The Cash Accumulation Phase Begins

by JDH on July 14, 2018

We are in the dog days of summer.  The weather is hot.  Everyone is on vacation.  Nothing much is happening.

As I have previously predicted, TSLA – Tesla Inc. will eventually go bankrupt, but it hasn’t happened yet.  The next quarterly earnings announcement will be around August 1, so presumably we will get more insight into whether or not they continue to burn cash at an alarming rate.  They have not raised cash, and so even though sales may have slightly increased, they are nowhere near profitable, so unless they can raise cash, the end will eventually arrive.  (If you are playing with the numbers, it is difficult to raise cash, because you are required to disclose all material events, so that’s putting a damper on it now).

Gold is meandering around, going nowhere.

The pot stocks are meandering around, stuck in a rut.

Amazon keeps making new highs, but do you really want to buy a stock with a PE ratio of 228?  If that isn’t the sign of a top, I don’t know what is.

It would therefore appear that the prudent course of action at the moment is to accumulate cash.  If we have a dip, or a crash, cash will be king.

In the medium term the pot stocks will do well.  They had the initial bump when legalization was announced, and will likely have another bump around October 17 when legalization actually happens, so between now and then, place your stink bids and slowly accumulate.  We are entering the buy zone for many stocks, but we aren’t quite there yet, so again, cash is king.

That’s how I see it.

More next week.

Keep your powder dry.

 

Like I said last week…

by JDH on July 7, 2018

Last week I said to buy gold and short Tesla.  That was good advice.  You’re welcome.

I bought some Tesla puts on Monday, sold them on Tuesday (at a profit), and then took another position on Friday.  It’s not a big position, but enough for fun.  I bought the $300 strike price, expiring in September.

My thesis is simple: Tesla is a gigantic con, bigger than Theranos, bigger than Enron.  They build fancy cars, but the cars aren’t that good, and they lose a lot of money on every car they build, and there is no path to profitability.

None.

They needed to raise more capital a few months ago, and didn’t, even though they were riding high with a stock price, then, of around $350.  Why didn’t they?  Because when you raise capital you have to disclose stuff, like, you know, facts, and they didn’t want to do that, because the facts are bad.

Executives are leaving, and they are leaving with a lot of options on the table.  Why would you walk away from a potential multi-million dollar payday?  Because you know that payday will never be there, so you want to leave long before it goes bust, so you can say “I was gone long before it happened”.

If the price pops up, I will buy more puts.  And I’ll enjoy it.

As for gold, it appears to be slowly waking up from the doldrums, which is good, so I will hold.

Again, the weather is fantastic here in Southern Ontario, so off I go to enjoy it.

See you next week.

Buy Gold and Short Tesla

June 30, 2018

It’s a long weekend here in Canada, and the weather is very hot, so since you don’t want to waste your time in front of a computer screen, I’ll be brief. The panic selling in gold appears to be over (for now), so on Friday I began to accumulate a small position in NUGT – […]

Read the full article →

Gold and Tesla are Going to Pot

June 23, 2018

Gold The two month carnage in gold continues.  From the quadruple top resistance level of around $1,360, gold has collapsed, and the next two stops appear to be $1,240 and $1,200. This is not a pretty picture. Why is this happening? I don’t know.  Could be the USD dollar, could be better places to put […]

Read the full article →

The Last Pop for Pot?

June 16, 2018

Bill C-45 will eventually become the Cannabis Act.  It was passed by the House of Commons (thanks to a Liberal majority government), and last week it was passed by the Senate, but with amendments.  The Liberals don’t like some of the amendments, so they have accepted some of the proposed amendments, rejected others and sent it […]

Read the full article →

1 Out of 3 Ain’t Bad

June 9, 2018

Two weeks ago I made this prediction: Gold $1,400 by Canada Day. I could still be correct.  All we need is a $100 move in three weeks and I’ll be a genius, but it’s not looking like a great prediction at the moment. Obviously I’m long on gold, and as I said one month ago, […]

Read the full article →

The Green Organic Dutchman

June 2, 2018

I had an informative chat with an investment advisor this week.  I asked them if the big mutual fund company they represent has a cannabis mutual fund.  They said no, because a lot of the fund managers are taking a “wait and see” approach on marijuana stocks at the moment.  Apparently they are worried that […]

Read the full article →

Gold – $1400 By Canada Day

May 26, 2018

Since you pay me the big bucks to read this silly little blog, I’ll make it worth your while by giving you a prediction: before the end of June, gold will hit $1,400. That may seem like a bold prediction, given that gold closed on Friday at $1,303.70. Or, that may seem like a not-that-bold […]

Read the full article →

Still the Same

May 19, 2018

I will keep this short, because it’s a long weekend here in Ontario, and we all have better things to do than worry about the markets. Tesla continues it’s implosion.  I sold all of my puts, at a nice profit, so I currently have no position.  Tesla appears to have a base of support around […]

Read the full article →

Short on Tesla, Long on Gold

May 12, 2018

I am short on Tesla.  I am on record as predicting that Tesla will file bankruptcy on or before September 13, 2019, and it would not surprise me if the date is September 13, 2018.  They are bleeding cash like crazy, and more importantly they have no idea how to build cars.  Deliveries are delayed, […]

Read the full article →