Cryptomania, Small Caps, TSLA, DIS, PFE And Much More
Here’s the transcript from today’s live Q&A chat:
Q. Will the fed lower rates this year? They just spoke about unlikely trajectory in their minutes. Or are they bluffing?
A. I think the FED will cut rates later this year but only if the markets are in trouble and inflation is coming in below 3.5%. I don’t think the FED will cut aggressively and I don’t think the FED will cut in March unless the S&P 500 is down 10% from its highs.
Q. Will the small caps outperform this year?
A. Tough to guess how 2000 small-cap stocks will perform compared to 500 large cap stocks over an arbitrary time period of about 250 trading days. But yeah, I’d expect slight outperformance of the small caps relative to the big caps over the next 365 calendar days.
Q. I am trying to get more interest from my idle cash in my brokerage account. TDAmeritrade pays a very low interest rate. I just saw the Alpha Architect 1-3 Month Box ETF (BOXX) that seems to yield around 5%. I am not familiar with this yield vehicle. Would you advise on putting my idle cash on it?
A. I’ve never heard of the BOXX ETF before and just googled it. Not knowing much about it, I can’t say one way or the other. That said, Robin Hood will pay you 5% on your uninvested cash just for moving your money to their platform.
Q. Feet to fire, which of our stocks will be the best performer for 2024?
A. Intel (INTC) or Tesla (TSLA) or Pfizer (PFE) or Disney (DIS). Total guess.
Q. Happy New Year! What are you too 5 buys now?
A. Hmm, not in a rush to buy anything. I’d probably repeat my answer to this question from last week: In alphabetical order: Autodesk (ADSK), Amazon (AMZN), Disney (DIS), STMicroelectronics (STM), Pfizer (PFE), Tencent (TCEHY).
Q. At what price would you start buying some Tesla (TSLA)?
A. I own a lot of TSLA and am not in a rush to buy more just now. If you don’t own any or enough, you might do a nibble here today and then buy a little more in a week or two. I’d probably buy some more TSLA below $200.
Q. It seems like the calls bought on Disney (DIS) and Pfizer (PFE) have expired or are worthless. Is it still a position for us? I saw that Cody recommended them as top 5 buys right now.
A. We exercised some of the PFE and DIS calls and have quite a few PFE calls dated out several months from here that we are still mostly holding.
Q. Isn’t Robert Marcin an advisor for the hedge fund? He just tweeted he is short Texas Instruments (TXN) and long STMicroelectronics (STM).
A. Yes, he is and a good friend of mine. We don’t always agree on stock picks but it’s good to debate.
Q. Cryptomania doesn’t seem to be slowing down. Miners and crappy crypto going up up up. Stay with the Jan crypto/miner puts or roll to Feb?
A. I think you should refresh your screen. Most all of the crypto miners that we have puts on are down 30% or more in the last three trading days. We have, as of this morning, sold about 1/3 or more of most of the crypto miner puts we had built up when they were at/near their new highs.
Q. I’d lock in some gains for sure. Most miners are down 20-30% in the last two trading days. That was like 40%+ for some earlier this morning. They will come roaring back, possibly soon as we’re not through this bitcoin cycle yet. Nice job if you got into those before the last couple days. Those have to be up huge at this point.
A. I’m not sure the miners will come roaring back unless bitcoin itself runs to way high new highs. When the bitcoin halving process happens, it will make the bitcoin miners operations half as productive as they had been. Their bitcoin balance sheet might help but most of these miners are trading at 5-10x the value of their bitcoin balance sheet and their bitcoin mining operations are going to have issues after the halving.
Q. This could be a situation where different strategies apply to a hedge fund vs a personal but my two cents is at least for next 6-12 months I wouldn’t stay long puts in the miners for very long if at all. I’d be in and out for now if I did. I will prob buy puts in these down the road, but based off prior cycles it looks like most of them will likely 2x, 3x, 4x and more from here before the cycle is over. The prospect of bitcoin etc approval, the halving, and record transaction fees are all catalysts for now. And the huge short interest on them will be like fuel on the fire when they start to run. Best of luck on them. We may get another 10-20% whoosh down this week but the one from this morning got bought up pretty quick.
A. Isn’t the halving process for bitcoin a major negative for the miners who will see their energy and compute costs double when the halving happens?
Q. Regarding the bitcoin miners: I think some of that will be offset with the record transaction fees. I’m not an expert here, but reading about limited block space is leading to record transaction fees for the miners this cycle. Also listened to a podcast recently with Bob Burnett that talked about this some.
A. Thanks, I’m not sure that those transaction fees can climb high enough to offset the 50% cut in production the miners are facing.
Q. Re bitcoin miners: I also think that’s all predicated on what bitcoin does. If it doesn’t go to all-time highs and beyond then, yeah the miners won’t do much. Anyway, my main point in all this is that they are just super volatile and it’s easy to get steamrolled if using options on them in a personal account.
A. Thank you. Most retail investors shouldn’t mess with options in their personal accounts.
Q. Have you all seen that new Coinbase commercial about home affordability over the decades?
A. No, but I assume it has something to do with how the US dollar and all other fiat currencies get devalued over time. Which is what I’ve been explaining as the main reason to own bitcoin since 2013.
Q. What was the percentage return for the hedge fund for 2023?
A. We’re not allowed to publicly reveal the hedge fund performance but if you’re an accredited investor and are interested in investing in our hedge fund, please email me clwillard@gmail.com or Bryce at bryce@10000daysfund.com and we can give you more details about the fund, including performance history.
Q. I saw that you predicted that Detroit will win the Super Bowl. The Lions will not win the Super Bowl.
A. Remember in 2008 when the Patriots went into the playoffs undefeated and lost to the lowly giants who barely got into the playoffs. On any given Sunday, after all. Predicting that the Ravens or the 49ers win the Super Bowl is NOT very exciting given they are so far favorited right now.
Q. So Cody went to Univ of New Mexico, yet the picture from yesterday posted shows a large BU – Baylor University – sign. So who in his family went to Baylor. I put three sons through Baylor – great University – and we were simply curious Blessings and best wishes! Happy New Year.
A. Bryce got a JD at Baylor Law School. I still cheer against Baylor whenever they are favored in any sport, partly because of the Dave Bliss connection. Sorry Bryce.
Q. What did you have for lunch?
A. I had a smoothie comprised of vegetable and fruit juice with ginger and honey in it. I found out at the doctor’s office a couple weeks ago when I had my heart check up (went very well!) that I’ve gained about 15 pounds since I had my heart attack last year. So I’ve been eating better, working out more, and having my favorite smoothies a lot again.
I leave you all with a shot of my car and the moon and the malpais that I took last week one morning on my way to work.
