Propped Up Corporations, Rare Trades, War Is Lame, Space On Hold And More

Here’s the transcript from this week’s Live Q&A Chat.

Q. Regarding the New Green Deal… Do you agree that we are in a predominantly fascist world, where world governments are picking and choosing which companies have the best opportunity at success? Did Tesla and SpaceX not greatly benefit (faster progress) due to corporate welfare. I’m not supporting this idea, but it seems relevant to our investments. In the same way with your post about money printing you were bullish (asset inflation), same works for business, correct?

A. I talk all the time about how we have no choice but to invest our money in these corrupted lobbyist-loving corporations which get endlessly unconstitutionally subsidized and protected by The Republican Democrat Fascist Regime (Search YouTube for Cody Willard Jon Stewart to see more of me not pulling punches on Republicans’ and Democrats’ fascism back when I had my own show on, yes, Fox Business — here’s the link https://youtu.be/SjA7tT9vmMw). I certainly recognize the reality of how these policies that Trump and Bush and Obama and Biden and Clinton and Reagan all used to prop up their corporate masters and on that kind of macro level, it matters. But the so-called New Green Deal is just another minor part of it and I’m not trying to game it on that kind of a level.

Q. Cody, Please give us your best insights of the current market situation. Are inflation and interest rates a given in the coming months?

A. I got us positioned for higher interest rates and inflation late last year before they were “a given”. One of my hedge fund investors wrote me this yesterday and I agree with it: “Inflation is coming but I always find when everyone is talking about something then you have missed the boat. “Inflation” is something like one of the top searches on Google right now. So that tends to tell me that story, while real, may already be priced in. Will lumbar and copper double again from here?…probably not.” I’m trimming my DBA calls and common and have closed out my TLT puts for nice profits now that everybody in the world recognizes what we were preparing for six months ago.

Q. Good morning Cody, and good luck with Amaris’ operation! Quick question for the Q&A, which I won’t be able to follow in person: with the maybe-“surprise“ appearance of increased inflation and a bump in interest rates, which equities or ETFs currently in our portfolio, or not, would you recommend for us to hop into or add onto to take advantage of these trends (if you think they’re real and will continue)? Thanks.

A. Thanks for the kind words. Amaris only has one working eye and that’s the one she’s having emergency surgery on tomorrow. Using ETFs to game macro economic trends is not my game at all and I think trying to short-term trade ETF themes around inflation concerns that are already in the headlines every day sounds like a recipe to lose money.

Q. Cody, have you looked at Brookfield renewable BEP/BEPC as a play on renewables? They are looking to double their solar farm operations over the next few years, while holding probably the lowest cost of debt access in the industry. They look well positioned to cheaply expand into the green new deal spicket. Their debt might be less worrisome as they operate like an oil company for the green sector.

A. I haven’t looked at it, but I will. To be clear, I don’t like to try to invest in a sector when the government is throwing largesse welfare at the sector. I invest in solar because it’s the best long-term market solution for energy on this planet (and other planets too). But I never invest in solar because the Republican Democrat Regime gets lobbied hard enough to waste my tax dollar subsidizing a private market.

Q Are you making any trades today?

A. I’m buying a few puts and I am re-shorting some hedges in the hedge fund. Nothing in the PA today.

Q. I have been trying to follow your playbook, and its been going quite well. I would love to partake in your more “short-term” trades, like options and such. I understand them, but would love strike price/exp date and when you purchase them. Thanks!

A. Yes, I do try to put in at least some details about whether I’m buying at-, or out-, or in-the-money calls and the dates when I mention a Trade Alert with options in it. But they are quite rare anyway and I think most people lose a lot of money over time trading options instead of stocks anyway.

Q. Do we get one more leg down from here?

A. Probably and probably at least one more leg down.

Q. Cody, you have been calling this a blow off top market and been pretty negative for quite a while…well its kind of “blown off.” You said earlier you expect two more legs down, but aren’t too worried about inflation any more. With not as many macro concerns, and way better valuations, generally, do you think we are at least getting close to something that is more palatable/investable?

A. Yes, getting closer.

Q. How would the escalating situation in the middle east affect our investment strategy and positioning? It’s absolutely insane to watch missiles being blasted at each other.

A. War is awful and people, including children are dying and that is heartbreaking. But I’m not sure this conflict between Israel and Palestine will ever go away or ever escalate enough to impact the economies and stock markets to the west and east of the “Middle East.”

Q. When do you expect moves in our space SPAC names, especially VACQ? Is it worth waiting or being invested elsewhere until then?

A. I have no idea when the market will finally get excited about the Space Revolution. Might be another two years, might be two months from now.

Q. Are you fully invested in VACQ in your personal portfolio? For those of us who aren’t yet, should we buy remaining tranches now given stock below $10?

A. No, I’ve still got room to add more VACQ. I do think it’s a great long-term bet on The Space Revolution, but the market cap is still overvalued.

Q. Cody, have you changed your fundamental strategy on BTC or ETH after Elon’s tweet about BTC energy usage? Thanks.

A. I got us in bitcoin seven years before Elon ever mentioned bitcoin much less bought it. I got us in Ether three years ago long before it was being used to pay for NFTs. I have lots of concern about energy being burnt mining bitcoins, but then again, we all know that cryptos would be so much more incredibly efficient and use less energy than the stupid fiat currency regimes.

Q. What’s your relative weighting of ETH vs BTC, Do you ever see ETH overtaking BTC in market cap?

A. Personally, I still own a lot more bitcoin than Ether because I bought and accepted bitcoins as payments back in 2013 and didn’t get into Ether until 2018. In the hedge fund, the weightings for BTC and ETH are about the same after the recent outperformance in Ether.

Q. Cody, thanks for the nice evaluation about Coinbase. My question is— what’s your opinion about an Ethereum entry point at this time? Does the valuation look fair to you? Secondly, should we wait or enter at this point in Coinbase? Thank you and good luck with the upcoming surgery for your daughter.

A. I still like ETH and have for years now. I can only tell you that I’ve started a position in COIN.

Q. Cody, are you buying more COIN here around $280 or expecting it to go lower? I had a limit buy in for last week at $250, but it was never filled because we only got down to $251.50 or so…. thus I have no position right now.

A. I already bought some COIN at these levels when we were writing up that Trade Alert and I am not adding to it today.

Q. On the COIN trade alert, you mentioned it was the first alert of two. When will the second trade alert be coming?

A. Probably this weekend. Still working on the idea a bit more. It’s not a stock, by the way.

Q. I noticed you sold U and CRSP which are Cathy Wood stocks. I tried to ask this before, but I will try again, it seems like her stocks are targets, we own a bunch of other ones, ROKU, TSLA, SPOT, ZM, SQ… I assume you feel that even after this mini crash, they are too expensive to add to, but you are kind of holding your nose and keeping them at least in a small way… Any comments?

A. I respect Cathy Wood. But I can’t say that I follow her trades, her picks or her analysis very closely. I do my own research. And yes, if you look at my most recent Latest Positions round up from a couple weeks ago, I was talking about how I am holding onto most of our stocks even though the valuations weren’t great (in the last two weeks, stock prices have come down and some valuations aren’t so bad anymore).

Q. Cody, what do you think about SQ here? It’s come down from the 52week high of $283. I read an article that they want to start expanding internationally. Is International something that you foresee for them?

A. I liked SQ at like $50 when we first bought it. Right now, like most stocks, it’s overvalued.

Q. Do you think TWTR is a good buy now? It looks like the price has fallen off the cliff ever since earnings.

A. I’d rather buy than sell TWTR below $50 a share, but I’m in no rush to buy more. We’ve owned from the lows and I am sick of the CEO not delivering on the monetization he keeps promising.

Q. Can you comment on JD? Is there a possibility it gets de-listed? Thank you!

A. Yes, it’s possible, but quite unlikely, IMHO.

Q. Cody did you like JMIA’s quarterly report?

A. No, the company’s revenues were not good and there are no earnings for the foreseeable future. It wasn’t a good quarterly report. But I am sitting tight because I didn’t buy JMIA at $14 last year because I thought the company would have a great first quarter of 2021 as the pandemic rages in Africa with no testing, no vaccines, inadequate health care systems and so on.

Q. Adding to MP or JIMA?

A. I’ve nibbled both in the hedge fund when they crashed earlier this week, but not much then and none since then.

Q. Which 5 names would you stick to for the next 5 years if you had to choose at this moment?

A. I don’t have an easy answer on that. I spend all my life trying to build a portfolio that minimizes risk while maximizing our upside long-term. I’d suggest slowly building a portfolio like I always do.

That’s a wrap, thank you all for the questions. Be safe, stay calm and keep rockin!