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Did Someone Hear a Birdy?


Twitter.

Hmmmmm.

What to do about Twitter.
Well, only a handful of people have asked me. I’m going to opine anyway.

What to do?
Well, You probably will not be able to do anything.

They started with a semi reasonable IPO price, and then drove it up.

Institutions are going to clean up.

This is one of the most overpriced IPOs ever done at this moment.
For some reason they are making us feel like it is not.

Don’t drink the cool-aid.

If you want to gamble and you can afford to lose some cash.
AND, you must sit at you computer for this one.

OK.

If you can buy some of this overpriced stock as high as the very low 40s right out of the gate then do so, as much as you can tolerate.

I’m betting, and so has everyone already said, they expect this baby to go high 40s, maybe touch 50.

The hype has been crazy and people want this.
They are going to get it.

Institutions will be laughing for the whole ride.

As soon as you make a nice profit or this gets near high 40s – lets make a line $46 – start selling.

Sell 2/3 at $46 if you ever get there, or you already haven’t, if it continues to rise sell fast all the way up.
At $47 sell 2/3 of what you have left.
At $48 just dump it.  You earned enough for one day’s work.
Be proud.
You might not even have the computer processing power to make a trade fast enough if it gets to $50.

That bubble won’t last.

You know why?  Because everyone said it will peak at $50 already.

You want better fundamentals?

OK, do your math.
500,000,000 tweets per day.
Let’s be overly generous and give each tweet a CPM rate of $10.
Let’s also be super generous and let’s quadruple their inventory right now and double the users!!

Crazy?  Yes!!!
The market won’t sustain this kind of nonsense when there is so much profit to be had on the first day.

By the way, those numbers calculate out to a revenue model that allows for an extremely high market cap and a stock price that, what do you know, peeks at $50!

That is why we do what we do!

Let’s see what happens the first few weeks then we’ll make more predictions.

We hope it goes super volatile.  That is where we can make some nice cash!

Memo to All Time Travelers . . .


Note to All Time Travelers,

https://appletonia.com/2007/12/17/

Let us revisit the past.
Shortly more analysis will be revealed.

We said the writing was on the wall. The opines were not perfect but pretty good.

Lets Be Reasonable . . .


Sometimes we have to just be a little more reasonable.

OK.

We rode out this Tesla party.

But this is getting crazy.

Time to take some profits and place some puts.

I’m selling 2/3 of my Tesla position.

This stock is so overvalued at this moment, stop buying it.
Right now!

Take your profits.

Because of the hype and over priced shares this stock will also overreact at any bad news.

If earnings are off, if a wheel breaks, if Elon flatulates downwind!

I’m guessing this stock cannot take any stress right now at this price.

I’m buying heavy puts for chains at a 20 point drop by the end of the year.

If the stock goes up, guess what?
Don’t panic.
I’ll buy even more puts.  This price will make Tesla stock even more Volatile to the slightest tension.

It is a gamble, but I think it is a good one.

Keep 1/3 of your shares in case the crazy ride continues to climb.
You already received healthy profits.

Hedge the crazy price with some puts on a volatility play.

You are going to be safe.

Are You Still Using FaceBook?


I don’t know about you, but somebody is still using FaceBook.

As long as that is happening then there is money to be made.

They have not touched the surface yet of continuing to enhance their ad tools.

So same story as last time.

Buy a little more equity positions for the long haul.

Also, go aggressive on the buy open calls.

I cannot imagine them not showing increasing revenue from these new tools and mobile ads.

People are hyped on the FB, and they will react.

Noone knows the long haul so check back.

I would buy call chains into January.

Layer them if you want, but at least into the winter.

As you start making healthy profits cost average out of your calls.

Don’t be too greedy.

Wanna Go for A Drive?


How about a nice drive?

Elon is the Man.
Must be nice.

Well we can’t all be Elon.
However public markets allow us to take a ride with him.

His crafty cars or on Hype-o-matic Overdrive.

Call shotgun and start buying.

My guess is this will play like a tech stock.

So take some antacid, and place your foot on the pedal, yes All The Way Down!

Keep buying till your stomach hurts again . . .

Buy Now!!!!!



Opportunities like this do not come often.

One must take advantage of them when they do.

Apple stock keeps plummeting.

We just sold at a near record peak.

But now the market has over reacted.

Buy now and keep buying all the way down.

Look at the balance sheet.  It is so obvious.

Cash on hand.
Debt service cost.

This stock is so undervalued right now.

If it drops below $400 then just buy as much as you can tolerate as a portion of your portfolio.

This stock can only go up.
I would keep buying all the way up to high $400’s.

Then depending on what is happening we can reassess.

They have to do a stock purchase at this price.
The cost of money is so cheap they would be crazy not to.

I’m writing Carl another letter.

He never listens.

When will Blockbuster finally Just Die?


When will Blockbuster finally Just Die?
I don’t know, but the brick and mortar just cannot hold out too much longer.

We have been ringing that bell for years, and we still are.
It is painful to watch them try.

It is like watching fax machines taking their final breaths for the last decade . . . It is just annoying.

Anyway.
Netflix.
What more could you ask for?

Grand opportunity.
They understand what went wrong.

They are smarter, more flexible, and will create compelling content and sign more streaming distribution deals and embed in other devices through App architecture.

How far will this go?

Who knows.

Again,
this is the simple mix of some equity and hit hard some long term calls.
Then do not be too greedy, take some of your cash back for redeployment.

Their will be more opportunities in the future.

These undervalued stocks are a great gamble right now.

Have fun.

Will you share your profits with me?