Outer space industry timeline, Shorting altcoins, No NoDaddy, Outperformance and more
Here’s the transcript from this week’s Live Q&A Chat.
Q. Cody, regarding mining in space, how many years/decades away do you think we are from seeing it happen? Thoughts on how it could impact the price of precious metals of the Earthly variety?
A. Just this weekend, I was reading this CNBC article that is called “Valedictorian Jeff Bezos said he wanted to build ‘space hotels and colonies’ in his 1982 high school graduation speech.” Bezos recently said, “in May, Bezos expanded on his vision of a future human society that has established permanent residence in space, including on the Moon, in order to protect the Earth’s natural environment and resources. At the International Space Development Conference in Los Angeles, Bezos said he envisions a future where most ;heavy industry’ will be moved off of Earth and onto space outposts powered by solar energy, which will be available in abundance in space.” And the article mentions that Bezos expects that it may only be “decades, maybe 100 years” before technological advancements will make it easy for human industries to move operations to space. “It’ll start to be easier to do a lot of the things that we currently do on Earth in space, because we’ll have so much [solar] energy.” And that it would take “thousands of companies working in concert over many decades” to make his dreams of space colonization come true. I’d guess Bezos is probably right, of course.
Q. Cody, being that many altcoins will go to zero, have you ever thought of shorting some of them as a pair trade to the ones you believe will survive?
A. Yes, I’ve thought about it often. But I don’t trust the exchanges enough to risk money borrowing an altcoin to sell to others and hope that it drops and then hope I can replace those altcoins I’d borrowed by buying them back lower than I’d sold them when I’d borrowed them from an exchange that I don’t really trust in the first place. See what I mean?
Q. Cody – Any thoughts on PANW? They report this week and have been on a pretty big run.
A. Trading at 50x next year’s earnings estimates and nearly 8x next year’s sales estimates, there’s little room for error for this network security leader. I should probably trim some of this name, as I don’t recall ever having taken any profits on it yet and it is near all-time highs with nice gains for us.
Q. WDC seems to be in the doghouse.
A. That’s not a question, haha. But yea, it does and that’s why I recently bought more at this level. I like it when I have the opportunity to buy a stock that’s hated even though the company is in an industry that I expect is likely to see “unexpected” secular growth in coming years.
Q. “While we like [Verizon’s] near-mid term prospects, we believe valuation will cap upside potential from present levels and therefore downgrade it,” Barclays analyst Kannan Venkateshwar said. Price target $50. Thoughts?
A. It’s all about the potential for Verizon to finally secularly grow via 5G. If 5G doesn’t add 5-10% extra topline growth to current analyst estimates for the next five years of Verizon revenue, then the stock is likely to struggle to break out of its 20-year range (VZ was at $59 in 1999!).
Q. Cody, when and where will your “NoDaddy” article that I saw you mention on Twitter over the weekend be published?
A. I don’t know. I deleted the tweet. I always get ready to write an article for WSJ or Marketwatch or USAToday or other places I sometimes publish to try to get back at GoDaddy for screwing up my sites or not processing billing on the paypal account that always works instead of some random old credit card they’ve had on file for 10 years. But then I remember I’m not that kind of guy, I don’t “get even.” It’s always better to just move on, find solutions and get results than it is to be vindictive. So there won’t be a NoDaddy article. All that said, let’s just analyze GoDaddy’s stock GDDY right quick. It’s trading at 160x this year’s earnings estimates but earnings are supposed to grow a full 100% in 2019 to $1 per share — which means the stock is trading at 81x next year’s earnings estimates. Topline is growing only 10-15% per year. Hmm, this looks like it could be an interesting stock to short to help hedge our own over extended longs. I want to understand why earnings are supposed to double on 12% topline growth next year first though.
Q. Cody, A quote from your post yesterday-“I’ve seen very few money managers (his name is Warren Buffett) outperform the markets over the 2.2 decades I’ve been on Wall Street.” Does this mean that we will not do better then the QQQ ETF or an S&P ETF? In short, are we trying to beat the market, or am I missing something?
A. I should have written: – “I’ve seen very few money managers (their names are Cody Willard and Warren Buffett — haha) outperform the markets over the 2.2 decades I’ve been on Wall Street.” And of course I plan to continue way outperforming the markets for me and my Trading With Cody subscribers!
Subscriber follow-up comment: Cody, Good. I can sleep again. Time for a nap.
Q. Cody, slow morning so why not a little storytime from the man behind TWC… what’s the Cody version of “How I Met Your Mother” that you’ll tell your girls one day?
A. I moved home to Ruidoso NM after 15 years in NYC to recoup from TV/Hedge Fund/Internet trailblazing for a while. My dad told me he wanted to introduce me to this nice lady who grew up in a tiny town outside of Ruidoso and is now an attorney and very pretty. So I was like, hey dad, why not invite her over to dinner at your house and tell her I’m coming too. We hit it off and a couple years later, I proposed to her on the hilltop of my “ranch.”
That’s a wrap for now. I cranked and hear gears grinding inside my head this morning. Can you get tendonitis of the left brain if you analyze too often?
