Broken Record Stock Market Breaking Records

Happy Thanksgiving. What a week it’s been and it’s only Tuesday. What a year it’s been and there’s still another 10% of the year left go.

Tesla, woo woo hoo hoo, is over $550 and over a half a trillion dollar market cap. I’ve asked it before, but now’s a good time to ask it again — just how many Tesla cars have been sold to TSLA stock owners who paid for their car with profits from the stock? Hundreds of thousands of cars so far and many still to go. A truly amazing example of a virtuous feedback loop reflexing on itself.

Then there’s our two most most recent additions to the portfolio — MP a few weeks ago and JMIA last week — and both have gone vertical too. MP reported earnings this morning for the first time since coming public and they were good and the market liked ’em too:

JMIA’s annualized gain since we bought it last week is something like 100,000%. That’s not a record-breaking one week performance, but it’s not too shabyy..  I mean, what to say? That kind of action isn’t normal. Of course, we’ll take it. But it’s also an indication of the frothiness, the greed, the euphoria in the markets right now.

And I don’t like it. I can’t say I quite “hate” the stock market again, but as I predicted back a few weeks ago, I do feel a bit like a broken record telling you all to stick with our longs while remaining cautious:

‘I am tired, tired of worrying about Amaris and tired of worrying about valuations. I’m tired of telling people to be cautious in the market and everybody telling me, “Cody, I’m in too much cash now.” This has been a replay now for three or four weeks, right? You guys been feeling this? Like a record player going. Pick it up, go back to the first song. Let’s play it again. “I don’t like valuations. You guys should be cautious right now.” Then your song comes on. “Cody, I got too much cash. I got too much cash and markets are moving. I’m not making enough money.”

Then my song comes up. “Be cautious. I don’t like valuations.” This is going to be a replay for the next I don’t know how long, guys. Get used to it. We’re probably in a little bit of a blow off top market and it could be this week, it could be a month, it could be two months of this, people. I don’t think the markets are going to quite break out, but you’re going to have all these little spaces and sectors and rotations where people will be making money. Then I’m going to hit replay, rewind, play and say “I don’t like valuations. You guys should be cautious.”

Imagine if the markets were crushed. Imagine if you’re losing your ass right now, imagine you’re down 30% instead of up 30%. Then you’re going to be … then you’re really going to be sick of it. Guess what? You guys have seen this before. You’ve been with me for years. There’s times when everything I bought is rocking. 97% hit rate like we’ve got right now. I’m pretty damn smart, aren’t I? There are times when our stocks don’t all go up.

Two months, three months after Amaris was born five years ago, it was hard, stressful. It was new then. It was a lot harder then than it is now, even with COVID. And the markets got slammed. Apple down 30%, Google 35, Amazon 40. Every stock we owned down 20 to 40, 50% just relentless selling. One day I’m in the room, the hospital with Amaris waiting for the doctor to come in and tell us if her skull is even going to grow enough or if we’re going to have to go to Dallas to have cranial surgery, spend the next year in Dallas at hospitals. It’s 8:30 in the morning and, as I’m going into that room where we can’t use our cellphones, the market is down 1000 points and I sent out a Trade Alert to buy stocks at that moment. That’s hard and that was the right trade.

We don’t have that right now. We feel good, right? It’s hard, but at least the money is good. There’s no difference between five years ago, two months after Amaris was born, and right now, except the psychology of people putting money in the markets is a little different. That psychology changes and it’s going to be really hard, and I’m going to feel really dumb for owning any of these stocks at some point. That’s when I’ll want to buy again. Then I’ll be a record play, rerun, rewinding myself from one side at a time.

Let’s just rewind to last year. Tesla, $50. I kept saying it was the greatest stock I’ve seen in years. “This was the best opportunity since I can’t remember. Apple at a dollar was the last time I saw something like Tesla at $50 last year. The set up there … then Tesla at $45. It’s down 10% and I’m like, “Tesla at $45 is the best opportunity I have seen in my lifetime,: and your song was, “but Cody, I’m already down 10%. This is stupid. Why would be buy more?” Then it’s at $40 and I’m like, “Tesla is my favorite stock of all time.” You guys go, “but I’m already down 20%. This sucks, man. Cody, can we do something else for a while?” I’m like replay, rewind, replay, rewind. Tesla, Tesla, Tesla. For two, three months that’s almost all I wrote about.” And I had to rewind and replay, and you guys got sick of it.

Something like that is probably happening right now. I’m sick of this. I’m sick of saying be cautious. So I don’t know how to time it, but this is probably a better sell than by moment, and I’m sorry to be a broken record.’

The upshot then, as usual, is be cool and don’t be greedy. Let your longs make you money while the times are good here. Maybe trim a little of some of your biggest winners in keeping with the broken record cautious approach.

If our stocks were down and/or the markets were panicking, I’d do a chat this week, but it’s Thanksgiving week and the markets are definitely not in panic mode. So let’s skip the chat this week and say Thanks for all of our blessings, for all our profits, for all of businesses, for all of our countries, for all of our worlds. I thank each and every one of you for being a part of this community.