Latest Positions Part 1: Tesla, The Chopping Block, Defensive Names, Crypto

We didn’t get the Latest Positions sent out to you yesterday as promised because…as the market closed, a forest fire in my hometown here broke out on the mountain. My local analyst and I jumped in our cars, ran over to a friend’s house that might have been in the path of the fire to help her get her two cows, ten goats and three sheep into a trailer to take to another friend’s house.

The forest around here, as it is most places, has been allowed to grow unchecked for most of the last few decades. Which is what makes the fire able to burn so hot, so quickly. But this morning, mother nature surprised us all with a light rain shower to help get this inferno under control.

There are stock market analogies here, obviously, as the bubble has been allowed to grow uncheck for most of the last decade which is what will make the downturn all the more volatile itself when it does come. Anyway, here’s the Part 1 of the Latest Positions round up as promised yesterday before the forest fire broke out.

If you have not read my Trade Alert from earlier today, please check your email or click here to read it before continuing on with the Latest Positions.

Here is Part 1 of 3 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position, including a couple Trade Alerts.

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 (8)
  • Physical gold bullion & coins (7)

• • TSLA Tesla (7+) – Tesla reports earnings after the close tonight. Some analysts are expecting them to sell 900,000 cars this year, up from 500,000 last year and up from a lot less than that a few years ago. We did a deep dive analysis on Tesla today, and found that the market is stuck between pricing in full self-driving and not. If and when the company were to deliver on full self-driving vehicles that could be summoned from someone’s garage to drive a customer around in an Uber/taxi like manner, Tesla would be the most valuable company in the world at possibly a five to ten trillion dollar valuation. If they do not deliver on that vision, Tesla is probably a little overvalued at the moment. Elon Musk mentioned the other day in a since deleted tweet that “I think there’s a >0% chance that Tesla could be the biggest company” adding, “Probably within a few months.” I think he is implying that he believes that Tesla will solve the self-driving problem soon. He is sometimes wrong and sometimes throws out false information to confuse the competition, but I think he truly believes that Tesla is going to solve full self-driving in the next year. I do not necessarily believe it, but if Elon does, then I am not betting against him. I am holding steady with TSLA, my largest position. (Update: The company delivered fine earnings, but the market wants to see full self-driving.)

The Great Reset Casualties –  

• • U Unity Software – As part of the Great Reset, I have decided to take my loss on this name for now. I need to clear my head from this name. I still love this company’s business model and positioning for the Virtual Reality Revolution, but the valuation is wild at 30x this year’s sales and according to analysts, it is not expected to earn anything anytime soon. I am going to do a deep dive into every software play in the virtual reality space and put Unity into that analysis. I plan on owning at least one or two great virtual reality software companies. This might be one of those names, but for now I need to clear my head from it.
  • DVAX Dynavax – Dynavax has been a little over a double for us since buying it last July at $4.50. Even though I do not think we are completely past the Covid pandemic and many countries do not have the access to vaccines that we have here in the United States, I think this adjuvant producer does not have the 5 to 10 bagger potential ahead of it that I like to see in my holdings. As a producer of just a portion of what goes into a vaccine, I do not think that their portion of the revenue of each dose given is going to add up to enough to justify their valuation exploding higher. Because of that, this name is getting the axe from the portfolio today as part of the Great Reset. I will continue to keep an eye on it and I have the ability to add it back later if the story changes.
  • CPB Campbell’s (6) – As I mentioned in the prior latest positions, I am bored to death with Campbell’s. In the name of the Great Reset, I am selling my entire CPB position, taking the profits and resetting my defensive positions. It was a great run since we bought at almost the exact lows two years ago, but I do not see enough upside potential going forward.
  • GLD Gold ETF (7+) – Believe it or not, I let go of my GLD position in the hedge fund today (I still personally own gold coins). With the Great Reset I wanted to clear out my GLD position (I have the ability to buy it back in the future), taking my profits and moving on for now.

Defensive names –

• • DBA Agriculture ETF (7+) – This agricultural basket ETF has really come alive in April. As a matter of fact, since its lows at the end of March, DBA is up more than 15%. We all know that lumber prices have spiked and it looks like inflation could be a real thing. I am holding this defensive position steady.

Cryptocurrencies/tokens –

• • Bitcoin (7) – I mentioned in the prior write up that I would probably buy more Bitcoin futures and/or Bitcoin itself if it traded below $50,000. Bitcoin went below that number last Friday and I did indeed pick up a little bit of Bitcoin futures in the hedge fund. Bitcoin is an average size position for me in the hedge fund. I would probably trim some above $60,000 and add more below $50,000.
  • Ethereum (7+) – I have started buying some Ethereum futures in the hedge fund in addition to having owned ETH in my personal account for many years. Having recently witnessed the artist Beeple, sell a NFT of his digital art for $69 million being paid for in Ethereum made me realize the importance of Ethereum behind Bitcoin in the crypto world. You will notice that I made Ethereum bold, signifying its forever position in the portfolio.
  • The Other Cryptos (6) – In the cryptocurrency world, there are just two “must owns”, BTC and ETH. However there are some others such as Stellar Lumens and XRP that I have owned off and on over the years. If you do indeed want to own some of the “others” just do your due diligence and stick to the cryptos that have some utility.

Stay tuned tomorrow for Part 2.

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

Remember: I wouldn’t rush into a full position all at once in any of these stocks or any other position you’ll ever buy. Patience and allowing the market and time to work to your advantage by buying in tranches is key. Maybe 1/3 or 1/5 of whatever you  might consider to be a “full position” in any particular stock. And I wouldn’t ever have more than 5-15% of your portfolio in any one stock position at any given time. The younger you are and/or the higher the trajectory of your career income, the more concentrated and risk-taking you can be with weighting in your portfolio. But spread your purchases and your risk out over time and over a several positions no matter your age or risk-averse level.

Scaling into a position using an approach of buying 1/3 or 1/5 tranches over time is how I build my personal portfolio positions, but there’s no scientific way to go about investing and trading. Sometimes you have to pay up for the latest tranche but I try to be patient and wait for a temporary sell-off to add to the existing position.

** NOTE FOR NEW SUBSCRIBERS:

If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t acted on much of my strategies yet and/or if you haven’t been in the markets, but you’re sick of getting 0% on your CDs, Treasuries, savings, checking, etc while the markets have been continually hitting all-time highs this year, what should you do now?

Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.

If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.

Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.