The GUH Daily Recap of February 11th
Quick News
Commerzbank lost $3.3 billions in Q4 but continue their restructuration plans.
Oil market has been very strong in the last few days thanks to OPEC's decision to reduce output and hopes for a recovery of demands. The recent small correction is due to the FED predicting a slower recovery than expected.
A certain company whose name starts with T (sighs) went up 50% yesterday. This seems to be partly due to reddit hype and germans (it was the most traded stock on German trading platform Lang & Schwarz).
A group of U.S. chip companies on Thursday sent a letter to President Joe Biden urging him to provide "substantial funding for incentives for semiconductor manufacturing" as part of his economic recovery and infrastructure plans. This is due to the chip shortage putting a toll on car manufacturers.
The Biden administration will look at adding "new targeted restrictions" on certain sensitive technology exports to China in cooperation with allies.
Yellen wants to prevent the misuse of cryptocurrencies for criminal activities.
Facebook said it would temporarily reduce political content appearing on New Feeds in Canada, Brazil, Indonesia and the US this week. Mark Zuckerberg said in January that he wanted to "turn down the temperature" of political conversations.
Facebook is building a new audio chat product similar to audio-based social network Clubhouse.
Twitter's CEO said the company is exploring allowing its users to receive tips, or digital payments, from their followers.
Quick Thoughts
As I've said in the first GUH Daily Recap, don't expect this to be a daily thing because 1) I don't always have the time (I have to find a fucking job to, you know, make money) and 2) right now I'm focusing on biotech companies to diversify a little bit. That's why I didn't post a daily recap the last 2 days. Also, I have been asked other things so Q&A time!
What do you think of this company? What should I invest my money on? No and no. Stop asking for this, I will not respond.
When should I sell X investment that you recommended? Refer to the first question.
What are you planning on talking about in the next few days? Nobody asked this but I'm answering it anyway. Palantir and C3.ai, gold (the potential bear case), gas and Commerzbank bear case. For the rest, it depends on the news and what comes to mind at the moment.
What do you think about Tesla investing in shitc0in? Ok I have a very clear opinion on that but it's quite long to explain but I think I need to do that.
For that, I first need to say what I think of Tesla's valuation. Tesla's valuation is based solely on hype. That doesn't necessarily means it's overvalued. That means that its valuation is not based on fundamentals or growth expectations but on another method of valuation : hype. That's neither right or wrong but that's something that I don't agree with and that's why I don't invest in it. "But then why don't you short it?" you might say.
First, because of the whole don't short a bubble and "they can remain irrational longer than you can stay solvent" thing.
And second, my personal method of valuation dictates that it's insanely overvalued but the method of valuation that Tesla investors believe in dictates otherwise. And it's important when investing (or shorting for that matter) to analyze the valuation of the company AND the psychology of the investors. If your method does not align with theirs, stay away from this company.
Now I believe that this "hype valuation" has its merits : that 3-letter named cinema company managed to raise a lot of money thanks to the hype it received recently and Tesla did too. In that way, you could think that the money that you put in this company will increase the share price and in turn will let the company raise more money to fund its projects.
You could also think that thanks to this hype people will buy your shares at a higher price. That happened with Signal Advance when Elon tweeted "Use Signal". People knew he meant the signal app which has nothing to do with this company but they bought it anyway because they knew others will do the same. And for the early investors, it worked! The same thing happened with Clubhouse media. But this is not limited to stocks, alternative investments are heavily reliant on hype. A painting does not cost millions of dollars to make, and yet people buy them for this price because they like the painting and think it will retain its value. It can be for tax purposes too but let's not talk about that.
The last reason (that I can think of) to use this hype valuation is that it's fun? If you see investing as a not so serious game, buying a company because it might go up for fun reasons is... well... fun! The "investor mania" that happened with some stocks recently is the best example of that.
With all that being said, Tesla benefits heavily from all of this and Elon Musk is well aware of that. So, if you know that the more hyped your company is the more valuable it will be, and if you want to provide more value to your investors (as you're obligated to by the way), you add even more hype!
That's why Elon Musk posts memes or talk about animes on Twitter. That's why he sells (not) flamethrowers and shorts shorts. That's why he tweeted about the old sub and godc0in.
And as buttc0in's value skyrockets, the hype around it become pretty fucking huge. So of course, Elon Musk will capitalize on that. Investing a (pretty small) portion of Tesla's cash in batc0in is his way of hyping the stock not just thanks to his tweets or his personna but by Tesla's financial decisions.
So that's my 2 cents on Tesla investing in Bartc0in.
What do you think of Cathie Woods and her fund?
She bought very hyped up companies in very hyped up sectors in a very hyped up market. She has great returns but why would you pay a 0.75% yearly fee on her fund when you can just buy the most hyped stocks in the EV sector and make similar or even better returns?
Ok Bye!