get going. It will be another 3-4 years before their first Small Modular Nuclear reactor is operational and the company will slowly grow service revenues as that time frame gets near. That said, I still think this company could Revolutionize the energy industry and if they do there’s a LOT of potential upside from here. We nibbled some SMR yesterday even as it was quite hard to do it. You’ve heard me say many times before over the years that the hardest trade is usually the best one.
Q. What do you think the likelihood that the space stocks experience a similar run-up that the AI stocks experienced earlier this year? That’s not why we own the companies (obviously) but can see the FOMO traders having this in their sights.
A. If/when SpaceX’s Starship successfully gets to orbit and/or if/when SpaceX’s Starlink subsidiary goes public with a $50-100 billion valuation and doubles the first week or two, I think Space Revolution Stocks could go parabolic. That’s probably a few months away though. The space stocks could start running higher in anticipation of those events as they get closer to happening.
Q. RKLB up almost 9% today. Any news driving this move?
A. Not that I could find. But I still think Boeing, Lockheed and/or the government of Australia or England or someone should come offer $20 a share for Rocket Lab while they have the chance. The company thinks they can create more value by being independent for the next decade or two but a $20-a-share buyout offer in 2023 would be hard to turn down.
Q. WOLF popped 10% with the broader NASDAQ rally. Anything to this outsized move?
A. Wolf had sold off hard to below $40 and now has rallied big off those lows. The company needs to execute and get their factories up and running and sell more product to get this stock higher. I’m anxious to see and hear their next earnings report in August.
Q. Morning, lots of higher target prices on UBER hope that is not the kiss of death?
A. Not sure it’s a kiss of death, but I always prefer analysts hate my long ideas and just this morning Bryce was talking about how his dad had told him yesterday that he’d seen an analyst up his price target to like $80 and how that was worrisome LOL.
Q. SEDG has been range-bound for almost three years. What will be the catalyst to get it going again?
A. Solar stocks got into a bubble as I’d noted a couple times when I was shorting solar stocks like FSLR, ENPH, RUN and SPWR off and on over the last year or so. SEDG is one of the best solar companies on the planet and it will likely keep growing over time and the stock will go higher if they execute. We’ve owned SEDG since it was MUCH MUCH lower years ago and still hold onto it.
Q. I’m trying to build a college fund for my 1-year-old great niece. Which five stocks should I start with?
A. That’s nice of you. I’d start with TSLA, RKLB, GOOG, SMR and INTC. Maybe some Bitcoin too.
Q. What do you think about Gateway Spaceport LLC and their plan to quickly scale space stations production? Too early to tell?
A. Yes too early to tell. It’s amazing how many space startups there are out there in the US (and to a lesser extent, globally) right now. I speak to space startups every week but still don’t know all of them. Axiom Space is probably the leading space station company in the US but Gateway Spaceport looks quite interesting and I’ll have Bryce reach out to them and try to set us up a meeting.
Q. Quick looksie please, on JOBY & ACHR. Revolutionary companies. Executing well. Well financed. Big-name partners. Getting FAA/regulatory support. Meeting milestones. JOBY making big news today. When would TwC give the nod of approval? VTOL stocks were hated last year, soon to be loved. Granted they also have lots of skeptics but so did Tesla. Thank you, KH.
A. JOBY has always looked interesting to me and I think it’s probably the best EVAV/VTOL company out there but it has no revenues and won’t for a while. I think ACHR is very risky. We actually coincidentally started doing a bunch of work on these names last week but are still doing homework on the sector and I won’t let us be FOMO’d into buying them. We’ll let our subscribers know if we ever end up doing anything.
Q. Do you still have a position in SHOP, and if so, what is your outlook for the stock?
A. I sold it as noted in a Trade Alert a few weeks ago. It’s a great company, a neat platform and if you don’t mind that it’s Canadian, it might turn out to be a great long-term investment.
Q. Is there a point in trimming if you own less than 20 shares.
A. It depends on the price of the stock, I suppose. If you own 20 shares of a $5 stock, I’d probably not sell any of it. If you own 20 shares of a $100,000 stock, it can be smart to trim some.
Q. I see ASTS is having another stock offering and it’s tanked the price. Do you think RKLB may do this and cause a drop like this? Do you think they can build Nuetron without an offering to raise the money needed?
A. I don’t think ASTS is a good company or that it will survive long-term. On the other hand, I think Rocket Lab will make it and I don’t think they’ll have to raise money to make Neutron work though they might do so to give themselves some safety margin. I don’t think the market would tank RKLB 30% on that news like it did to ASTS today but it would probably be down 10-15% on the day they announce such a raise if they do.
Q. Have you checked out the Start Engine platform at all (startengine.com)? Curious if so, any companies you like? WIGL has my attention and I would love your thoughts on them if possible. I respect if this may be too far outside the lines you comment and provide feedback on.
A. I just went to their website and I’ll take a look further later and let you know if we do anything.
Q. Cody and Bryce, it was an absolute pleasure to meet you both in person in Albuquerque last week. I hope your golf game was on point when you played. Your investment knowledge has been a blessing to many of us in the military. I can’t thank you enough for providing us with the opportunity to see what you do. When you asked if I bought Tesla when you first called it a buy, I could see in your eyes how much you want all your subscribers to win right along with you. Your attitude is contagious, even through a chat room or an email. Don’t stop being you even when the markets are struggling and the world is trying to figure out if it should shut down. (Bryce, anyone can learn investing fundamentals, do your best to learn Cody’s attitude and passion and you will do well.) You have taught me a lot about investing over the year but I am most thankful for showing me that emotion is not in my best interest if I want to be objective and to follow a plan. Thank you for your service. I truly mean that. My son has shown your autograph to everyone we have met since then. Haha. Hopefully, I can get him more interested in investing now. Thank you. JC.
A. It’s been a while since someone approached me and said, “I know who you are.” I like to say that I used to be almost famous and that happened a lot more often when I was on TV. Thanks for the kind words and thanks for serving our country and helping to try to keep us safe. Your family was beautiful and it was fun to run into you guys that night. Peace, grace and love to you.
Here’s the picture JC, his son, and I took last week in Albuquerque:
Thanks all, that’s a wrap!
