Van Hesser’s 3 Things in Credit - A KBRA Podcast
This week, our 3 Things are:
Some perspective going back to 2019. Consumer still loaded with cash.
Have a listen…
KC
Remember the Metaverse? AI made us forget all about it, but I believe it is still incoming.
I can no longer recall exactly the beginning of my sense of VR worlds, as there was Tron many years ago and other similar digital avatars like Max Headroom, etc…
But the big one for me was the audiobook version of Ready Player One, read by Will Wheaton, which was one of my first Audible purchases and still one of the best I ever listened to, and has a high-reread/re-listenability. (is that a word?)
The movie version was generally a letdown. This was a 16 hour type audiobook, so a 2 hour movie was never going to do it justice.
Shortly after that book, Oculus was formed and later bought by then-Facebook.
I bought the original Oculus Rift from myself and my kids, as I loved the idea of immersive VR. Later came the Oculus Quest now on version 3 as the Meta Quest 3.
Companies like MTTR are still around…former SPACs that jumped on the Metaverse craze that Zuckerberg went all in on. Then it…fizzled out, especially in the backdrop of horrid stock price action in 2022 and by early 2023 everything was pivoted to AI anyway.
But Metaverse is still coming. How do I know?
Because KISS just immortalized themselves as a digital avatar so they can play forever into the future after their last recent live concert:
Apparently some Korean (K-pop) bands already ahead of the curve here, too.
This post would be ten pages long and not get to all the ideas/examples of where Metaverse can go, but think of it akin to AI. Much like Electric Vehicles often seem to get lumped to future version of Autonomous Vehicles, there is a similar connection.
If you can easily imagine how AI can “replicate” video, speech, and anything in the digital realm, you start to be able to better understand the ideas around digital twins. With digital twins, you could:
You get the idea.
I liked META when it got cheap in 2022 and didn’t bite enough or long enough on the idea. (like a lot of stocks in June, Oct, and Dec 2022 - I screwed up bigly)
I don’t know that META is the answer, but the Quest is certainly getting the financial backing here, and whether Zuck wants to frame his spending as being on MetaVerse or AI, it is all the same in the end, imo. I think he, like Elon, is getting to the point of Eff You money, and are doing what they want with their toys and their vision of the future.
If/as stocks get hit in a future downturn, I will be keeping my eye on those that can benefit the future of the AI+Metaverse.
Dreamer
Cloudflare aka $NET out in the world making friends…
Dreamer
That was a fun read, thanks for the link.
And congrats to SMCI holders! Have been on my watchlist, but hadn’t pulled the trigger yet. Up over 30% on increased guidance from the company!
You own TMDX, foodles, you can´t complain, you´ve made a good choice too.
Have a good weekend!
Haha, yeah, I’m not complaining, TMDX made quite the recovery after dropping around 65% after their report 2 releases ago when they announced the purchase of the aircraft business. I never expected it to be accretive to earnings in the first quarter of ownership, thought that would take a year or more. Management really seems to be on it here! Can’t wait to hear their results as they’ve continued to purchase aircraft at what seems like a furious pace… although if they’re making money off each plane, why not.
The best investing method for me seems to be picking great companies (not always the easiest), but then continuing to add to them when the market overreacts to some short term event that doesn’t fundamentally affect the company and drops the price way more than it should. It’s TomE’s (TMF1000) old adding at better value points. That’s what got me investing initially and worked wonderfully for many years, and I’ve gone back to it now. Been doing it recently with CELH, NVDA, and TTD. Only difference now for me is I’m not working any longer, so I have to trim other holdings to add to these (would work better if I had new funds to add, but then this forces me to trim some holdings while they’ve potentially run up too far too fast). Been trimming CRWD recently (although still my largest holding).
On the way to ATH, congrats!
Hope you are all out of AEHR by now.
Is this the bottom?
Might already be too late, but looks like MOD caught AI fever and up 400%. They do datacenter thermal cooling or something something:
https://seekingalpha.com/article/4676423-modine-manufacturing-ai-exposure-no-longer-under-the-radar
ODD was brought up on Saul board. I find it intriguing. Took a toe dip, but need to learn more.
SMCI, COIN, and Bitcoin are telling me the bubble is still intact and going strong.
Dreamer
MSTR, RDDT, and DJT (formerly DWAC) are telling me the same thing.
This is really sad. Who is gonna catch Nicole’s killer now?
Boy - what a HUGE correction in the market, eh? You should all be buying dem dips, eh?
My perspective: the shorter watchlist I have has worst performing stock, by measure of how far off their 52-wk low they are, to be PTLO just a few percent off that low from this week.
Next up? TTD at about 29% off 52 wk low.
Then 39% for SPG, and then 50% for GOOG.
ELF up 86%
CELH up 130%
So…just saying I am not sure these dips are really dips.
Could easily all go on a tear next week thru election, for all I know.
At some point, all these maxed credit cards, full-time job losses for US-born citizens, compounded effects of inflation on insurance, gas, food, and shelter…well…just thinking something will truly give.
If we don’t get a capitulation, then what is alternative? YOLO alt coins and Jeo Boden coin and ride AMC/Gamestop/Tesla (again)? Maybe ZM resurgence? I don’t see where the money comes from. Consumers get (are?) tapped out, that trickles to corps, corps spend less as Wall Street already allowed them to ignore flat/down sales growth in favor of profitability. They can’t keep EPS up if demand disappears, so have to cut costs to save the profitability. You cut costs by buying less of somebody’s stuff and/or paying less people. This trickles down to…you get the idea. It feeds on itself.
This could be akin to April of 2022 and the worst is yet to come or maybe it is just April of 2023 and a Summer of YOLO/FOMO/MOMO fun awaits where valuation dont matter and neither does commonsense.
What say you?
Enjoy the weekend,
Dreamer
I admit to never having heard of CoStar before, that I recall.
They do data for comm real estate and moving into residential.
Fairly rich PS/PE, and doing about $2.5b/yr rev on a $34b mkt cap. Could have made 20x on that stock if you bought in 2010.
Huh…how bout that?
Anyways - they bought former Metaverse SPAC darling Matterport (MTTR) as I saw stock was up 150%+ due to acquisition price announcement.
Basically they combine to form a data/3D powerhouse. Wonder why META didn’t buy them. I long have believed and mentioned in posts long-dead (thanks TMF!) that a ready-player-one type future Metaverse that needs digital twins of everything would be a great fit for Real Estate market. Virtually “walk” thru every room in house, use Augmented reality within the Virtual reality to place your desired furniture and game room ideas. Just ask your AI assistant to put in the brick paver patio over here or finish the basement, etc… to get a feel of the potential of the house you are thinking of buying.
But I guess CoStar isn’t a piddly little company like Matterport, so maybe they will be a Metaverse player some day.
Found it interesting. Not sure there is an investing opp there at current levels, but I threw CSGP on the ol’ watchlist to keep track down the road.
Dreamer
SNAP up like 22% in AH or something dumb.
Guess the bull market is back, cause that feels legit.
Anyone know anyone that actually uses this app? Nope.
Are we nearing final days gasps of senseless euphoria?
Fun question no one seems to honestly answer: if consumer is so good, and economy so great, then why does US have to run massive deficits?
Could it be that the only way to keep GDP positive is by running deficits?
And now GDP is falling, inflation still stubborn. They call that Stagflation, I guess.
But lets YOLO on some SNAP stock!
Dreamer
I’m really enjoying Fallout.
Oops, wrong thread, sorry.
“Fallout” is one of the best series of the last years. It doesn’t reach the level of “Warrior” or even that of “Yellowstone”, but I find it much better that any Mandalorian or The Last of Us.
The screenplay, the special effects and the post-apocalyptic atmosphere are great, but I found the dialogues and especially the music were very often boring and sometimes even annoying.
Sure the choice of actors in the lead roles is odd (not to say uninspired!), but I’m aware of the world we live in and…that´s it. Besides, after seeing the two lead heroines in The Last of Us and Justified 2.0, nothing seems ridiculous anymore.
So former Saul board darling ZoomInfo (ZI) reported.
A whopping 3% y/y growth and they are touting it as a “beat” which just shows how pointless this beat/miss game is.
They also reduced their guidance, I believe, by just a sliver, which of course led to an AH beatdown of 15% at moment, putting them in striking distance of their ATL.
What do they do?
Well - this is where companies go to get contact info and sales leads, to drive revenue growth for their own businesses.
So…if a company that supplies business/sales leads is flat, then what does that say about all the businesses that buy from them? Hmmm…
Dreamer
I got a hold of (UPST) Upstart’s PR firm, and they had this to say about ZI’s AH price action:
That’s me, buying the SHOP dip. Got a negative spiffy pop today. My purchase price was $9.415 and today it is down $15.04. Still up 558%. P/S of about 12, what’s not to like?
KC
it took GLBE down with it, looks like.
I am too distracted to put a lot of time into describing this pattern, but I feel like I am seeing it with familiar names.
2016-2021 parabolic during this period
2022 omg - what were we thinking (kills stock by repeating hitting with flaming mallet)
2023-Q124 - we are sooooooo back, baby!
Now - meh. I knew we broke up for a reason. Just forgot for a moment there…
Anyone else know what I mean?
The math/pattern geeks among us might see it as a sort of diminishing oscillation wave or something…like that first bungee jump from the bridge made it all the way to the water’s edge, but then the subsequent moves are getting smaller.
It describes a certain of former Saul stocks, except ZM (cause that sucker stayed dead): UPST, DDOG, SNOW, NET, TTD. And then others during that nonsensical 2020-21 stock boom; TSLA.
I guess you could throw Bitcoin in there, too.
It is like they partied so hard on cocaine or heroin in 2020-21 and then collapsed, but someone jabbed them with adrenaline and they popped back up and now are they finally getting to the point where there is nothing left in the tank?
Dunno. I have largely sucked as an investor since end of 2021, so don’t follow me blindly.
Used to be that the goal was waiting for the fat pitch to hit. No one seems to have that patience and/or they aren’t getting any good pitches yet. So they stick to what they know and hope a 40b stock becomes an 80b stock due to…momentum?
Dreamer