To The Moon

Playing Defense AND OffenseI’ve never liked the term risk management. You’re either taking a risk or you’re it’s not, so “managing” risk seems like an oxymoron for investors.Instead, I like to think about understanding and taking an appropriate amount of risk for the moment in time. Right now, I am avoiding some of the most hyped names in the market trading for 50x earnings and 10x sales and instead adding companies trading for low multiples who may not be as impacted if the market turns south.If everyone else is being greedy, I want to be fearful.And with the U.S. economy growing at a paltry 1.6% in the first quarter of 2024, inflation remaining at 2.8% in March, personal debt at an all-time high, and government deficits with no end in sight there are plenty of signs risk is rising as fas

1. $Meta Platforms, Inc.(META)$ I have never owned META (my mistake) but if shares keep dropping I will be very intrigued.Zuck has proven to be the best, most motivated founder of his generation.Why is the market worried about AI investment? The last time Meta invested heavily in new products (Stories and Reels), cash flow dropped like a rock. But long-term...ImageI you think Mark Zuckerberg is going to spend $40 billion on capex and be reliant on Jensen Huang for all of the chips he needs you are sorely mistaken.Meta's custom AI chips will be the story of the next 3 years.2. $Alphabet(GOOG)$ $Alphabet(GOOGL)$ Spotlight on Sept. 23, 2023 at $132.17/share.After h

On Tuesday, $Tesla Motors(TSLA)$ reported one of the worst quarters I’ve seen in years and Elon Musk doubled down on products that don’t have a proven business model or track record (FSD and Optimus). As Elon Musk said, the auto company “should be thought of as an AI or robotics company“. 🤷 Investors overlooked the flat revenue, falling margins, and negative free cash flow, pushing Tesla’s stock up 12.1% on Wednesday.24 hours later, $Meta Platforms, Inc.(META)$ announced a phenomenal quarter and doubled down on being a leading AI company…which it already is. The stock is down 12.8% as I’m writing.Season 6 What GIF by The Office Does Anything Matter?Speculation and FOMO are back and it’s impossible t

Today’s deep dive is on $Alphabet(GOOG)$ $Alphabet(GOOGL)$ . Not all asymmetric investing opportunities come from small, fast-growing companies; in this case, I see a big, powerful company with outsized growth opportunities in a few important markets.Why Alphabet? In < 100 WordsBuying Alphabet is a combination of buying one of the best business models in the world and the brightest technical minds.Search is the financial powerhouse that’s arguably the best business model ever invented and it lays the foundation for future growth opportunities in artificial intelligence, streaming, and autonomous driving.Like $Apple(AAPL)$ a decade ago, a combination of steady

$General Motors(GM)$ ’s numbers look great across the board and guidance is UP for 2024ImageI'll be covering earnings on YouTube, but let's talk about the bigger picture.1. GM has the trucks and SUVs that people want to buy and generate profits.2. GM is managing supply to the demand it has for vehicles.3. GM is buying back stock at a 5x P/E multiple.https://twitter.com/TravisHoium/status/1782772661052944823

Earnings day today. Here are four charts showing $Tesla Motors(TSLA)$ 's trends and what to watch.We know deliveries dropped so I expect:1. Lower margins2. Increased inventory3. Low/negative FCF ImageImageImageImageHere's where it gets complicated: 1. Net income is down because of lower volumes and discounting.2. Operating cash flow is down because inventory is up, despite discounting.What do you do now?Reduce production volume? Cut prices even more? Manufacturing is hard.ImageDid they make the decision yesterday to "utilize aspects of the next generation platform as well as the current platforms" to make a vehicle that will be in production next year? This doesn't seem like a well thought out plan...ImageOk, honest comment about autonomy and robo

Asymmetric Universe company $Matterport, Inc.(MTTR)$ got a huge buyout today.ImageFirst of all, the buyout price is shocking. Shares of Matterport closed at $1.74 on Friday and the buyout is for $5.50 per share ($2.75 in cash and $2.75 in CoStar stock).I’ve never seen a buyout at a 216% premium or a price chart that looks like this.Matterport Buyout DetailsHere’s what Matterport shareholders will get in the buyout:$2.75 per share in cash$2.75 per share in CoStar stockThe transaction is subject to a 10% symmetrical collar based on a CoStar Group share price of $86.02 as the midpoint.The transaction is expected to close this year and 15% of shares outstanding are already committed to voting for the deal.I don’t see any major regulatory roadblocks to

1. $MGM Resorts International(MGM)$ Are more buybacks coming? From Q4 2024 conf call: "we calculate an implied current trailing trading multiple of just 4.9x"Image2. $Spotify Technology S.A.(SPOT)$ At this rate, Spotify will have over 1 billion users in 2027.SPOT selling off because $Netflix(NFLX)$ is selling off seems silly to me.Image3. $General Motors(GM)$ This chart doesn't even do buybacks justice because it's weighted average shares. In Q1, shares outstanding will fall below 1.2 billion...Imagehttps://twitter.com/TravisHoium/status/1781662559977755065

Failure to FrameworksI’m going to break this down into a few simple frameworks that inform my view on investing.Think In Decades — Like a Founder DoesOn Thursday, I told a story of how we explained REM5’s business model to prospective employees in an empty warehouse with nothing more than tape on the floor to signify where walls would go.This was foundational to my understanding of how founders and CEOs must look at their businesses and why founders are often behind 10x returns. It’s not enough to understand the financials, you have to think 5-10 years out about where the business is going.Vision and strategy is what makes the best founders and CEOs.Maybe a better way to put it is that financial metrics like return on invested capital (ROIC), revenue growth, margins, and free cash flow are

I give these examples to lay the foundation for failure being not only acceptable but necessary in many cases. It’s what these great investors and entrepreneurs learned from failure that led to their greatest success.Here’s a little bit of my story and why I may look at the world of investing differently than many other analysts.Two Face PokerIn 2006, I started a poker chip company called Two Face Poker. I spent ~$30,000 of my own money to build a custom poker chip mold and manufacture 20,000 poker chips that were of casino-level quality.I built the website. I set up drop shipping for cases and cards on the site. The branding was amazing.Poker was still booming, and I thought I had done everything to build a great poker chip business.I sold very few chips and the mold still sits on my desk