IA Daily Digest (July 19-24, 2024) (Patreon)

Summary of InvestAnswer's Posts (thanks, Josh, for collecting)

Date: 19 July 2024 - 22 July 2024

• Tesla:

  • EV Mandate:

  Little does Donald Trump know that removing the EV mandate is going to put legacy automakers in a worse position. Why? Tesla will keep growing. Tesla will solve autonomy. Legacy automakers can’t make an EV profitably. The future is electric and autonomous. Tesla makes a profit on its EVs. Legacy automakers will be stuck with unwanted inventory. ⁠

  • FSD:

  From John Carmack: Tesla full self driving has made significant strides in the last year, and I am feeling very confident about this bet. I have made multiple two hour drives without touching the wheel. I wouldn’t have wanted the task of leading a self driving effort for a couple reasons: There was uncertainty that working in all the possible situations might be an “AGI complete” problem — you work almost everything out, but you just can’t get that crucial last bit reliable enough. I now think they will be able to data it across the finish line without any research breakthroughs. “Move fast and break things” really is the most effective way to build new things, and that just isn’t an option with passengers on public roads. So cheers to the team for attacking a daunting, but grand and worthy task!”.

• MSTR:

  • TSLA Swap:

  IA sold about 1.8% of his MSTR and swapped it into TSLA as a test. However; he is extremely overweight MSTR. ⁠

• SOL:

  • SOL Upside Model:

  SOL prices as a % of ETH market cap. Logic suggests 33% to 50% this bull run is well justified. ⁠

  • SOL is clearly showing strength and now at 3.5 dominance of the whole crypto market cap. Next 8 weeks will be very interesting with the run up to Breakpoint in Sept.

  Bitcoin:

  • Selling Calls:

  IA only considers selling calls on two standard deviation squeezes on the 4hr timeframe. ⁠

  • Ark Funds:

  IA believes Cathie Wood is an amazing woman and investor. Her research team is second to none. The only issue is 1) market timing is awful and 2) limits on funds is restrictive. IA highlights that if market timing were easy, everyone would be rich!

  • Life Changing Money:

  It is nice to hear folks make life changing money in these markets, but remember it is not what you make it is what you keep. Always stay humble when investing. ⁠

  • Selling:

  The hardest thing for some to do is sell - that’s why IA is trying hard to share as many kind of mini profit taking and selling experiences to hone the muscle memory going forward for the community. ⁠

  • Retirement Trading - rules to build a bag:

  In a retirement account with trading fees, IA advises the following:

  • Avoid Overconcentration: Ensure your portfolio is diversified. For example, do not invest more than 25% in a single asset like MicroStrategy (MSTR), even though IA is heavily invested in it.

  • Timing the Swap: Consider swapping to a lower-fee proxy, such as MSTR, which can save money over time.

  • Market Timing: Perfectly timing the market is challenging, but IA aims to identify market bottoms and tops correctly about 80% of the time.

  • Monitor Fees: Regularly check the fee structure of your investments to ensure they remain cost-effective. Some folks are in some accounts eg Crypto IRAs and the fees are scandalous.

  • Use Models: Employ models like LILO (Layer In, Layer Out) to guide investment decisions based on data and not emotions​​​​.

    CRWD:

  International air travel, financial services, medical systems, and television broadcasts briefly ground to a halt on Friday after CrowdStrike, a U.S. cybersecurity firm, pushed through a flawed software update that sparked a global technology outage. CrowdStrike may not have been a household name before Friday, but the firm plays an outsized role in operating many of the world’s digital services, as demonstrated by this incident. More than half of all Fortune 500 companies rely on CrowdStrike’s cybersecurity software, which allows them to identify and thwart potential hacking attempts, according to the company. ⁠

  • CRWD Reputation:

  CRWD’s reputation is destroyed per the folks that IA knows. Trad SAAS software model is heavy sales and market retention. Better ways these days. ⁠

• Macro:

  • TX & FL Real Estate:

  Texas real estate home sales were down and price is starting to roll over.

Date: 22 July 2024 - 23 July 2024 

• Trading and Investing:

  • Cash Allocation:

  IA is keeping cash for now and not front running TSLA’s earnings. He already has 100s of extremely leveraged Tesla synthetic longs. He has 13.5% cash. ⁠

  • SOLPERP:

  IA would like to enter a monster SOL PERP if SOL can hit close to $150.

• Tesla:

  • New Buys:

  $231 would be an awesome target to buy more TSLA. UPDATE he entered a big SL at $217.⁠

• Bitcoin:

  • IBIT:

  IBIT had over $500 million in inflow on 7/23, buying 7865 BTC.

  • ETH ETF:

  Remember BTC went from 35k to 46k on the run up before the ETF launch. ETH had no such run up. ⁠

  • Tom Lee:

  Tom Lee from Fundstrat are BTC surgeons. Their analysis is beyond calculated and they stand by their $150K BTC prediction by end of year.

Date: 23 July 2024 - 24 July 2024 

• Tesla:

  • Dream Price:

  IA’s dream would be another shitshow of an earnings call and price falls to $141 again and buys another 6 digits of TSLA. Wall St is delusional and that is our gift. Just watch what this company does over the next 3 years. ⁠

  • Price rise:

  Tesla’s price is still up 43% in 42 days. ⁠

  • Bot Demand:

  Musk stated on the earnings call bots will exceed all of Tesla’s businesses combined. Demand for bots is in excess of 20BN units and Tesla has the most advanced bots. It is also good at manufacturing andthe most experience in real world AI. Tesla has all of the ingredients for large scale humanoid generalized robots. IA is playing where the puck is going. ⁠

  • Earnings Call:

  IA writes a complete substack covering the entire Q2 Tesla earnings call highlights. ⁠

  • Synthetic Long:

  IA entered a synthetic long on TSLA at $217. If TSLA hits $600 by expiration, his ROI will be 2,235%. ⁠

  • Cybertruck:

  Tesla says Cybertruck is on track to achieve profitability by the end of this year. Tesla has also entered validation of vehicle testing for their first prototype Cybertruck produced with in-house dry cathode 4680 cells, a major cost reduction milestone once ramped.

• Trading and Investing:

  • Retirement Account:

  IA has started a new retirement account where he is experimenting with swapping between assets like MSTR and TSLA. It is new and less than $1M but plans to build it up fast.

  • TSLA:

  The response to TSLA earnings call is overdone in IA’s opinion. With money printing and interest rates cut coming in 2nd half… IA entered a synthetic long on TSLA at $217 for a net debit of $17.35. His break even is for TSLA to be above $236.35 by Christmas 2026. ⁠

  • Buying Leaps:

  IA encourages not over paying for option leaps. One of his golden rules is never to pay more than 50% of the leap price on time. Eg say stock is $200 and the leap is $100 and Strike is $150 - you are spending $50 on time value. You are far better off buying the stock on margin than buying a leap. ⁠

• SOL:

  • Dex Volume:

  SOL has surpassed ETH in 30 day DEX volume for the first time ever.

• FED FUNDS RATES - Projections

  Market expectations for Fed Funds Rate:

  -July 31, 2024: Hold

  -Sep 18, 2024: 25 bps cut to 5.00-5.25%

  -Nov 7, 2024: 25 bps cut to 4.75-5.00%

  -Dec 18, 2024: 25 bps cut to 4.50-4.75%

  -Jan 25, 2025: Hold

  -Mar 19, 2025: 25 bps cut to 4.25-4.50%