Latest Positions: Forever Assets, Tesla, Space And Defense

Here is Part 1 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position.

Back in August, I wrote about how back in April, I wrote: “The many charts that had become hockey sticks are now looking sort of like the rocky mesas in northern New Mexico with a slope down potentially ahead. Many good companies’ stock prices have come down some 30-50% in the last week or two and that means there have been some buying opportunities developing as I’ve noted in the past week too. But be careful out there. I’m not sure we’re going to see the recent all-time highs for many stocks that are now probably in bear market territory.”

And those stocks have certainly not gone back towards their all-time highs from last February when I was doing my Great Reset. And buying a basket of beatens or just about any other tech stock lately has been painful at best. The opportunities to make big money over the long run come when the markets are punishing blindly, which is where we are right now. The markets probably still need the megacap stocks to fall further or for some of the beatens to come back up a bit in order to resolve the disparities in the market valuations and relative performance.

I’m going to look to sell a name or two in the portfolio to clean up some slots and to be disciplined, so let’s jump in.

The ratings for each stock go from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.” The positions that are bolded are those that I consider to be “core” holdings and am unlikely to ever sell out of them entirely.

Longs –

• Forever assets and other permanent holdings –
  • Media, hedge fund and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
  • Real estate, including the office I work out of, some land and the ranch I live on in NM (7)
  • Physical gold bullion & coins (7)

• (Driverless Revolution) –
  • TSLA Tesla (7) – Tesla’s going to raise the price of its Full Self Driving software yet again, which I find surprising because it’s not really gotten much better over the last couple years that I can tell, even as the price has gone from $3000 to $12,000. Being able to raise the price is also a reflection of how little Tesla’s competitors have been able to produce cars, allowing anybody who can produce a new car to charge a premium price. Tesla’s ability to rewrite software for and otherwise manage their supply chain better than everybody else has been a perfect storm in a good way for Tesla. The stock remains overvalued unless/until the company cracks real autonomous driving but I remain a believer in the stock for the long-term.

• (The Space Revolution)-
  • SpaceX (9) – I include SpaceX in the Latest Positions round up because even though it’s a private company that my hedge fund has invested in that most retail investors can’t get into, it’s by far the leader in The Space Revolution and I want to keep a record of my analysis and ratings for the company. I’m not sure SpaceX gets us to Mars in the next five years as they hope they will, but I do think it’s just a matter of years before they do so. Meanwhile, the company’s Starlink Internet business is likely going to be worth hundreds of billions of dollars when it comes public in the next couple years. SpaceX is currently valued at about $100 billion in the private markets.
  • RKLB Rocket Lab (8) – Last time I’d mentioned that: “We’ve been, as I was worried we might be, early so far on getting into The Space Revolution, but as I look at the potential risk/reward to most tech stocks vs a company like Rocket Lab with its proprietary technology in a burgeoning trillion dollar space economy, I find myself wanting to buy more Rocket Lab. I have a pretty big position already though and I will make it a huge position if the stock gets closer to $8. I’m looking for 100-baggers that change the world as they grow — I think Rocket Lab and other companies in The Space Revolution are the perhaps the best positioned for that kind of potential return.” Nothing much has changed since then except the company did two more successful launches and the backlog has also grown steadily.
  • BKSY Blacksky (8) – The company blew its quarterly report soon after de-SPACing and they guided revenue estimates from a measly $40 million to the low $30 millions. The stock hasn’t stopped falling since then. On the other hand, I think there’s still promise in the growth of satellite imagery and services and Blacksky has a terrific and growing set of satellite constellation assets. That said, this company needs to spend more to build more and I’m concerned that if the stock doesn’t get going back in the right direction that a vicious cycle including a lack of access to cheap capital could end up hurting this company. Now that said, the company did just put a couple hundred million dollars into its checking account with the SPAC and the total market cap is now less than half a billion. I’m going to nibble a little bit of this one in both my personal account and in the hedge fund while the stock is here below $4.
  • RDW RedWire (8) – Redwire’s either a fraud or its very cheap here. The company is expected to do some $230 million in sales next year, up 50% from this year and the market cap is a measly $360 million right now. With nearly half that market cap in cash on the balance sheet, I’d rather buy than sell RDW here. I will nibble a little bit more of this one if it gets closer to $5.
  • SPCE Virgin Galactic (6+) – What a mess this stock and company are. This is a tiny position for me and I’m not looking to add more to it any time soon. The company’s got to get some flights going again. Even then, the company has to figure out how to make money at some point.

• (Defensive names)–
  • Gold/GLD Gold ETF (7+) – What I wrote last time is why I own gold in my personal life. I don’t have any GLD right now in the hedge fund, but I might nibble a little back in there soon: “But I tend to think that when the alt-coin bubble crashes (90% of the cryptos out there right now are likely headed to $0 in the next two to three years) that gold will be taken seriously as a store of value once again.”
  • BTC Bitcoin (7-)–  I’ve said since 2013 that bitcoin is and remains the de facto standard cryptocurrency of the world and therefore remains the currency most likely to replace the US dollar as the world’s reserve currency in coming years. After having sold all my bitcoin and crypto exposure in the hedge fund a few weeks back, I did go back in and nibble a little BTC and ETH futures in my hedge fund late last week. I still think the SEC is probably going to crack down on a bunch of cryptos and the whole crypto sector still feels a bit crowded but less so than when I was sounding the alarm throughout the last half of last year.

Part 2 tomorrow.