Trade Alert: Betting On Indirect Brilliance
One of my best go-to principles of investing is to, as I’ve written about many times in the past, “Always Bet on Brilliance.”
I wrote this when we first started buying Tesla back at around $50ish a share three years ago:
“I have one name I am adding to the portfolio — and it’s another one that might shock you. After all, the CEO personally blocked me on Twitter years ago.
How many times have you heard me say that we should always bet on brilliance? When I bought Apple at a $1 per share back in 2003, it was a bet on their valuation and on the vision of Steve Jobs. Those who invested in Amazon in 2001 might have liked the idea of an online bookstore, but the brilliance of Jeff Bezos is, that like Steve Jobs or Mark Zuckerberg, that he was envisioning so much more — AWS Coud, Amazon Shipping, AI, Voice Revolution, etc.
Which leads me to Elon Musk, the CEO of Tesla.
Here’s a fun tidbit. Back in early 2009 when I was anchoring my show on Fox Business, I actually got to drive one of the first Tesla cars ever produced. In fact, we shut down Central Park and I got to drive the 2008 Tesla Roadster full speed and took it from 0-65 in like 2.8 seconds or something. It was sweet. But I’ve been very skeptical of all the tax credits and corporate welfare and government assistance that Tesla and their customers have built their business upon, so I’ve been mostly bearish on Tesla. That’s what I tweeted to Elon that caused him to block me on Twitter instead of coming on my show that night back in 2009.
Regardless, as I step back and try to find the most Revolutionary companies led by the most brilliant people in the world, I have decided to build a position in Tesla TSLA.”
Well, betting on Elon’s brilliance worked out well, didn’t it? I’ve also invested in Elon Musk’s SpaceX in private markets through the hedge fund and it’s done well for us too though it hasn’t gone up as much as TSLA has.
But, come on, I mean, Elon’s a genius and nobody argues that now (they sure did argue that back in 2017 when I flipped from bear to bull on TSLA though). And now Elon’s on Twitter’s board and is Twitter’s largest shareholder? Let’s keep and/or get on a little of that action.
I still own Twitter in my personal account with a cost basis of just about exactly it’s all-time low of $13 a share from when I first bought it and sent out a Trade Alert about investing in Twitter to my dear subscribers back in 2013. But I’d sold it out of the hedge fund earlier this year. I’m going to start building a position in Twitter in the hedge fund again and I might even nibble some longer dated call options dated out into the summer and maybe 20% or so out of the money on TWTR here if the stock will get hit a bit from the current $51ish levels I’m starting to buy the common stock here for the hedge fund.
Easy does it and don’t get greedy, as Elon’s NOT the CEO of Twitter so we’re not getting to bet directly on his brilliance with Twitter here.
The markets are ugly today. In the hedge fund I’m doing a tiny bit of maintenance by covering a little bit of my short hedges into this action but other than that and TWTR, I’m mostly sitting tight today overall.
Staying long plenty of patience.
Why do they fight against the poor youth of today? And without these youths, they would be gone – All gone astray. Said, it’s four hundred long years – (400 years, 400 years. Wo-o-o-o) Give me patience (wo-o-o-o) – same philosophy. – Bob Marley
