Latest Positions with quotes from Nikola Tesla

“There is something frightening about the universe when we consider that only our senses of sound and sight make it beautiful. Just think, the universe is darker than the darkest ink; colder than the coldest ice and more silent than a silent tomb with all the bodies rushing through it at terrific speeds. What an awe-inspiring picture, isn’t it? Yet it is our brain that gives merely a physical impression. Sight and sound are the only avenues through which we can perceive it all. Often I have wondered if there is a third sense which we have failed to discover.” – Nikola Tesla

Here is a list of my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position. I’m letting go of Wells Fargo. It’s a fine bank, but it’s not exactly a Revolutionary kind of company and I’d like to free up the capital for another name. You’ll notice a few mentions of some small recent trades below too. I’ve been reading biographies and speeches of Nikola Tesla, the inventor that Tesla the car company is named after, and I thought it’d be enlightening to put some of his quotes placed in relevant places.

I’ve broken the list into Longs and Shorts. I’ve further broken the list down in order of highest-rated to lowest-rated. Those ratings 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 (8) – Here’s a quote that’s either from Nikola Tesla or Elon Musk, you guess which one:
    “In the first place, I come from a very wiry and long-lived race. Some of my ancestors have been centenarians, and one of them lived one hundred and twenty-nine years. I am determined to keep up the record and please myself with prospects of great promise. Then again, nature has given me a vivid imagination which, through incessant exercise and training, study of scientific subjects and verification of theories through experiment, has become very accurate and precise, so that I have been able to dispense, to a large extent, with the slow, laborious, wasteful and expensive process of practical development of the ideas I conceive. It has made it possible for me to explore extended fields with great rapidity and get results with the least expenditure of vital energy. By this means I have it in my power to picture the objects of my desires in forms real and tangible and so rid myself of that morbid craving for perishable possessions to which so many succumb. I may say, also, that I am deeply religious at heart, although not in the orthodox meaning, and that I give myself to the constant enjoyment of believing that the greatest mysteries of our being are still to be fathomed and that, all the evidence of the senses and the teachings of exact and dry sciences to the contrary notwithstanding, death itself may not be the termination of the wonderful metamorphosis we witness. In this way I have managed to maintain an undisturbed peace of mind, to make myself proof against adversity, and to achieve contentment and happiness to a point of extracting some satisfaction even from the darker side of life, the trials and tribulations of existence. I have fame and untold wealth, more than this, and yet – how many articles have been written in which I was declared to be an impractical unsuccessful man, and how many poor, struggling writers, have called me a visionary. Such is the folly and shortsightedness of the world!”
    That quote actually comes from Nikola Tesla, the incredible inventor that the car company is named after. There were surprisingly shocking parallels between Tesla’s life and Elon’s life. Maybe they’re both actually aliens from Mars trying to get home? Tesla talked about receiving signals from Mars and going there someday too, after all, haha.
    Here’s the other point I want to (re)make. Tesla cars keep getting better even after you buy one. My car will soon be able to do this: Tesla v10 Software Update Preview and Tesla Enhanced Summon. I’m not sure how old fashioned car companies are going to ever start mass making electric cars with a positive gross margin, much less how they’re going to figure out over-the-air updates that continually improve your car after you own it. Stick with Tesla. I’d look to nibble on more TSLA at $210ish or so.
    Okay, one more quote for you, again is this from Elon talking about SpaceX rocket ships or from Nikola talking about a turbine?
    “The one feature, however, which has most amazed experts, is the extraordinary power of this form of prime mover. Owing to the great effectiveness of the underlying principle and peculiar construction, ten times more power can be produced than with any other machine known.” Nikola is the answer again (unless they’re the same alien/person, in which the answer is both).
  • UBER Uber (8) – Headlines like these get clicks, but the analysis doesn’t do you investors any good: Uber lost over $5 billion in one quarter, but don’t worry, it gets worse. Uber’s investing for the long run and the company is either going to end up being a de facto standard people-and-things mobility platform worth hundreds of billions of dollars or its going to fail trying. I think it will succeed but it might take a few more years. I might buy more Uber at $35 or so.
• (Social Revolution)
  • FB Facebook (7) – Facebook should change its name to WhatsInsta. Because WhatsApp and Instagram are seemingly the only assets that are growing with any meaningful magnitude right now. You should watch the movie “The Great Hack” on Netflix and see how you feel about posting and consuming content on any of the social media platforms. That said, everybody’s going to keep on using social networks, so I continue to hold onto this name. I might scale into more FB at $175ish. Quote from Tesla: “My electrical eye comes as the result of years of study and experiment. Three stages mark its construction and the first two and most difficult have already been completed. I am certain that Man will soon possess this machine in completed form and will be able to see at will to any part of the earth. In planning its construction I have taken the human eye as a model and have followed the principles which nature used in developing the human eye. My mechanical eye will be one of a group of associated machines, just as the human eye is part of the body and can only function in cooperation with other parts of the body.”
  • TWTR Twitter (8) – Twitter reported another strong quarter of topline and earnings growth and user growth might even be accelerating here. I like Twitter for the long-term though it could probably use a rest here in the low $40s for the near-term. I’d buy more TWTR, already one of my hedge fund’s largest positions, below $40.
  • SNAP Snap (7) – Snap has been a huge winner for us over the last year since we bought it and throughout this calendar year too. Snap’s app is also gaining traction, user growth is accelerating, as is average revenue per user. All systems go here, though the stock has run so much this year, the valuation is a bit whacked. I’m a holder of this stock for the long-term and might buy more if it were to ever go back below $14 or so.
• (5G Revolution) Here’s a quote from Nikola Tesla about 5G, about 130 years before it existed (‘before long’ can be a long time): “As the waves of this kind are all the more penetrative the shorter they are, I have for years urged the wireless experts to use such waves in order to get good results, but it took a long time before they settled upon this practice. Although the world is still skeptical as to the feasibility of my undertaking, I note that some advanced experts, at least, share my views, and I hope that before long wireless power transmission will be as common as transmission by wires.”
  • VZ Verizon (6) – Verizon and T-Mobile (now that TMUS is acquiring Sprint) are likely going to waste AT&T and any other competitor in 5G. AT&T is distracted with trying to rationalize the content and satellite businesses they stupidly overpaid for (feels like 2000 all over again for AT&T). Verizon and T-Mobile will pick up the pieces. Dish Network is a darkhorse competitor in 5G but as a long-time unhappy Dish Network satellite customer who can’t fathom that their remote controls and set top box interfaces somehow keep getting even more user-unfriendly over the years, I’m doubtful the company will be a leader in 5G. So I stick with a little Verizon and might buy more Verizon near $50.
  • TMUS T-Mobile (8) – T-Mobile + Sprint just might be using frequencies and technologies for 5G that just might be quite a bit cheaper and more effective/reliable than Verizon’s own 5G frequencies and technologies. I like T-Mobile here for the long-term. I’d buy more near $70.
  • QCOM Qualcomm (8) – It’s not about the near-term for Qualcomm, or about whether or not Apple is going to use Intel modems in their non-5G devices. It’s all about 5G and the next five years for Qualcomm as 5G hits mainstream worldwide.  Nothing’s changed here except that The Great Trade War is likely to take some of next year’s earnings estimates lower by maybe 10-15%. I still think the stock is terribly cheap and attractive here looking out of the next five years. I might buy some more Qualcomm at $65.
  • Cisco (8) – Cisco is a the de facto world leader in routers and Internet infrastructure that’s not named Huawei. Huawei’s losses are Cisco’s gain just as 5G and IoT are about to roll out mainstream in the next few years. Cisco’s trading at 15x next year’s earnings, growing about 5% or so right now, but that might accelerate with 5G and IoT and the Huawei ban.
• (Cloud Revolution)
  • Palo Alto Networks (6) – I’ve been worried that the residual business of selling appliances to protect networks is holding back Palo Alto. That said, I made a few calls about it and I want to give Palo Alto another quarter or two to see if their recent acquisitions and their pure cloud offerings can catch more traction. I’m not about to buy PANW unless the next quarter is good.
  • DELL Dell (6) – Dell’s volatility and stock action continue to reflect the VMW’s stock action. Dell’s other investments and its own Dell businesses are growing but aren’t moving the needle for the stock at this point. The debt on the balance sheet and the convoluted share structure isn’t helping this stock, which remains very “cheap” on a P/E and most other metrics. I trimmed this position down quite a bit when it was higher and I’m sitting tight with the stock for now. I might buy more if it got back down to the low $40s.
  • SQ Square (7) – Square has sold off since their quarterly report included guidance that Wall Street was clearly disappointed in. Then again, the company might just have reigned in expectations and they’re now back on for UPOD (under-promise, over-deliver) for the next few quarterly reports. Theoretically, at least. I also think the Square Cash App, which is now a more than $1/2 billion dollar a year business and growing quickly. I bought more SQ recently around these levels and would buy more below $60.
  • NVDA Nvidia (6) – Nvidia’s earnings report is coming up this week and the expectations from both the bulls and bears are for big moves. That might mean the stock won’t go much of anywhere after the report. I might buy more NVDA near $140 and I’d probably trim some at $180. Sitting tight on it for now.
  • ZEN Zendesk (7) – The quarterly report and the guidance weren’t bad for ZEN, but the market didn’t like this kind of commentary: “Second-quarter revenue was $194.6 million, up 37% year over year and about $2.1 million above the average analyst estimate. Growth was particularly strong in the U.S. and Latin America, but there were some issues elsewhere. Growth in Europe, the Middle East, and Africa (EMEA) and in the Asia-Pacific (APAC) region, although “still solid,” CEO Mikkel Svane said during the earnings call, “didn’t quite live up to our own expectations and [lagged] other regions.” Meanwhile, 35% topline growth, which is what the company guided for, is quite robust and the company has just turned profitable this year and should more than double earnings from this low base next year.  I’d look to nibble more ZEN near $65.
  • SPLK Splunk (7) – There’s a lot of value in the way Splunk helps companies figure out what’s going on inside their data. Splunk’s use of its engine to provide its services makes this one incredibly high margin business. Here’s another fascinating “most important trends on the Internet” from Mary Meeker. Fast forward to about 13:50 for the part about data plumbing as it applies to the market Splunk is creating. I’d nibble more SPLK below $120. Do you realize that Splunk’s market cap is $20 billion, making it worth nearly 1/2 a Tesla or 70% of Twitter? Splunk’s data crunching engine is answering questions such as these:
    • You see that one of your servers is down, has it impacted the health of your service?
    • How do you predict service-level degradation before it occurs?
    • What is the impact of your critical service being online?
• (Energy Revolution)
  • SEDG SolarEdge (6) – Another very impressive earnings report from Solar Edge has the stock on fire at all-time highs. As I wrote last time: “This remains, along with First Solar, one of the best plays on The Solar Revolution.” I’d probably buy more SEDG below $80 if it ever gets back down there.
• (China Middle Class Revolution)
  • JD JD.com (7) – JD just reported a strong earnings report this morning, beating analyst estimates on top and bottom lines and the stock is up nearly 15% on the day. The Trump China Trade War continues to be a threat to this company’s near-term growth, perhaps, but that might also mean the company would simply be growing even faster if not for the trade war. I’d probably nibble more JD around $25.
  • BIDU Baidu (8)– Baidu’s stock has continued to sell-off but I’m going to give it at least one quarterly report before bailing on it. The report will come on Monday next week and I’ll send out an updated analysis of BIDU after that. I keep going back to the balance sheet as BIDU has $12 billion net cash (now over 35% of the market cap). And the company’s investments range from AI to Driverless to equity in iQuiyi (IQ) and others totaling billions of dollars of worth, probably at least another $10 billion. I’m sitting tight with BIDU for now.
  • TSM TSM (8) – A very smart friend of mine opined to me when I told him that I own Taiwan Semiconductor that TSM might be the only company in the world that the US would go to war over. So many US companies are dependent upon TSM’s fabs to make their chips that make our world’s technology run that it’s certainly a key company for national defense. I’d be a buyer of TSM at these levels in the low $40s. Tesla quote: “There is one more discovery which I want to announce at this time, consisting of a new method and apparatus for the obtainment of vacua exceeding many times the highest heretofore realized. I think that as much as one-billionth of a micron can be attained. What may be accomplished by means of such vacua is a matter of conjecture, but it is obvious that they will make possible the production of much more intense effects in electron tubes. My ideas regarding the electron are at variance with those generally entertained. I hold that it is a relatively large body carrying a surface charge and not an elementary unit. When such an electron leaves an electrode of extremely high potential and in very high vacuum, it carries an electrostatic charge many times greater than the normal. This may astonish some of those who think that the particle has the same charge in the tube and outside of it in the air.”
• (Defensive names)
  • CPB Campbell’s (7) –  With Kraft Heinz fundamentals falling apart and the stock crashed, it underscores how important management decisions can be in a subindustry like food distribution or anything else, really. I’m a holder of CPB here and could buy more if it got back to below $35. It actually might be time to nibble some KHC with the stock in the mid $20s here, if you’re looking for another non-tech name to invest in. Tesla quote: “Artificial food, manufactured by the sun’s power, may then afford relief, but it is difficult to foresee just how far the human race can make itself independent of the products of the soil. We are the results of ages of adaptation to the environment and our organs would have to be profoundly changed to enable us to exist on artificial food alone.”
  • Altria MO (7) – I recently invested a small amount of money (less than 1% of the fund) into Juul before its probable IPO in the next year. I sold an equivalent amount of our Altria position, which I’d invested in partly because of its large holdings in Juul.
  • GLD Gold ETF (7) – What a rally in gold this year, one that started just soon after we’d initiated this GLD position back in April or so. I’m a trimmer of GLD here in the low $140s and would perhaps buy some of it back if it got closer to $138.
• (The Trillion Dollar Basket)
  • GOOG/GOOGL Google (7) – Google is probably my favorite of the FAANNG names (Facebook, Amazon, Apple, Nvidia, Netflix and Google — Netflix being my least favorite of the FAANNG names right now). I don’t think Huawei will be able to pull off the miracle of replacing Android with a homegrown OS. It’s a terribly difficult proposition to get all the developers of new apps to build for yet another OS.
  • AAPL Apple (7) – Apple’s been caught in the back and forth of the Trump China Trade War and that seems to be the biggest driver of the stock right now. Trade War escalates, the stock sells off. Trade War calms down, the stock rallies (see today’s 5% pop, for example). I’m a trimmer of AAPL here near $210 and would be a buyer back near $190 or so. 
  • AMZN Amazon (7) – Amazon’s not cheap but it never has been and probably never will be. I continue to hold this core name that has so many ways to win from retail to Alexa to logistics to cloud. I’d look buy more near $1700 and to trim some near $1900.

• (Other)
  • AXGN Axogen (7) –I nibbled a tiny bit of AXGN near $12 after its earnings report, per the Trade Alert I’d sent out at the time. It’s really popped now, getting above $16 earlier this morning. I’d trim some now rather than buy some. And I might buy more if it got back near $12. It’s still one of my smallest positions.
  • BA Boeing (7) – The newsflow around Boeing and its infamous Max jets is pretty relentlessly negative. That might mean the stock is a good buy down here. I’m a buyer here near $330. Tesla quote: “The present international conflict is a powerful stimulus to invention of destructive devices and implements. An electric gun will soon be brought out. The wonder is that it was not invented long ago. Dirigibles and aeroplanes will be furnished with small electric generators of high tension, from which the deadly currents will be conveyed through thin wires to the ground. Battleships and submarines will be provided with electric and magnetic feelers so delicate that the approach of any body under water or in darkness may be easily detected. Torpedoes and floating mines will direct themselves automatically and without fail get in fatal contact with the object to be destroyed – in fact, these are almost in sight. The art of telautomatics, or wireless control of automatic machines at a distance, will play a very important role in future wars and, possibly, in the later phases of the present one. Such contrivances, which act as if endowed with intelligence, may take the shape of aeroplanes, balloons, automobiles, surface, or underwater boats, or any other form according to the requirement in each special case. They will have far greater ranges and will be much more destructive than the implements now employed. I believe that the telautomatic aerial torpedo will make the large siege gun, on which so much dependence is now placed, utterly obsolete.”

Shorts –

• Primary short portfolio
  • IBB Biotech ETF (7) – IBB’s been one of the best hedges we could have in the markets this year, but that could change in a heartbeat, I suppose. I do think medicine-related businesses will be under fire as the Republicans and Democrats who run for offices in the next elections will pretend that they’re going to do something about it. Closer to the election, if biotechs and hospitals and other healthcare industry stocks are getting crushed, there might be some good buying opportunities.
  • QQQ Nasdaq 100 ETF (6) – I’m getting a bit dizzy with these wild swings in the markets but at least we’ve had some nice success using the swings to our advantage. I’m now re-adding to these index put hedges by re-shorting a little of the QQQ, SMH, IWM, SPY and DIA today.
  • SMH Semiconductor ETF (6) – I’m getting a bit dizzy with these wild swings in the markets but at least we’ve had some nice success using the swings to our advantage. I’m now re-adding to these index put hedges by re-shorting a little of the QQQ, SMH, IWM, SPY and DIA today.
  • IWM Small Cap ETF (7) – I’m getting a bit dizzy with these wild swings in the markets but at least we’ve had some nice success using the swings to our advantage. I’m now re-adding to these index put hedges by re-shorting a little of the QQQ, SMH, IWM, SPY and DIA today.
  • SPY Small Cap ETF (7) – I’m getting a bit dizzy with these wild swings in the markets but at least we’ve had some nice success using the swings to our advantage. I’m now re-adding to these index put hedges by re-shorting a little of the QQQ, SMH, IWM, SPY and DIA today.
  • EWU and EWUS British ETFs (6) – I’m mostly out of these short hedges, but still have a small short exposure in each.
  • Tiny short hedges, rated about a (7) – in VHC, GLUU, CVNA, EVBG, HTZ and others. I might cover these at any time and I’m not expecting to make much money on these shorts. They’re just hedges for the hedge fund and I’m not sure any of these are no-brainer shorts. Please don’t just go around blindly shorting these for your personal portfolio.

Cryptocurrencies/tokens –

• • Bitcoin (7) – We’ve had a good year buying bitcoin futures before they popped, trimming them on huge rallies and nibbling them back when they sell-off again. I’d be more of a buyer than a seller of bitcoin and bitcoin futures here below $11,000.
  • Stellar Lumens (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.
  • Ethereum (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.
  • Ripple (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.

Disclosure: At the time of publication, the firm in which Mr. Willard is a partner and/or Mr. Willard had positions in some of the positions 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.

You can find an archive of Trade Alerts here.