Trimming Roku, Tough To Buy SpaceX, Amazon Lagging, Etc
Here’s the transcript from this week’s Live Q&A Chat. Have a great weekend!
Q. $ROKU is just an absolute beast of a stock. Thanks for yet another one Cody.
A. Can I get a woo woo and a hoo hoo? ROKU’s more than tripled since we bought our first tranche a few months ago for an 800% annualized gain (and even more than that on later tranches). Probably a good idea to trim a little ROKU if you haven’t yet. Consider this a Trade Alert, I’m trimming a little ROKU.
Q. How do I get into SpaceX !?!? And I’m not talking about TSLA as a side play to get some “Elon.” SpaceX is crushing it! The test today was remarkable and I think this company is gonna be a world leader in space tech… so again how does one get into a private company like this?
A. I get this question a lot and there’s no easy answer. I was able to sneak in and buy some SpaceX in the private markets for a reasonable price in a pretty safe vehicle last year but in the time since then, it’s gotten harder to get your hands on SpaceX mainly because the private market knows that being able to “buy” the world’s leading Space Revolution company at a valuation of less than 50 billion or so is way cheap compared to SPCE or other start up space companies or any dominant tech stock that’s publicly traded right now. That said, the vehicles in which you have to buy into SpaceX are a lot more expensive with way higher fees and costs than they were a year ago, so some of that upside is being captured by the private market brokers. If you have $10 million you can probably buy some real SpaceX equity without being screwed otherwise, it’s probably not really possible in a safe risk/reward manner right now.
Q. Cody – any stocks you’re looking to short with these crazy valuations? BLNK hasn’t worked so far but that one seems like it’s due for a fall.
A. So many stocks that I want to short, but few that I feel comfortable shorting in size or suggesting to followers. Maybe MAXR is my favorite short because it’s competing against SpaceX and the new Space Revolution players and it’s old school with high sunk costs and lots of debt so it makes a good paired short hedge for my Space Revolution longs.
Q. Cody, for today’s chat. FB seems to be under fire again or still. I presume with a democratic win any regulations might be weak. Do you agree? Thanks.
A. Are Democrats or Republicans ever actually hard on regulations of tech companies? Or they both just pay it lip service and like to garner headlines for pretending they’re doing something about tech monopolies like FB? I say nothing changes until it does.
Q. Cody, for today’s chat. FB seems to be under fire again or still. I presume with a democratic win any regulations might be weak. Do you agree? Thanks.
A. Are Democrats or Republicans ever actually hard on regulations of tech companies? Or they both just pay it lip service and like to garner headlines for pretending they’re doing something about tech monopolies like FB? I say nothing changes until it does.
Q. Cody, looks like Naspers subsidiary Takealot is pretty well positioned to dominate South Africa e-commerce, and be a viable African competitor. Does this affect your view of JMIA’s opportunity?
A. It doesn’t change my view, as there will be competitors but I think Jumia looks positioned to be a winner.
Q. Do you have an opinion re Farfetch (FTCH)? JD is a shareholder and they’ve just agreed to a JV with BABA that includes ~$1 Bn investment from BABA and others. Seems they will become the dominant e-merchant for luxury goods.
A. Trading at 10x next year’s sales estimates, not profitable, $20 billion market cap….not for me at this levels.
Q. Would you consider writing and distributing position reviews (Latest Positions) on a more regular scheduled basis, perhaps one part every week on a rotating basis. This could be combined with your estimate(s) of where you would consider nibbling more, so that all positions were covered at least once a month.
A. Sigh, yes, not a bad idea. Thanks, I’ll do some Latest Positions writing this next week, I promise.
Q. Would you recommend nibbling some of ABNB and DASH ? At what price level?
A. App companies. I LOVED all things App-Related ten years ago. Now, I sorta think the best is priced in for many of these App Stocks, including AirBnB and DoorDash both of which just came public this week at valuations of $100 billion and $70 billion respectively. I’d rather find some more Space ideas! Space Stocks will come public in ten years at valuations like this and that will be a time for us to look for the NEXT Revolution to get in front of after that!
Q. Have you reconsidered BB?
A. Nah, it’s up on some news that it’s car operating systems are going to be used somewhere or something? Nah, I’m over Blackberry and Motorola and Nokia.
Q. As the market (in general) would appear to be largely overbought, which of the names in the portfolio that you are most likely to trim either now or in the coming weeks?
A. I think the following stocks look like better trims than nibbles right now: ROKU (see above), TSLA, SPCE, TSM, MP, SNAP, AMD, CRSP, JMIA, PINS, TWTR, SPOT, SEDG, SPLK, SQ. Names from the portfolio not mentioned in this list are probably better nibbles than trims right now.
Q. Calix (Calix) has reached the levels you said it might get to in 3 to 5 years in 2 years time. Just giving you props for that one. Is it worth taking another look at this stock here?
A. Yea, maybe. The company has successfully transitioned to being more software than hardware. I have a good friend who works there, I’ll call him and catch up.
Q. Cody, not revolutionary, but any thoughts on adding to any energy stocks as a catch up play and as diversification to our other stock holdings as we head into 2021?
A. Solar is the only energy sector I like.
Q. Cody do you think Elon moving to Texas so he can oversee cyber truck production. Do you think the cyber truck will be their biggest selling vehicle maybe bigger than all of their others combined.?
A. He’s moving for a lot of reasons, SpaceX, Cybertruck factory, company taxes, etc. Yes, I think the cyber truck will be the biggest selling vehicle for Tesla within five years of its launch.
Q. Hi, Cody: For today’s Q&A: Will you be issuing the genuine, real-deal, all-Cody, official, full analysis (as opposed to those two you got on spec) trade report on SRAC today? Thanks.
A. Ah, maybe. I’ll try to do that. Just very busy with work, holidays, fam, Coronavirus Crisis, etc.
Q. Cody. Your view on GLD and Bitcoin now.
A. I like Bitcoin better than GLD right now, but both look like better places to be invested than a lot of stocks out there.
Q. Cody, If you were choosing to swing for the fences for only 3 of your latest positions ..with a time horizon of 3 to 5 years what companies would they be? Thanks for all the years of being a part of the TWC community!
A. Hmm, I don’t know. I like too many of them enough to exclude from this list. That’s why we build a portfolio. Sorry.
Q. Can you comment on the meteoric rise and potential going forward for The Trade Desk , TTD?
A. Great company, positioned to benefit from lots of streaming and Internet trends. My bad for not owning it, really. Terribly expensive right now, so I’m nowhere near wanting to buy it.
Q. Hi Cody – love your service. You’ve advice has not only made me and my family a lot of money but you’ve also really ignited my interest in revolutionary investing. It’s become real passion of mine. My question – what do you think of Metromile (going public via INAQ this Spring). I’m very interested in the licensing opportunities and the business looks pretty darn revolutionary to me. Thanks again!
A. I think the auto insurance business is ripe to be Revolutionized, but I’m not sure these guys are the ones to do it. Will need to learn much more about their financials and what not before I’d buy it. Thanks for the kind words!
Q. When you typically describe “trimming” either in your personal portfolio or your hedge, what’s the range of trimming that you do? Is it typically between 5%-10%, 10-20%, 25% or more? I understand that this answer could vary, but I’m just wondering how much you trim, on average?
A. Yes. Haha. But seriously, yes. All of the above is correct. Maybe 10%ish or a little less is probably about the average of one of my “trims”.
Q. There as some select CPG / food stock that have posted record results in the C19 era and the respective stocks reaching levels not seen in years, if ever (i.e. MKC, K, GIS, CLX, KHC, etc.). Assuming vaccine is widespread in 2H21 and we’re quasi back to eating out, on the go, etc. do you think any of these make good short candidates at some point in the next couple of months….by the time we get to 2H YoY comps will be lower for many of these companies….granted some of them have somewhat good.
A. Yes, I think most of those stocks are probably better shorts than buys right now. I think that about a lot of stocks right now though!
Q. Any thoughts on why AMZN has been lagging lately? Is there any chance the board makes bezos do a stock split?
A. It’s worth like a trillion dollars. Like, really, a trillion dollars! I can see it lag for a year or two at and around these levels and I’d still think it’s a good stock to own. No idea if they’ll ever do a stock split, nor do I care that much because it doesn’t really change anything in my analysis.
Q. Thank you Cody, and thank you Terry and Christian for the SRAC write-ups.
A. Good call and thank you! Happy holidays everybody!
I leave you with a shot from my driveway as I left for work this morning in the mountains of southeastern New Mexico.
