SpaceX Competes, Web 3, Rips To Dips And Lots Of Stocks

Here’s the transcript from this week’s Trading With Cody Live Q&A chat.

Q. Hi Cody, Seems like we are in a very crazy market. On any given week a stock can go up 25% and then down. Was wondering if it makes sense to sell off these stocks on crazy increases (speculating it will probably go down) i.e FUBO. Not big on day trading, but there seems to be money to be made in this volatility. Thank You!

A. Crazy market indeed. Some of these stocks are so volatile on a day-to-day basis that you’ll see 20% pops and then 20% craters (again, ie, FUBO). I’m feeling like I’ve got too many positions again and I want to trim the number of longs down and I have to say that FUBO is a candidate. Molotov is a good acquisition at a good price, but the gross margins are an issue for FUBO and I’m continually thinking that I’d rather focus on Space stocks rather than streaming stocks.

Q. I saw a YouTube video saying SpaceX can still make a profit using Starship to compete with Rocket Lab’s Electron. Do you agree with that analysis? If so, does RKLB have any other advantage vs SpaceX?

A. SpaceX is the big dog, no doubt. And yes, they are competition for almost every space company, from satellite constellation companies to launch companies. I expect there will be more than just one successful Space company in almost every space subsector that SpaceX competes in though.

Q. Over the years I’ve enjoyed listening to your music and reading your write-ups with musical references, its probably the reason I started following you in the first place. Maybe you would consider doing the Elton John song “Rocket Man” except it would be “Rocket Lab!”

A. “They packed the satellites last night pre-flight. Zero hour 9:00 a.m. And they’re gonna be high as a kite by then. Satellites orbit the Earth so much when costs drop. It’s getting cheap to get out to space on such a frequent flights. And I think it’s gonna be a short, short time til touchdown brings the boosters ’round again to find. The satellites will make things work at home. Oh, yes, yes, yes, It’s Rocket Lab Rocket Lab, shooting satellites up there above.” Adapted from: “She packed my bags last night pre-flight Zero hour 9:00 a.m. And I’m gonna be high As a kite by then I miss the Earth so much I miss my wife It’s lonely out in space On such a timeless flight And I think it’s gonna be a long, long time ‘Til touchdown brings me ’round again to find I’m not the man they think I am at home Oh, no, no, no I’m a rocket man Rocket man, burning out his fuse up here alone”

Q. What are your thoughts on the RDW earnings rescheduling? Would you suggest to just sit tight for now and wait for clarity?

A. I’m mostly sitting tight.

Q. Also, what did you make of the BKSY earnings report? Still in the early innings here. Thank you so much!

A. I didn’t like the report much as the company’s competition is crunching prices, as I’d worried they might be. I trimmed a little bit of BKSY in the hedge fund lately and did a little bit more today. Still holding some though.

Q. On the sktls.com site, where is the spreadsheet of space companies?

A. Thanks for asking. Several hundred people have now signed up on sktls.com and growing. Please take a minute to go to sktls.com, log in and maybe interact with a few people, follow a couple people, post in one of the Groups. Here’s the link to see/work on the spreadsheet for tracking every space company out there. I think it’s safe to say that sktls.com is already the leading Space Crypto Community in the world.

Q. Cody, 5 months after you recommended Helium (HNT) as being worthy of a small investment back in June it has climbed from $13 to $50. The number of hotspots is growing by 75k per month and has gone from 60k to over 300k in that same span of time. LoRaWAN Bobcats are now shipping to Southeast Asia, Korea and Australia in addition to the US and Europe. Dish wireless and GigSky are partnering with Helium and FreedomFi Gateways are now shipping to help provide 5G coverage. The network seems to be snowballing in a big way. Do you recommend dollar cost averaging at these levels or would you be more opportunistic and take advantage of any volatility to the downside?

A. I’m a big fan of HNT and I haven’t sold any and I’d rather not choose between having to dollar cost average vs being opportunistic on any downside volatility. Don’t go crazy betting very much on any specific crypto, but this is a good one.

Q. Cody, there is a lot of Web 3 talk in the crypto space. How can we capitalize on this movement in the stock space? What are some high level concepts/trends we should consider when looking for opportunities in public stocks that will benefit from web 3?

A. Web 3 came up in our sktls Space Crypto bi-weekly zoom call while I was in NYC. I’ll do some more work on it. Good call.

Subscriber A: My thesis on crypto is that we face an irreversible transfer of commerce onto the blockchain, and that BTC will continue to represent a safer store of value/currency, and ETH is the scaffolding upon which the smart contracts of the near future will be built with the most ease. That said, I believe there will be hundreds/thousands/millions of other attempts to do what Ethereum currently does, and those with the most benefit to their users will succeed in proportion to their benefit to their users, and Ethereum will likely be remembered in 30 years as the “Atari” of its time. Innovative, incredible, amazing, and waaaaay out of touch with the new innovations of Web3, Web4, Web5? That said, I will ignore the “current cycle,” and practice discipline taught to me by Cody and others over the 10 plus years I’ve been following him to “buy the rips, sell the dips.” I recently sold some BTC and ETH as it scaled higher. I am holding my position of HNT though because it’s seemingly under priced in the retail market. and that’s only because I’m not smart enough to game what the corporate world is doing. I wish I had that skill. Good luck to you, and I think the discipline Cody preaches will serve any of us.

Subscriber B: Good thoughts — thanks for putting it out there! I’ve learned a great deal from Cody, too. Mainly his approach and how he thinks about a potential investment. He’s given me a set of question tools by which to measure. It starts with the primary one: Is it revolutionary? What will be the future impact on society and corporations as a whole? How does it differ from other technologies in its space? How is it valued currently? And what’s its exponential growth potential over time. I’ve also learned from Cody to give the investment room to find its legs. Revolutionary stocks typically have wild price swings and one must guard against being shaken out. I’ve learned how not to be shaken out by understanding and managing my emotions, plus I remind myself of my conviction thesis. In times past, before I learned the art of MME, I allowed myself to be shaken out of stocks that went on to have phenomenal returns. Or I jumped in and out of them, minimizing my returns. Sell the rips and buy the dips. I’m thinking if the crypto cycle is lengthened there’ll be more rips to sell before the winter takes hold It’s going to be interesting to see how this cycle plays out. Maybe cryptos won’t get snowed in, or worse yet, plowed under — maybe just a little frosty LOL.

Q. Cody, I stumbled onto this company IMMR during my readings on the Metaverse. What’s your opinion on the company? Does it have any role as a Metaverse play? Thank you.

A. Hmm, I don’t know it, but it’s been public for 20+ years and is down 90%+ from its early days. “Immersion Corporation, together with its subsidiaries, creates, designs, develops, and licenses haptic technologies that allow people to use their sense of touch to engage with and experience various digital products in North America, Europe, and Asia. The company provides technology, patent, and combined licenses. It also provides software development kits (SDKs) comprising tools, integration software, and effect libraries that allow for the design, encoding, and playback of tactile effects in content. In addition, the company offers reference designs and SDKs; and licenses its patents to implement the licensed software to customers. Further, the company offers engineering and integration services, design kits for actuators, mounting suggestions, controller boards, software libraries, programming examples, and documentation. The company offers its products to mobile communications, wearables, and consumer electronics; console and PC gaming; automotive; and medical markets. Immersion Corporation was incorporated in 1993 and is based in San Francisco, California.” Doesn’t sound like much of a pureplay on the Metaverse, but share the link of the article you read and I’ll read it. Thank you.

Q. Cody, I’m just curious as to what level Rivian would have to drop to before you became a buyer?

A. I’d be interested in buying RIVN at or below $80 or so.

Q. Cody, do you think TSLA continues to bleed until Elon finishes selling his 10%?

A. I just have no idea how to game that stock’s near-term moves.

Q. MP has taken off this week. Is it a good time to trim some here?

A. Yes, probably. I hedged some in the hedge fund and trimmed some personally.

Q. Are you concerned at all about MP Materials after the stock dropped over 20% on October 26-27 after a highly publicized research report claimed MP “is nothing more than a “smoke and mirror show”? It found that Shenghe, a related third party and significant shareholder, accounts for 99% of MP Materials’ revenue. Furthermore, the report traced that entity’s ownership back to the Chinese government. It also noted that MP Materials is a failed repackaged business. Its predecessor company, MolMolycorp, went bankrupt and that management dumped on investors at an inflated price. Because of these and other factors, Grizzly Research sees 60% downside in the short and medium term as investors and regulators “wake up to the company’s shenanigans.” The stock has since recovered plus a bunch but I bailed out not knowing if the report brought up legitimate issues.

A. Some of the issues seemed worrisome, some seemed silly. MP is a Chamath SPAC and that is a yellow-flag in its own right. But the premise behind owning this remains the same and I’ve got a small ish position for now.

Q. Could you look at and comment on BYND (beyond meat)? I tried the “burger” recently and found it to be delicious. The stock has been going down quite a bit.

A. I wonder if the business is too competitive to ever be any thing but a commodity-like margin business. I’d rather buy BYND than sell it here though.

Q. Have you ever looked at Origin Materials (ORGN)? Thanks.

A. Far from profitable, but certainly interesting. Will dig in. “Origin Materials, Inc. operates as a carbon negative materials company. Its platform converts the carbon found in biomass into useful materials. The company was incorporated in 2008 and is headquartered in West Sacramento, California.”

That’s a wrap folks. Thanks for the fantastic questions.