My portfolio has been on a good start to July, largely due to Tesla’s stock performance, which rose from $197 at the end of June, to more than $260 during the first ten days of July, at least partially due to their announcement at the beginning of the month that deliveries were better than expected, particularly for their Energy business.
In the second half of the month, I gave back some of the gains as Tesla slipped down to $232 (probably at least partially due to pushing back the timing of their planned robotaxi event from August to October) and as The Trade Desk slid a bit from $100 down to closer to $90, resulting in my port being up only a little bit in July
Here are my updated results, cumulatively by month so far for 2024:
-9.7% YTD Jan
+11.0% YTD Feb
+3.7% YTD Mar
+2.3% YTD Apr
+1.2% YTD May
+9.7% YTD Jun
+11.8% YTD Jul
On July 15th, I was up more than +26% YTD so it slipped a bit as my two largest positions drifted down the past couple of weeks.
My portfolio is still very concentrated, nine positions, and three of those make up the majority.
This was my allocation at the end of last month 6/30/24
39.6% (TTD) The Trade Desk
29.0% (TSLA) Tesla
12.8% (MDB) MongoDB
6.4% (ZS) Zscaler
4.7% (AXON) Axon Enterprise
3.8% (SNOW) Snowflake
3.6% (MELI) MercadoLibre
and here it is at the end of July, 2024:
35.3% (TSLA) Tesla
33.4% (TTD) The Trade Desk
12.9% (MDB) MongoDB
4.2% (AXON) Axon Enterprise
3.7% (MELI) MercadoLibre
2.9% (ZS) Zscaler
2.9% (MELI) Crispr Theraputics *NEW*
2.6% (SNOW) Snowflake
2.0% (ELF) elf Beauty *NEW (again)*
Note that a portion of my TTD and TSLA holdings includes some 2026 Leap call options.
In July, I decided to start a position in Crispr Theraputics (CSPR), so I sold a portion of my Zscaler and some of the Snowflake shares to free up funds for a small CRPR position.
I then sold some TTD and some ZS to buy back into a small ELF position.
and I also sold a small amount of TTD and ZS, and some AXON to raise some needed funds which I permanently pulled out of the portfolio.
TTD and MDB have been two of my top three holdings pretty consistently for the past five years.
It is a very concentrated portfolio which I don’t generally prefer, but as of right now I don’t have many other companies that I have a high level of confidence in to allocate investment funds towards.
Here is the year to date performance of each of my current holdings. Also note that the companies that I didn’t own at the beginning of the year (ELF, AXON, MELI, CRSP, ZS, SNOW), this only shows the performance since I purchased them:
| Dec 31 2023^ | Jul 31 2024 | YTD Gain | |
|---|---|---|---|
| TTD | 71.96 | 89.88 | +24.9% |
| MDB | 408.85 | 252.36 | -38.3% |
| TSLA | 248.48 | 232.07 | -6.6% |
| ELF^ | 190.10^ | 172.58 | -9.2% |
| MELI^ | 1,409.42^ | 1,668.9 | +18.4% |
| AXON^ | 307.22^ | 300.01 | -2.3% |
| SNOW^ | 155.20^ | 130.38 | -16.0% |
| ZS^ | 177.00^ | 179.35 | +1.3% |
| CRSP^ | 55.06^ | 57.29 | +4.1% |
^ Because I didn’t own ELF, AXON, MELI, SNOW, ZS, CRSP until this year, the “December 31st” numbers above are not their 12/31/23 prices, but the stock price of my initial, most significant purchases.
Most of the shares I hold in TTD and MDB were purchased in 2018 and 2019 at much lower costs. The largest portion of my Trade Desk shares were purchased in January 2019 for $11.39 and are up +689%, while most of my MongoDB shares were purchased in July 2018 for $57.39 and are up +340% now.
Lots of earnings reports coming in the next couple of weeks for my companies:
Mercadolibre - August 1st (today)
Axon - August 6th (next tuesday)
Trade Desk - August 8th (next thursday)
elf Beauty - August 8th (next thursday)
Comments on the companies:
Crispr Theraputics (CSPR)
After learning a little bit about Crisper Theraputics, I decided to take a small entry position this month.
I’m not sure if the company is on topic for this board or not so I didn’t do an intro post on them. We have had other health companies that have been held and discussed here in the past (Butterfly? Or was it called Monarch? that got acquired a few years ago when several here owned it…and Moderna a couple years ago, etc), so maybe it is, but I’ll just share a few thoughts I why I bought here rather than starting a full thread on them, unless it’s deemed ok to do so and there is interest.
CRISPR is a (generic?) term for a gene editing tool that won its’ inventors the Nobel Prize for chemistry in 2020.
Crispr Theraputics is one of, what I assume are several (many?) companies attempting to use the new CRISPR gene editing tool to find therapies that will cure disease.
They already have one FDA approved therapy (cure) for sickle cell disease, which was just approved in December 2023. It is called Casgevy and is a (collaboration? I don’t know the exact term) between Crispr theraputics and another company called Vertex.
This therapy literally cures sickle cell disease in most all patients that have gone through the therapy and it sounds like it dramatically improves their quality of life afterwards.
It’s not all smooth sailing though as the therapy itself is not fun and does include a round of chempotherapy. But once you get through that one round of chemo and treatment, it sounds like the therapy consitently totally cures the disease. There are also only certain locations where the therapy could potentially be provided today, you can’t just walk into any doctors’ office or hospital and get treated.
The other catch is the cost of this therapy, which is currently over $2 million (but will certainly come down substantially in the near future as it gets marketed for the first time).
One possible reason to be optimistic that this will bring in substantial revenue from Casgevy, is that the highest rates of sickle cell disease are in Saudi Arabia, where the country and government probably has the desire and funds to make sure their people that struggle with this disease can get the treatment they need, even if it is an expensive proposition.
How and when the treatment will realistically be monitized consistently in the USA or get any health insurance to cover it (certainly won’t happen today at $2m despite what will probably be significant future cost savings for each patient after the disease is cured)
Crispr Theraputics today has a market cap of just below $5 billion. There are various online discussions using different estimates that suggest that a succesful Casgevy alone would have a value to CRSP of that, or even more. I frankly have no idea if those are realistic or not. But the company also has lots of other treatments that they are working on for other diseases, including diabetes. Granted other companies are certainly working on these too.
It sounded interesting enough to me, especailly with one therapy already FDA approved, to take small position. It is certainly very speculative (but aren’t all biotech companies?). It also helped diversity my portfolio a bit from my other holdings.
Here is a video that I thought was quite good with a fairly short, 12 minute summary of how the CRISPR gene editing technology works
The First CRISPR Gene Therapy Is Here
elf beauty (ELF)
This is the third time I’ve owned ELF so far in 2024. I originally bought ELF early in the year in the $150’s, sold out completely around $210, then I bought back in the $160’s, and sold out again when it hit $190
Since then, ELF was trading mostly in the $200+ range and hearing some of the great coverage on this board about stores struggling to keep it in stock as it sells so quickly made me reconsider whether I should have sold again. Well in July, it came back to $190 and I bought back into a small amount. My timing wasn’t great as a few days later, it had dipped all the way into the $160’s. I was tempted to add a little more then but my conviction just isn’t high enough to want to add any more to my ELF even at those lower prices.
Earnings coming up next week so that will be a good time to re-evaluate and see what I’m comfortable with going forward.
Tesla
As noted above, Tesla’s stock price moved up significantly at the beginning of the month after they announced Q2 deliveries which were better than expected, particularly for their energy busines.
The stock slipped in the second half of July after it was reported that they were pushing back the planned August robotaxi event to October.
and oh yeah, they released earnings in July too, but having already known the deliveries numbers, there wasn’t anything too significant that came out of that report and it didn’t have a huge impact on the stock.
Whether you like Tesla CEO Elon Musk, or you hate him, one thing that I find incredible about being a Tesla retail shareholder is that, probably for the first time in the history of investing, we have essentially a live feed of the daily, even hour to hour, thoughts of the chief executive, and person that drives the business of one of the biggest companies in the world. It’s really kind of astounding when you think about it.
If you follow Elon’s posts on X (formerly twitter), which, as owner of X, he certainly has a big incentive to post regularly and keep engagement high, he is constantly describing his reactions to news about his companies’ successes, frustrations, and everything in between. We hear about his thougths on hobbies (he loves his video games), and we get more than our share of his other opinions, which are sometimes more political than many shareholders would like to see expressed so openly and often, and not always well thought out and can easily be construed to paint him (and to some extent impacting the reputation of his companies) in a negative light.
But regardless, it’s like nothing else that has ever been available to the average joe seeing real time information about so many aspects that can affect their investment decisions, and like nothing else available to us for any other company even today.
Elon has expanded a little bit during the earnings call and other interviews about the delayed timing of the robotaxi event. Here what he said during the earnings call:
“We postponed the Robotaxi product unveil by a couple of months where it’s shifted to 10/10, to the 10th of October. And this is because I wanted to make some important changes that I think would improve the vehicle – the sort of – the Robotaxi – the thing – the main thing that we’re going to show. And we’re also going to show up a couple of other things. So moving it back a few months allowed us to improve the Robotaxi as well as adding a couple of other things for the product unveil.”
It’s the “couple of other things” (my bolding above) that raised my antenaes the most as I’m interpreting this as being something other than robotaxi that they also plan to show off in October. Whatever it is, it seems like a positive that something else, a couple of other things, will be ready to be unveiled or demonstrated so soon. It could be related to any number of inititatives and products they have in the pipeline, but we’ll just have to wait and see.
During the month of July, we got lots of updates on estimated timing for a variety of things. Now keep in mind that the company, Elon Musk in particular, are historically overly optimistic about timing, so take this all with a grain of salt, but there are a lot of things that, if Tesla is sucessful with them, could really move the needle and several of these have the potential to really start to happen over the next two years. As I’ve noted in the past, I don’t own Tesla because it’s a vehicle company, I own it because there are lots of opportunities that, with success, should drive the value of the company much higher in the future.
Here is a summary of what I’ve heard or how I interpret the latest estimates for some of these businesses/initiatives:
-
Core sedan vehicle sales (existing) - definitely not seeing the strongest growth at the moment but likely to continue to see solid growth in the future as the world continues to move toward EV’s, interest rates come down, and Tesla continues to pull away from competitors in terms of the technology available in their cars. I also do think we could see some high profile competitor bankruptcies in the auto industry in coming years as some longstanding brands are just not going to be able to compete profitabily, which could further consoldiate the industry toward Tesla.
-
Energy (existing) - Tesla’s energy business grew more than 100% last quarter. It’s probably never going to be a giant part of the company and may not move the overall needle that much for investors, but it’s profitable and growing and the company is likely to add capacity here where they can to continue to expand.
-
Cybertruck (existing) - Cybertruck also won’t be a huge profit driver for the company anytime soon. In fact, I don’t believe it has been profitable at all to date. I believe the company has said that, net of cybertruck, the margins for the core auto business actually increased this year, which hasn’t gotten much attention as most media outlets have only been reporting on the total consolidated numbers suggesting that there is an overall negative trend for the company’s vehicles).
But they’ve been pretty successfully increasing the weekly production numbers, you’re seeing more and more of them on the street. I have no problem with this part of the business. Some people hate the way the truck looks, others love it.
They’re selling more and more of them, I think it’s only a matter of time before they start contribute to profits, and even if those profits are negligible, it’s a plus for Tesla’s overall brand awareness, and I bet they are experimenting with new features in the cybertruck that the high price tag is able to essentially provide some free R&D on some things that may eventually be added to the other sedan vehicles. They are currently producing more than 1,400 cybertrucks per week and expect them to be profitable by the end of 2024.
- Lower priced ($25k?) affordable cars (est first half 2025) - Originally Tesla planned to re-imagine it’s assembly lines to create a new lower priced vehicle that would appeal to more of the masses that are currently priced out of their cars. Earlier this year the company noted that they will be able to produce lower priced cars on the existing production lines and that would speed up the expected timing from the second half of 2025 to the the first half of 2025.
What does that really mean? we don’t know. Will these new lower priced vehicles actually cost as low as $25k or will the price point be higher than that? Will they just be slightly modified version of existing Tesla vehicles and not a huge change? Will there be a seismic shift in auto ownership as robotaxi suffices for many people’s auto needs and they, especially in the lower priced tier, decide not to own or lease cars in the future and just order robotaxi rides and occassionally rent vehicles? We just have to wait and see.
- Robotaxi/Cybercab (2025?) - Elon said recently that the start of their robotaxi business is simply based on when they’ve fully solved unsupervised full self driving (FSD). He recently said it could be by the end of 2024, but most likely will be sometime in 2025.
I used to think they would roll out the robotaxi business with live drivers supervising the self-driving car initially to work out the kinks and get people used to riding in cars that drive themselves. It doesn’t sound like that is the plan and I now believe that the app and service won’t go live until the cars are ready to fully drive autonomously with no driver.
Other companies like Waymo already have this happening in certain cities. And it sounds like the new v12.5 of Tesla’s FSD is pretty amazing. There are lots of youtube videos online since the wide release of 12.5 a few days ago praising that they used it to drive them long distances without having to take over control of the car at any time.
Elon recent described future robotaxi’s as “mobile lounges” where people could use the time they previously spent driving/commuting to get work done or sleep or drink/party since they won’t actually be operating the vehicle themselves. I tend to agree that it’s at least going to change the way many people think about automobile trips. I won’t be surprised if people get accustomed to using robotaxi’s for 4 hour rides that they historically took one-hour flights. Including the check in/boarding/baggage claim etc processes, it may not be that much longer door to door, and will likely be much more comfortable to ride in your own car compared to being crammed into a tiny coach airplane seat, and it might (will probably?) be less expensive too.
I do think it’s going to be matter of when, not if, and even if this doesn’t happen until 2025 or 2026, it could have a huge impact on the value of the company as it has the potential to provide taxi rides both cheaper and more profitably at the same time, than anyone else.
- Unsupervised Full Self Driving (2025?) - There are a few different revenue opportunties related to FSD.
One (a) is robotaxi noted above.
Another (b) is the fees, typically monthly, that Tesla charges to owners to use FSD in their cars. This is already ongoing and the price was slashed this year from $199 to $99, I believe just to get more people using FSD and seeing how great it is. I suspect that the odds are that they will have no trouble charging $199, or more, per month in the not too distant future while increasing subscriptions from where they are today.
The third opportunity (c) is the possibility of licensing FSD to other automakers. While other companies will likely have hesitations about getting too integrated with a large competitor like Tesla, it’s also possible that licensing from Tesla is going to be the best option for some to keep their vehicles competitive. This is going to be a longer term opportunity, as, even if Tesla came to an agreement with another automaker to license FSD for their vehicles, it’s likely going to take three years or more before it’s been tested on their cars and ready to go live. Not to mention that FSD hasn’t even really begun testing in Europe or China yet but the company expects to get approval for it’s unsupervised (current) FSD in both locations very soon.
- Semi Trucks (late 2025) - In my May 2024 portfolio update I wrote a bit about the latest regarding Tesla’s Semi truck business. Tesla is already using it’s Semi trucks internally, primarily to deliver batteries to the auto production facilities. Pepsi, which has been piloting some Tesla Semi’s for some time recently decided to expand it and will receive an additional 50 Tesla Semis, and various other companies are believed to also be testing the Tesla Semi’s. Tesla is already building a Semi specific production facility in Nevada
Elon has said that they expect “volume production” of Tesla Semi Trucks by the end of 2025. I believe the Semi business, if it proves to be successful and profitable could add a not insignificant amount to the value of the company.
- Optimus Humanoid Robots (2026) - This will be further out but has great potential. Elon has long said the value of the Optimius robot business could be greater than the sum of all of the other parts of Tesla. They currently have a couple Optimus robots working internally in Tesla factors but doing very simple tasks.
The Company expects to have an initial production of robots working in their production facilities in 2025 (reducing operating expenses) and then they hope to have production for sale/lease to external customers in 2026. It’s way too soon to ascribe any value of this business to Tesla today, but it’s a big one to keep an eye on.
- New Roadster (late 2025) - the new roadster was teased a while back as being developed in conjunction with spaceX, as they are saying it will use some kind of rocket technology and may be able to go from 0-60 mph in one second. The original Tesla roadster was the first car Tesla ever sold. This will be the first time they’ve produced a roadster since those early days (when much of the vehicle wasn’t even produced in house back then, I don’t believe).
Elon sounds very excited about the new Roadster when he talks about it. He recently said the engineering is complete and that he expects production sometime in 2025. I don’t expect that the roaster will drive enough profit to have a real impact on the value of the overall company, but it could be something cool that gets good press for the company (and like the cybertruck may allow them to experiment with new features that will someday be used in the regular Tesla cars).
- Dojo chips (timing?) - Tesla has been developing their dojo chips to reduce reliance on Nvidia’s products. Recently they have sounded more and more optimistic that it is something that they need to do. When it has an impact, who knows?
Elon recently said that dojo could someday be “competitive” with Nvidia. I assume that just means an opportunity to produce them for internal use, lowering costs and waiting time, and not that Tesla has any plans to ever sells chips to external customers in direct competition to Nvidia…but stranger things have happened, years from now I wouldn’t completely rule it out.
- Batteries/Solar/Powerwall - They’ve had their powerwall solar home product for a few years. It’s there. I don’t think about this part of their business very much. It makes sense that it would work in conjunction with EV’s, but I believe the payback period is about 10 years currently (how long it would take the reduced energy costs of a homeowner to cover the initial costs to buy and install the product) so I don’t think adoption has been that great and I don’t really think of this as a significant part of the investment thesis.
So there’s a lot of opportunities here in my opinion, several of the bigger ones could really start to get going in 2025. They don’t need to get all of these right. It will just take a couple successful big winners (or in the case of robotaxi or optimus, one bigger winner, if they are really successful with one of those) to potentially grow the value of the company signfiicant from where it is today.
Timing is unpredictable and as I noted, the timings noted above are just the company’s best estimates from recent statements made. It could be a while before the fruits of these labors could show up in revenue and profits, but as the opportunities get closer to being real, I do think we could see the stock price move ahead in advance, at least a bit once any of these get closer to reality.
I was asked a few months ago why I had recently taken such a big position in Tesla when most of their new products are not going to get going until at least next year, if not beyond, and why would I want that opportunity cost if it takes that long for the stock price to move. I simply felt that sometimes the anticipation of something that is coming soon is enough to start to move the stock price and I didn’t want to be on the sidelines when some of these major opportunities might start to come to fruition, especially with so many in the works that may all start to blossom at once.
It’s going to be an exciting company to follow for a long time, and feel good about owning a lot of Tesla in my personal portfolio with the intention to hold for a while.
The Trade Desk
A week from now we’ll know a lot more about how things are going for TTD.
The stock pulled back a bit after Google/Alphabet reported somewhat weak advertising numbers last week. I do wonder how much of that is due to the overall ad market, vs how much could potentially mean that companies like TTD are taking a bigger share of what is out there.
We have what is shaping up to be a big dollar advertising spend political election season in the second half of 2024 and the Olympics ratings have apparently been fantastic so far, which bodes well for the advertising industry as well.
It’s a great company with a great CEO and lots of runway opportunities ahead both short term (election/olympics) and longer term (CTV and overall shift to digital programatic non-linear ads)
Hopefully we’ll get some good news next thursday
That’s it for another month. Enjoy the rest of the summer. Thanks as always to Saul and everyone that makes this board so great!
-mekong