Robinhood Revolution Song Lyrics, Will Trump Impose Martial Law After The Elections, Loving Shortsellers, And Much More
I expect that as AI gets ever easier to use (that's the whole point, after all!) and as it can do ever more varied stuff for us ever easier, and as it helps cure many forms of cancer, helps make incredible movies easy enough for a thirteen-year old to do, and is applied in millions of ways...
You can listen to the lyrics about why a company like Robinhood is Revolutionary in the song below. Just push the little arrow button and it should start playing.
Here's the transcript from this week's Live Q&A Chat.
Q. Cody, I hate to ask this question for a few reasons but I value your macro analysis almost as much as your stock picks and I unfortunately have no doubt this will dominate the news cycle for the next 2 months and curious how you think it may affect the markets. There’s a better chance of me dating Sydney Sweeney than Trump accepting the election results next week. Best case scenario he whines like a baby (as usual) and sends unhinged tweets for the next two months about everything being rigged. Worst case scenario is martial law, insurrection act, seizing voting machines, pressuring states to not certify results, not sitting Congress etc. i guess effectively ending Democracy. I mean he has already tried pressuring States (Georgia in 20 and now Alaska) not to certify, said he should have seized machines last election and has insiders in his ear about martial law.. My question to you, is if one of those scenarios happens, what happens to the stock market, bond market, the dollar as a reserve currency etc? There’s so many scenarios I can envision happening and they all scare the living ….. out of me. Appreciate your thoughts and hoping you can lead me off from the ledge.
A. Wow, yes, let's step back from the ledge and catch our breath a little bit. I'm not going to say that there's no way Trump calmly accepts the election results if the Democrats take as many seats as most polls are suggesting they do. But I don't think The End Of Democracy and/or Martial Law should be your base case. There's a lot of gray in between complete dictatorship and where the Republican Democrat Regime has carved out their own version of "complete electoral control" for their Two Parties. Trump will be pissed and will grumble around and he'll not let the results just go uncontested if the Dems win as big as they are currently expected to. That said, I'm not even sure that the Dems will win over many seats, as they still have the Communism/Socialism factions seemingly as part of their core, and I still expect most Americans are knowledgeable and moral enough to fight outright Communism inside our own country with their votes. I don't think the Dems are truly Communist and I do believe that Trump and his Republican team are just as socialist as the Dems are anyway. I think we have plenty of things to worry about and maybe Trump declaring himself King of The World is one of them, but it's not up there very high on my list. Finally, I'll mention that the fact that so many people, traders, investors, institutions, and other entities are so worried about Trump doing something to destroy Democracy means that if he doesn't, the market has a lot of bricks in the wall of worry it can climb as people move on from this overwhelmingly agreed upon worry. Rock on.
Q. Cody what stocks have you been adding most to recently based on weighting? Thanks.
A. Same as last week, really, when I'd mentioned that I like and/or am nibbling: CBRS, AMZN, NVDA, CRCL and GOOG too. Looking at our names, I'd probably be remiss if I didn't mention I also like SPCX and VPG here too.
Q. What about TSLA?
A. It's been one of my largest positions for many years. Still is, but I could see trimming it a little bit here after this massive moves its had. That said, the fact that SpaceX and Tesla are likely to merge and that SPCX would likely be considered the "acquirer", it's likely that there's a virtual put here for TSLA, keeping it from going down very much. The SPCX put for TSLA is NOT something I'm trying to game, but something I have thought about this week.
Q. I noticed no META...still in penalty box I'm assuming? Thank you.
A. Eh, less so now that the stock price has come down so hard after a stellar earnings report. I think META should be trading closer to $800 not $600 after that report. I'm still sitting tight for now.
Q. Enjoyed the write up on SpaceX, pretty amazing earnings with Elon's commentary, exciting times. Is Robinhood still revolutionary? One earnings miss doesn't make me question their future, but revenue grew only 12% despite record trading volumes. Is there still more on the way from HOOD?
A. Robinhood still seems pretty Revolutionary to me as it works to help individuals around the world get access to the many investment asset classes and other investment opportunities than they ever had before. My friend, Bujo, who is the lead rapper of my band, wrote lyrics for one of our songs back in 2006 or so that are poignant to this day as to why Robinhood remains Revolutionary (and I took Bujo with me to meet with Robin Hood executives at their NYC HQ a few years ago because he loves that company and what they've enable him and his friends to do with their money (the bold part is the part that's really related to Robinhood being Revolutionary):
"Desperate like the beast washed up on the beach,
How you powers gonna be gonna go prey on the weak?
Like a child now everything's in my reach,
Cuz I'm not yet mental-wise out of the projects,
Alive by this hand, drugs, money and sex,
No lie, it's all stress with the bills collect,
Brother fools struggle for cash but can't connect to invest,
and they can tell you the best..."
You can listen to those lyrics in the song below.
Q. Do you follow/favor punditry/podcasts etc. of other financial/economic brains regularly? If so, any names to share?
A. I read almost all day every day. I follow Republicans, Democrats, Libertarians, libertarians, Communists, Europeans, Asians, Brits, athletes, scientists, CEOs, old journalist friends, musicians, etc etc etc on my only social media consumption (X). I read the WSJ, NY Times, NY Post, CNBC and a few other mainstream outlets most every day. I sometimes watch CNBC and/or Fox Business, but not much. I almost never watch any partisan cable news networks. I read books, new and old, including novels and science fiction and lots of Wall Street autobiographies and even more technology-related books. I truly believe that one of my biggest and best superpowers (we all have some) is that I actually HATE being a part of any consensus or any group or any club. I strive to be independent in my thoughts, analysis and feelings. It's the only to be different and the only way to do more than average.
Q. Do you have a favorite piece of media (movie, novel) about economics/market/finance etc.
A. Hmm, narrowing lots of favorites down to just one favorite is always challenging. The most influential book on my investing approach was called "Information Rules", which outlines a lot of the except concepts I use today for Revolution Investing, including critical mass, de facto standards, network effects, etc. I love science fiction books from the 1950s and 1960s. Ray Bradbury and Robert Heinlein are two of my favorites.
Q. Cody, you mentioned yesterday that you estimate compute & power will continue to increase in price for maybe another 2-3 years. Can you share your reasoning for that timeline? Thanks.
A. I should clarify that I said (or at least meant to say) that compute and cost per watt for compute will likely continue to increase in price for AT LEAST another 2-3 years. I think most hyperscalers, frontier model applications, cloud providers, etc can see that even at current levels of AI demand that it will take at least 2-3 years of more AI datacenter building to get close to meeting this current amount of demand. That said, I expect that as AI gets ever easier to use (that's the whole point, after all!) and as it can do ever more varied stuff for us ever easier, and as it helps cure many forms of cancer, helps make incredible movies easy enough for a thirteen-year old to do, and is applied in millions or billions of ways that you and I never thought of... that pricing for compute and probably for each watt of AI usage will continue to be strong and probably rise. Along the way, some months or quarters will see some price declines and/or some varied movements, and eventually, maybe in 5-10 years, there might be enough compute to handle most of the AI stuff. But maybe not.
Q. Hi Cody, Fantastic article on SpaceX yesterday . It seems like a screaming buy and gives us days like today to keep accumulating traunches.
A. Thanks for the kind words. Charlie did most of the heavy lifting on that article and he did a great job with the analysis and writing once again.
Q. Was there some kind of alert yesterday sent via e mail?
A. Just that aforementioned article about SPCX. If you didn't get it and/or if you're reading this and are not getting at least two Trading With Cody articles per week from us (except when I'm traveling overseas sometimes), please email support@tradingwithcody.com and let them know. Teguh will take care of you and make sure you're all set.
Q. Hi Cody, any insights did you draw from Anthropics S1 that confirm or chnaged any of your thesis?
A. I was impressed with the numbers in the Anthropic filing, which confirms the incredible amount of demand for AI and AI compute here. I was disgusted with their commentary about whether they can control the technology. I'm like, "Don't sell stuff you can't control!" I don't like the CEO and I think there's a lot of competition for enterprise AI demand and that this LLM company at this valuation of $1.5 is still riskier than I'm comfortable with.
Q. Cody, you've mentioned you still thought BTC is in a crypto winter. Does that mean you think the 4 year cycles might continue?
A. I don't believe that there's any kind of standardized trading cycle for bitcoin or other cryptos. I think it requires a lot of backfilling to even see a four year cycle in bitcoin and that even if there coincidentally actually has been that it's not statistically significant enough to think it will continue as such. All that said: Crypto winter could last forever. Bitcoin winter could already be over.
Q. These people are so annoying who publish stuff like this. (@CulperResearch): "We are short Cerebras Systems $CBRS. Cerebras claims to have solved wafer-scale chips. We believe otherwise: $CBRS wafers break down after just ~2 years in use - a lifespan that undermines the entire business. See full report and disclosures on our website, link in bio."
A. Well, we love short sellers because when they're right, they often help investors to stop funneling money to frauds or inefficient companies. We love them when they're short one of our own names too, because if we are right about the fundamentals of our names, eventually the shorts are guaranteed to have to buy the shares back at some point. For example, I loved it when we first invested in TSLA and over 30% of its shares were sold short and there were short seller reports explaining how Tesla was either a fraud or stupid or was guaranteed to fail, etc. Since the company turned out to not be a fraud or stupid and that it didn't just not fail, but it actually had great fundamentals for the next 3-5 years after we first bought it... those guys had to cover and helped the stock overshoot to the upside a few times along the way. Culper is calling CBRS pretty much a fraud in that report. I think Culper is wrong. But we don't mind them publishing that report and certainly don't mind them borrowing the stock from us or other CBRS owners to sell into the market. It's a mostly free market and that's how we want it: Let the best analysis and investors win!
Q. Space X- Do you see SPCX possibly being a stock that could be one of the best performing stocks over the next 5-10 years?
A. Yes, possibly.
Q. Apple - Do you see Apple with a 10T market cap in 3-5 years?
A. Yes, probably.
Q. Where do you see NVDA in 3-5 years?
A. Doubled or so from these levels, trading at like 18x earnings still.
Q. Which of the core holdings besides spacex did you anticipate was going to have the best earnings results. Palantir maybe? Or maybe I should say were you most anxiously awaiting to hear.. from the investment thesis confirmation perspective.
A. Hmm, maybe I'm confused by your choice of past tense wording. After all, we're barely 10% of the way done with our portfolio names quarterly reports. I expect each of our names had some pretty good quarters. That said, the last 90 days of business trends doesn't necessarily mean much for the long-term anyway. Steady, as she goes. Again.
Q. Fair enough… poorly written… sounded better in my head… like most things hahaha
A. It's always nice when something actually comes out sounding better in real-life than it does in our heads. That doesn't seem to be how it usually goes though. And that's partly a reflection of how we each think we each are so darn smart... until we open our mouths! Haha.
Q. Morning Cody, is there a price point where you would buy more CBRS and is it still a buy for you?
A. Yes, as I probably mentioned last week and the week before and the week before that, I've continued to nibble into more CBRS and it's a large position now. That said, because it's a large position now and because it's still quite more risky (albeit with more upside potential too) than most of our other names, I'm going to sit tight for a while here and let it trade as it will without doing any more nibbling. Steady as she goes. (From Gemini AI: "The phrase 'steady as she goes' originated as a traditional maritime command given by a captain or officer to the helmsman to maintain a ship's exact heading at the moment the order is issued, regardless of temporary waves or wind gusts.").
Q. Safe trip Cody, enjoy the experiences… make the memories.
A. Thank you. I'm trying not to stress out about all the hotel changes, plane trips, train rides, public bathrooms, masses of crowds, lines to stand in, etc and to just be excited about building this business with my great partners who are opening big doors and the experiences and sights and delicious unique dinners etc. But this one is going to be a lot of work for me. That's cool though. I don't mind hard work mixed with sushi.
Q. It's no not like you will have a lot of time off, but the Beatles' "magic bus" tour was SO worth it! and there is always the Cavern, purchased by McCartney, and Ringo's original drumset is still there.
A. Yes, this will be my third trip to Liverpool and will be the first time I might have time to check out the original club the Beatles got going at. I actually am also going to see Bob Dylan in Munich as he happens to be there the night I'm there.
Q. Please share the details on how to participate in markets where we can buy privately-held companies?
A. I am not planning on doing any investments in privately-held companies any more. If you do try to invest in privately-held companies, try to make sure you only invest in a single-layer SPV. That said, it's hard enough to invest successfully in publicly-traded companies and I don't think most retail investors should mess with privately-held equity.
That's a wrap! Thank you all. No chat for the next three weeks while I'm traveling overseas. We will have some of our usual long-form weekly articles for you all at least two of those weeks, so stay tuned for those. I leave you all with a shot of last night's sunset.
