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Apple Earnings Preview, Avoiding Jack Dorsey, Toyota Survivorship, And More

Cody Willard

02 Nov 2023 — 37 min read

Here’s the transcript from this week’s Livestreamed Q&A Chat, hosted by Cabana Crypto, a subscriber who has been reading my stuff for more than 20 years. You can watch a replay of this video here. Thank you, Cabana.

We missed a couple questions from the chat room during the livestream, so I’m adding them to the top here.

Q. In your new semiconductor book‘s disclosures, I noticed you had mentioned trade disclosures in mu, avgo, wdc, stx, sgh, aosl, amd. Is this also for the personal account and will we be getting trades updates on these positions if we put them on? Thank you.

A. In the hedge fund, we have had puts on Micron (MU), Broadcom (AVGO), Seagate (STX), Smart Global (SGH), Alpha and Omega (AOSL) and AMD (AMD) as hedges for our semiconductor long names and disclosed that when we published the book. We locked in profits on some of those that tanked in the days after our book was published. We didn’t have puts or shorts on any of those in our personal accounts. In the hedge fund, we currently have some puts on AVGO and STX and a tiny bit of remaining puts on MU and AMD that I expect will expire worthless in the next couple weeks and won’t be renewed. I don’t have any puts or shorts in our personal accounts and haven’t in a long time.

Q. I’m sure most subs down in size on MP, INTC, RKLB, BLDE, HOOD, SMR, RIVN. It will be a long road back for these.

A. MP Materials (MP) and Rivian (RIVN) are still both up from our initial Trade Alerts on those although we did pound the table on MP at higher levels and I obviously regret that. We did take some profits on MP at much higher levels and we did remind subscribers repeatedly to trim some RIVN after it doubled off our buying levels. Robin Hood (HOOD) is down about 10% from our initial Trade Alert and I’m still a believer in that one. Rocket Lab (RKLB) has been a disaster for a while now even as we did take a few profits after it popped soon after we bought it and I’m worried that SpaceX is a competitor killer. Intel (INTC), Nuscale (SMR) and Blade (BLDE) are all down since we first bough them but INTC’s come back nicely from its lows. INTC is still one of my and the hedge fund’s biggest positions. SMR and BLDE are small positions and are speculative, unprofitable small cap companies. I’ve been pretty clear that we need to consider them to be like Venture Capital kind of investments that have binary outcome potential: Either they go to $0 or they work out long-term as big winners, both need their stock to go back up so that they can raise some more money at some point. Mea culpa on SMR and BLDE so far, for sure.

Q. I’m sure most subs down in size on MP, INTC, RKLB, BLDE, HOOD, SMR, RIVN. It will be a long road back for these.

A. In the hedge fund, we have had puts on MU, AVGO, STX, SGH, AOSL and AMD as hedges for our semiconductor long names and disclosed that when we published the book. We locked in profits on some of those that tanked in the days after our book was published. We didn’t have puts or shorts on any of those in our personal accounts. In the hedge fund, we currently have some puts on AVGO and STX and a tiny bit of remaining puts on MU and AMD that I expect will expire worthless in the next couple weeks and won’t be renewed. I don’t have any puts or shorts in our personal accounts and haven’t in a long time.

Cabana Crypto:
Well, we do have plenty of questions that are coming into the tradingwithcody.com chatroom, so we have a bunch queued up. Feel free if you are watching to add those to the YouTube chat, we will pull those up here. You want to just dive right in, Cody, I know you try to keep it about an hour plus, your answers can be pretty in-depth sometimes.

Cody Willard:
Yeah. When I do these video calls, my answers are a little bit lengthier than when I type it. So, here’s Bryce. I need the cowboy hat today Bryce. Yeah, I think that’d look nice. See, I used to tell people when I lived in New York that I was a New Mexico cowboy and by New York standards that was a hundred percent true, because I’ve ridden horses, I ride horses occasionally. But I don’t have a pair of cowboy boots and I don’t have a cowboy hat. Bryce on the other hand, literally had to ask me for Friday off so that he can go run a bunch of cattle.

Cabana Crypto:
Excellent.

Cody Willard:
For his father. They are real cowboys. They run cattle. I tell Bryce next time we do a Zoom call, I want you to throw the hat on.

Cabana Crypto:
I should have grabbed mine.

Cody Willard:
You have a cowboy hat?

Cabana Crypto:
But yeah, I don’t run… I got a cowboy hat and boots. I got multiple pairs of boots, but I’ve just ridden horses in the past. I live around farmland, but I do not herd cattle myself.

Cody Willard:
Yeah, see so you’re like me, you’re a maybe-

Cabana Crypto:
Pseudo, yeah.

Cody Willard:
Pseudo cowboy. They used to call him an urban cowboy, I believe John Travolta and Debra Winger.

Cabana Crypto:
Great movie.

Cody Willard:
It was.

Cabana Crypto:
Johnny Lee, Looking for Love, in all the wrong places. That was my first favorite song as a wee little Cabana boy.

Cody Willard:
I don’t think I’ve ever actually seen the movie by the way. I just know it. I had the Urban Chip Monk album, which took all of the number one hits from Urban Cowboy and other country songs like The Gambler and did it in Theodore, Simon, and who’s the third chipmunk Bryce?

Cabana Crypto:
Alvin.

Cody Willard:
Alvin. Thank you.

Cabana Crypto:
Alvin. All right.

Cody Willard:
All right, so let’s jump in. Now that we’ve done the silliness, let’s do some questions.

Cabana Crypto:
Let’s go to the chat. So, @Kayanks16 asks, could you please expand on the bull case for STM, which is a very recent edition to the portfolio, I believe. Where’s this one rated? I see it had a seven rating when the share price was about 43.

Cody Willard:
Yeah, so what is it now about 39?

Cabana Crypto:
Yeah, I’m going to look that up.

Cody Willard:
Let me pull it up here.
STM is 38.30 as I speak.
So look, there’s several factors that we like about STM. Specifically, they are not completely fabless. Bryce and I just published a book. If you’re watching, go to Amazon and type in The Great Semiconductor Shift. We just published a book last week about this great semiconductor shift, which is the idea that companies like Apple, Amazon, Google, Meta, Tesla, have gotten big enough, rich enough and have enough smart engineers on staff and/or that they can hire such that they can start designing their own chips. We’ve seen Tesla do this for years. Apple started doing it about two or three years when they replaced the Intel chip in their computer with the M1 chip designed by Apple. And that is, it’s a very early trend. I don’t think most analysts on Wall Street are even paying attention to the fact that Avago/Broadcom, NVIDIA, AMD, who are some of the other big fabless guys, Bryce?

Bryce:
Did you say Qualcomm, MediaTek?

Cody Willard:
Qualcomm, MediaTek. Companies who do not have their own factory. In semiconductor lingo, it’s called a fab. And if you don’t own your own factory to actually make the chips that you’re selling, your customers, if they include the biggest chip buyers in the world like Meta, Apple, Amazon, Google, and Tesla, these customers are going to start designing their chips without you. It saves themselves billions of dollars because NVIDIA, AMD and these others are marking up their chips with 60, 70% gross margins, as big as margins obviously as they can get away with. Avago tries to raise prices of any company, once it acquires a company, it jacks the prices and cuts the R&D, and that is not a sustainable model. You need to own your own factory if you want to have a competitive edge in five years or 10 years, especially on the very highest end chips.
So STM owns its own fabs. Another reason we like it a lot is I think the silicon carbide technology, a new base element that they build the chips out of instead of using silicon, companies like STM, Onsemi, Wolfspeed are focused on creating silicon carbide chips and I think that they’re much more efficient and the energy transfer in and out of them is more efficient. The bits and bytes that go in and out of those silicon carbide chips are more efficient. So we’re trying to get in front of the silicon carbide chip. On an STM are the only two that are actually pulling off making and growing their silicon carbide business into multi-billion dollar businesses right now. Wolfspeed has had problems ramping up their capacity.
So STMs hitting on a lot of cylinders. And then I would finally add, I think the thing that tipped the scale for me from being like, oh yeah, I like the stock, which say in Onsemi, I like the stock, but what makes me actually buy STM here as a long-term investment that I hope to own forever is they count Tesla and SpaceX as two of their largest customers and they are the only silicon carbide industry semiconductor who can say that.

Bryce:
I would just add too, that Tesla is designing its own chips, but it’s probably not going to design its own power and analog chips. They’re probably going to focus on the logic side, like what they would be buying from NVIDIA or Intel, because you would think that might be contradictory to our big picture in our book.

Cody Willard:
Yeah, that’s right. So STMs products are probably not going to get designed out of the Tesla cars or robots.

Cabana Crypto:
There you go. And speaking of fabs I guess, another tradingwithcody.com name now that’s just top of mind, Intel has been performing rather well lately. You have a take on that quarter? I guess the dream is to have them going full bore fab and being one of the next TSMC or something like that.

Cody Willard:
That is the hope and that they can pull that off. There’s the on-shoring revolution where the United States has recognized that the entire supply chain that they’ve been depending upon China and Vietnam and Taiwan and South Korea to bring on chips and technologies and finished products for decades frankly, it doesn’t work anymore. And so there is an on-shoring revolution where they’re even making underwear in the United States, is going to happen again in several years. But specifically the semiconductor industry is so crucial for defense, for military defense, for the United States to feel secure. For our Tesla, Apple, Google products to work we need the most advanced chips and the only place that we’ve been able to get them until recently has been Taiwan with Taiwan Semiconductor, TSMC. And Intel, the whole reason I’ve been investing in Intel for the last year and a half, two years, and built that into one of my largest positions in the hedge fund and in my personal account frankly, is because we have to get out of Taiwan.
We can’t be dependent upon Taiwan for the most advanced semiconductors that run our world, our society and our defense. And so Intel is the only one that can compete against Taiwan Semiconductor in the United States. Samsung can do it in South Korea, but again, you’ve got an existential threat to that supply chain at any time, and so you want to have your chips made in Arizona, not in Taiwan, and within about sometime next year, Intel will be making some of the most advanced chips on the planet here on the American soil, not just their own chips, but Intel is pivoted to making chips for all these other companies including Google, Apple, Amazon, Tesla, Meta. They haven’t announced these customers yet. Intel has said what? They’ve got three of the who’s who of them, so it’s probably NVIDIA, Apple, maybe Google, Qualcomm. But yeah, you would expect within the next two years that Intel has 20 of the biggest chip buying and/or chip vending companies on the planet using fabs from Intel.

Cabana Crypto:
So would you say smartphones and PCs, a lot of people were like, oh, well, PC numbers were great. That’s cool and all for right now, but the needle mover will be, I guess the fab going forward years from now. Is that fair to say?

Cody Willard:
That’s right. Intel’s got several levers here. They probably are starting to take some market share back from AMD in the central processing unit, the computer chips that run the Mac I’m talking on right now, well, not the Mac I’m talking on, it’s an M2 on this one, but those types of central processing units, they’re probably taking some market share from AMD again, maybe they’ll start taking some market share in the data center. There is the AI chip called the Gaudi that Intel makes that has started taking market share or at least competing. I don’t think that anyone’s taking market share from NVIDIA at this moment, but it is successfully competing against NVIDIA with these AI chips, the Gaudi, and so you’ve got a lot of moving parts for sure at Intel. There’s even the MobileEye self-driving unit that they still own 85% of the company. They floated a little bit to the public last year. You’ve got the FPGA, filled programmable graphic, FPGA.

Bryce:
Gate array.

Cody Willard:
Gate array. Thanks Bryce. He just wrote a book on semiconductors. He’s got the terms in his mind. The FGPA business at Intel is going to get spun out in an IPO at some point next year, so there’s a lot of moving parts, but I think Intel’s winning on most of those moving parts. I’ve got a lot of faith and one of the reasons I bought Intel from the beginning was because Pat Gelsinger, the CEO, had come back to the company. He’s the guy who originally created and designed the x86 central processing unit that runs most every computer in the world and even AMD has to license x86 technology from Intel to make their CPUs. This is the guy who created it and then he went over to VMware and turned that into a multi $10 billion juggernaut, very successful, profitable company. I think he’s going to do it here at Intel.

Cabana Crypto:
Well, shareholders would rejoice at that fact.

Cody Willard:
It’s true.

Cabana Crypto:
We have plenty of questions queued up here in the chat. I see Vince and Derek tried to join. It looks like a technical error, but if you are in the YouTube chat just to the right of us there, feel free anybody to type your question. We have a decent amount of viewers since this was published on the Trading with Cody site as well. If you’re in the chat room on the site, we are monitoring that as well for questions, so please post them there. We got another 45 minutes and we’re going to get to the next one. From @clbreasseale, what is your short term view on Square SQ, Shopify, Shop and PayPal PYPL?

Cody Willard:
I think Square is a fantastic buy as a trade right here right now. I’ve said for the last year or so that after learning about how Jack Dorsey was running Twitter behind the scenes before Elon bought the company, I will never invest in another Jack Dorsey company so long as I live and I plan to stick by that right now. Can’t stand the guy. I think he’s a total hypocrite and not necessarily saying what he means whenever he’s talking, and so I think Square’s probably a great trade at 39, 40 bucks or whatever it is right now, down 50% from its recent 52-week-high and down, I don’t know, probably 75, 80% from its all time high. We just actually ran some numbers on that this morning. I asked Bryce to run our numbers through what I call my winner ratio and look at what the profits five years from now on some conservative assumptions and it was like a five price to profits price right now.
The price right now is five times what the profits in five years will be, and that’s pretty good buy if they can pull that off. But again, I don’t want Jack Dorsey in my life, so I’m not doing that one. Shopify again, this one is a great company. It is a Canadian company, which I’ve never really successfully invested in a Canadian company for the long-term, so I think it probably has a little bit of a Canadian discount anyway here. But yeah, if you’re going to put my feet to fire, I’d rather buy Shopify than sell it both as a trade and/or as a long-term investment. It’s a great product if you want to build your website or a shop on the internet, it’s a great way to go about doing it. PayPal. PayPal is a utility. I use it at Trading With Cody, I’m locked in to PayPal. I hate the service, I hate how much they charge me and they piss me off all the time.

Cabana Crypto:
I hate the chart.

Cody Willard:
Yeah, there you go. But I’m locked in. It’s not like I’m going to go rebuild my Trading With Cody payment system and ask everybody who subscribes to it to put their credit card in at a different spot than the PayPal place that we’ve used for 12, 13 years that I’ve had Trading With Cody. But PayPal, again, looking at that chart and seeing where it’s at right now, long-term investment, it’s not like this is a bad company or something. I would rather buy it than sell it at this moment from a trade perspective or from an investment perspective. I do not have a position in PayPal, Shopify, or Square at this moment, any of the three, but I’d rather be long than short, any of them, even with the Jack Dorsey factor.

Cabana Crypto:
Interesting. Next up, a space related question. Speaking of space, the SKTLs call, SKTLs cryptocurrency call is right after this one, so hop on over from this show to that one if you’d like to join us for crypto and Space news. All right, @dskeula asks, any pre-analysis with Rocket Lab earnings coming up as most of us here have pretty big positions in this name?

Cody Willard:
Look, I’ve been saying for the last month, what happened most recently, look, Rocket Lab is… Let me back up. Rocket Lab is one of the maybe handful of entities on this entire planet that can successfully repeatedly send satellites to space. So that is a unique and important and valuable thing to have. Rocket Lab most recently had one of their rocket ships blow up before it got satellites for their customer to space and the FCC… Is that who does it? Who’s the company?

Bryce:
FAA.

Cody Willard:
FAA, thanks.

Bryce:
Gives them the license.

Cody Willard:
The FAA stepped in and said, look, we’re going to have to investigate what happened before you can launch again. Then was it last week the FAA came out and said, yeah, you guys are good to go, green light for the next launch, go ahead. And so that’s all good. I’ve been saying for the last month I want to get through this next earnings report and hear, what’s the CEO?

Bryce:
Peter Beck.

Cody Willard:
I want to hear what Peter Beck has to say about near term trends, near term ability to get the launch cadence up. They’re supposed to launch how many times this year? 12 or 13 and they’re not going to make it.

Bryce:
Yeah, I think they were shooting for 20 or something, weren’t they?

Cody Willard:
Yeah, whatever it is, they’re not going to make the cadence that they were hoping for this year. I’d like to hear what next year expectations are. So I don’t think the stock trades off in earnings report much anyway, so this is a speculative long-term space play that is competing against the 800 pound gorilla named SpaceX. As I’ve said all along, I think Boeing or Lockheed Martin or even the country of Australia or something like that should come and just buy Rocket Lab. Another thing to keep in mind, Rocket Lab’s entire market cap is equal to the price of two United Launch Alliance launches. The ULA costs more than a billion dollars to send stuff to space. You can buy the entire company of Rocket Lab for two or three, well, if you’re going to have to pay a premium, so call it $5 billion. Next question.

Cabana Crypto:
Next question. Speaking of questions, we need more questions because-

Cody Willard:
I’ve got questions in the email too.

Cabana Crypto:
Okay, great. So we can look at those here. Next one is from @FrustratedBull. What are your thoughts on Apple going into earnings? Personally, I have older generation Watch Ultra, iPhone 13 and 2021 MacBook Air. I have no interest in upgrading. I’m just a sample of one, but I wonder if this is a widespread sort of idea to hold off on larger purchases?

Cody Willard:
Look, I do think there’s a rich session instead of a recession, a rich session. I think wealthy people… By the way, you’re frozen Cabana. I think wealthy people are feeling the pinch right now. I think middle class people are feeling the pinch right now. I think poorer people have been feeling the pinch for months already anyway with inflation having skyrocketed like it has over the last year or two. So I think there is sort of a consumer recession percolating. This underscores some of that and Tim Apple/Tim Cook, the CEO of Apple is a great operator and a very conservative, boring manager of a formerly exciting, innovative, revolutionary company. I’ve owned Apple since 20 cents a share in 2003 personally, and I still own it and I’m not selling it, but I’m not excited about it here.
It’s overvalued. I think the market cap, the valuation here with the price to earnings ratio of like 25 at this moment is too rich even. I think 15 to 20 price to earnings ratio would be a more balanced, reasonable place for the stock to trade. So look, I wouldn’t go out and buy a bunch of puts or bet against Apple not delivering here. I think China demand for iPhones is better than most people expect and the upgrade cycle for the iPhone 15 is like all of them, going to have people that have their old iPhone for the last five or seven years and you’re going to have an upgrade cycle with some of those people. I’m not planning to, I’ve got the 14 plus or whatever and I’m not upgrading either.

Cabana Crypto:
Yeah, I haven’t upgraded for a few years and I’m quite surprised maybe that the devices are still, they haven’t had the cycle end glitches that you’re used to that. Oh my goodness.

Cody Willard:
Battery dies every time within a day and stuff.

Cabana Crypto:
Just amazing how that comes around when your term is up.

Cody Willard:
Bryce has what, a five-year-old iPhone yourself probably don’t you Bryce?

Bryce:
12, I think, iPhone 12.

Cody Willard:
And you’re not interested in upgrading?

Bryce:
No, I need a new one. My camera’s kind of broke.

Cody Willard:
Oh, that’s right. So there you go. He might upgrade. He’s a sample of one also. Next question.

Cabana Crypto:
Next question. We see this, maybe it’s Bart who asks this every week. What are your top five buys and top five positions as of today? And I’m going to leave and come back in just to see if I can correct my camera issue. Go ahead.

Cody Willard:
Okay, I’ll keep talking while you’re gone. My top five largest positions in alphabetical order as I like to give it every time would be, we’ll go with the stock symbol alphabetical order, (HOOD)Robinhood, Intel(INTC), Netflix(NFLX), Tesla(TSLA) and Uber(UBER). Oh, look at that. HD and everything.

Cabana Crypto:
Uber or Uber?

Cody Willard:
All right. My top five favorite buys at this moment would probably be, I like GSAT here. This is a dollar stock, don’t be throwing 20% of your fund in GSAT here, but as a small speculative stock. I like Robinhood here. NET, CloudFlare(NET) would be one of my favorites, I’d like that one to be a top five position around here and I’m building it up, bought some today.

Bryce:
You still like Netflix.

Cody Willard:
Still like Netflix here. If you don’t own much, I would, I did sell a little bit. We have a big position in Netflix. I bought a bunch of it before the earnings a month ago as Trading With Cody subscribers know. And then I exercised some of the calls that we had. I still like Netflix a lot here. I’m not buying it today. In fact, I sold a tiny bit of my position just to keep it a little bit balanced in the portfolio. But yeah, there you go. How about SNOW? I’d throw SNOW up there.

Cabana Crypto:
I guess that’s along the lines of CloudFlare. And so far since we’ve put these on in the portfolio, they’ve kind of traded in tandem and I would kind of expect that I guess going forward to an extent.

Cody Willard:
Yeah, all right. Are there more questions in here or you want me to go to the emails?

Cabana Crypto:
I would prepare the emails. I have one more that was just asked in the tradingwithcody.com chats. Any new updates on Upwork, which I think is not part of the portfolio anymore if I’m not mistaken?

Cody Willard:
Wait, I’m sorry. I was-

Cabana Crypto:
Upwork. I think that was sold a couple of months back.

Cody Willard:
Any new updates on Upwork? Look, this is a business that people like us can go and find help trying to figure out how to use artificial intelligence people to help us use artificial intelligence. And so Upwork is a place where companies can go hire people temporarily, part-time and/or you can go find a full-time employee, but Fiverr is its biggest competitor. Both of these stocks have been completely hurt over the last few months. Believe it or not, Trading With Cody subscribers know that we were buying this stock, this Upwork right there at the bottom of that one red candle. If you’d move your mouse over there and show them right there, we send out a trade alert that morning and said we’re buying this thing pre-market while it’s down and by the time it finished that day, it was back up like 20% from those morning lows. We trimmed a little bit along the way, have not bought I don’t think any back at all since then. I’d rather buy it than sell it at this moment, but-

Cabana Crypto:
I think he sold it maybe above 14 or something like that.

Cody Willard:
Yeah, we did send out a trade alert to trim some right near the high-ish. Yeah, we had more than a double within like a month on it. We took some off the table and I still like the business, but this is a bear market for small caps that are unprofitable and that applies to Upwork and some of the other stocks in our portfolio. If you’re a small cap and you’re not generating cash right now, your stock is probably near a 52-week low and Upwork would be one of the few that’s not actually at that level and I’d be a buyer say with an eight handle, I’d be aggressive around six and I’m sitting on a small position at this moment.

Cabana Crypto:
And there you go. That’s the last of the YouTube and chat room questions that I could find. I’m going to scan the chat room one more time.

Cody Willard:
I bet there’s more questions up above that in the chat room.

Cabana Crypto:
That’s where I got them from. Yeah, I encourage everyone. We have 16 now watching, so plenty of people please post your questions here in the chat.

Cody Willard:
I have a question.

Cabana Crypto:
Cody has some email as well.

Cody Willard:
So I just pasted this from the Gmail, the Trading With Cody email. Thoughts on the sell off and did you make it a larger position?

Bryce:
SMR, he’s asking about.

Cody Willard:
That about SMR?

Bryce:
Yeah.

Cody Willard:
Thank you. No, I’ve not been buying SMR either. Look, this is another unprofitable speculative small cap stock that is in a bear market and I don’t know when that will end. I’m a big believer that in the nuclear revolution to power our grid over the next 10, 20, 30 years, this is a company that makes small nuclear modular reactors. SMR, small modular reactors is where that stock symbol comes from. The name of the company is Nuscale, which doesn’t have anything to do with SMR, but look, this is a company that if it works out, it’ll be worth tens of billions of dollars and if it does not work out, it’s a zero. And at three bucks here, if you don’t own any, I’d probably take a look at nibbling a little bit.
I think we started buying around eight or nine, so it’s been very painful and I’m not thrilled with it. I haven’t bailed on it yet, but there’s rarely a day that goes by for the last month that I don’t turn to Bryce at some point and go, I am so sick of SMR or I’m so sick of Rocket Lab or I’m so sick of MP. We’ve got a handful of unprofitable small cap speculative stocks in the portfolio and none of them are working worth a shit right now.

Cabana Crypto:
The Blade as well.

Cody Willard:
There you go. Blade. Yeah, that’s another one I’m about sick to death of. 52 week lows right now as we’re talking.

Cabana Crypto:
Did have another question I found in the chat. This was I guess maybe yesterday, but-

Cody Willard:
Yeah, that’s fine.

Cabana Crypto:
Thoughts on Tesla, it is around still around $200. Are you looking to buy any? Thank you, from @Kayanks16.

Cody Willard:
Get that Nuscale chart off there, bro. I don’t want to look at that.

Cabana Crypto:
There you go.

Cody Willard:
Throw a Tesla chart up there if you would please Cabana. Tesla, we’re buying long-dated call options in the hedge fund here. We have no significant hedge on our Tesla at this moment for the first time in weeks if not months. The stocks, let’s just run through the scoop right there. Look, so the stock peaked out right near Elon’s favorite number of 420 and then it spent the next year almost collapsing down to a hundred dollars, maybe it was 105 at the low in November of last year, and then we came into this year off to the races again, it ran up to like 260 and we’re now back down to 200 below 200, at this very moment I think we’re above 200, 204, up 2%. Woo, woo.
Look, I’m a buyer of Tesla, not a seller at these levels. I’m very excited about the long-term for Tesla. I don’t think I have any higher conviction on a stock I own other than maybe SpaceX, which is a privately held investment anyway, most people cannot buy SpaceX. But the Tesla electric vehicle business is profitable and it’s the only one that can say that that’s not based in China. I don’t think electric vehicles are instantaneously about to take over the world, but I do think the fact that Ford and GM and the rest of these legacy automakers that I’ve been short for most of the last year, that they can’t even figure out how to make an EV that anybody wants much less make it profitable, is a problem for them but a good thing for Tesla. I don’t have any shorts on Ford or GM at this moment anymore as of this week. Maybe late last week we covered the last of them, but you own Tesla for the electric vehicle business certainly, but longer term the company’s got two other trillion dollar kickers in it.
You’re distracting me.

Bryce:
Sorry.

Cody Willard:
Where are you going?
Oh, he’s doing some work as we’re talking.

Cabana Crypto:
He’s answering fan mail.

Cody Willard:
His screen never stops.

Bryce:
I’m not texting.

Cody Willard:
You’ve got the Optimus robot from Tesla that I think is a potential trillion-dollar business, multi-trillion dollar business and you’ve got the Dojo supercomputer from Tesla, which I also think is a multi-trillion dollar potential business in coming say five to 10 years. What nobody is talking about with the Dojo supercomputer is the fact that Elon… And Elon did say this about six months ago, maybe nine months ago in one of the earnings calls or in one of their AI days or whatever. At some point we listened to Elon mentioned that there’s an Amazon Web Services model for the Dojo supercomputer artificial intelligence at some point, where other companies could use the Dojo supercomputers’ artificial intelligence capabilities and machine learning capabilities and large language models to create new services and products in the same way that Netflix uses Amazon Web Services to deliver you video. And I think it is unheralded, much less, it’s not even, no one has even thought of it. Nobody thinks of that at all. Oh, show us the dog Cabana. Where’s that little boy? Come on, get him over here. We want to see the dog.

Cabana Crypto:
He ran out. He is probably chasing the mailman.

Cody Willard:
Oh man. If he comes back, pick him up. There’s nothing better on TV than cute dogs or little kids.

Cabana Crypto:
I shall. Just Tesla for a minute. I forget where I saw it mentioned, they were talking autos, it was some podcast I think and the guests raised the point or the prediction in the next say 10 years I think the timeframe was, that the only surviving two US automakers would be Tesla and Toyota. Do you see any validity in that or is that a possibility at all?

Cody Willard:
I would push back on Toyota being an American company.

Cabana Crypto:
Fair.

Cody Willard:
But other than that, no.

Cabana Crypto:
They’re made in Kentucky, but yeah.

Cody Willard:
Yeah, right. So they do build the cars in the United States or much of the cars in the United States, but technically it’s based in Japan. Toyota smartly did not go all in betting tens of billions of dollars on making shitty electric vehicles that nobody wants, unlike GM and Ford who did spend tens of billions of dollars promising the world that they could somehow compete profitably against Tesla on electric vehicles that people would want. If you have not driven a Mach-E or a Forward Lightning, I would invite you to go suffer through trying to do so. The software sucks, the cars are fine, but the software is old school and you can’t get over the air updates and it’s not all tied in.
One of the many things about my Tesla that I love, that product itself, is not just that it can get these over the air updates and improve and create new features and do things like that over time and you get new video games you can play in while you’re sitting in it charging or whatever. That stuff’s all cool, but it’s tied in where they’re like, Hey, we need to recall the car because the trunk doesn’t close right. And they’re like, yeah, we’ll send you out a software update. Because Tesla designed that car from the ground up… Oh yeah, there’s a cute doggie. Yeah, that’s good TV right there.
Oh, geez. Come here boy. Come on. That’s a good boy right there. Oh yeah,

Bryce:
I can’t hear you.

Cody Willard:
You guys are muted.

Cabana Crypto:
I was going to say I could put headphones on him, but I don’t think he would know what was going on.

Cody Willard:
That’s too bad. Good boy.

Bryce:
Cool dog.

Cody Willard:
Yeah, beautiful. And Bryce doesn’t even like dogs, so that must really be a cool dog.
Look, the Tesla fact that they designed the car from the ground up to be completely integrated. And another example of how that worked was when Ford and GM couldn’t get some of the chips they needed for their cars last year, even their old legacy ice cars, they were like, ah, we’ll have to shut down the factory. And Elon and Tesla were like, Hey, you know those other chips that we can get? Let’s build some software that’ll integrate that into our car and put it in and keep selling. And they kept going right on, nobody could tell the difference and that’s because the car is designed from the ground up as a computer on wheels that eventually will be full self-driving. When Ford and GM are like, Hey, let’s take our old-fashioned F-150 model, pull out the motor and throw some batteries in there, put a new screen, make it a little bigger, we’ll make the screen bigger, and you know what, we should have some USBC chargers, that’s revolutionary.

Cabana Crypto:
How about a cigarette lighter?

Cody Willard:
Oh, those cigarette lighters are cool, man.

Cabana Crypto:
Nice.

Cody Willard:
I saw a picture on Twitter the other day of a 1950s car that had a coffee maker in it. Make yourself some coffee while you’re driving down the road.

Cabana Crypto:
That’s safe. Did you happen to see Joe Rogan shoot an arrow at the Cybertruck?

Cody Willard:
I did. Did you see that last night, Bryce?

Bryce:
Yeah.

Cody Willard:
Yeah. Amazing. It was just cool. That’s just fucking cool to begin with. Sorry for the F-bomb, but that was just fricking cool. Yeah, show that.

Bryce:
It’s Joe Rogan?

Cody Willard:
Yeah.

Bryce:
Oh, I didn’t know it was Joe Rogan.

Cody Willard:
And it leaves a tiny little scratch. Yeah, so yesterday Elon was on Joe Rogan’s show again and apparently he had driven his Cybertruck to the show and Joe was like, he was like, Hey, would it withstand an arrow?

Cabana Crypto:
They had a bet for a whole dollar.

Cody Willard:
And Elon was like, yeah, I bet you it would. He is like, I bet you a dollar. And they were like, I wish we could do it right now. And Elon was like, well send someone to go get your arrow. I got the car.

Cabana Crypto:
Come shoot my truck.

Cody Willard:
They cut over and Joe shoots that arrow and Joe’s not a small dude. That guy’s lifting weights, right? And that thing, and he talked after, he said it was like, I don’t know, 10 grains or something. I don’t know how you measure the force of an arrow, but it was apparently like a really powerful arrow and a really powerful bow that he shot. You saw it. That thing was not quite bullet speed but not not bullet speed. I wouldn’t want to be in front of that arrow and it barely left a dent on that car. I can’t wait to get my Cybertruck. I’ve said all along, I think the Cybertruck will be the best-selling vehicle in the history of our planet and on Mars.

Cabana Crypto:
Full bulletproof or just everything but the glass for you?

Cody Willard:
Oh, full bulletproof. It has to be full bulletproof. I don’t think they’ll sell it without bulletproof glass.

Cabana Crypto:
Well the glass, you can’t wind down the glass if it’s bulletproof because it has to be such a thickness. I think that’s what Elon was saying yesterday.

Cody Willard:
I didn’t see that part.

Cabana Crypto:
Yeah, I think that was close to beginning when they were talking.

Cody Willard:
I live in New Mexico, I’m going to need to be able to roll the windows down at some point. If you lived in New York City, sometimes-

Cabana Crypto:
Drive-through would be a pain as well.

Cody Willard:
You drove that car 99% of the time in New York City, you don’t want to roll it down because New York City doesn’t always smell that great, but out here in New Mexico you have pine and after a rain you want those windows down, you want to fill the wind in your hair. Yeah, so apparently no, I will have the not full bulletproof glass.

Cabana Crypto:
But a more functioning window I guess.

Bryce:
Do you want to talk about what Elon talked about, the difficulty manufacturing it and if that has implications? I think yesterday he said it would only be maybe 200,000 units instead of 250.

Cody Willard:
And that’s a bit of a near term rounding error, like 200,000, 250,000. It is what it is. The truck itself is a completely revolutionary design with an exoskeleton and nobody’s ever made a vehicle like that. I guess maybe the closest parallel to that vehicle is the SpaceX Starship, and nobody’s done this on a massive scale where you’re making hundreds of thousands.

Bryce:
Wasn’t the DeLorean stainless steel? I thought I saw that it-

Cody Willard:
It was.

Bryce:
Back To the Future and then they remade it.

Cody Willard:
And frankly the Cybertruck sort looks like an updated DeLorean in a truck design. I don’t have any problem with that. The DeLorean’s like the coolest car ever.

Cabana Crypto:
Do the doors come out?

Cody Willard:
Yeah, the butterfly doors and that’s where he got the idea for the X doors I’m sure too. Look, if there is anyone who’s going to figure out how to make millions of Cybertrucks, it’s Tesla and I wouldn’t want to be Rivian if you’re betting on the Cybertruck failing. I think there’s room for both Rivian and the Cybertruck. I don’t know that the F-150 Lightning is going to ever really be successful.

Cabana Crypto:
Do you think, I guess since you mentioned it, do you think Rivian ends up surviving? Amazon I guess has some sort of faith in them because they buy them for their fleet, but I mean there has to be more than that. And as you’ve said many times, competing against Tesla is very, very, very hard.

Cody Willard:
Yeah, Rivian, we’ve owned Rivian since it was about 13, $14 and we took some profits when it popped into the mid-twenties and we still own some. It’s not a terribly big position, but it’s not a tiny position either. I could almost lose some sleep over Rivian trying to compete against the Cybertruck. Yeah, that’s not going to be easy.

Bryce:
We did test-drive a Rivian when we were in New York and we both, I loved it.

Cody Willard:
It was awesome. Yeah, it was great, what I liked about the Rivian better than even, I have the Tesla Model S Plaid from last year and it’s supposed to be Tesla’s highest end car, right? But you get into a Mercedes or a high-end Beemer or something and it feels luxurious and the Model S, for as much as I love it, does not feel luxurious. The Rivian, it felt almost luxurious and not quite a 750 BMW, but call it a 550 BMW. It was a nice, really nice interior and for 80,000 bucks, it’s luxurious for that kind of a price.

Cabana Crypto:
How many questions do you have? I have one more.

Cody Willard:
They were all about SMR, so I think we answered that.

Cabana Crypto:
All right, well since we’re on the topic of Elon, slight pivot mentioning crypto. @dd would like to know, would you ever consider buying some Dogecoin due to the Elon effect, I.e., he promised to take it to the moon a long time ago? Thank you.

Cody Willard:
I don’t know if he promised to take it to the moon.

Cabana Crypto:
I don’t think he did.

Cody Willard:
I think he was in a Saturday Night Live skit when he said, Dogecoin to the moon. So I don’t know that we should truly take that as a promise.

Cabana Crypto:
Was the top I believe, as well.

Cody Willard:
It was a hundred percent the top. That Saturday night was when Dogecoin topped.

Cabana Crypto:
Yeah. A friend of mine had asked me, I think that Friday, he was like, should I get into Doge, Elon’s going to be on Saturday Night Live. And I’m like, this just smells like the top man.

Cody Willard:
In Trading With Cody chatroom, we had on the transcript that week, I was quoted as saying, “No, this would be a sell the news setup, not a buy the news setup”. And so yeah, that thing got sold hard since then. It’s down like 90% off those highs from that Saturday. Look, you take a little bit of speculative crypto capital and the there are two cryptos I own, that is Bitcoin, which I’ve owned for 10 years and SKTLs, the space debris cleaning cryptocurrency that I helped create and make, no founder tokens, I had to buy them. But those are the only two cryptos I own.
I don’t own very much dollar amount of the SKTLs, the Bitcoin I have a bigger amount, but the only other one I would ever consider buying would be Doge and it would be only because of the Elon effect. So yes, to answer your question, I don’t know that I would ever consider buying Doge coins due to the Elon effect, but if I were ever to buy Doge, it would be because of the Elon effect and Doge would be the only cryptocurrency that’s not named Bitcoin that I would consider buying.

Bryce:
When would you buy Doge do you think?

Cody Willard:
I don’t know. Apparently I don’t really want to because I don’t have a good idea for that specific part of the question.

Cabana Crypto:
You could pack a small moon bag here at the bottom for six or 7 cents.

Bryce:
6 cents. Is that the price?

Cabana Crypto:
Yeah, 7 cents-ish.

Cody Willard:
And what it was 80 cents or something at the top?

Cabana Crypto:
Yeah, this is a Coinbase chart, but yeah, it was higher than that.

Cody Willard:
So look, I don’t have an answer of when I would buy Doge. Someday, maybe lower from here. Stick with Bitcoin.

Cabana Crypto:
Well, any comments on Bitcoin? We have about 10 minutes left and I’m still looking for some questions. Oh, I got another one here in the chat I will pull up here too.

Cody Willard:
All right, I’ll hit on Bitcoin real quick. Look, we were big buyers of Bitcoin in the hedge fund a month ago, two months ago. I wrote about it for Trading With Cody in that weekly question I get in the chat lately where someone every week seems to, I don’t think it’s usually Bart, but someone every week is asking me, what are my top five buys? What are my top five largest positions? For two or three weeks, I said Bitcoin, Bitcoin was one of my top five favorite things to buy. That is not the case at this moment. We’ve had a nice little rally on it. I’ve trimmed a little actually, but yeah, still long-term, all currency roads lead to Bitcoin. So you stick with the Bitcoin.

Cabana Crypto:
I did notice that you did not mention Ethereum in your cryptos that you own. Any particular reason? Just lack of scalability, promise. Vitalik, dumping every now and then. Any particular reason?

Cody Willard:
I don’t trust Vitalik.

Cabana Crypto:
That’s Buterin, the founder for those out there.

Cody Willard:
Look, Bitcoin has, its premise was to be an alternative currency to Fiat currencies and I understand and get why that’s a powerful thing with an open source ledger blockchain. The Ethereum, it’s partly a supercomputer concept. It’s got utility, not just a currency, which I suppose could be a bullish point, but I feel like the world’s past Ethereum buy frankly. And yeah, I’m not interested in owning Ethereum probably at any price.

Cabana Crypto:
There you go.

Cody Willard:
Do you own Ethereum Bryce? I take it back. I think-

Bryce:
I know what you’re going to say.

Cody Willard:
At the top three years ago-

Cabana Crypto:
Oh boy.

Cody Willard:
Bryce gave all of us in my family $20 worth of Ethereum as a gift. That was his Christmas gift.

Cabana Crypto:
When it was at 14.20?

Cody Willard:
Yeah, literally it was like the week it topped and so it’s worth about $5 now. So I have $5 of Ethereum.

Cabana Crypto:
Well it should be back to where it was now, we’re past the top again. So it went down to like 88 bucks.

Bryce:
I think it was two years ago.

Cody Willard:
Whatever. It hasn’t come back dude.

Bryce:
It was the top.

Cabana Crypto:
Oh, okay, so the recent top like 4,000 or something like that?

Bryce:
Yes.

Cabana Crypto:
Okay, gotcha, gotcha.

Cody Willard:
Yeah, like 4,644.

Bryce:
No it wasn’t.

Cody Willard:
Okay, it was 2021.

Bryce:
It was the next year.

Cabana Crypto:
Close to 5,000.

Cody Willard:
No, it wasn’t Bryce. I’ll pull that email up. I’ll do it right now. Don’t make me pull that email up, Bryce.

Bryce:
To be fair, we were told to give gag gifts to 20 people and I couldn’t think of 20 gag gifts. I was like, you know what, I’m going to give $20 in crypto.

Cody Willard:
And he did and it was funny to give that to his grandma and she was like, what? She didn’t get it at all. I thought it was funny. I was like, hey thanks man. I’ll actually keep this.

Bryce:
And my other point is, you could have sold it.

Cabana Crypto:
Right away.

Bryce:
You could have sold it and had $20.

Cabana Crypto:
Because it is literally right where the top of this down trend is.

Cody Willard:
You are absolutely right, could have bought a Happy Meal with that two, three years ago.

Cabana Crypto:
It’s turned into from the Red Lobster to a Happy meal.

Cody Willard:
Yeah, that’s right. That’s right.

Cabana Crypto:
All right.

Cody Willard:
All right, let’s wrap it up with that last question.

Cabana Crypto:
Intel. @Teewilly asks, feet to fire stock price for Intel 3, 5, 7 years if they execute to justify your 8.5 rating in your GSS book?

Cody Willard:
With my name being Cody Willard, do you guys mind start calling me C Willie?

Cabana Crypto:
C Willie.

Cody Willard:
This is Tee Willie. I’m C Willie. Feeling that? DJ C Willie here, yo.

Cabana Crypto:
Yo.

Cody Willard:
All right. Feet to fire price for Intel three to five, seven years out if everything goes right. Three years from now, $75, five years from now, $110 and seven years from now, $200.

Cabana Crypto:
A lot of ifs, but they’re in the early stages perhaps of executing.

Cody Willard:
Let’s do the math real quick. What’s the market cap right now, Bryce?

Bryce:
150 billion.

Cody Willard:
I’m going to go with 170. Let’s look it up. Intel market cap at this moment is-

Bryce:
157 billion.

Cody Willard:
What did I say? 160?

Bryce:
You said 170.

Cody Willard:
I’ll take the credit. It’s 157. Bryce was correct. So going to, what were my price targets? 75 would be, call it almost exactly a double, so that’s 300 billion. That seems reasonable in three years.

Bryce:
TSMC for comparison is like 450, 500 billion.

Cody Willard:
I thought it was higher than that. I really shouldn’t argue with this kid, he just wrote a fricking book on it. 430 billion. He’s right. So look, yeah, I think 300 billion would be in the realm of possibility in three years. And then I said 110 would be another 50% from there. I think that’s 450, 500 billion and then a double, not quite a double from there it gets you to about 700 billion. Look this, that might even be conservative frankly, if Intel executes on everything, if everything goes right with the CPUs, the artificial intelligence and the foundry businesses for seven years, Intel will be a trillion-dollar company. So your price target would be about an eight bagger from here.

Cabana Crypto:
Yeah, I just looked at the old high, it was like just short of 70 back in early 2020.

Cody Willard:
Three years ago.

Cabana Crypto:
And once again early 2021.

Cody Willard:
Double top.

Cabana Crypto:
Double top. And look where we went. We had maybe a triple bottom.

Cody Willard:
Today we have a triple bottom, Cody, Bryce and Cabana.

Cabana Crypto:
There you go.

Cody Willard:
Thank you guys for tuning in.

Bryce:
Hey, do you want to mention the returns on the stocks? You were going to talk about that?

Cody Willard:
We missed it. Too late. That was the notes you were making, huh?

Bryce:
Well no, I already had it, but I was adding the NASDAQ.

Cody Willard:
Oh, thank you. I’ll just throw it out here real quick. You know what the S&P performance year to date is at the moment that Bryce wrote this?. 10%. S&P was up 10% on the year at the moment he wrote this. You know what the average stock as an equal weight S&P 500 is?

Cabana Crypto:
Far less.

Cody Willard:
Down 2%. The small cap index year to date is minus 5%. The average small cap is… You exed it out.

Bryce:
I couldn’t find it.

Cody Willard:
Can’t find it. Not helpful. You handed me this paper like I was going to get some information out of it.

Bryce:
Well you’ve got the point with the S&P.

Cody Willard:
Yeah, that is the point actually. So hey, I’m teasing you. Great job today, thank you. Cabana, as always, appreciate your time and energy on this stuff, hosting. It’s a lot of fun having you to help us along.

Cabana Crypto:
It’s fun. I enjoy it.

Cody Willard:
Cabana and myself and Bryce will be hopping over to the SKTLs YouTube channel right now, S-K-T-L-S, crypto. Just search S-K-T-L-S, crypto on YouTube and you’ll find the channel and we’ll see you in there. Thanks guys. Thank you Cabana, everybody.

Bryce:
Thanks.

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