Friday File: Happy (?) New Year!
by Travis Johnson, Stock Gumshoe | January 8, 2021 4:12 pm
What's happening with our Real Money Portfolio as we start the year? Updates on Roku, AerSale, The Trade Desk, Power REIT, GAN and many more...
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Source URL: https://www.stockgumshoe.com/2021/01/friday-file-happy-new-year/
Hi Travis,
Probably one of your newer subscribers here…
“If I make an equity trade that amounts to more than one tenth of one percent of the portfolio, either a buy or a sell, I send out a Trade Note on that day to let you know.”
How do I subscribe to the on-that-day trade notes? Seems that you’ve posted two this week and I haven’t got any. I cannot find them in my mailbox (I do get notifications about reveals) and I cannot find them as separate posts anywhere on the website… where are they :)?
I really like your page so far!
Thanks!
Sorry friend, we’ll look into it. You should be on the list but it’s possible the updating was not complete to start the year — sometimes those notes are more likely to get caught in a spam filter, too.
Nothing in the spam 🙂
Aersale
There was an article in Seeking Alpha this week by Chris Demuth Jr who had a good write-up about it. Note: He has 30K followers. Yours truly is one of them. I think he is one of the most wealthy authors . He was very bullish on Bitcoin and still is, so you know.
What was his opinion on AerSale?
Bitcoin has certainly had quite a week, Ethereum even more so.
I read that article too and can sum up his thoughts on ASLE:
1) He thinks ASLE’s fair value right now is $18-$24, but didn’t detail a thesis for why.
2) He thinks if the FAA approves AerAware, ASLE will be worth an additional $10 (so $28-$34). AerAware is a safety feature ASLE has been developing but it hasn’t been FAA approved yet. More information here:
https://www.businesswire.com/news/home/20200929005332/en/AerSale-Commences-AerAware%E2%84%A2-EFVS-Flight-Testing-Featuring-Universal-Avionics-ClearVision%E2%84%A2-Components-on-a-Specially-Modified-Commercial-Boeing-737-800-Prototype-Aircraft
https://www.aersale.com/products/aerware
3) If ASLE gets added to the JETS ETF when it rebalances (which ASLE apparently qualifies for based on its mkt cap, trading volume, cash flow and profitability) then he believes this will create a bunch of demand.
As a holder of ASLE warrants at a cost basis of 28 cents p/warrant purchased on 11/9 it has been my best performing security of 2020 — I like the company, am optimistic about the air industry’s recovery through the next two years, and intend to redeem my ASLE warrants for shares and hold them long term.
On that note, when I bought the warrants I read the SEC filing and my understanding is that if the warrants trade above $18 for 20 out of 30 trading days then you basically HAVE to redeem them or lose them, and as such the 5 year expiry date no longer applies. Is that correct? Just wanted to double check because these were the first warrants I’ve purchased. Anyway, thanks for all you do — I find a lot of value in your work! Not just to generate research ideas but perhaps even more so for its value as an “investing school” to help me learn how to improve my thinking about investing since I’m fairly new to it all.
Yes, that would give the company the right to accelerate expiration of the warrants — sometimes they do just that, meaning your warrant gets redeemed for one cent if you don’t exercise or sell it, and sometimes they instead do a cashless exercise for all warrants, meaning you essentially get the the-current fair value of the warrants in shares. Typically they do the former if they need the cash, the latter if they don’t.
Travis, you may be right about the top of the bull market theme. My prediction for the year is this: after considerable time virtually begging for inflation to come, the Fed will get it in spades. As we tally up our equity gains for the past year, few have noticed that the bond market is also thinking about this. The 10-year treasury rate rose just rose 20 basis points in the past five days. I suspect by year end it will be close to a 2% yield. Sooner or later the stock market will notice this and the euphoria will quickly be sucked out of it. I’m guessing it will be sooner. Happy New Year, anyway!
Several of my holdings that have done well and become high valuations, SHOP, TTD, TSLA, GBTC, etc…, I sold enough shares to recover my investment costs. So what remains is sort of ‘free’ money. But it still sucks when that ‘free’ money goes down.
Thank you Travis for the reality check on 2021. You are so right about that feeling of invincibility from crushing 2020. While I needed the lecture I had my own 2000 bubble burst saga to ruminate on and remember forever. I will keep my 2020 experience, your wise words from today and a much clearer exit strategy very close to my electronic devices at all times!
Thanks Travis, I always look forward to reading your thoughts on a Saturday morning (in South Africa).
Your clear thinking and good writing has definitely brought some much needed introspection to my investment decision making!
All the best for 2021.
Thanks Travis and happy new year, its good to be able to read a balanced view again (which seems in short supply in a lot of online forums).
Regarding Pershing Square, do you see it as a long term type hold even if it trades above its NAV(more like like a Berkshire type hold) or more speculative shorter term position to take advantage of its discount? and also what is the windfall gain that they could get from the SPAC that you highlighted?
I know you mention that they’ve only been linked to it but I’ve got to admit I listened to an interview from the CEO of Stripe a while ago and it blew me away so I’d love to get potential exposure to that.
I’m no longer willing to trust Ackman completely at a big premium to NAV — he has changed in the years since he blew up the fund with his terrible and huge Valeant bet, but I don’t know if he’s changed for good.
The fund owns some of
PSTH, and has agreed to supply a couple
More billion of capital if needed in a SPAC transaction… which would mean, if they do a great deal, The fund would presumably get an immediate boost from their pre-public investment at NAV.
PSTH might end up with an awful deal, too, or no deal at all, that’s just a reason for a bit of upside hope in the still-discounted PSHZF.
LMND got another recommendation from stock advisor this last Thursday, which no doubt helped with that 25%+ gain on Thursday.
That’d do it. Crazy what happens when they pick a relatively small company.
Hello Travis can you share anything about (epgfx). Euro pasific gold fund I read that this fun focuses on the mining companies with the most potential and that it could have bigger a gains then (gold)barracks gold Thank you. And happy holidays
What would a merger between Tesla and another automaker theoretically yield for both parties, assuming such a merger is possible in the foreseeable future? I have seen other predictions on this with regarding Tesla acquiring Toyota as a possibility as well.
For Tesla? Manufacturing capacity and distribution/service
networks, mostly. GM builds about 6X as many cars as Tesla
per year, VW 20X.
I don’t think it would work well, to be clear.
Thanks for the review of PW Power REIT. Today I received the “Rights Offering” letter/package in the US mail. I was remiss in reading this Friday File on Friday night and today thought, wonder what Travis has to say about it. I thoroughly enjoyed your comments.
I also liked your end of article discussion “Have a Plan”. Thanks again Travis, Happy New Year!!
Yep, I got my mailing over the weekend. Seems quite old fashioned these days to be sending in a signed form and a check, kind of fun 🙂
Called my broker, Fidelity, they said as of Jan 8 they could not help me execute the Purchase Rights Offering / Trade, on PW Power Reit…..as you mention, I have to send in a signed form and check directly to PW. Thanks Travis.
You should have gotten a mailed packet, i expect, I did — it’s fairly simple, albeit a little old-fashioned (mail a check and form) if you wish to exercise (though the deadline is tight).