Brief Summary
The video discusses the speaker's investment strategies and portfolio decisions, highlighting a public account nearing $4.2 million. He shares his thoughts on potentially cashing out for a steady yield, explains why he sold a position in Palantir, and outlines his approach to the market if it continues to rise. The speaker emphasizes his love for the "game" of investing, his long-term goals of giving back to society, and the importance of focusing on value and dividend stocks in a frothy market.
- The speaker's public account is nearing $4.2 million, a significant increase from $1.2 million three years ago.
- He sold his Palantir hedge due to concerns about decelerating revenue growth and potential downside risk.
- He emphasizes the importance of focusing on value and dividend stocks in a frothy market.
Intro
The speaker celebrates the success of his public account, which is nearing $4.2 million, and congratulates his private stock group members on achieving significant portfolio milestones. He mentions a post on X (formerly Twitter) where he pondered the idea of selling his portfolio to earn a substantial annual income from a high-yield savings account. The speaker also notes the impressive performance of Palantir stock, which has rapidly approached his earlier prediction of reaching $200. The video will cover his reasoning for not cashing out, a recent sale in his public account, and strategies for navigating a potentially continuing bull market.
Why Not Sell Everything and Become a Yield King?
The speaker explains that he enjoys the "game of money" and the challenges and opportunities it presents. He compares his passion for investing to his love for playing Madden in his youth, where he constantly sought new challenges and ways to improve. He views the stock market as a game he loves to play, including navigating crashes, corrections, and various market conditions. The speaker also shares his long-term vision, which includes potentially starting a hedge fund in his 40s with a significant personal investment and helping others achieve financial success. Ultimately, he plans to give his wealth back to society through charitable endeavors rather than directly to his children, believing they will have the knowledge and connections to succeed financially on their own if they choose.
Position Sold: Palantir Hedge
The speaker reveals that he sold 100% of his Palantir hedge in the public account, incurring a small loss. He explains that he grew uncomfortable with the position due to uncertainty about when Palantir's revenue growth might peak and decelerate, which he believes would lead to a significant stock decline. While acknowledging the potential for Palantir's stock to rise further if it continues to deliver strong revenue growth, he decided the risk of a substantial loss from his leveraged position was too great. He points out that Palantir's valuation is already high and that the market is currently driven by momentum rather than fundamentals. The funds from the sale were reinvested into TSLZ to complete a 1% hedge for the portfolio.
Why Tesla for a Hedge?
The speaker explains his rationale for using Tesla (TSLZ) as a hedge, despite acknowledging that it, like Palantir, can be driven by market momentum. He believes Tesla is more vulnerable to downside risk due to its weak fundamentals, including declining revenue growth, plummeting earnings per share, and poor margins. He notes negative trends in Google searches for Tesla and declining market share in key markets like China and Europe. The speaker also casts doubt on the near-term profitability of Tesla's robo taxi efforts. While acknowledging the risk that Tesla's stock could continue to rise, he maintains that its poor fundamentals make it a better hedge against a market downturn than Palantir. He emphasizes that he prefers to "go big" on investments with strong fundamentals and attractive valuations, rather than betting against companies with only momentum.
What If the Market Keeps Going Up?
The speaker shares his strategy for a market that continues to rise, advising to take profits when returns no longer make sense based on projected numbers. He emphasizes the importance of running projections and selling when the base case scenario doesn't offer an attractive return. He also suggests focusing more on value and dividend stocks, which tend to be overlooked in frothy markets dominated by momentum stocks. Dividend stocks provide income during market downturns, allowing for reinvestment into growth stocks at cheaper valuations. For experienced investors with substantial portfolios, hedging strategies can be employed. The speaker illustrates his approach by discussing his Palantir projections, explaining why he significantly reduced his position despite the company's strong growth potential. He concludes by urging viewers to build portfolios they will be proud of in the long term, focusing on wealth-building opportunities.
