Talking Stocks 2.0

[huncho]

Originally Posted by 7sins

Enjoy the ride my friend, warrants up another 9% this morning after good earnings today. Posted them below for anyone who didn't see, impressive growth and plenty of catalysts in the future to keep this going (ie pending bank charter). Completely on board with you and it is a large holding for me too, when they make the warrants redeemable, I plan to convert those to shares, per the warrant they execute at $11.50/sh, then will write covered calls and take that income to roll into longer leap call options. Would be willing to bet it won't be long, probably after merger, Cathy Woods buys in her ARK complex, completely aligns with ARK fintech innovation ETF and investor flow will follow.

SoFi Announces Q1 ‘21 Record Results

- +430k members (biggest ever growth)
- 2.3M members total (+110% YoY)
- 3.2M total products used (+121% YoY)
- Galileo hits 70M accounts (+130% YoY)
- Net Revenue of
$216M
~14% beat (+151% YoY)
- EBITDA +
- Reiterates 2021 guidance

i was also thinking she might buy it, but her track record hasn't been too great lately. i'm curious to see how her funds do in a more "normal" market where tech stocks aren't going parabolic. she definitely had an insane year last year but i feel like some of what she's been doing lately is kinda dangerous. time will tell though but it seems like her entrance into stocks doesn't move prices the way they used to

[7sins]

Originally Posted by huncho

i was also thinking she might buy it, but her track record hasn't been too great lately. i'm curious to see how her funds do in a more "normal" market where tech stocks aren't going parabolic. she definitely had an insane year last year but i feel like some of what she's been doing lately is kinda dangerous. time will tell though but it seems like her entrance into stocks doesn't move prices the way they used to

The challenge with investors today is they want immediate gratification and when something underperforms, asset flow immediately chases returns to a better performing manager, fund or asset. The worst mentality you can have in investing is to chase returns, when anything underperforms, the question is why and do you add more. That is how you avoid buying at the top.

People forget, Cathy has been managing money for over 3 decades, way back to the late 80s when she was at Regent. Remember her time horizon for most of her positions is 5 years, this is normal in thematic investing. I work now at one of her previous firms and had many interactions from the sell side with her team along with her. There is zero question, she is exceptional in every aspect and will be remembered as one of the best PMs in history. She will go in and out of favor, just like she did for decades prior to ARK. When she goes out of favor, that is the time to buy opposed to seeing where you can get better short term returns. That is an efficient way to build a satellite position to your core holdings dictated by your risk tolerance.

Just my .02

[huncho]

Originally Posted by 7sins

The challenge with investors today is they want immediate gratification and when something underperforms, asset flow immediately chases returns to a better performing manager, fund or asset. The worst mentality you can have in investing is to chase returns, when anything underperforms, the question is why and do you add more. That is how you avoid buying at the top.

People forget, Cathy has been managing money for over 3 decades, way back to the late 80s when she was at Regent. Remember her time horizon for most of her positions is 5 years, this is normal in thematic investing. I work now at one of her previous firms and had many interactions from the sell side with her team along with her. There is zero question, she is exceptional in every aspect and will be remembered as one of the best PMs in history. She will go in and out of favor, just like she did for decades prior to ARK. When she goes out of favor, that is the time to buy opposed to seeing where you can get better short term returns. That is an efficient way to build a satellite position to your core holdings.

Just my .02

i agree, and i think the market last year spoiled and ruined a lot of views. no doubt she knows what she's doing and has a full team behind her with all the analytics and everything. i just wonder if she'll get burned by continuing to put so much money into stocks like tesla, even with the 5 year horizon. but then again, she has research and data behind her and i'm just a retail investor lol

[CoveWatch]

Originally Posted by huncho

i was also thinking she might buy it, but her track record hasn't been too great lately. i'm curious to see how her funds do in a more "normal" market where tech stocks aren't going parabolic. she definitely had an insane year last year but i feel like some of what she's been doing lately is kinda dangerous. time will tell though but it seems like her entrance into stocks doesn't move prices the way they used to

I don't have the links on hand, but Ark has mentioned Sofi by name a few times, even before the ipoe merger announcement, to exemplify the types of companies they were looking for.

[7sins]

For those riding the SABR train with me, great article on Seeking Alpha today re-iterating a lot of my older posts here and citing optimism for future growth along with their cost saving measures in 2020. I think they are a bit over-aggressive using an 11x multiple on EBITDA for their forecast but they project year-end price objective at $26.50 and $35 ending 2023, sitting today at ~$12.80. Worth a quick read for those who are interested: https://seekingalpha.com/article/442...tter_automated. Full disclosure I am long $12c and $15c $2023 leaps and will continue to add through the dips.

[Magnum75]

Originally Posted by 7sins

For those riding the SABR train with me, great article on Seeking Alpha today re-iterating a lot of my older posts here and citing optimism for future growth along with their cost saving measures in 2020. I think they are a bit over-aggressive using an 11x multiple on EBITDA for their forecast but they project year-end price objective at $26.50 and $35 ending 2023, sitting today at ~$12.80. Worth a quick read for those who are interested: https://seekingalpha.com/article/442...tter_automated. Full disclosure I am long $12c and $15c $2023 leaps and will continue to add through the dips.

I was ready to buy more if their "technical issue" that affected several airlines this morning caused a big drop, but that didn't happen.

[eanzenberg]

Got some TLT puts today as a hedge against my growth leaps. I think new inflation data comes next week.

[7sins]

IPOE warrants up another 13% today, almost 50% since I mentioned in the last week or two. Interestingly these are at a DISCOUNT relative to the stock price. Current stock price is $19.80, warrants redeemable at $11.50 means at breakeven, warrants should trade at $8.30 (delta between the two) but they are trading only at $7.10 - a $1.20 relative discount. That gap will eventually close, this will be the last week it trades as IPOE and into SOFI next week.

Originally Posted by Magnum75

I was ready to buy more if their "technical issue" that affected several airlines this morning caused a big drop, but that didn't happen.

Wasn't too bad, I think closed down 2% on Friday and now positive 3.32%, I was buying as much as I could under $13.





Good article below on inflation being priced in for anyone interested in reading.

Monday, May 24, 2021

Inflation risks are priced into the market
Everyone is talking about inflation.

And that, of course, includes investors.

According to BofA's monthly Global Fund Manager Survey published last Tuesday, "higher inflation is now the consensus." And furthermore "inflation is now again the biggest risk for markets," as initially identified by 35% of the survey's 194 respondents who manage a combined $592 billion worth of assets.

Translation: Investors are worried about inflation.


But if investors are broadly concerned about inflation, it suggests stock prices are likely already reflecting these risks and investors have discounted, or priced in, inflation risk into the markets.

While it may not be a perfect analog, it's worth considering what happened during the early stages of the coronavirus pandemic.

On March 17, 2020, BofA's Global Fund Manager Survey identified "Coronavirus" as its biggest tail risk, and it remained on the top fo the list for the next 10 months as data consistently and persistently reflected an economy in a state of emergency. But the S&P 500 prices bottomed on March 23, 2020.

In other words, the market had priced in the coronavirus recession and discounted the pandemic's worst financial impacts by mid-March, but this risk still remained the consensus worry among investors for another year.

The threat of inflation is the most known risk in the markets right now. And so investors should consider the likelihood that the downside of inflation has been priced in.

"Unlike recent cycles, we acknowledge that inflation tail-risk is higher and that inflation data could get hotter before normalizing," JPMorgan's Dubravko Lakos-Bujas said. "This outcome, at the same time, is getting increasingly priced-in as essentially every investor we have spoken to in recent weeks is well aware of this backdrop." (Emphasis ours.)

According to Google, search interest in "inflation" is at an all-time high. The University of Michigan's recent survey of consumers revealed sentiment got dinged in May due to unusually elevated concerns about inflation in the years to come.

On the corporate side, a record number of S&P 500 (^GSPC) companies have discussed "inflation" on earnings calls as executives just can't stop talking about higher costs.

Whether or not inflation actually becomes a major problem for the economy will only be known in hindsight. And despite folks arguing that recent upticks in price represent "transitory" concerns and "reopening quirks," this debate is likely to rage on for months especially as high-profile skeptics sound alarms.

And none of this is to say the economy won't take a hit should hotter-than-expected inflation come to fruition. But the stock market may look past this event if it does indeed arrive as investors look towards a better future. Another reminder that we often see stocks rally when things are terrible. Indeed: We just did.

[logo]

Curious if anyone has any thoughts on ASPL. This is a SPAC merging with Wheels Up (new ticker to be “UP”) a large private aviation company aiming to be the Uber/AirBnB of private jets. Merger expected to complete by end of Q2 2021, so probably next few weeks. From what I’m seeing, they have solid revenue (~900M estimate for this year) and good membership growth, with a projected 2025 revenue over $2 billion. At $10/share currently (warrants $1.40) and having a look at the SEC filings, I’m calculating their current valuation to be about $2B. They just announced earnings last week, here are the highlights:

First Quarter 2021 Highlights

Revenue increased 68% year-over-year to $261.7 million
Active Members grew 56% year-over-year to 9,896
Adjusted EBITDA improved by $8.4 million year-over-year to ($8.7) million
Net loss improved by $12.3 million year-over-year to ($32.2) million


And here is the investor presentation from a few weeks ago:
https://d1io3yog0oux5.cloudfront.net...esentation.pdf

They have brand ambassadors by the names of Tom Brady, JJ Watt, A-Rod, Serena Williams etc., and Delta airlines owns a big stake. In a post-COVID world, I can totally see an increase in private aviation usage among those who can afford it, as it’s now not just a luxury to fly private, but also a safety feature by avoiding crowded airports and crowded planes.

ASPL has hardly moved and with super low volume. Seems to be an interesting opportunity, but curious on other opinions.

[huncho]

Originally Posted by 7sins

IPOE warrants up another 13% today, almost 50% since I mentioned in the last week or two. Interestingly these are at a DISCOUNT relative to the stock price. Current stock price is $19.80, warrants redeemable at $11.50 means at breakeven, warrants should trade at $8.30 (delta between the two) but they are trading only at $7.10 - a $1.20 relative discount. That gap will eventually close, this will be the last week it trades as IPOE and into SOFI next week.

love all the movement for ipoe but a bit worried that it's going up too fast and will go right into a small sell off post merger, not that it changes anything since it's a long term hold though

[chsu74]

Originally Posted by huncho

love all the movement for ipoe but a bit worried that it's going up too fast and will go right into a small sell off post merger, not that it changes anything since it's a long term hold though

Spacs tend to follow that; only exception I can think of is CCH/UTZ which is a profitable revenue generating company.

[7sins]

Originally Posted by huncho

love all the movement for ipoe but a bit worried that it's going up too fast and will go right into a small sell off post merger, not that it changes anything since it's a long term hold though

Originally Posted by chsu74

Spacs tend to follow that; only exception I can think of is CCH/UTZ which is a profitable revenue generating company.

There are others that come to mind, most notably, DKNG and SPCE which are well above their merger price but you do need to be selective. The difference with IPOE/SOFI compared to most spacs, is within their S1 it allows PIPE investors to short aka box their position in. Preventively this *should* limit post merger volatility. You also have a lot of institutions buying it near $15 which is IMO the floor here.

It is tough to be upset here, IPOE warrants are up over 45% in 5 days and another 13% today (still at a $2 discount), which could be a bit of buy the rumor sell the news. More specifically as it is perceived most investors and institutions are waiting for it to turn into SOFI before purchasing but we are seeing strong buying into merger. You could always trim gains here and see what happens post merger. Valuation at $21 now does put SOFI marketcap north of $17B which is a high P/S it will need to grow into and I believe it will. It did trade near $25 previously this year before the SPAC meltdown. My warrant exposure is fully invested, I have cash set aside for 2023 leaps to be purchased post merger to see where price leads us. Everyone should be making a killing that got in on this, worst case, take your initial investment out and let the gains ride.

If you own the shares, I would look at loaning them out, the borrowing rates are OFF THE CHARTS. 150% plus to loan your shares out to short investors.

[huncho]

Originally Posted by 7sins

There are others that come to mind, most notably, DKNG and SPCE which are well above their merger price but you do need to be selective. The difference with IPOE/SOFI compared to most spacs, is within their S1 it allows PIPE investors to short aka box their position in. Preventively this *should* limit post merger volatility. You also have a lot of institutions buying it near $15 which is IMO the floor here.

It is tough to be upset here, IPOE warrants are up over 45% in 5 days and another 13% today (still at a $2 discount), which could be a bit of buy the rumor sell the news. More specifically as it is perceived most investors and institutions are waiting for it to turn into SOFI before purchasing but we are seeing strong buying into merger. You could always trim gains here and see what happens post merger. Valuation at $21 now does put SOFI marketcap north of $17B which is a high P/S it will need to grow into and I believe it will. It did trade near $25 previously this year before the SPAC meltdown. My warrant exposure is fully invested, I have cash set aside for 2023 leaps to be purchased post merger to see where price leads us. Everyone should be making a killing that got in on this, worst case, take your initial investment out and let the gains ride.

If you own the shares, I would look at loaning them out, the borrowing rates are OFF THE CHARTS. 150% plus to loan your shares out to short investors.

dkng is the first one that came to mind for me because i wanted to get into it around 16-20 but kept waiting for the post merger dip that never happened. i also feel like because these warrants are still undervalued that trying to do any kind of sell/reenter play probably won't work out as expected. i know the price will start to more accurately reflect the delta post merger so might end up shooting myself in the foot so just gonna hold them and see what happens. i'm also in leaps and worst case will just open some new ones

[gabrielnovar]

Originally Posted by 7sins

Another reminder that we often see stocks rally when things are terrible. Indeed: We just did.

which has me concerned when all we hear about how everything is the best economy, roaring 20s. your house will sell 20-40% over asking all cash.

Stock will only go up with inflation. Bitcoin to 500k.


I am a bull by nature, but now I see everyone gambling because they missed out on the march bottom.

Innovation always wins, but sentiment is WAYYYY too bullish.

[BBL]

I felt compelled to trim gains, and now searching for quality stocks with dividends for long term. Driving my financial planner nuts, I think.

Day trading info here is very interesting, though. And, I would love to have a penny stock that would grow like "carrots"..... inflation proof.... I'm a dreamer!

Carry on guys. You're inspiring.

DM

[chsu74]

Today is a weird day. Gold prices climbing but miner stocks selling off. Its risk on but in selective growth stocks so gotta be picking the right ones.

B of A shared this interesting tidbit last week.

1. People with less than $1K in their avg monthly bank balances before pandemic have 7X today

2. People with $1-2K in their bank balances before pandemic have 3X today

3. People with $2-5K in their bank balances before pandemic have 2X that today.

[scarlet knight]

I am bullish on Ford. Low valuation compared to Tesla, more iconic models than GM. The light bulb for EV has lit up for them.

[Magnum75]

Originally Posted by scarlet knight

I am bullish on Ford. Low valuation compared to Tesla, more iconic models than GM. The light bulb for EV has lit up for them.

Completely agree here. I bought LEAPS calls a couple of times in April when the SP was around and under $12. In addition to their new and upcoming electric models, it appears the Bronco will be a hit (not sure how the Escape-based Bronco Sport will do). For the record I am not a Ford fanboy. ;-) Obviously there is concern around how long the semiconductor shortage lasts.

[Rolexfanmiami]

Originally Posted by BBL

I felt compelled to trim gains, and now searching for quality stocks with dividends for long term. Driving my financial planner nuts, I think.

Day trading info here is very interesting, though. And, I would love to have a penny stock that would grow like "carrots"..... inflation proof.... I'm a dreamer!

Carry on guys. You're inspiring.

DM

Good Morning. Thanks for your post, I feel the same way and has been buying some dividend stocks on weak days/pullbacks .. like some utilities, Reit's and some energy names. What are the forum readers thoughts in that industries/sectors with this inflation if you don't mind to share your views ?

[meloncap78]

Feeling a bit low. Never been a market guy until everyone started jumping on the crypto train. I decided to put a couple g into various coins. I was mind blown when it turned into enough to buy a couple of new watches but I held for more like a greedy scamp. Now I’m only up a small profit and have it in my head that it will get back there. I have a bad feeling at this point all of the click bait vids and articles by certain investors is just a last minute attempt to pump it so they can recover their losses. I think the run is over and if I continue to not sell I’ll be left holding the bag. Lesson learned. A friend of mine warned me that it was all market manipulation and smoke and mirrors.

[huncho]

Originally Posted by meloncap78

Feeling a bit low. Never been a market guy until everyone started jumping on the crypto train. I decided to put a couple g into various coins. I was mind blown when it turned into enough to buy a couple of new watches but I held for more like a greedy scamp. Now I’m only up a small profit and have it in my head that it will get back there. I have a bad feeling at this point all of the click bait vids and articles by certain investors is just a last minute attempt to pump it so they can recover their losses. I think the run is over and if I continue to not sell I’ll be left holding the bag. Lesson learned. A friend of mine warned me that it was all market manipulation and smoke and mirrors.

run is (imo) absolutely not over but it all depends on what you invest in...a lot of the alt coins are scams and then a good amount of others have zero real world adoption and only promises of development. the biggest red flag was there when every day a new one went parabolic. same applies to stocks, just look at all the EV stocks that gave insane returns over the winter that all came crashing down

[meloncap78]

Originally Posted by huncho

run is (imo) absolutely not over but it all depends on what you invest in...a lot of the alt coins are scams and then a good amount of others have zero real world adoption and only promises of development. the biggest red flag was there when every day a new one went parabolic. same applies to stocks if you buy penny stocks that have no use

Thanks for the reassurance. I’m in Doge, Eth, Shib and Kishu. Just going to hold I suppose. I’m not worried about losing my initial investment just kicking myself for not taking profits along the way.

[huncho]

Originally Posted by meloncap78

Thanks for the reassurance. I’m in Doge, Eth, Shib and Kishu. Just going to hold I suppose. I’m not worried about losing my initial investment just kicking myself for not taking profits along the way.

yeah unfortunately besides eth the rest are useless lol

[logo]

Originally Posted by huncho

yeah unfortunately besides eth the rest are useless lol

Could be worse. A certain rocket and rear-end coin come to mind lol.

But to OP - I suggest you look into why you bought these in the first place. If there’s a long term thesis, hold if you still feel it to be true. Otherwise, sell and take profit.

[huncho]

Originally Posted by logo

Could be worse. A certain rocket and rear-end coin come to mind lol.

But to OP - I suggest you look into why you bought these in the first place. If there’s a long term thesis, hold if you still feel it to be true. Otherwise, sell and take profit.

yeah it actually amazes me at how much easy money it must've given some people just off social media presence

[jaisonline]

Sold some CCIV / LCID yesterday for a profit. Used the proceeds toward CCIV+ warrants. The warrants @ $7.80 per was a $1+ discount over the common stock at the time ($19.83). Now shareholders just need the merger to complete & start having cars roll off the assembly line…

[7sins]

Hope everyone had a wonderful holiday weekend. Great day to start the month of June with continued momentum on our favorite trades. SABR well ahead of my $15 summer forecast, positive another 4.5% today, breaking $14.5 and positive well over 12% in the last two trading weeks. Hope everyone got in the 12s when I was pounding the table on the buy. Nothing but upside here and continues to be one of my largest positions along with favorite recovery trade well under intrinsic value. Interesting almost 20% short position here, higher than AMC, could poise well if shorts need to start covering. TSA screened more passengers last weekend than any weekend since the pandemic started, great news for SABR.

SOFI no selloff post merger, positive 6.5% today on strong volume and I will continue to hold as a rising rate hedge, hoping to get to ATH from earlier in the year - warrants still at a 15% discount. Same with COTY, back above $9, up 2% and hopefully those sold in the 10s then bought back in the 8s. Time to take some gains and buy a watch :)

For COTY, I would pay VERY close attention to the ER from ELF and ULTA last week. YoY comps were OFF the charts, as you would expect and the market reacted very positively. We should see the same for COTY, especially as Europe continues to reopen and be back in the $10s. 2023 LEAPS here are still very undervalued.

I am working on a short quick post for all of you to explain LEVEL 2 data and how to use a stock order book for best trade price execution, hoping to post that later today or tomorrow.

[spurwar]

Definitely a great day for SABR! I was also listening to the news this weekend regarding the heavy travel and can see this thing keep running.

What are your thoughts on Takeda? They had some positive data releases the past few weeks but the stock has been relatively flat. Options have taken a hit but seems like an attractive point to cost average down.

[AshCashEmAll]

Originally Posted by 7sins

Hope everyone had a wonderful holiday weekend. Great day to start the month of June with continued momentum on our favorite trades. SABR well ahead of my $15 summer forecast, positive another 4.5% today, breaking $14.5 and positive well over 12% in the last two trading weeks. Hope everyone got in the 12s when I was pounding the table on the buy. Nothing but upside here and continues to be one of my largest positions along with favorite recovery trade well under intrinsic value. Interesting almost 20% short position here, higher than AMC, could poise well if shorts need to start covering. TSA screened more passengers last weekend than any weekend since the pandemic started, great news for SABR.

SOFI no selloff post merger, positive 6.5% today on strong volume and I will continue to hold as a rising rate hedge, hoping to get to ATH from earlier in the year - warrants still at a 15% discount. Same with COTY, back above $9, up 2% and hopefully those sold in the 10s then bought back in the 8s. Time to take some gains and buy a watch :)

For COTY, I would pay VERY close attention to the ER from ELF and ULTA last week. YoY comps were OFF the charts, as you would expect and the market reacted very positively. We should see the same for COTY, especially as Europe continues to reopen and be back in the $10s. 2023 LEAPS here are still very undervalued.

I am working on a short quick post for all of you to explain LEVEL 2 data and how to use a stock order book for best trade price execution, hoping to post that later today or tomorrow.

I’m so happy I listen to you. Thank you for your analysis on SABR. I will ALSO buy COTY LEAPS


Sent from my iPhone using Tapatalk

[HTXlex]

7sins, seriously appreciate all the post and insight on your trades and why you make your trades. I’m steadily learning from you, thanks!