Crypto outlook He owns Bitcoin, Coinbase and many other cryptos and he's been in pain. He predicts in the next week or so, a big player will go to zero. Some of these are over-levered, so when they blow up, there will be panic and a bottom. Ethereum has been crushed, but it's his pick.
He added shares. It's always traded at a 50% discount to UPS and poorly managed. But now there's an activist tone to FedEx, which is good. With new management, there's opportunity to raise margins, reduce capex and take advantage of a big overall market sell-off.
Downgraded a lot today BOA downgraded it to a sell today, but he added to his holdings today. It's down 80% from its pandemic highs, but its products are everywhere. Not a great investment, sure, but DOCU is an essential part of any business that already uses it, and businesses rarely change their service systems. Also, companies and countries are reacting to the Russian invasion of Ukraine--they're asking, in which country is my data residing? He's in pain, but is averaging down. DOCU is a long-term bet. He's known the management since they were private--he's confident DOCU can pivot. He projects double-digit returns in 18 months.
To consider in this market: 1) Will the Fed be more aggressive, like hiking75 basis points? 2) When will the consumer roll over? Doesn't see it yet. 3) Has the market capitulated? No. To do so, what he's looking for is one big blow-out day, like a Bitcoin company going zero, some company that's huge and over-levered. That will be our bottom. Now, we're seeing a slow, painful grind-down. There are great deals out there, like some tech companies trading at once-in-a-lifetime low PEs. We're two-thirds of the way there before we hit bottom.
Agriculture is an amazing place to be now. Resilient. BG is a small cap. They're delivering over 80 storage facilities, specialized oils and grains-- things that people must have in this cycle.
He just bought this midcap. A third of the Russell 2000 stocks are profitable and outgrowing the S&P; not subject to currency or tariff changes; they serve domestic markets. This is an infotech company that will serve sectors that will endure. It's a safe place to hide because they service domestically, are cash-flow positive and trading at lower PE's.
Unfortunately, funerals will endure, which is their business. Their chart outperforms many companies. It's a safe place to hide, trading at lower PE's.
He owns a big position. It's about pure infrastructure; their technology is essential to businesses for customer acquisition and retention that will last decade. CRM is a long-term hold.
He's buying a lot in this bear market, including Chevron, Dupont, Apple, JNJ, Pfizer, BABA, Moderna, Home Depot and Meta. All these companies do no require financing; they have strong cash flows and balance sheets. They pay shareholders. Their PEs have been crushed. He can either go to cash--but would lost 7.5% in the face of 8% inflation--buy the 10-year bond at 3% (not, not until it pays 5%), or buy stocks with pricing power. They won't go out of business regardless of Powell, Ukraine or anything.
The tech companies' growth rate has not slowed, but their PEs have been slashed to anticipate a slowdown which hasn't happened yet. E-commerce around the world hasn't happened yet. His portfolio is enjoying the best cash flow ever--the America consumer is on fire like never before. He likes it that people think the world is ending, because this is the time to buy. Zero chance of a recession this year. We're not seeing another dotcom bubble. Meta's cash flows haven't changed at all and he doesn't see that happening. Yet, shares have been crushed by half. Meta is the best example of tech being oversold and being on sale. It offers growth. No slowdown here.