Latest Positions Part 1: TSLA, UBER, FB, TWTR, SNAP

Here is a Part 1 of 5 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.

It’s amazing how quickly the prices of individual stocks are changing. If I’d written this part of the Latest Positions update three weeks when we were buying stocks near their lows, I’d have been much more bullish than what you’ll find below, which reiterates the fact that I’d rather trim than buy most of our stocks…at least as of the writing of this Part 1 on Monday night…let’s see how many of our stocks move 10-20% tomorrow before I write up Part 2.

I’ll send out another part of the Latest Positions each day this week and it should be interesting to see how stocks and my analysis shift over the course of the week as the wild moves might continue.

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)
• (Driverless Revolution) –
  • TSLA Tesla (7) – Since the prior Latest Positions write up, Tesla has gone from $550 to nearly $100 down to $360 and it was up nearly 15% today and after hours as I type this, it’s trading at $675. Tesla’s one of the best performing big cap stocks on the planet this year, up more than 50% year-to-date, despite being in one of the worst performing industries where sales were already declining even before the Coronavirus Crisis hit. I have a hard time believing that Tesla’s not going to retest some its lows from the past few months at some point over the next few months and I’m trimming some here, but I keep most of this core position in tact.

    Electric cars are better, smarter, faster, cleaner and they’re the future. Meanwhile, as the Coronavirus has put all of the other big car companies into total retrenchment mode, there’s no way GM, Ford, Volkswagen, Toyota, or any of those companies are going to invest in electric cars now. There’s no way they roll out a meaningful number of electric cars in the next two or three years. Everybody else’s smart, electric, over the air update car that they were all supposed to roll out, none of those are going to hit in the next two, three, five years. Maybe ten percent of what they said they were going to roll out might come to market.

    And it’s a good thing Tesla raised cash when they did. Do you guys remember how many times I kept saying “Tesla‘s not out of the woods yet?” Well, they pretty much got out of the woods when they raised that last two billion dollars. They can get through at least the next six months if not the next year, even if demand tanks. They’ve got a better balance sheet and more access to capital than GM or Ford. I can’t fathom why people want want to own these car makers that are basically at best Nokia and BlackBerry to Tesla‘s Apple.

    Likewise, let’s just fantasize for a moment, what if Tesla actually gets this self-driving thing figured out? Right now, nobody wants to be in a car with anybody else. Well, one company on the planet could be providing you cars that don’t have drivers in it. The upside potential of Tesla if they pull that off is probably even bigger than it used to be, because again, nobody else is going to be investing in this and trying to catch up to them. The others are just trying to survive now. Tesla will be continuing to invest and innovate and do the things that Elon Musk does with his companies. That said, if the coronavirus is still around in nine months and nobody’s buying Tesla cars a year from now, Tesla could go to zero.I had nibbled TSLA near its recent lows at about $380 or so a few weeks ago as noted in “Don’t doubt the USA or mankind’s ability to prosper.” Fast forward *checks calendar, shakes head in disbelief* three weeks and I think it’s a good time to trim some once again, maybe 5-10% of it, here as the stock gets close to $700 a share again and that’s exactly what I’m doing.

  • UBER Uber (7) – This stock has been wild this year, as it rallied hard to start off the year, crashed 60% plus and then doubled off the lows. Can Uber get to the other side of the Coronavirus Crisis lock down and find that people will still want to ride in a stranger’s car? The flip side is that it’s still going to be a lot safer and anti-coronavirusey to ride in an Uber with just one person who might have an issue with Coronavirus versus riding in a bus or public transportation, subway or something, bumping elbows with lots of people.I imagine that Uber is actually going to benefit from the travel trends when the Coronavirus Crisis subsides and that Uber Eats could also benefit as people order in more instead of going out even after the crisis ends. Uber Freight will either start growing quickly too or they’ll have to shutter it to focus on what does work over the next year. Uber has a great balance sheet but certainly does not have the kind of money that guarantees they make it through six or nine months of a fundamental vacuum in their business model. Like with Tesla, I think this stock is likely to trade lower than its current price (about $28 per share as I type this Monday night) and has 30% or more potential downside at some point over the
    next few months but I could be wrong and I still believe in the long-term thesis. So I’d look to trim this one a bit more aggressively here, maybe 10-20% of it, and hold onto a core position.
• (Social Revolution) –
  • FB Facebook (7) – Can FB join the FANG (FB, AMZN, NFLX, GOOG) party? It’s underperformed the other names during this rally off the higher high off the crashed market lows from 10 days ago. Here’s the issue with Facebook, the valuation is anybody’s guess here because we don’t know what revenue or costs will look like this year. The company is having to keep hiring at a frantic pace and it’s clear that earnings estimates will have to come down.In the prior Latest Positions update, I’d mentioned: “FB is still growing topline 25-30% per year with 80%+ gross margins and the stock is trading at just over 20x next year’s earnings estimates, which are probably too low. I think this stock looks pretty good into year-end and for next year, as 2021 earnings estimates will probably be close to $12 per share, meaning a 20-25x forward estimate on that would get you a $240-300 price target next year.” Let’s update that analysis now with our best guess on how the Coronavirus Crisis will impact them (changes are in italics):FB is growing topline maybe 10% this year with 70%+ gross margins and the stock is trading at just over 17x next year’s earnings estimates, which are probably too high. I think this stock looks about fairly valued into year-end and for next year, as 2021 earnings estimates will probably be close to $8 per share, meaning a 20-25x forward estimate on that would get you a $160-200 price target next year.I’d also nibbled some FB at its recent lows below $150 as noted in “Don’t doubt the USA or mankind’s ability to prosper” and I’m now trimming all of those shares but keeping all of my long-held FB core position in tact.
  • TWTR Twitter (7) – Twitter was the only social network that I consume content on, at least it was until this week. I’ve noticed that Twitter’s creating my own unique echo chamber using its algorithms of what I click on, post about and like and retweet. Which is actually pretty amazing, because as all of you know, I have a pretty unique way of looking at politics and the Federal Reserve and Republicans vs Democrats and Corporatism and Investing. Apparently I don’t consume sports on Twitter and I don’t consume celebrity content and so Twitter feeds me all these posts about politics and the Federal Reserve and Republicans vs Democrats and Corporatism and Investing from people I’ve never heard of because someone I follow liked one of their tweets and the algorithm is pretty correct that I would agree with it. And I don’t need confirmation bias. I need a wide array of viewpoints and news and ideas. Which I used to get when Twitter fed me my Twitter Feed chronologically. But not any more. Oh, and as for the stock analysis? See the FB analysis above and get to the same conclusion. This stock, which was also in that Trade Alert from March 18 when we were buying this one at the lows, is probably more a trim than a buy after rallying 30% off those lows to today’s levels.
  • SNAP Snap (6) – Maybe the Coronavirus Crisis saved Snap? Because kids use it to communicate and not just post humorous memes and 15 second dance videos? In the prior Latest Positions update, with Snap near $19 per share, I’d written: “Snap is facing so much competition for teenager eyeballs from Tik Tok that I’m worried it could be in trouble this quarter. I still hold a core position in it and I’m going to buy a few SNAP puts dated out to late February with strike prices around $17 or so, just to get a little more protection on the sheets here for the portfolio in general and for SNAP in particular.” Maybe Tik Tok is actually peaking right now and Snap is about to surge again because young people are using Snap to communicate? I don’t know, that sounds a bit optimistic, but we also bought this stock near it’s all-time lows and I’ve been steadily trimming it down ever since and I’d rather trim than buy this stock right now too.

Parts 2-5 coming this week.