Why I probably won’t ever invest in Tesla, an update on the Great Crypto Crash and more
Here’s an unedited transcript for this week’s episode of The Cody Willard Show, including an update on The Great Crypto Crash, Why I don’t own Tesla and probably never will and much more..
You can watch a replay this morning’s show on Facebook here or on YouTube here.
The Cody Willard Show is my once weekly 45-50 minute live show that you can find on Facebook, YouTube, Twitch TV, Periscope, Twitter and elsewhere. We also publish it each week in podcast form on iTunes, Soundcloud and Stitcher. And we send out a transcript of each show exclusively to Trading With Cody subscribers.
Speaker 1: Coming up on the Cody Willard Show Tesla’s Elon Musk drives towards taking his company private. But what’s with the tweet and where’s the money going to come from? Trillion dollar wars; Amazon versus Apple versus the world. Cody explains it all.
Speaker 1: The Alex Jones Info Wars shutdown and what it means for conspiracy theories, free speech and online platforms gate keeping, plus your questions and breaking news as it happens.
Speaker 1: The Cody Willard Show is brought to you by tradingwithcody.com.
Cody Willard: I’ve got my executive partner and partner Chris McHugh in the house with me.
Chris McHugh: Hey, how’s it going, Cody? It’s like a party, it’s like a party.
Cody Willard: I’m feeling like it’s a party. Let’s have a party, Chris. Hit me with … What do you want to talk about first, man? Frankly, I’ve got an inkling.
Chris McHugh: I’m going to hit you with my best shot and that is, Cody, what’s up with Elon Musk trying to take Tesla private on Twitter nonetheless? Who does that? What kind of day and age do we live in?
Cody Willard: Well, a couple, three different takes on this and I’ll tell you on the first part. Number one everyone that’s saying that Elon Musk should not have tweeted this kind of information … What he did yesterday, which is shocking because nobody really does it this way ever before, he just tweeted out that, “Hey, I’m considering taking Tesla private. I’ve already got the funding.” And he went out to the public just straight using social media. You’re following Elon Musk, which by the way, I can’t because Elon Musk has me blocked. Is that right, Chris?
Chris McHugh: I think that’s right. That’s what it looks like. It says you are blocked.
Cody Willard: I didn’t know I was blocked by Elon Musk until yesterday when I tried to write about this topic and I tried to tweet to Elon Musk and it wouldn’t fill out and so then I went over to his Twitter thing and that was my screen so I took a screenshot. I guess I’ve been blocked by Twitter. Anyway, the point … I’ve been blocked by Elon Musk at least anyway on Twitter. But the point being, it’s ironic that he’s blocking me on Twitter because what he was actually doing yesterday was being incredibly transparent.
Cody Willard: The way it typically happens when a company gets taken private is only the insiders and maybe the biggest shareholders would know that it’s even happening and the retail investors, your average Joe, would find out after the fact that the board’s already thinking to try to merge or take it private or whatever the transaction might be. In this case, Elon was actually incredibly transparent by going out to the public immediately. Well, maybe not immediately, but last week at some point the board started meeting, talking about taking Tesla private and instead of waiting until they were far down the path, Elon Musk just preempted it and sent that information out to everybody.
Cody Willard: Everybody’s complaining that somehow that was a violation when in reality I think that is actually probably the most transparent way to do it. Now on the other hand, why does Elon Musk want to take Tesla private anyway? I mean, after all there’s … number one I don’t think he can, the company has a $50, 60 billion dollar market cap right now and if they’re going to take it private, he’s saying they’ll take it private at $420 per share. I don’t know that his shareholders would be okay with that. $420 is … I mean that’s only another 20%, 10% of where the stock was, it’s all time high just recently, late last year.
Cody Willard: So, why does he want to take it public? Well one of the things he cited was that the short sellers are so mean, they keep picking on his company and it’s bad for morale and the other shareholders, including the employees of the company. This will not be the last time I emulate crying today by the way. Stay tuned. I gotta ask, what’s wrong with short sellers? Do you think Steve Jobs cared about the short sellers when the iPhone was rolling out? When the iPod was coming out? There were short sellers everywhere in that stock. When I bought it at a dollar per share in March 2003, and I didn’t care. Let the short sellers short the stock until the cows come home. Elon, if you deliver fundamentals, if you just focus on the company and not the short sellers or the traders in the stock, if you earn $50 a share some day, like Apple does, if you earn … Well, not $50 per share for Apple, but if you actually went back pre-split adjusted, I’ve owned Apple for 14 to 1 shares. I have 14 as many shares now as I did when I bought one share in March 2003 and the company is making like $50 per share compared to the share that I bought and the stock at the time was $14, split adjusted at one dollar.
Cody Willard: So, if you can earn more than your share price is in five or ten years, Elon, it doesn’t matter what the short sellers are doing. The stock will be much higher because you’re earning a lot of money. Go earn $200 per share and the short sellers will be squeezed out at $1,500 or $2,000 per share. And finally, I just want to tell you the main reasons I don’t own Tesla’s because I don’t even understand the company’s business model. They are barely, if at all, going to make profits on most of their cars, net margins. I’m speaking to net margins there. Meanwhile, the company is profitable and maybe at the last half of this year will be profitable, quote unquote. But also they’re measuring, they are actually counting selling tax credits from Nevada, from California … carbon tax credit trading. They actually sell casinos tax loss credits that the state of Nevada gave them and they count that selling of tax credits as profits. So, the company might quote unquote be profitable but I do not like to buy companies that are so dependent upon largess, tax subsidies, corporate welfare to even get to profitability and if you recall, Tesla was funded with welfare money, $500 million dollar welfare loan from the Department of Energy years ago.
Cody Willard: I want to buy companies that are selling products or creating platforms that I can understand that have revenues and earnings not companies that are gaming republican, democrat regime subsidy targeted tax trick games and calling it profits. So, I don’t own Tesla, never have and probably never will.
Cody Willard: Back to you Chris.
Chris McHugh: Surprise, surprise. I got Jim Nabors by Request here. And you know what? I love some of these cuts that he’s got. My favorite by request is, Apple versus Amazon versus the World, Cody. Tell me more, tell me more.
Cody Willard: Well, Chris I actually did a little bit of footage last night, if you’d roll it, from my family. I just went around and grabbed a handful of the Amazon and Apple devices we have. Who is Cody Willard?, my daughter says.
Speaker 2: Cody Willard is an American investor, television anchor and former hedge fund manager.
Cody Willard: Chris, I was hoping you actually had the clip where she said, “Who’s Cody Willard?” and Amazon said, “I don’t know.” But the point being that if you’ll see, we’ve got all these devices down here, Amazon and Alexa. I’ve got Firesticks, Alexa devices, Amaris is grabbing one of the Alexa … I don’t even remember what that Echo Dot, Echo Tower, whatever that thing is and Apple and Amazon are truly trillion dollar companies. I mean, Apple’s already there outright. I actually predicted a long time ago … We’ll talk about that in just a second but let me run through, let me try to put some perspective … I wrote this for Trading with Cody subscribers yesterday morning when I was thinking about how a trillion dollars … a trillion dollars … Let’s just put some perspective on what a trillion dollars is. The companies Apple and Amazon are both essentially worth a trillion dollars at this particular moment. A trillion dollars is a thousand million dollars. So, that’s a lot of money. I’m sorry … a thousand billion dollars. You see how big those numbers get? A thousand billion dollars is a trillion bucks.
Cody Willard: All right here’s some more ways to think about it. The gross world product, basically the economy of the entire world, 90 trillion dollars this year. Apple and Amazon, worth one trillion dollars each. Total U.S. gross domestic product this year, about 20 trillion dollars. So Apple’s and Amazon’s market cap are equal to about 5% of the entire United States economy and equivalent to about 1%, more than 1%. Together they make up more than 2%, in their evaluation, it’s more than 2% of the entire world’s annual economic activity. Apple will probably do close to $276 billion dollars in sales next year, up from $263 billion. That’s equivalent to more than 1% of the US GDP. Interestingly though, Apple does most of their sales overseas unlike Amazon who will actually do close to $286 billion dollars in sales this year, passing, surpassing Apple on the top line, up from $234 billion in 2018. Unlike Apple, almost all of Amazon’s revenues are actually in the United States. And you’re talking about more than 1% of the United States, one cent out of every dollar of economic activity is how much revenue Amazon does.
Cody Willard: Apple’s profits this next year, probably $70 billion dollars in 2019. That’s up from about $60 billion dollars this year. Amazon is expected to generate only $13 billion dollars in profit, that’s next year, 2019 versus this year’s $9 billion dollars in profit. So, Amazon is going to do more sales than Apple this year but will have a fraction of the profits. Why? Because a retailer of other people’s products doesn’t have the gross margins that an Apple product maker, which makes their own products and sells them would. Of course, Amazon is starting and making ever more hardware devices and depending more and more upon software revenue and there the margins are huge and Amazon web services and in Apple’s services business, when you’re buying or selling or doing anything in the App Store, for example, those margins for Apple and Amazon are probably … the gross margins are over 90%. So, lots of profits to come for Amazon as their platforms become more important drivers versus the retail side of the business.
Cody Willard: Whereas Apple, also actually going to be expanding margins in coming years because services are becoming a bigger part of their overall revenue. Services growing 30 or 40% per year for Apple. The hardware business, in a good year, grows 10 or 15, maybe 20% and in a bad year with an iPhone cycle that didn’t roll out or something, can actually be slightly down. Amazon, I don’t think, has ever had a down year in sales. Apple’s up 51,000% since it’s IPO 38 years ago. That is an 18% annualized gain. Amazon is up more than Apple in a shorter amount of time. 108,000% profits in Amazon in 21 years and that is a 40% annualized gain. It’s why Jeff Bezos is the richest man in the history of the planet. The richest person, the richest being. Not including supernatural beings.
Cody Willard: Apple has almost five billion shares outstanding. Amazon has almost 500 million shares outstanding. That is why Apple’s stock price is almost 1/10 of what Amazon’s stock price is but they are both have $1 trillion dollar market caps. And Apple has Siri which sucks and Amazon has Alexa which is pretty awesome.
Cody Willard: Alexa, play me Dinosaur Jr.
Speaker 2: … I can’t find songs by Dinosaur Jr.
Chris McHugh: You need a subscription package. You need to upgrade.
Cody Willard: I listen to Dinosaur Jr. songs all the time. Alexa, play Dinosaur Jr. On Spotify.
Cody Willard: Alexa, play Spotify, Dinosaur Jr.
Speaker 2: Playing Dinosaur Jr. from Cody’s Spotify.
Cody Willard: Now, I will say this by the way … One last thing about Apple … this is actually not about Apple, this part’s Amazon versus Spotify. If you ask Alexa to play just Dinosaur Jr., she randomly shuffles the songs. If you ask Alexa to play Spotify Dinosaur Jr. … Come on, where did you go? Alexa, play. It plays …
Chris McHugh: Your wife is in the chat room and she says, “You’re driving my Alexa crazy.” You’re driving your wife crazy on the show, Cody. You do it at home all the time and then you got to bug her when you’re broadcasting? What kind of person are you?
Cody Willard: Alexa? Alexa? Everybody listening is [crosstalk 00:16:55]
Chris McHugh: How about you talk to your wife Lori? How about you apologize?
Cody Willard: I’m sorry Lori.
Chris McHugh: This is going to be a spousal issue when you guys get home.
Cody Willard: All right Chris, you got anything else there you want to get on?
Chris McHugh: Yeah, Alexa stop playing music so we don’t get flagged by Sony Music or whoever sells Dinosaur Jr.
Cody Willard: Alexa stop.
Chris McHugh: I would like to say too, hi in the chat room to obviously your wife, who you are driving crazy. Steven, Semere, Cassie. We got Ross, Mark, I don’t know who that guy is … Sue Ann, Lauren, many others in there as well and you know, comrade, comrade … Can I call you that? Comrade Cody.
Cody Willard: You can but you forgot one thing. We want to put up my prediction. Apple of my Eye. I called it.
Chris McHugh: Oh. Oh. This is the headline everybody. Look at this.
Cody Willard: That’s 2010. Now I will say, it wouldn’t shock me at all if the markets are putting in a top just as now the whole world is celebrating what I predicted eight years ago that Apple would be the first trillion dollar company in the world. The company was worth less than … it’s about $150 billion dollars, it’s gone up like six times, six fold, since I made that prediction to get to a trillion dollar market cap. This is my victory lap and also my suggestion that let’s be cautious when everybody’s celebrating the first trillion dollar company in the world.
Cody Willard: Chris, next topic. Thank you.
Chris McHugh: He scores. So, Comrade Willard, how do you say GOP and democrats actually communist?
Cody Willard: There’s a story, let’s just back it up and give you some context here. My wife is an attorney and does pro bono work at times and Saturday she was out doing pro bono work, an open legal advice thing at the community center. A former history teacher of mine, Gerald Ames, respect the heck out of this guy. He was actually a very powerful influence on me and my political viewpoints and the way that I question republicans and democrats and the power that they have and anytime that they’re trying to pretend that they’re either a, liberal or b, conservative or the republicans are for free markets and democrats are for poor people because it’s all BS, man.
Cody Willard: And one of the things that he taught me, if we could, Chris. This is some pictures from my yearbook that I found after my wife told me that she had seen Gerald last week. This is him 25 years, 30 years ago I guess. 1988. He used to teach us about how … We did this stock market game, this is what I’m trying to get to, we did a stock market game and he would go, look, it’s basically how the world headed into depression. And you would have kids that could buy and sell anything they wanted. They’d buy stocks, they’d …
Cody Willard: Anything they want. They buy stocks. And he’d make up these symbols. And the stocks would go up. And then he’s trying to pitch us to go on margin. He’d be like, “Guys, if you’ll just buy stocks on margin, instead of making a little bit of money, you could all be millionaires.”
Cody Willard: And a bunch of us did. So we’d all start going on margin and the stocks would go up even more. All of us were rich and millionaires, and then the crash came. And just a few kids had never invested and kept their cash the whole time. The rest of us were caught. And we tried to sell, but by the time you’d sell, it would drop another 40 or 50 or 70 or 80 percent. And you were on margin! And we all went broke.
Cody Willard: All of the kids who were safe and didn’t invest at all, they had money and they were gonna get A’s for the assignment. Maybe there were one or two kids that had just invested a little bit and never went on margin. And they were gonna get B’s and C’s. Out of a class of 25 kids, there was maybe two A’s, two B’s, one C, and the rest of us were F’s.
Cody Willard: So Gerald did this thing, he said, “Look, you guys can choose. You can vote. Do you want it to be a capitalist society? Do you want freedom? Should the people who earned their A’s keep the A’s? And should the people who were risky take the F’s?”
Cody Willard: Well, we all voted communist. We all wanted that C. So the masses overruled the people who had been smart and conservative and safe.
Cody Willard: Fast forward to real life today, and isn’t that sorta what happens with the bailouts? Rewarding shareholders of banks and corporations that should have gone bankrupt and gone to zero, because they risked their money? You took taxpayer dollars from the middle class, the poor people, the working class, and you sent it to the rich. And then of course, let’s just keep going here.
Cody Willard: Let’s call out all of the hypocrisy from Republicans and Democrats. You got farmers on welfare for soil conservation and everything under the sky. Now they’re gonna get more bailouts for these farmers and more realistically, the farming corporations. Corporations that are related to the farming industry. Oh yeah, but the farmers themselves, they’re gonna get some welfare. They’re gonna get … the ranchers are gonna bid under market for ranch, cattle, public lands that they can run it on. You got three steel companies that are begging the public for more support with endless tariffs, I guess.
Cody Willard: More corporations getting subsidies in every form, like Amazon Headquarters Two, shopping around and extorting as much money and subsidies and welfare that they can get from any city that’ll give it to ’em. Every professional sport’s team on welfare. The stadiums all publicly subsidized. Why? Every corporation that broadcasts news, every bank, every food production company, every chicken, beef company, every railroad, every internet company, every car company, like Tesla. They’re all on welfare and begging for more welfare. And they’re all voting Republican and Democrat and they want us all to be C’s.
Cody Willard: It’s pretty much only the middle-class entrepreneur who is not on welfare at this point. It’s the middle class entrepreneur that is paying their full share, 40, 50 percent of their income is taxed every year. Billionaires, millionaires, and corporations pay a small fraction of that. Maybe 10 or 15 percent, maybe 25 percent. That’s not even counting the subsidies that those companies and billionaires and millionaires get that the middle-class entrepreneur does not get. This all comes back to the lesson that Gerald Ames taught me in 11th grade history in social studies.
Cody Willard: You guys are all delusional if you’re voting Republican and Democrat and calling yourself a free marketer or doing something for the poor. You’re not. You’re just votin’ for C’s.
Cody Willard: Chris.
Chris McHugh: Cody, while you were talking there, I came up with a high-concept movie, maybe Ross the Boss could help us workshop it. It’s a science fiction, happens in Russia. It’s Russian science fiction. The whole concept is they have things they need like toilet paper. What do you think?
Chris McHugh: No? Okay. Well, that was a bad joke, which segues into Amazingly Bad Movie Reviews. Right Cody?
Chris McHugh: Now for something different-
Cody Willard: Amazingly bad movie reviews with my old and dear friend, and by the way, we had a picture of Neil Patrick Harris there, from that high school journal book. This friend of ours, that we’re about to see, Cory Turner, doing our Amazingly Bad Movie Review grew up with Neil and me for many years.
Cody Willard: Let’s see it Cory.
Cory Turner: This is Cory Turner. And welcome to Cory Turner’s Amazingly Bad Movie Reviews.
Cory Turner: 1989’s Canadian horror movie “Things” puts and incoherent stream of badly lit scenes, poor acting, incoherent dialogue, and completely unrelated Amber Lynn new reporter cut-ins together, to form an unforgettable movie.
Cory Turner: Seriously, not gonna watch this whole thing, are we?
Cory Turner: So you want kids, but can’t physically conceive. So what’s the next best option? As this film shows, you should carry out some bizarre and dangerous experiments on your wife in effort to father a child. I mean, what could go wrong with that?
Cory Turner: A lot of things. This gore-fest of a movie is packed full of haunted-house-type special effects, these non-human things that go on a rampage of attacks. The whole time, you’re asking yourself, “What am I watching?”
Cody Willard: [crosstalk 00:26:31] All you can do, Chris.
Chris McHugh: So are you gonna check out that movie or what, Cody? What’s going on?
Cody Willard: I’ve actually, I own that movie on VHS and Laser disc. I actually just ordered the copy for my Argus Dual Master 882.
Chris McHugh: So you’re just gonna be able to watch the five-minute version, right? ‘Cause those are the small reels. You’re not gonna be able to hold-
Cody Willard: I’ll change it every five … it’s not a problem. Five minutes, then another five minutes.
Chris McHugh: You’ll just keep on changing it 57 times.
Cody Willard: Yeah, it’s 22 times for that movie. I’ve done it many times.
Speaker 1: For CNBC and Fox News Anchor, hedge fund manager, and the go-to stock market guest for the Tonight Show, Cody Willard and his stock analysis have been published in the Financial Times, the Wall Street Journal, Fortune Magazine, and many other places. Want to follow his secrets to investment success? Go to tradingwithcody.com. There you can get analysis on stocks, cryptos, markets and the economy, a full list of Cody’s positions, access to Cody’s chatroom, trade alerts every time Cody buys or sales, and much more. To find out more, go to tradingwithcody.com.
Cody Willard: Look, it’s the whole Alex Jones controversy. He’s been pulled off every major platform I guess, except for Twitter. It got me thinking, are we supposed to take this serious? Is Alex Jones serious about anything or is he actually the one who’s just faking it all and he’s the conspiracist? He’s not a conspiracist, he’s a conspirator. Is that the story here? Let’s just do some compare and contrast. Can we please frame how we used frame … talk about headline news, and how people who are consuming, for example, Info Wars, are consuming the mainstream news these days?
Speaker 3: Tuesday, January 20th, 1981, a day that began as the 444th day of captivity and ended as the first day of freedom for the American hostages in Iran.
Alex Jones: People are so evil. Why can’t America wake up and beat ’em. Donald Trump’s not perfect, but he doesn’t want to hurt you and your family. Hillary and Obama want to make you poor and pathetic. We have all their white papers. They hate you. They hate prosperity. They hate God. They hate children. And God damn them to hell.
Cody Willard: Wow.
Alex Jones: We’re going to find the lever to beat these people [crosstalk 00:29:06]. They’re gonna be beaten. Look at her shark face and look into that demon face. She’s a freaking demon.
Cody Willard: I’m very angry at Republicans and Democrats and Trump and Hillary. I’m pretty sure they are taking the middle class, well …
Alex Jones: We’re gonna have President Linda Blair.
Cody Willard: I like when he wipes the sweat off his face, I like-
Alex Jones: I’m not go on with it!
Cody Willard: That sound.
Chris McHugh: It’s good showmanship.
Cody Willard: One more wipe.
Chris McHugh: He is, puts on a good show.
Alex Jones: Excuse me.
Alex Jones: With Doctor Group’s help, we have developed the ultimate male-vitality supplement with eight concentrated super [crosstalk 00:29:30]
Chris McHugh: And Cody pointed out, this is what he sells on his show.
Alex Jones: What the hell!
Alex Jones: Well known to be safe and, please, doctor, doctor, wait a minute. Ladies and gentlemen, we’re just gonna cut to commercial. For just moment. Cut. Cut. Get everybody outta here.
Cody Willard: So, all I can tell you is i don’t take that serious. I mean, whether the guy’s peddling some male vitality, I mean, it’s the very definition of snake oil salesman in the 21st century. Male vitality BS vitamin supplement stuff? That is snake oil salesman, literally.
Chris McHugh: I went on Amazon, though, they had three and a half stars, I want to say, on it. People were very satisfied with that, and the ones that weren’t, at least on the first couple, they were like, “It didn’t work for me. There was nobody blasting Alex Jones for this product [crosstalk 00:30:24].
Cody Willard: Oh, you don’t think Alex Jones is filtering and editing and having his fans go out and manipulate his ratings and everything else? Again, who is the one conspiring?
Chris McHugh: No one would ever manipulate writings, Cody, that never happens. Conspiracy theories never happens, but what about free speech, Cody, what about his free speech on these platforms that say, it used to be anything goes, and now they’re the new gatekeepers. What say you?
Cody Willard: Look, what he violated, the one thing that confuses me is how all of these corporations decided to do it all at the same day. That doesn’t … that doesn’t fit the smell test with me. Was it a rash decision or a conspiracy? I don’t know. None of it makes sense that they would suddenly Spotify YouTube, Apple, one other, all pulled ’em off on the same day, or within 24, 48 hours of each other, when he has been harassing and causing pain and … there’s an example of the Sandy Hook parents that have had to move seven times. He will not, they don’t want to disclose in court where their actual address is because they’re being harassed and even having their lives threatened by Alex Jones’ Jonesites.
Cody Willard: I mean, those are private people. Alex Jones is a big boy out here in the public. I’m gonna talk about him and go after him. Frankly, you can talk about people in the private, too, but you do not harass people. You do not cause actual real-world emotional pain for people that … yeah. I mean, I think Alex Jones should have been pulled off a long time ago for doing things that were causing pain to people and harassing people and violating terms of service at most of these public networks, public social media platforms.
Cody Willard: But it doesn’t make any sense the way it all went down the last two or three days. Everybody’s wrong here. Imagine that.
Chris McHugh: Yeah. We got some comments in the chatroom. Arthur Miller says, “you’re take on the misdirection game of the Clinton’s pointing to Trump on, ‘I hope he knows which side he’s on,’ while Frank, the 25 to 100 million dollar donor of the Clinton Foundation was guided with the help of Bill and Hillary to obtain Uranium rights to …
Cody Willard: So, yeah, look, did Hillary and the Clintons and the Democrat party get in bed and monetarily benefit and get information from the Russians? Probably, yes. Yeah.
Cody Willard: Did the Trump campaign do the same thing, in a different way? Probably, yes. Are they all wrong? Probably yes. Imagine that. Everybody’s wrong in this case. Don’t try to def-
Cody Willard: If you’re so delusional that you think, “Only the Clintons would do that,” or, “Only the Republicans would do that,” or, “Only the Democrats,” you guys are missing it all. They’re all together on it. Chris, it drives me crazy.
Speaker 1: A former CNBC and Fox News anchor, hedge fund manager, and the go-to stock market guest for the Tonight Show, Cody Willard and his stock analysis have been published in the Financial Times, the Wall Street Journal, Fortune Magazine, and many other places. Want to follow his secrets to investment success? Go to tradingwithcody.com. There you can get analysis on stocks, cryptos, markets and the economy, a full list of Cody’s positions, access to Cody’s chatroom, trade alerts every time Cody buys or sales, and much more. To find out more, go to tradingwithcody.com.
Ross: I’m Ross the Boss. I want to talk sports with you, cowboy. Big big night last night. One of my favorite shows premiered on HBO, Hard Knocks. It means it’s the beginning of football season. You know what that means to me? It means it’s like being at the Sistine Chapel, it means being at the Mecca of sports, the beginning of football, NFL.
Ross: They featured the Cleveland Browns, they’re gonna be featured this year. It’s gonna be a great year. They started with Hugh Jackson, Hugh Jackson’s mom died and brother died within two weeks. They showed the whole thing about him finding about his mom dying. It was very sad. I’m surprised they showed it, they kept it in. But Bravo HBO for doing that. It was very emotional.
Ross: They also talked about Baker Mayfield. He was the number one pick Heisman Trophy winner, they showed him a lot. He rented a camper for this year. All the quarterbacks will sleep in the camper this year. It’s gonna be interesting.
Ross: Great speech by Jarvis Landry. He is a receiver that played for Miami last year. He’s a free agent. He gave this great inspiring speech about players not coming to practice, missing practice, because they’re hurt supposedly. Very inspirational speech, great show last night, I had a great time watching it. I hope you guys can watch it too. They did a great job. Bravo HBO.
Cody Willard: Do the Cleveland Browns have any chance of winning eight games, half their games?
Ross: No. They were 0 and 16 last year, and they have no shot, I mean, I don’t think they’ll be-
Cody Willard: Come on! Baker Mayfield, though, man! That guy, he feels like a winner. I loved watching him and I don’t like college football. I don’t even, like, when I was-
Ross: Remember he’s the backup.
Cody Willard: I just thought he was great.
Ross: He’s not even starting this year. It’s gonna by Tyrod Taylor, the quarterback form Buffalo.
Cody Willard: They got no shot then.
Ross: Baker will be lucky if he plays a few downs this year. I don’t see him playing much unless they say, “Screw it. Let’s put Baker in. The season’s over anyway. Let’s give the rookies some experience.” They could do that. But they actually showed Baker signing the 14 million dollar bonus contract. So on TV, we saw him signing a contract in which he’s getting guaranteed 14 million dollars this year, and then another 22 million dollars later. They showed him doing it. I’ve never seen that before on television, a guy actually signing a huge contract like that on HBO, for everybody to see and talk about. They talked about the numbers, which is an unbelievable.
Cody Willard: And Ross, again-
Ross: The first thing out of his mouth was, “I gotta call Cody Willard, I need to invest this money. I need to be a billionaire. And Cody Willard’s the only guy that knows how to do it.” That’s what they talked about. It was amazing.
Cody Willard: That’s a lot of money. But it’s not compared to a trillion dollars at Apple.
Ross: I know, I know.
Cody Willard: But, and I will tell you, it’s a lot of money compared to, what, say the guy serving coffee to you this morning is making.
Ross: That’s true.
Cody Willard: And I bet that guy has a higher tax rate than Baker Mayfield. But I [inaudible 00:37:37] want to talk sports, I hope.
Ross: Another story that caught my attention is the North Carolina suspensions. University of North Carolina suspended 13 players for actually selling their shoes that were given to them, by the school, so they can wear in football games. These guys have no money. I mean, they would love to keep the sneakers, I’m sure, but they wanted the extra money. So they sold the shoes.
Ross: Cody you played profess- you played college basketball. I’m sure you got free stuff. I’m sure you have a backstory about this.
Cody Willard: Yeah. We were, everybody on the team was pretty poor. I don’t think we had any wealthy kids at the University of New Mexico when I was a walk-on. And certainly not at Blinn Junior College. But at UNM, yeah, we would get shoes and jerseys and practice gear and things. Friends of mine, teammates of mine would sell them at times. Sure, if someone offered someone a hundred bucks for practice shorts, they’d take it every time. These kids were trying to eat. I mean, we had free food at the cafeteria, but it’s exactly like you said.
Cody Willard: The fact that our coach was making a million dollars a year, Dave Bliss, who should be in prison for obstruction of justice in a murder trial, was making a million … or, at that point, 500 thousand dollars a year. He had kids that, A, he was, some of the boosters were giving … like one of our best players was a real poor kid from North Carolina. He drove around, showed up at class, sophomore year, he had a brand new, Eddie Bauer Ford Explorer one of the boosters had given to him.
Ross: Shocked about this behavior.
Cody Willard: It’s rampant. Everybody’s cheating in college sports, as far as I can tell.
Ross: Everybody cheats, but the whole blasphemy of the whole situation was, these were special edition, Nike Jordan shoes. What college did Michael Jordan go to, Cody?
Cody Willard: I wrote Michael Jordan a letter when he was a freshman at the University of North Carolina.
Ross: So these guys sold special edition Air Jordans and they go to North Carolina. That to me is a crime. They should be thrown in jail, they should throw away the key. You’re idol-
Cody Willard: I will say, that is a great point.
Ross: The biggest name in college basketball still is Michael Jordan at the University of North Carolina.
Ross: Basketball still is Michael Jordan at the University of North Carolina. He has a statue at Chapel Hill, Cody. Do you have a statue at University of New Mexico of yourself? No. You have nothing there. There’s maybe a few girls remember, that’s it.
Cody Willard: I don’t think they’ve [crosstalk 00:40:13] statue at the University of New Mexico, either. You know what’s interesting about that is, if you had actually bought … I actually had the first pair of red Air Jordans back many years ago, 1984.
Ross: Tell me you still have them. Tell me you still got ’em.
Cody Willard: This is the point of my story. If you bought one share of Nike stock in 1984, it would be worth … You would have turned a hundred dollars into 35 thousand dollars.
Ross: Tell me you bought it.
Cody Willard: If you had the original pair of Air Jordans from 1984, it’s worth at least 35 thousand, more likely 50 or 100 thousand dollars. The shoes are a better investment than the stock, and I’ll bet you those kids who just sold those special edition Air Jordan North Carolina shoes, those things will be worth five grand, or ten grand in five or ten … In fifty years …
Ross: I agree, they sold them for $110.
Cody Willard: You’re right. It’s a crime.
Ross: It’s a blasphemy.
Cody Willard: Why would you sell that?
Ross: So to switch gears a little bit, the NBA announced last night the schedule for Christmas Day. It’s a big day for NBA basketball, Christmas Day. I actually watch NBA basketball that day. They play like five different games. The big prime time game is going to be the Lakers with LeBron James, we’ll talk about him in a second, versus the Golden State Warriors in Oakland. I think that game is going to be a blow out. They’ll try to promote it, like, “This is a big match up, LeBron versus Curry versus Durant.” I see it a blow out. I don’t see it exciting.
Ross: There’s some other games. I’d rather watch Boston and Philadelphia, which they’re showing earlier in the day. I don’t think the Lakers have a chance. I don’t think the Lakers will make the playoffs this year. How about that Cody Willard? The Lakers won’t make the playoffs because the west is so tough. Any opinions on the Lakers making playoffs?
Cody Willard: I will bet … What are the odds? I’ll go to Vegas and bet that the Lakers make it to the western finals. I don’t know that they’ll get to the finals.
Ross: Let me get you … I’ve got the whole staff here, hold on, I’m getting it. The Lakers making the western finals is twenty-two to one. I just got that in my ear piece.
Cody Willard: I’d take those odds. I’d take those odds.
Ross: Put Cody down for a hundred. He got that bet. Talking about LeBron James, he’s the only guy that makes headlines. There’s no basketball season. Basketball season doesn’t come back until October, October. He’s in the headlines every day, every day. You know what he’s doing now? He announced his new HBO show, where it’s a talk show and a barber shop. That premiers on HBO in August. There’s a new show on Showtime where he talks about all these political situations. That’s going to appear on Showtime, I think in, I think October.
Ross: He has Netflix shows. He has like 12 different deals around town for all his production stuff. He’s a huge producer. He didn’t sign with the Lakers because he wanted to play for the Lakers. He signed in LA so he can produce movies and TV shows.
Ross: I know he wants to win. We all want to win. Cody Willard wants to win. We all want to win, but what I’m saying is, he signed to be in LA so he can produce movies, meet with big, big producers, meet with directors, meet with Ross the Boss. There’s a whole reason why he signed here. It’s not the reason why, “Oh, I want to make the Lakers a winner.” I don’t believe that. Cody, what do you think? Do you believe that?
Cody Willard: I think that LeBron … How many amazing athletes, prototypes, incredible physical athletes just, God gifted natural abilities do you see come through the world? One in a thousand people.
Ross: Cody, it’s one every ten years. It’s one every ten years. There was Jordan.
Cody Willard: I think it’s more often than that. That’s my point. I think those … One in a thousand athletes is truly a freak, amazing. Then you have someone like LeBron or Michael Jordan who has that ability, but also is so, I’m going to call it genius. I mean, the competitive drive is almost genius in those people. LeBron is … He has sustained since the age of 18 years old, he is now 16 years into being one of, if not the very best basketball players in the entire world. That is just so mind blowing to me. You have to have so much respect for LeBron, unless of course you’re a Trump lover, or Trump himself, and then LeBron isn’t cool, or said something bad in LeBron’s [crosstalk 00:44:38].
Ross: By the way, on Saturday, Trump was on CNN.
Cody Willard: LeBron’s done more to build his own personal wealth than Trump has ever stumbled into or borrowed.
Ross: I agree, and just so you guys know the story, on Saturday LeBron was on CNN talking politics, bashing Trump. Trump heard it, somehow somebody told him. I don’t think Trump watches CNN. I don’t think he watches the news channels. I don’t think he’s capable of doing that.
Ross: Somebody told him that he was blasted. Trump went on Twitter, blasted LeBron, starting a Twitter war with a professional athlete who is loved by millions. Trump, for some reason, wants to pick on him. You know, it’s just like …
Cody Willard: Then again, Ross …
Ross: This has never been done in politics, or with anybody with any power in government. Who picks on a person who is one of the biggest athletes in the world? It’s amazing to think this is happening.
Cody Willard: It works. The one thing that people always have to remember is that Trump has a 90% approval rating from Republicans, and they’re basically half of the active partisan voting population. That means 45% of the active voting partisan population loves Trump, whether he’s bashing LeBron, or anyone else. I wish that LeBron, and all the other people that are considered Democrats and Liberal would also stand up and fight against the Democrats, because they’re just as bad as the Republicans. Come on LeBron, don’t go after Trump, go after them both.
Ross: I know, I know. Really quick, Ross the Boss, I don’t want to pat myself on the back, but I have won many contests in the NFL. I’m kind of the hill in Vegas with betting. I’m not allowed to bet in some casinos in Vegas. Last week I told you to bet the Bears in the Hall of Fame Game, they covered. They lost by one, but you got two and a half. Let me give you a couple picks for preseason, again. It’s tough because you’re playing third and fourth strings, but really quick.
Cody Willard: Give us your two best bets.
Ross: I’ll give you three. I’ll take Pittsburgh at Philadelphia. The world champions have a big mark on their back. If you look at their back, they have a big X. Pittsburgh wants to beat them with their third and fourth strings, which I see them winning in Philly. It’s like a high percentage when a team wins the Super Bowl, the next game they play in preseason they lose. Take Pittsburgh.
Ross: The other one I like is, just because I watch Cleveland, and they’re not practicing well, take the Giants against Cleveland. You’re getting one point. I mean you’re giving one point if you’re the Giants. It’s in New York. I don’t see Cleveland playing well this week, especially with the death of Hue Jackson’s mom.
Ross: The other bet I like is Kansas City at home against the Texans. Kansas City is like two and a half point favorites. Those are my three picks for preseason. They’re shoe ins, they’re locks. I never lose. I’m Ross the Boss, and you know that’s a fact, Jack.
Cody Willard: Ross, always winning, but, Ross, I have to push back. I don’t think … I think you’re going to be wrong on the Giants here. I would take Cleveland, because …
Ross: You’re taking Cleveland? You watched the show last night.
Cody Willard: Of the very reason that you said, the very reason that you said not to take Cleveland, is the reason to take Cleveland. A death of a family member, of the coach, the team will have so much buzz, and family, and chemistry going out there. I would take Cleveland over the Giants. In fact, Ross, right here, right now, I’ll bet you a Pepsi.
Ross: You got the Pepsi. I want Diet Pepsi, actually.
Cody Willard: It’s a deal. Ross the Boss.
Ross: I’m Ross the Boss and I love talking sports with you Cody Willard. Chris, thank you, and I’ll talk to you guys next week.
Cody Willard: Thanks so much for being here, bro. Ross the Boss, Ross Mark everybody.
Chris McHugh: That was awesome. You know, he’s a problem solver. He’ll take care of anything for you. You know who else is a problem solver? You, Cody. You’re like the Vanilla Ice of fixing things financially for people.
Vanilla Ice: (Singing) “If there was a problem, yo I’ll solve it.”
Chris McHugh: And we got Cody’s mail bag here. First question. Your recent cautious outlook is well noted. With this being said, are you also looking for the short side for possible Trading with Cody editions?
Cody Willard: Absolutely. I spend tens of hours a week, hundreds of hours a month analyzing stocks. In this particular moment, one of the reasons I’m so cautious is because so many midcap, middling, decent, not great technology companies are trading at ten times, or twelve times, or fifteen times their sales estimates for next year, and fifty or a hundred, or two hundred times earnings estimates. That’s just bubblicious, I’m afraid to say. It’s tough to find really good valuations, and so I think there’s probably some opportunities in some of those midcap tech names if we can find some of the ones that are going to struggle fundamentally. Sort of like, say, SnapChat. I should have been short SnapChat, here into this call.
Cody Willard: Another one that I’m sure is going to be a good, well I’m never sure of anything in investing, but, one that I do think will be a great investment is a short, will be car insurance. Car insurance, anybody who sells car insurance, including even, perhaps, Warren Buffet’s Berkshire Hathaway and their Geico eing such a big part of their cash flow business. Or Progressive. If you’re selling car insurance in a world where we are all going to be riding driverless increasingly over the next five, ten, fifteen years, you are in a secularly declining industry, and probably got a lot of problems ahead of you. I’m always looking for short opportunities, though. Chris?
Chris McHugh: Alright. A lot of Ethereum’s detractors consistently bring up scaling as its main obstacle, and why it may lose out to other cryptos. What’s your take on that front Cody?
Cody Willard: Scaling is definitely one of the major obstacles for any of these crypto currencies, including Bitcoin, even, certainly with Ethereum, too. The ability to scale up to facilitate what will be trillions of transactions, trillions of dollars worth of transactions, economic transactions, is a crucial part of any … You gotta ask that about any crypto currency you’re investing in. Can it scale?
Cody Willard: I think in both Bitcoin and Ethereum’s cases that there are so many hundreds of millions, if not billions of dollars being invested in Ethereum and Bitcoin, in making them scale, in making them quicker, in making them better, that they’ve got a decent chance. But with what I told my Trade with Cody subscribers, is that finding a crypto currency that’s going to win is sort of like trying to find a dandelion at Augusta. They do exist, and there might be one or two that will bloom out and actually flower, and throw seeds, but most will be killed long before they ever grow at all.
Cody Willard: I’ve been telling you guys since December, when Bitcoin hit twenty thousand, and I’ve owned Bitcoin since a hundred, for five years. I’ve been a long time crypto currency bull, and believer in the platform, in the block chain concept. I got bearish, because it’s a bubble, and it was really bubblicious, and even today, crypto currency, as I’m talking are down 15, 20 percent across the board.
Cody Willard: Bitcoin is down 10%, Ethereum is down 10%. Some of them are down 40% in the last week. I’ve warned you guys that that’s probably the case, and I think there’s still more pain ahead, but I do think there are going to be three or four, five, crypto currencies out of the existing batch that will be very valuable over time. I don’t know that you want to run in and buy any of them right now.
Cody Willard: Maybe, put a toe in the water. If you do want to buy some crypto currencies on a day when they’re crashing like this, it’s a great time to buy your first small charge. Maybe one tenth of as much as you would eventually want to own though. Chris.
Chris McHugh: Alright Cody. Question number three, the final question here via Trading with Cody. It is, who is your favorite, and our most memorable guest back in the day of Happy Hour on Fox Business Network?
Cody Willard: You know, I gotta asked that question yesterday on the chatroom at Trading with Cody, and it took me some time to think through who it might be. I don’t even know if I got an answer. It was an incredible experience. I was hosting a TV show on a notoriously, quote unquote, conservative news network out of the Bull and Bear Bar in the Waldorf-Astoria, New York City.
Cody Willard: We would have guests like, some of the names I threw out yesterday, Tony Hawk, Norm from Cheers. I slid him a beer. I got to ride Tony Hawk’s skateboard during the show. I hung out with Bode Miller before and after, really had a good time with him. I thought he is another genius kind of mind, so competitive and stuff going on in there I found fascinating. I interviewed, I didn’t even mention this one yesterday, I interviewed Jeff Chimenti from the Grateful Dead, or the latest iteration of the Grateful Dead ten years ago, and ended up backstage at their show afterward, and was talking about the Republican Democratic regime and how we’ve got to fight them if you’re going to have actually a political change of any sort.
Cody Willard: Bob Weir came over to me and was like, “Dude, can you say that again? I didn’t quite hear what you said, but it sounded really interesting.” To this day, Bob and I are good friends, as the viewers know. A couple, three weeks ago I was hanging out with Bob in Albuquerque, and that was awesome. He came on the show a couple of times after that.
Cody Willard: LL Cool J, probably the single coolest dude I’ve ever been around. The crowd that showed up just to be around LL Cool J the day that he was on the show was really cool. There’s so much interest and fandom for LL Cool J, which I found so much interesting, because when he became a TV series … You know, he’s on that CSI knock off, and, it doesn’t seem like a superstar thing to do, to be on a weekly TV show on a network, but LL Cool J, still as big a superstar as any, except maybe Neil Patrick Harris, my oldest best friend in the world. It was always awesome having him on the show.
Cody Willard: I’ll tell you this story. I bet Donald Trump, Jr., during a two hour block party when we had shut down the actual Wall Street, and I bet him his inheritance versus mine that oil would crash from, at the time, 125 down to 30, before it hit 150. He thought I was nuts, and it sounded nuts, because, you know, oil is going to have to drop 75% or something to hit my target, and it only had to go up like 20% to hit his target. Well, within three months, oil was back down below $40, hit my $30 price target, and we invited Donald Trump, Jr. on the show to come back.
Cody Willard: He’d been on the show probably three, or four, five times, and he would never come back on the show after he lost his inheritance to me. Actually, our first ever Happy Hour guest was Ivanka Trump, who was peddling a jewelry line or something he was hawking to the masses. I did actually send her a thank you note after her second or third appearance, and asked her out. She never wrote back, and she also never came back on the show after her brother lost his inheritance to me.
Cody Willard: So there you have it. Some good times. I should write a book about the 515 episodes of Happy Hour we did. It was an incredible time. Chris, anything from the chat rooms? We’ve been on for an hour, I’m exhausted. What do you got?
Chris McHugh: Woo, yes, actually it was kind of back to Ross the Boss sports segment here. There’s no comparison to Jordan. He was the overall grittiest and a finder of ways to win. Lebron is an embarrassment to the game, with the most whining, and complaining, and flopping. Disgraceful.
Cody Willard: Look, I was disgusted with LeBron after that playoff when Smith, I can’t think of his first name, dribbled around and ran out the clock at the end of the regulation of the first game in the series there, the finals. LeBron choked it. You saw him afterward. I watched the clips on Twitter, where for a minute and a half, he just sat there pouting during the time out. Then, “Did we have a time out?”
Cody Willard: That’s not how you win. You knew the series was over at that point. Beyond that, for someone to sustain the level of greatness relative to everybody else in the world that is trying to be the best basketball player in the world, there’s one guy for sixteen years that sustained that.
Cody Willard: Don’t get me wrong, I’m a Jordan guy. I’m not a big LeBron fan, basketball per se, but I do respect the amount of work and dedication that he has given to his career, to have it sustained at the level it’s sustained at this long, even if he can’t win as many championships, because he’s, in the end, doesn’t have the right wiring that’s not as good as Jordan’s was. At the end of every game, Jordan was going to get you, to at least have a chance. Never going to collapse, LeBron collapsed at the end of that series, no doubt.
Chris McHugh: Cody, that’s a show, man. That was a beautiful thing you did.
Cody Willard: Hey, you too, Chris. As always, I appreciate all of your efforts in making this happen. Thank you to Ross the Boss. Thank you to Cory Turner. Thank you all for watching. Peace, love, and happiness.
