Interesting Stocks

[BlueWolf]

Did anyone pick up any SKHYV today?

[jiesen]

[*I tried to post this before, but it was flagged as spam for some reason. Sorry if this ends up getting posted twice.]

My leveraged entry cost is actually around $145. I have no reason to bail on the position, and I don’t want to add any shares because, in my mind, it’s a very speculative buy for long term returns at this point. If it dips significantly from here, I’ll reassess. If I still believe in the long term prospects of the company, I might add to my position. If I believe the circumstances have changed significantly for the worse, I’ll dump it. Sitting here trying to micro calculate every up and down move, however, is not something I do. Nobody can do that with 100% accuracy. I took a shot when it IPO’d betting that it would spike up, and I won, but there was a risk/reward associated with the trade and I could have just as easily lost.

That's a great mindset to have, and one I need to keep trying to have with my own positions. It's difficult though, as our human nature always wants to try to game the system and throw the dice at what we see as sure bets.... but there's no such thing as that.

[BlueWolf]

If you were patient enough to wait until today, you could now get SPCX for the same price you could on IPO day, right around 151.
SPCX, anyone? Of course, it's still likely to continue to drop, while the AI balloon continues to hiss out all its hot air.

[*I tried to post this before, but it was flagged as spam for some reason. Sorry if this ends up getting posted twice.]

My leveraged entry cost is actually around $145. I have no reason to bail on the position, and I don’t want to add any shares because, in my mind, it’s a very speculative buy for long term returns at this point. If it dips significantly from here, I’ll reassess. If I still believe in the long term prospects of the company, I might add to my position. If I believe the circumstances have changed significantly for the worse, I’ll dump it. Sitting here trying to micro calculate every up and down move, however, is not something I do. Nobody can do that with 100% accuracy. I took a shot when it IPO’d betting that it would spike up, and I won, but there was a risk/reward associated with the trade and I could have just as easily lost.

[BlueWolf]

Well, I took advantage of recent dips to pick up some shares in two of the companies involved in robotics that I mentioned, TER and SYM. I view these as (hopefully) long term holds as I think the robotic revolution, while well into its early stages, has a little ways to go before the big wave comes. I don’t hold stinkers, though, so if either of these turn sour, I’ll dump them and look for a better entry. I already own some TSLA, which I’ve had for a while now. I think TSLA is going to play a big part in the robotics revolution.

I was tempted to grab some SERV, but there were just too many red flags including a serious cash burn problem. Another company I had an interest in was ISRG, who holds a dominant position in surgical robotics. The chart just doesn’t look ready, though. I think valuation concerns are keeping the share price down even though they’re growing their business at a decent clip. There was a recall earlier this year, and that could be having a negative effect too. They’re set to report earnings on July 16. A big move, one way or the other, could be afoot. If I were bold, I’d pick up a few shares before earnings, and I’d be lying if I said I wasn’t considering it despite the chart. It all depends on my intuition at this point. Most of the numbers say Yes, but the valuation and chart say No.

The biggest barrier is that most of the robotics companies that are really interesting are still privately owned. I’ve done some research and there are some very cool companies doing some amazing robotics research like Neurolink, Apptronik, Figure, and Agility Robotics. I found a list of over a dozen robotics startups here in California alone. The problem is, figuring out who the winners are going to be is a daunting task, but wildly worth it if you choose wisely. In some cases there are vehicles for buying pre-IPO shares of these outfits, but the risks are obviously tremendous. Figure is one company for which I might make an exception, though. They have some awesome technology. Check them out at Figure.ai.

[jiesen]

You sees? Now's the chance to get back in at under 160.

If you were patient enough to wait until today, you could now get SPCX for the same price you could on IPO day, right around 151.
SPCX, anyone? Of course, it's still likely to continue to drop, while the AI balloon continues to hiss out all its hot air.

[jiesen]

You’re right. I thought it was counted as other income, but it’s not.

EDIT: BTW, there actually is a tax bill when money is raised by issuing equity. It’s just not on the company, it’s on the individual share owner. It’s not a free lunch. It’s income to somebody.

figures... there's a tax for everything these days.

[BlueWolf]

You’re right. I thought it was counted as other income, but it’s not.

EDIT: BTW, there actually is a tax bill when money is raised by issuing equity. It’s just not on the company, it’s on the individual share owner. It’s not a free lunch. It’s income to somebody.

[jiesen]

It’s GAAP profit for 4 quarters straight, which includes money raised through investment and the IPO. A little clever bookkeeping and they’re there. Even if it’s only the NASDAQ 100 and the Russell for now there should be some passive buying.

No, sorry BW, but I have to correct you again on this one. GAAP rules don't count money raised on an IPO like this as income. It's an increase in Additional Paid In Capital, so it goes under APIC on the balance sheet. Go ahead and google the question, if you still don't believe me, but this is how it is, and why an unprofitable company doesn't suddenly become profitable for a year when they raise money by issuing equity or taking on debt. Those things are treated differently from income, otherwise a company would have to pay a huge income tax bill whenever they raised any money issuing equity, right?

[BlueWolf]

It’s GAAP profit for 4 quarters straight, which includes money raised through investment and the IPO. A little clever bookkeeping and they’re there. Even if it’s only the NASDAQ 100 and the Russell for now there should be some passive buying.

[jiesen]

I don't see how they can turn a profit 4 quarters straight starting this year, but yes in a year or two that could be possible. Once they have met all the criteria to be included, whether that is in 2 years or 4, they will become part of the S&P and that should give it an extra bump in price when it happens. So I agree, it's good to be in now at 135 or 145 before that happens in a few years. If they use the AI properly, and therefore can build decent rockets that don't blow up when they land anymore, we should be looking at a $300 or $500 stock in a few years. ECHO (formerly SATS) should also be at $300 or more when that happens, and though I regret now picking that one over the SPCX IPO, I think it'll be just fine, as long as SPCX does what it's supposed to next year.

[BlueWolf]

This is one of the things I was looking for in SpaceX. They should join the Russell index soon, and I still anticipate that they will be fast-tracked into the S&P next year.

[BlueWolf]

My cost of entry after legging in like I did is around $145, so I’m happy. Believe it or not, my main goal was not a quick profit. If that’s all I wanted, there were many other, less risky trades. What I really wanted was a long term position in SPCX at or near $135, which was the original IPO price. I didn’t quite get there, but I’m happy with what I have. I really believe that a year or so from now, I’m going to be happy with my position. I can even see myself adding more shares if it dips a lot. I believe that 2027 is going to be a big year for SPCX.

I’ve also continued to dig into Anthropic and Open AI, and I am started to get a better sense about how they’re both hoping to scale. I’m leaning towards thinking Anthropic has a better path to profitability, but it’s still early in the game. I have substantial fears about what they’re doing, however. Both of them are on the cusp of having their AI do all or most of it’s own coding, which means we might soon have have self-sustaining, self-evolving AI, which is scary. Deciding which company to invest could end up being a moot point.

[jiesen]

You see? Any shares you sold at 205 yesterday could be bought back today at 175. (or tomorrow for 165, probably)

You sees? Now's the chance to get back in at under 160.

[jiesen]

Yeah, robotics has been, and will continue to be a growing industry. We would all do well to dig more into these companies, and find the best of them to own for the next 10 years of advanced robotics. Thanks for the list of examples to look into!

[BlueWolf]

I just saw an interesting video that discussed the fact that Amazon now has 1 million robots working side-by-side with 1.5 million human employees in its warehouse. Moreover, this ratio is rapidly approaching 1:1. So I did a little digging (I plan to do a lot more) to try and find some of the companies that are supplying all these robots. I came across a number of them. One that really impressed me was an outfit called Universal Robots, which makes something called collaborative robots in the form of robotic arms. This company was bought by Teradyne (TER) back in 2017, and it’s become very good for the bottom line, especially over the last year and a half. Take a look at the chart. I don’t think this is likely to be a one off as this industry, which has primarily been operating in larger operations, is growing extremely fast and starting to spread to smaller companies. I wish I had spotted TER earlier, but there has to be other good opportunities out there. There are a lot of companies now making robots or important components for robots. A few examples are CGNX, SERV, GMED, BSX, IRSG, SYM, and ZBRA. I have to do a lot more digging in this area.