Dreamer Corp - Port Update

Investment Analysis Clubs Where Angels Fear to Tread
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hoping KC still had UPST on his bingo card today…

Looks like this Q round of ERs it is all the rage to pop in AH. Still think most are a fade. Most ERs were drops in AH last Q it seemed. Wonder if we see things circle back to drops in the July/Aug round of ERs, when companies might have better visibility into any incoming recessionary vibes for 2H of 2023. More likely, the way things are dragging, the Oct/Nov ERs will probably be the most telling. Things seem to move slowly, then suddenly.

Just don’t know when “suddenly” will be, exactly.

Dreamer

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UPST has been one of the most shorted stocks, so a (huge) short squeeze doesn´t surprise me at all.

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KC was slightly overweight on an “as invested” basis, 5.4% of port versus 5.0% target. At end of regular session the UPST position was pretty much break even (up 0.15%, for the hopelessly annual). So not as heavily invested as I was for the disaster ER’s.

2 billion annual (?) commitment on funding. This was bound to happen, just a matter of when. Kind of surprising that it happened now, in the month of credit squeeze. Makes onewonder what was going on in the corner offices to hold the deal(s) together.

Now, how long does the pop last. I didn’t get up ‘til 9 so missed after hours trading and didn’t see AH price until I read Dreamer’s post and went searching. I need to listen to the call to maybe get the flavor of the analysts’ reaction. Might trim the half-percent overallocation.

My new, bottom-of-the-line, cheap old retired guy’s, HP laptop went to intensive care ward at computer shop yesterday. So am on my old, bottom-of-the-line, cheap old retired guy’s desktop out in DW’s command post desk in the kitchen/pantry/laundry area. I think the xcel spreadsheet here is same version. It shows up 3.7% YTD.

I think the volume on UPST includes AH. If so, it is 3 to 4 times normal, maybe 20% of outstanding shares. Could be a little more squeeze left for tomorrow. (?)

KC

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Except for the giant mounds of rice and international location, I am pretty sure you are my father’s brother from another mother.

Dreamer

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Strange Friday. Rooting for a down day. CRWD and BILL calls now out of the money. SNOW still $5 above strike price. If it stays that way I will net a few hundred bucks. But at a much bigger portfolio loss. UPST is $2.50 less than I sold it for, so can buy it back.

KC

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S&P has been oscillating above and below 4125 since beginning of April.
In a weird way, as someone short, I take it as a good sign. If the FOMO bros can’t achieve escape velocity, despite MMAAAN stocks being near ATH, and inflation going down 10-11 months in a row, then I feel like my theory of an injured fighter running on adrenaline holds true.

Slowly, then suddenly.
Unemployment will rise, and while many will scream “pivot!” and even if they are correct, you then realize the reason for higher unemployment and a need for a pivot is a recession…so enjoy your lowering rates, as the market is going to go down due to recession anyway.

I just don’t know how much longer I have to wait. Days, weeks, months?
Will see.

Also, as par for the course, big post-ER pops are fading (like UPST).
TTD growing at 21% y/y and still commanding their multiple and mkt cap? C’mon.

DDOG made a nice move back into the 80s and a $27b mkt cap for a company whose growth is slowing and whose benefactors (the cloud titans) are seeing slower growth.

Seems like a thousand new uses for AI/Chat-GPT in news every day. Impossible to keep up. Feels like we are entering the “Chaos” stage for tech, but I am just a guy on the internet.

Dreamer

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So why is KC not dancing in the street? Answer: “OKE”

and: “UPST is $2.50 less than I sold it for, so can buy it back.”

I sold almost 25% of UPST on the earnings pop, and then bought back only 65% of it when the price came down. So, I ended up with 92 to 93% of the pre-earnings shares (and a few $'s cash). So there is always greed, right?

And then my biggest by far position, held in both IRA’s and taxable… OKE bought out another pipeline company and took a 10% haircut. That ate up 90% of the UPST gain. Other company up 22% on the buyout and the lawyers are circling to see if OKE should have paid more… The share price outcome ought to reflect what happens to the dividend. Other company was paying more, 7.56% vs. OKE at 6.0%. It wasn’t broke, wish they hadn’t “fixed” it. Don’t plan to do anything to either UPST or OKE positions.

KC

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Oh, the SNOW shares were called away. So that cash plus the premium on all the calls plus the net cash from UPST sell/buy gives me 15% cash plus 2% treasuries.

+5.7% YTD. Blah.

I am not going to chase SNOW. Either it will come back down or I will find something that is on sale. Some day.

KC

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…or I will find something that is on sale. Some day.

UPST was on sale a week ago. :wink:

…before the $6B of consumer loan funding deals were secured/announced.

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It is probably too soon to judge whether the post-ER pops are fading. I looked at ten stocks in my portfolio with May earnings releases. Except for SPG and I think TTD, they all went up. None of the others have faded. UPST is special case because it did give back half of the pop and then the additional 4 billion funding was announced. But OLED, GLBE FOUR, DDOG, BILL and AFRM have continued up, some only slightly, others a lot.

Now, whether they “should have” is another story. The market has been “risk on” for several days. SNOW, PSTG and CRWD earnings coming up.

As to recession, I have been thinking that by the time the recession is announced, the economy will have been in it for 6 months and Mr. Market will be looking at the other side. As long as there isn’t a stagflation grand canyon to cross, the market could start (or continue) a rally. Meet Mr. Bull.

On the other hand, Mr. Dimon says there is no bottom and no other side. I am conflicted. I was up more than 14% YTD on February 2. Then back negative and, at the moment, up 6.6%. Protect the measly 6.6%? I am not sure what NASDQ index we were discussing here. At E*Trade I get COMP.IDX displayed. The 1-year low was about 10,200, several times in October, November and December. The chart has looked better since mid-March and in the last week, order has been restored. Daily price above 20-day average which is above 100-day average which is above 200-day average. Last time we saw that was… November 24, 2021, another day to live in infamy as far as my portfolio is concerned. The teal leaves say that we are headed from current 12,500 up to 13,000. 13,000 was where the last runup ran out of steam in August 2022. If random macro-garbage doesn’t derail, we could get there in about two weeks. Just about debt ceiling day.

Dreamer: “I just don’t know how much longer I have to wait. Days, weeks, months?
Will see.”

Maybe if the market can’t break through 13,000, you will get your chance and we break below 10,000. Or, UPST might go to $45 and DDOG to $120…

Dead hang time,

KC

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You nailed it with “market has been risk on” therefore the post-ER pops have been supported. I think that wont last.

I am not a genius and my success is not certain, and things may get worse for me than better. Up about 3% ytd now, so still have a little room to play before the pain really kicks in for me.

If market is freaked about by prospect of debt ceiling, their actions dont back up their words. So when debt ceiling deal announced, and q3 recession signs start to pile up…we just fomo to moon?

Used to visit Legoland w young kiddos.
Near San Diego.

Went in June once…very blah weather.
That is when I learned about June Gloom.

Wonder if market will learn too?

Dreamer

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the mystical 4200 SPX was finally breached (barely) but too consumed at work to get puts lined up in time.

Probably my luck that market tanks at open. Whatevs.
If not, may add some puts, but running out of cash to play with.

Closer to being up 2% YTD now. Blah. Been a tough 2-week stretch.
Nice thing about indexes are it is a relatively slow bleed.
Bad thing about indexes is that when it goes in my favor it will also be a bit muted in terms of big gains.

But a true capitulation should be min 10% to more likely 20% drop, from current levels. That is the return I am holding out for. Then hopefully buying good entries at the bottom.

Or basically what I should have done last June or Oct or Dec.

Still ultimately about 10% off my March 2022 high point, which was pretty much my Jan 2022 high point. Not devastating, but still not growing the port for past 18 months essentially. Boo.

Dreamer

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Another “risk-on” session. NASDAQ at 12689, up 188. Three more days of unrelenting, irrational exuberance…

UPST and AFRM at the top of the leader board, +15% and +12% (don’t mind me if I round up the gains for psychological effect). UPST volume was again its normal abnormality. 18 million shares traded of the 69 million shares of float. AFRM just 10% of its float. Bert says that these two were being used as convenient tool to play the Fed’s tightening. Are hedge funds reversing the flow?

I wondered if the price action is warranted based on the new, committed funding. I am a bit leary. Back in '21 and '22, there were $11.2 and $11.8 Billion of loans originated via UPST. But 4Q volume was down 62%. Previous year would have been almost 4 billion, or a 16 billion run rate. Run rate based on 2022 4Q would be 6 billion. If UPST is able to use all of the new 6 billion funding, and banks don’t want to increase their balance sheets, that would get UPST to 12 billion, maybe.

So they could get back to 2021 level with minor Y-o-Y growth. This would need further analysis as to expected profit (with recent cost controls) and a WAG on p/e. For now I am not going to over think it. I need a POMO analog for maintaining a 3-year investment view to filter out the noise. If UPST gets cut in half again, is that just “noise”? Whatever. Together, UPST and AFRM make up 10.2% of the portfolio AFRM was not one of the 20 stocks targeted. I just bundled those with UPST for some diversification.

Up 9.5% YTD. SNOW is running away from me. One can only hope for a bad ER.

KC

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wealth degradation suppression weapons have been deployed to protect me from myself!

removed much of the QQQ puts, because obviously AI is the next metaverse is the next ecommerce is the next broadband…blah blah.

Instead, deployed some Oct puts.
Expect those to make up the losses (eventually) recently incurred, while giving me some cash back to short higher if things continue to go cray cray.

about 70% short now.

Feeling the pain, and only slightly up for year (2% or so) at this point.

Dreamer

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Seems Dreamer got some relief in the Friday session although QQQ rallied the last hour. I was down almost 2%, so the bloom was off this weeks rose. The interesting stock was GLBE. They will announce quarterly results BMO on Monday. It rallied all week, along with the risk-on trade and advanced another 6+% Friday. Volume 3 to 4 times normal. Always makes me wonder about leaks. The Earnings Analyzer of CBOE predicts a 12% move. The analyzer does not predict direction, just magnitude. Pre-market trading begins at 4 a.m. which is a relaxing 4 p.m. hour here. Note to self: scratch that, will be away on Monday… I am not mobile and do not get along well with android smart phones.

KC

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UPST!!! Up 25%. Again. Squeeze, one would think. I sold just 6% of the position which is/was up 100%. Should probably have sold half.

GLBE earnings were o.k., stock was down around 5% so I added a bit. Made a few pennies.

S&P up less than 0.2% so not horrible for dreamer

NASDAQ up 75 to 12,736. 264 shy of 13,000. Will we test that this week?

KC

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9:30 footnotes.

  1. SNOW came home to roost! My call strike price was $162.50 and the stock was running away. Earnings was my only hope. Jackpot! Down 15%.
  2. Remember NTNX? It still has fans. I have one share as a marker when it was recommended less than a year ago. I suppose earnings, but up 14% and my share is up 27% now.
  3. UPST up almost 4%. The big up day, the volume was 30 million shares, with shares outstanding of 83 million and float in the 60 millions. Then on the post-earnngs down day, 20 million shares as the bears got the upper hand.
  4. UPST now down almost 4%. How’s them apples?

KC

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had a good week until NVDA popped market today. will be interesting to see if it fades or surges rest of day. I sure should have bought them at the 2022 lows…grrrr!

The ongoing debt ceiling thingy may reassert itself as a negative, but conversely could be additional ammo if/when they get their deal done. Either way, I see it as an eventual mini-pop then sell the news. Outside of NVDA/AI, I still think we are a dead-market-walking.

Dreamer

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Hi Dreamer,

As a novice, I just noticed this…The market had every reason to go down today…and yet it didnt…

NVDA

Did you see the recent analyst targets…Euphoria sure…but we are talking about a solid company with a huge new market that was touted for a long time…Till now, it was a myth…And now, it has become a really serious possibility…And I absolutely can not believe it that there is ONE and Only ONE company which could power this - NVDA…I just don’t understand how the others were caught napping here!!!

I mean, in this macro, if Jensen had the guts to provide a guidance of > 50% QOQ revenue growth, I dont know what else to say…

And Twitter is going crazy - I love it…

Congrats Jensen - You the Rock star!

Charlie

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Oh I posted it here because I know you are a valuation guy…and respect you a lot for that…but when even u said what you said acknowledging NVDA, I had to post this…

You know, I did not have the good fortune to know the David Grdner or invest when he was running the show …but I believe he was a big time bull on this…and made some outrageously great calls when he was running the show…This might well be his next legacy!!!