Bad v. Good Space Stocks, Bitcoin, US “Freedoms”, And More
Here’s the transcript from this week’s Trading With Cody Live Q&A chat.
Q. Hey Cody, what’s your outlook on real estate? Do you think we’re in for a correction or continue to rise into next year? Thanks.
A. Oh, I think most real estate is ready and primed to slow and probably reverse lower. I’m not sure real estate is going to crash nationwide, and in fact, some inner cities might be ready to rocket to new all-time high prices, but most suburban and many rural areas are likely to see some real pain in the next two to three years.
Regarding real estate: 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.
Q. “If it’s not space, it’s probably a waste of time.” You were very enthusiastic in your email on September 30 about being focused on the particular space stocks you listed. If we are currently as exposed to the market as we want to be, should we be liquidating lower rated positions such as TWTR, ROKU, & SEDG in order to load up on RKLB, BKSY & RDW?
A. I have already a reduced the number of positions in the portfolio this year and am comfortable holding onto some older names as we build our long-term Space Revolution positions.
Q. Cody, do you own SPIR? It has crashed 43% today. Can you also comment on ASTR? Thanks.
A. No, I did a lot of studying all the new Space stocks that came public in the last year and kept us out of that one and most of the others. RKLB, BKSY, RDW, SPCE are my space stocks (and SpaceX and Relativity Space but they’re still private).
Q. Can you comment on RedWire (RDW)?
A. Not much has changed since I last wrote: “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.”
Q. Have you looked at Virgin Orbit, which is in talks to go public through NGCA?
A. Yes, have worked on it and am interested in owning it, but am still not ready to pull the trigger.
Q. What do you think of the cash apps (Venmo, Paypal, Zelle) having to give out 1099’s if your account transfers/receives over $600?
A. All these people who say they are so worried about our freedoms in this country that they won’t wear a mask yet they sit there and don’t say anything about the unconstitutional income tax. And now people who say they are worried about our freedoms in this country are like, “Hey, that’s not cool that the government’s going to track $600 payments but it’s okay that we have to file income tax reports that are hundreds of pages long. It’s okay that the government has overcomplicated our entire tax policies that rich people can lobby so they pay 1% tax rates while middle class people can’t lobby so they pay 50% tax rates. Hold on for a second while I go through this border patrol check point and show my papers to the authorities hundreds of miles from the border. Anyway, I’m real upset about our loss of freedoms in this country.” Okay, that’s the quote. It’s Cody back talking now. I say if there’s going to be an income tax, that the government should damn well enforce the laws and if we’re worried that the government wants to draw the line at $600 or at $10,000 transactions that we might have missed the point. In my mind it works like this: Income tax is not cool. Forcing people to follow the income tax laws that Republican Democrat Regimers have passed is cool.
Q. Hi Cody, what is your outlook for BTC in the next 6 months to a year?
A. Feet-to-fire, I expect that BTC will fluctuate between $35,000 and $55,000 but will spend most of the time around $45,000 for the next six months or so.
Q. Hi Cody, what is your outlook for BTC in the next 6 months to a year? Do you think ETH will eventually flip BTC?
A. What do you mean by “flip”?
Q. Do you see the semiconductor sector going flat or down for the coming year? I am heavily invested in the sector.
A. Hmm, not sure. On the one hand, there’s a ton of demand and little supply. On the other hand, there’s a lot of money being spent ramping up new supply. I’d rather focus on specific companies. I am long QCOM, TSM and NVDA and I am short SMH as a hedge against the entire industry.
Q. Are we just early on FUBO? It’s only gone down since we started buying it. Is FUBO a small or medium position for you? (I assume not a large position).
A. I’ve never expected any of our stocks to go straight up immediately after we buy them. I don’t even really know what you mean by being “early” on Fubo. I mean, we might be early on Space, but FUBO is part of a 13 year old App Revolution, so we’re not “early”.
Q. Do you still not like U?
A. Hmm, I don’t think I’ve ever said that I don’t like U. In fact, I think it’s one of the most incredible companies ready to benefit from The Virtual Reality Revolution. It’s just that the stock is very expensive.
Q. Do you think Twitter enabling cross border payment is a game changer?
A. If they were to do something like that, it’d be great.
Q. Did I remember seeing a passing comment you made on the NKLA options probably not going to work? Your options were for January, no? Seems like there’s still plenty of time. Was there anything else material recently which makes you more pessimistic?
A. Nah, it’s just that the options have already lost a lot of time premium.
Q. Do you like NET,CRWD or ZS? They are all plays on hacking worries.
A. All great companies, just very expensive.
Q. Do you like AFRM?
A. I’d rather own SQ than AFRM.
Q. Adyen N.V. operates a payments platform in Europe, North America, the Asia Pacific, Latin America, and internationally. The company’s platform integrates payments stack that include gateway, risk management, processing, acquiring, and settlement services. It offers a back-end infrastructure for authorizing payments across merchants’ sales channels, as well as online, mobile, in-store, and APIs. The company’s platform services a range of merchants across various verticals, connecting them directly to Visa, Mastercard, and other payment methods and providing data insights. Adyen N.V. was incorporated in 2006 and is headquartered in Amsterdam, the Netherlands.
A. I am beginning to think that there’s a bubble in the payments stock sector of the market and that I should probably look at shorting some of the crappiest payments-related companies out there. AFRM, ADYEY, SQ, SOFI….those are the good ones. I bet there’s about five other payments-related stocks out there that are headed pretty much straight down from here. I should find them and short ’em. Let you know if I do.
Q. Cody do you know or have an opinion on ONDS?
A. I wonder why a company worth $300 million bothers going public.
Q. Please look at CPNG. Thanks for your thoughts!
A. The chart looks compelling to me because it’s so bad since it came public in April. Sounds like a fine company: “Coupang, Inc. owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. It sells various products and services in the categories of home goods and décor products, apparel, beauty products, fresh food and groceries, sporting goods, electronics, and everyday consumables, as well as travel, and restaurant order and delivery services. The company was founded in 2010 and is based in Seoul, South Korea.” But I have no interest in owning an internet retailer in South Korea.
That’s a wrap folks. Thanks for the great questions.
