Weekly Recap | October - W2
China's stimuli, Lots of Tesla news, PayPal ads business, GLP-1 & the FDA, Portfolio, option calls & speculative position, SpaceX doing wonders & another OpenAI comment.
From now I'll be dividing the weekly into three parts. The first part about general economic news that affects the markets, the second to cover stocks I own or are on the watchlist & portfolio updates. The last one will be about various subjects I want to write about, market-related of course.
Macro.
China’s Stimuli.
As expected, China’s market been very volatile and this shouldn't change anytime soon as the different commissions will continue to comment on policies, create confusion & overreaction from investors.
National Development and Reform Commission.
Starting with the NDRC, one of the numerous macroeconomic commissions in China. They have opinions to express but aren't responsible for making decisions, an important distinction as the markets had very high expectations while nothing was to be expected from them…
But investors wanted to hear about a clear plan to apply the stimuli and they didn’t get anything remote to this.
"Words are not enough." & "They created expectations of a much bigger stimulus, so everybody was disappointed"
The truth is, nothing changed, and the most accurate comment was:
"The stock market, especially, had high expectations. But this is the NDRC, not the Ministry of Finance. Even though they didn’t announce fiscal stimulus today, that doesn’t mean there won’t be fiscal stimulus."
The Chinese market needed a breather and this conference was the excuse to do so. Levels for Alibaba were already identified and volatility will certainly continue inside of this range.
Lot of noise with nothing particularly interesting. Normal market dynamics after a +70% run up in a few months, and the stimuli are coming.
Ministry of Economy.
This was the conference that mattered with those who decide economic policies. They confirmed once more the stimuli with the same objectives to support consumers and the property sector, though they didn't provide any specific plan neither as in China, everything needs to be validated by the National People's Congress (NPC), which will happen before the end of the month to review & vote on specific proposals. Precise numbers and actions will be detailed afterward.
A bit more patience is needed for precise data, but stimuli are on their way and every institution confirmed it while the ministry said they have room for even bigger stimuli. Patience.
Watched Stocks & Portfolio.
Tesla.
We, Robot & Optimus.
I have commented on Tesla's event on Friday, which I personally liked although it didn't provide anything new in terms of business. But I learned the next day that the Optimus, the only thing that really impressed me, were actually remotely controlled...
https://x.com/i/bookmarks/all?post_id=1845047695284613344
My conclusion on how far ahead Tesla was in automation was entirely wrong and my bigger problem is that we didn’t have any indication on how really advanced these products are. This changes nothing for FSD or the robo-taxi, but we didn’t see anything interesting about Optimus.
Many said that this is a positive, this is the kind of data & experience needed to train its AI and that's true. But I expected to see a demonstration and at the end, I didn’t get anything and the conclusion is the same from an investor perspective.
I also need to say that Tesla didn't hide it - they didn't announce it explicitly either. I guess omission is what they chose. Not sure if that strategy helps them.
China Deliveries.
We also had geographical data for Tesla deliveries shared last week. Tesla had its best quarter ever in China with nearly 250,000 EVs delivered in the region. The trend should continue with the Chinese stimuli which will help many Chinese households to take on debt to buy their EVs.
Will be interesting to see if they chose Teslas.
U.S. Financing.
Tesla introduced a 0% APR financing for the new Model 3 & Y in the U.S, for loan terms up to 72 months with a minimum down payment of 15%. This is meant to help households to buy Teslas as the interest rates are still pretty high in the U.S., not helping traditional methods.
Tesla chose once more to prioritize volume over margins, as this means they won't earn interest on the loans but consumers will have more favorable conditions to buy their EV. Some will say it's a bad thing, others will say it's a good thing... I say it's important to be aware of it to judge the next quarter.
Huricane Milton & Megapacks.
I'd just like to talk a bit about Hurricane Milton which caused significant damage in Florida this week, and about how important Tesla's Megapacks could be in these situations. This is true for all batteries of course, but there aren't many like the Megapacks.
Tesla shared that they were getting ready to deploy mobile supercharger stations powered by Megapacks.
A pretty useful & powerful product. Explains why demand is rapidely growing.
Hims, GLP-1 & FDA.
Following last week's news about the FDA shortage list and tirzepatide, things have evolved a bit over the last few days as there would apparently be few (lots) pharmacies which still cannot procure Lilly's branded GLP-1 drug.
Again, Hims doesn't sell tirzepatide so it won't affect their business, but it could influence how the FDA manages the shortage of semaglutide which Hims sells.
Many tirzepatide compounders sued the FDA for removing the molecule from the shortage list, apparently based solely on internal data from... Lilly. Regulation decision based on data provided by the company holding a monopoly isn't the best idea, although legally challenging the institution that regulates your entire business isn't a better one...
Measures will probably be taken more cautiously in the future to ensure supply. This could favor Hims when time comes to address semaglutide shortage.
PayPal Ads Business.
We already talked about PayPal's goal to start an ads business and things have progressed faster than expected, which is becoming usual since Alex Chriss arrived. Barron's shared that this business would start on Thursday (past Thursday), and will only grow from there and be expanded in Europe.
PayPal has more than 400 million users and has already made significant changes to leverage its user base & data. This ads business is another of these upgrades, with a pretty huge potential.
Portfolio & Other Positions.
Quiet week, so I'll take a minute to talk a bit about the portfolio, which is doing pretty well since inception, up 7% compared to the SPY up 3.44% during the same period - although there's nothing to be very proud of after only a month or so.
The best is yet to come.
Every position & accumulation price has been shared here over the last weeks, except the last one which I'll talk about a bit later. I long hesitated if I should share this kind of position here, but they'll be part of the returns in the future so I see no reason not to do so. We're very far from what I usually share as there's nothing fundamental here; it's fully speculative. High risk, high reward with a very small position.
I also bought option calls this week, which Portseido, sadly, doesn't manage, but I decided to also share them & the reason why I bought. I'll very probably share everything from now on and let you guys judge what you want to read about.
Option Calls.
To talk about options; I only buy calls, just like I never short the market, and I only buy options on companies I follow when the combination of fundamental & price action seems perfect. It’s a way to maximise potential returns when confidence is high.
CleanSpark. This one is a bit speculative but CleanSpark is one of the strongest Bitcoin miners fundamentally, growing its hash rate regularly while optimizing costs and price per Bitcoin mined quarter after quarter.
We've already had a very strong run over the last months following Bitcoin, but things have quieted down since the king's last ATH in March.
We're back on bull-run’s breakout price; although CleanSpark has more hash rate than ever and the status of miners has changed drastically in the United States, I've written a lot about that already.
https://x.com/WealthyReadings/status/1753466275227902385
And about how they could become a key player for the U.S.
https://x.com/WealthyReadings/status/1744737960879407252
I also believe on a Trump pump if he were to be elected in November due to better regulations, but this is pure speculation.
All of these made me accumulate shares but I also added a few option calls as you can see on the chart, Dec20'24 with a $12 strike for $1.21.
SoFi. I've already shared many times that I felt like the stock was ready to pump after years of accumulation, with very strong fundamentals improving quarter after quarter. This isn't a speculative move at all but a leveraged play with much bigger potential rewards.
Gotta go big when everything seems to be set up perfectly.
So i bought two different options, Mar21'25 with a $10 strike & Jun20'25 with a $11 strike at $0.89 & $0.98 respectively.
PepeBRC. We're literally talking about a crypto meme coin which I bought based on nothing but a potential liquidity rotation. Before explaining, this is a very high risk high reward play, the gain could come in double digit multiples while the risk is less than 1% of the portfolio - screenshot above is done without cash.
The thesis is simple. As you know, I am very optimistic about the current state of the crypto market and its bullish potential over the next months, with Bitcoin being the leader. There is a meme coin called PEPE, built on the Ethereum blockchain, which has received lots of hype & liquidity over the last months and is currently the most traded meme coin in the entire market, with an actual capitalization at $4B - yes, it is ridiculous, no arguments here.
PepeBRC is... the exact same meme coin but extracted from the Ethereum blockchain and imported into the Bitcoin blockchain, trading at $4M. Memecoins are the stars of the ecosystem lately and PEPE the brightest one. There will be a rotation from it to other meme coins, and what would be better than the exact same one, trading at a capitalisation 1,000x smaller and built on the king's blockchain.
This exact scenario already happened in April while the entire crypto market got crazy after the Bitcoin’s ATH. PEPE pumped more than 1,000% in the same three months while PEPEBRC followed a few days later with a 700%ish. I wouldn't be surprised at all if this scenario repeats once more, as I expect Bitcoin to print a new ATH before the end of this year.
The narrative looks ridiculous and I'm entirely aware of it. But that's what crypto is about and if many would rather never touch it - understandable, I love to have a few bucks in. Everything in investing is a balance between risk & reward with a powder of probability. The risk is less than 1% of total portfolio, the reward is to be calculated in multiples and the probability of it happening is correlated to Bitcoin’s probability of doing a new ATH during this cycle.
Here’s my dark side, weighting less than 1% of portfolio though, gotta stay serious.
Other Subjects.
SpaceX.
We witnessed this morning what is probably the most impressive display of engineering I've ever seen, as SpaceX scheduled its fifth Starship launch, which ended as a brilliant success.
Sending a rocket past the atmosphere, catching the booster with chopsticks, re-entering the atmosphere with minimal damage, soft-landing in the ocean... "Incredible" isn't enough to express what these engineers just achieved.
And this was only the fifth test for the biggest rocket ever created, supposed to bring us to the moon again but to Mars later... Fifth - after years and years of development, of course.
It opens so many possibilities for the future, and whatever we all believe about Elon Musk personally, he really makes the world interesting and he also makes it tough to bet against him, his companies & his teams.
This. Was. Amazing.
More OpenAI.
Just giving some more data on OpenAI because it's funny.
Annual losses are expected to triple to $14 billion in 2026. Total losses projected for 2023-2028 are estimated at $44 billion. OpenAI is not expected to be profitable until 2029. Currently valued at $150 billion. I asked this last week:
“My point here is, is this the heart of the so-called AI bubble, with everyone just throwing cash at them because they have some crazy R&D projects, or is it all just FOMO and wasted money?”
I think I have my answer…