Taxing The Rich, Resetting, EV Self Driving, GLD, Crowdfunding And More
Here’s this week’s Trading With Cody Live Q&A Chat.
Q. Cody, what do you think are the chances Bidens cap gain proposal passes? If it does, what do you see as net effect on the markets? Do you encourage selling or discourage selling to avoid realizing gains? Thanks.
A. There’s close to 0% chance the the Republican Democrat Regime is going to piss off its bosses by raising capital gains tax in any meaningful way without creating lots more loopholes to let the very wealthy donor class and/or giant corporations avoid paying such taxes anyway. Middle class and poor people who trade stocks, sure they might have to pay some more in capital gains taxes (a TINY bit more if at all) but they don’t own enough stocks to move the markets now, do they? We live in a time of a vicious cycle of only raising taxes on the middle class and poor people while pretending that very wealthy families and giant corporations don’t ever actually pay any more in taxes as they move around their money to avoid taxes using loopholes they lobbied for while the Republican and Democrat Regime moves the so-called tax rates up and (mostly) down. If Republicans and/or Democrats want to cut and/or raise taxes without simplifying the tax code by eliminating loopholes and targeted tax tricks for the very wealthy and/or giant corporations…we all know that they are simply going to hurt the middle class and poor people. Same playbook, same beneficiaries. The stock market is ALWAYS an intended beneficiary of Republican Democrat policies.
Q. Hope you and your family are well. I’ve been reading and hearing more about Web 3.0, a “better” internet where users will have more control of their data. What are your thoughts on this and how can we position ourselves with stocks and/or crypto?
A. Web 3.0 will likely get hijacked by the same governments/corporations who hijacked this current Internet. We already own those companies’ stocks of course. Bitcoin and Ether are my favorite cryptos.
Q. We all know investing can be very emotionally driven (although it shouldn’t be). Can you share more of your mindset to “RESET my brain and emotions”. What initiated this? How do you think through this? I feel this will be helpful in making hard decisions when investing hard earned money.
A. I’ve felt like we have gotten a little stagnant at my office and my desk was cluttered and so a couple weeks ago, I told my assistant that we need to RESET the office. I wanted to clear out the junk, throw out any old papers and boxes and reorganize. I then realized that the same concept might should apply to my investing right now too. It’s better to sell/reorganize when you can, not when you have to. So we wrote “RESET” in big all cap letters across the white board in our office and I stewed on that thought for a couple days. And then I started RESETTING my brain, my emotions and my portfolio. Speaking of which I’m taking next week off from writing, so no Trading With Cody at all next week while I finish my Great Reset.
Q. Where do you research or learn about the future, new tech, disruptions, etc.? Who are some of the best people, podcasts, etc. to learn where things are heading? I’m interested from a stock and crypto point of view.
A. I read all day every day as I read books and websites and magazines. The only podcast I listen to is Revolutions which is all about historical societal/governmental revolutions (which are often actually correlated with technological revolutions by the way).
Q. Sounds like you think VACQ is going to knock it out of the park. When do you expect the deal to close?
A. They said sometime in the second quarter is when the deal should commence.
Q. Morning, I was wondering why we haven’t seen a better upside in VCAQ with all the success SpaceX is having. Being a SPAC doesn’t help?
A. Me too and yes, SPAC-taint don’t help.
Q. It looks like people are selling all SPACs indiscriminately. Are there any SPACs that have mergers in place that you find interesting now? I have some IPOE from higher levels but I have lost faith in the founder. Wondering if I should do my own purge in my portfolio now.
A. I write about the stocks I like every day for you.
Q. Cody, by order, which company (Tesla, Cruise, Waymo, Bidu, etc) do you think is ahead of the autonomous car race? The only reason I am still holding on to an oversized $TSLA position is the possibility of Full Self Driving (FSD) pulling ahead of the race. Do you have the FSD beta, and if so what is your opinion of FSD?
A. Tesla’s probably closest to solving real autonomous driving. I have Full Self Driving and it’s fine everywhere but here in the country, it’s not as useful out here as it is on the city highways.
Q. Hi Cody, can I still enter Facebook as a first tranche at this level or should I wait for a pullback?
A. I always tell people that if you want to invest in a particular stock you should probably consider starting with a small first tranche of 1/5 or 1/3. I’d start small with FB if you’re starting today, but the advice still applies and I do think FB still has more upside over time.
Q. Hi Cody, could you revisit vuzi? I came across this podcast interview with the ceo: “Augmented Reality with Paul Travers”. Ticker symbol: VUZI. Website: https://www.vuzix.com/. Although AR and VR are related, perhaps we should view it as 2 separate plays?
A. I think VUZI is fishy and I think it makes a good short hedge to our FB Virtual Reality long. I’m long some VUZI puts as I think the stock is at best WAY overvalued.
Q. Republic and WeFunder offerings, the recent companies mentioned here are quite young (compared to Relativity Space’s recent funding round D). Can you comment on the typical number of rounds a successful company may go through? I ask this in trying to judge whether to wait for future funding rounds, knowing that I pay more (per share) for lessor risk with a more mature company.
A. Each company’s path of funding is different and it varies based on a million factors. There’s no guarantee that the small private companies that are raising money on crowdfunding sites like Republic or WeFunder will use crowdfunding again in the future rounds, indeed it’s rather unlikely. I suggest being VERY careful and using a TINY bit of capital if you do anything in these crowdfunding places, but it’s not like you can always just go back and get into future rounds so if you see something you want to risk some small amount of money on in one of these sites, you should probably go for it while you have the chance.
Q. Have you looked at the offerings of StartEngine?
A. A few months ago I did. I mostly stick with Republic.co unless I’m trying to invest in a particular start up that’s only available somewhere else.
Q. Why are you selling gold if it’s a 7+? Should we still hold physical gold? Should we shift GLD ETF to physical gold? Also, what do you think about HTC being the next generation VR investment? Is everything priced in already?
A. I think it’s good for people at home to have some physical gold and I’ve never been a fan of people owning GLD for the long-run because GLD is just a paper promise of gold, not the real thing. I’m selling the GLD from the hedge fund and my PA but I still own physical gold personally. GLD has underperformed since I bought it and like I said when I wrote that I was selling it and three other positions, I want to RESET my brain and emotions so I did what I had to do.
Q. Did you completely get rid of Unity or do you still hold some? What would be your re-buy point of PINS?
A. I sold it all, as I’d said. We bought PINS originally one year ago at like $13 and we’ve trimmed along the way and I’m sitting tight and I don’t know where I’ll decide to buy more.
Q. Square, you wrote in Latest Positions part 3 on Wednesday “It is trading at 130x next year’s earnings on a company whose growth is slowing and whose gross margins are only around thirty percent. I find this company clearly overvalued right now…. I trimmed Square but I do not sell it all.” Yet, less than 10 days ago (4/19 Getting a Wee Bit Longer) you were “nibbling more shares” in the hedge fund. I’m nibbling a few shares of the following names: PINS, SQ, MP, JMIA. These comments don’t jibe well.
A. Yes, I’d nibbled a few SQ at $200 when the markets tanked a few weeks ago. I then trimmed some this week after it’d rallied 30% to $260.
Q. I think your memory may be playing tricks on you. SQ did not trade anywhere near $200 when you posted your nibble comment on 4/19. Mostly around $245 with a low the following week of $240. But it really doesn’t answer the question of why you would be nibbling a name that you think is that overvalued.
A. Yea, you’re right. I nibbled it and then 10 days later we did the Latest Positions and I didn’t like my analysis when I’d revisited it, .Look, I’m trying to do the Great Reset and this is partly an indication of why — I need to reduce my positions and RESET. Sorry for the confusion, sometimes I’m confused too.
Q. Are you still bullish on SNE?
A. Yes.
Q. You wrote in the Latest Positions part 2 yesterday: ”I do not sell my Solar Edge but I hedge it with a basket of crappy solar stocks in the hedge fund.” What suggestion do you have for your average subscriber for whom this is not a practical suggestion?
A. In my personal account, I trimmed some SEDG as my cost basis is still about $14 on it. I’m holding the remainder steady.
Q. Hi. I know that you are not a big fan of Chinese stocks in general, but what are you opinions of BIDU? It looks like they are generating a lot of free cash flow and have a strong balance sheet.
A. I like BIDU and used to own it as my Chinese stock exposure before I bought JD.
Thank you all for the questions. Rock on and stay safe out there.