Notes on Travel, Recessions, Intel, Tesla and The Importance Of Cutting Camping Losses

I was in Austin last week for Amaris’ therapy (which went very well…by the way, you should see her play the piano, and she can’t help but kick in delight when I help along with some chords beneath her — pic below).

Every gas station on the road from central NM to east Texas was busy, every restaurant was packed and Top Golf was fully booked so I didn’t hit a ball the whole week. I found that surprising given how the consumer data and conversational anecdotes with friends have thinking we’ve been in a recession as I’ve been saying for the last month or so. I saw that Cathy Woods told people on CNBC this morning that the US is probably already in a recession.

Now remember that being in a recession doesn’t mean the markets will crash…and see, many stocks already have crashed and some stocks are probably have already put in their long-term bottoms here. On the other hand, as I keep reminding us, the markets were in The Greatest Bubble Of Bubbles that we’ve ever seen as assets across stocks, bonds, ETFs, real estate, cryptocurrencies, NFTs, REITs, commodities, SPACs, etc all finished up in a Blow-Off Top end to their long-time Bubble-Blowing Bull Markets.

And that means that many stocks are still overvalued, many stocks are still headed to zero and valuations are still not exactly anywhere near historic lows. Earnings estimates for the S&P 500 haven’t officially come down yet, but Wall Street is pretty convinced that earnings estimates overall are way too high for this year and next year (and thusly has already priced much of it in).

So you know I’m very willing to jump up and down and tell people when I see an incredible long-term buying opportunity in individual names and/or for our portfolio, especially in a market crash-ish environment as we have been in for most of this year. But it’s my analysis hear seems to indicate that the risk/rewards here are just pretty balanced right now. I’m not terribly bearish like I was back in November and into the end of last year when I was pretty confident in my analysis that the risk/rewards were terrible as the markets were going through that Blow-Off Top End Of The Bubble-Blowing Bull Market. I’m not wildly bullish like I was back in March 2019 when the markets were going through the Covid Crash and I was pounding the table every day about why and what names we should be loading up on.

Feet-to-fire, I expect that we’ll probably get a better chance to buy many stocks, including in my favorite sectors but since I don’t have a crystal ball that another major leg down is coming, you’ve seen me nibble and buy a few tranches of my favorite names when the markets do set new lows in crash-ish action as I did a couple weeks ago before I took off for Austin. In the hedge fund, I use rallies like we’ve had in the two weeks since then to put a few short hedges on the sheets and I did so again recently, but overall I’m leaning towards opening up more long exposure as I’ve been explaining since that low a couple weeks ago. For example, I continue to nibble more Intel INTC every time it hits a new low and I would do so again if it it hits $35. Intel is cheap, pays a 4% dividend, has a relatively new and certainly a brilliant CEO now in charge, might be about to take market share finally and has a potential trillion dollar valuation for its new fab business. In the hedge fund, I’ve also been trading AMD and NVDA and SMH puts as a hedge to my Intel bet.

I’ll also mention that while I was in Austin, I tried to go camping with my brother overnight on the Colorado River, something he does often and which I’ve been trying to join him on for years now. Soon after I accidentally hacked the hammock (which my brother had brought and hung up for me) with a machete while trying to clear the brush beneath it, I told my older bro that I felt pretty itchy and lifted up my shirt to find my whole body covered in welts. We tore down camp, pulled all of our fishing rods, and canoed back up the river to his car as darkness was about to set upon the land. By the time I was showered up in cool water with a benadryl in my system going to bed a couple hours later, I was fine. That’s only the third time in my life I’d had to take an antihistamine. It was a good lesson in remembering how important it can be to cut our losses even when it’s painful to clean up the campsite (portfolio) and head home. Here’s a shot of me before we took off. I don’t have a shot of what I looked like when we got back but it wasn’t pretty.

I’m working on a Latest Positions write up and ratings so stay tuned for that each day the rest of this week, but a last comment before I go for now — I finally got to pick up my Tesla Model S. The car amazing, it’s fast, it’s comfortable and the stereo is pretty great although I am still playing around with the settings and I might upgrade the rating to really great soon. Remember that I’d bought a Model 3 back in 2019 to see if Tesla’s mainstream car was ready for prime time and I found that it was by far the best car I’d ever owned….the Model S is just like the Model 3 but more amazing, faster, more comfortable with a more juiced up audio system…

While we were waiting for the car at the Tesla showroom a truck with eight brand new Tesla cars arrived and the sales lady confirmed to me that every car on that truck had been ordered months ago and would be picked up by a happy customer this week. I thenm walked across the street to the Hyundai dealer which had quite a few brand new electric vehicles called Ioniq5 for sale at $59,000 each that looked really sweet but nobody was on the lot looking and they were just sitting there getting dusty. Interesting anecdotes about the car industry right now if nothing else. At any rate, I’m not sure Tesla’s going to go straight up from here and it might have a hard time meeting this quarter’s delivery estimates if the backlog of orders and the struggles to ramp up production in Austin and Berlin because of The Great Chip Supply Chain Crisis. But if Tesla were to a new 52-week low I’d probably start nibbling some of it for the first time since we bought it back at $50 or whatever it was when we started buying in 2019.