I am probably the only one here who saw John Cameron Swayze “live” on black and white TV. Who? He was newsman and commentator who turned product spokesman (back when there were spokesmen). He said the line? “Takes a licking and keeps on ticking” for Timex.
That’s my portfolio. Keeps taking lickings and keeps on ticking.
KC is still here and has a few comments to make regarding UPST, design, price, and probably life. But KC is up the coast at DW’s new property. Fixing “tented” tiles and mis-hung doors, tracing electrical issues and supervising repairs and additions to the bar and kitchen. Generally discovering what isn’t working right, like a wall fan (fixed) and a water heater (thinking about that, probably the water flow sensor because operation is intermittent ?).
KC, about 60% cash
Upstart. I had concluded that I would not hold UPST through the earnings call in August. I would have 2 to three weeks to reduce to half of my targeted long term position. In the meantime I was selling calls of different expiration dates and day/short term trading. Was caught by surprise with the pre-announcement. In retrospect, I should not have been surprised. As I posted earlier, the J P Morgan sell side analyst downgraded drastically to $18 target, and maybe (probably) he got info from the securitized loan side of J P Morgan about the lack of funding from hedge funds, etc. Once that downgrade was issued, well it now seems obvious that UPST would have to preannounce if there was a problem.
So, caught with my pants down. I had sold about 15% of the position.
Beyond that, there was the Tom Gardner interview with Upstart CEO. My reaction to that interview was that it was interesting stuff but completely ignored the bigger, funding issue and said little about loan demand. It focused on the AI, which is nice, but not worth much if there are no loans to make. The additional credit unions and small banks could not fill the void, not even over several years.
The auto loan progress is encouraging but what hard numbers will there be for the net 3 or so ER’s?
Bert was also focusing on the validity of the AI and that in any environment, he thought (and I do) that it will still predict borrower performance better than FICO. But the lack of securitizations, which I commented on before last ER, was the canary to guide for the next few weeks.
That’s the story there. I sold a ton in pre-market and saved a few bucks, and the covered calls plunged. One set expired worthless on Friday and another pile expires the 20th and those are $40 strikes. Those earn me pennies on the dollar, cigar butts in front of the steam roller. Bert stated that the relatively muted drop might have been due to short covering (profit taking) because short interest was 31%. Deamer might consider $18 to $20 as an entry point.
That’s it for now.
Thanks to Dreamer for the movie clips. Good for the resort and for the portfolio reconstructions. Got to sweep up the rubble and debris first and life, design and value/price provide the framework.