🌞 The future of solar, shorting the quantum computing sector, and how to master limit orders
🔎 Episode Highlights:
💡 2025: A Solar-Battery Renaissance?
➡ Jigar Shah, director of the U.S. Department of Energy Loan Programs, predicts that solar companies must pivot to battery storage to thrive. Is the grid’s future really in batteries?
📉 Shorting Quantum Computing: Risk vs. Reward
âž¡ Monkey shares his bold short position on a headline grabbing quantum computing company and unpacks the challenges of betting against the hype. Can their pivot from beverage company to quantum computing hold up to scrutiny?!
🔋 EOS Energy: Bull Case or Bubble? $EOSE
➡ Why EOS Batteries dominate Monkey’s portfolio and how utility-scale storage could reshape renewable energy investments.
📈 Using Limit Orders Wisely
âž¡ Listener asks about mastering market orders and the role of market makers. Learn when and how to set limit orders to avoid costly mistakes!
📩 Listener Questions:
➡ What’s the best way to set a limit order price?
âž¡ How do market makers impact retail investors?
🛠Patreon shoutouts to: Nick 1, Big Nick, Eggnog Forever Nick, and many more whose names aren’t Nick! Join the conversation on Patreon.com/wallstreetwildlife where we interact with members and are building an inner-tribe community of investors.
Segments:
00:00 Introduction
04:15 Skiing Adventures and Living the Dream
08:11 Quantum Computing Short Strategy
14:10 Battery and Solar Investment Insights
24:55 Listener Question: Using Limit Orders
33:21 Zen and the Art of Investing
41:05 King of the Jungle Portfolio Update
49:10 A Fintech Disruptor
#
E62 Solar ENPH EOSE QUBT Limit orders – SPONSORED
[00:00:00] Krzysztof: Most bad investing decisions happen from hope, I would say. Or, you know, like you hope something happens and then the thing doesn’t happen. if you can identify and be with, let’s say an upset, right? Then you might write the stock goes down.
You feel upset. If you stay with that upset, you might come to the conclusion. Why am I asked the question? Why am I so upset? Oh, because I was hoping that this company would X, Y, and Z. But in that moment you realize, Oh shit, that’s right. I was investing based on hope, which is a very poor investing strategy.
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[00:01:00] ​
[00:01:58] Luke: [00:02:00] Welcome to Beautiful Chamonix and hello for another episode of Wall Street Wildlife podcast. In today’s episode, Christoph is short quantum computing. How’s that working out for him? Also why 2025 is going to be a huge year for batteries and maybe solar. How should you use limit orders? We answer a Patreon question and there’s a big switcheroo in the King of the Jungle Portfolio Challenge.
[00:02:31] Krzysztof: Indeed, Happy New Year, Badger!
[00:02:33] Luke: New Year, Christoph!
[00:02:35] Krzysztof: It’s the first time I’m seeing your ugly furry face. Uh, almost furry face. Not quite, not quite
[00:02:44] Luke: see this? So look, you challenged, you mentioned, you said, I’ve got to grow a beard. I said, I can’t grow a beard because A, I can’t grow a beard, as I’m demonstrating, and b, my wife would freaking kill me. But I’m now away from my wife for, she’s coming out on the 1st of [00:03:00] February, so I’ve got a month, and I think I’m going to give up already, because look, this is, we’re recording on the what, the 6th of January, this is since the 1st of January, I think I shaved last week.
So look at my, you can see how ridiculous this bit’s never gonna come in, ever. So, it just ain’t happening.
[00:03:17] Krzysztof: I could tell you that all of our Patreons, for which we are eternally grateful, by the way, find us at patreon. com slash wallstreetwildlife. All of those animals that we’ve gathered into our jungle would be hugely disappointed and probably upset if you didn’t, if you threw in the towel so quickly. I mean,
[00:03:39] Luke: nothing’s happening. And I feel like I’m,
[00:03:40] Krzysztof: it doesn’t, uh, uh, uh, uh, no, no, no, no, no, no, we’re gonna see this out, we’re gonna see, we’re, we’re going through at least January, uh, right, Patreons, right, you let us know in the comments on, on our page.
Whether you think Badger should give up after a measly five days or whether we’re going to see this through [00:04:00] February and, uh, see to what extent he could catch monkey
[00:04:03] Luke: I’m like, I’m never catching that fairy face. Anyway, on to more important matters, surely.
[00:04:10] Krzysztof: where, where, uh, your view is once again, spectacular. Where are
[00:04:15] Luke: Yeah, this is like a tiny bit of, uh, Chamonix, uh, Mont Blanc, so like the French side of the giant Mont Blanc mountain, and it’s just a fabulous, it’s like a valley with a ton of mountains and ski resorts all around the valley. So I’m here. For my 2025 ski season. It’s the first time I’ve done a full season in Europe.
The last four years have all been North America. So yeah, pretty, pretty excited. And this is why actually the annoying beard is going to piss me off. Cause I’m now out on the mountains trying to like make friends with people. And they’re going to think, who’s this lame ass 50 year old with like some patchy ass face.
But okay, I’ll suck it up for you.
[00:04:52] Krzysztof: you, uh, for are some of our new listeners. You might not know that part of [00:05:00] Badger’s, um, whole reason for investing is wanting to quit his job so he could spend like months at a time living on a mountain and then going down the mountain and then going back up and then going back down on, on skis. So this is like living your, your dream life, right?
And you said season 25?
[00:05:20] Luke: Yeah, my fifth season. Yeah, this is, yeah, this is absolutely, uh, why it turns out I started investing like 22 years ago so I could do this now. Yep.
[00:05:31] Krzysztof: hey, uh, how expert of a skier are you at this point? You must be like, really pretty badass.
[00:05:39] Luke: good. I’m pretty good. Uh, yeah, I’m like, I’m, I need to buy something called a touring setup. I haven’t got that, but I’ve got my avalanche gear and, uh, I’m pretty competent in the back country. I can just about speed ride. It’s like skiing with a parachute and you kind of fly and ski. So yeah, I got a few, I got a few like [00:06:00] tricks.
Yeah. Don’t ask me to backflip over anything. I can’t do that.
[00:06:03] Krzysztof: Have you ever tried any, uh, what’s it called? Slalom? Slo slalom.
[00:06:08] Luke: Uh, there’s, yeah, today it’s kind of like a, there was a baby ish kind of Like a small border cross park. I haven’t checked out the video yet, but it’s quite cool. Like you sort of check in with your ski pass, and then you get like, beep, beep, beeep, and the gate opens. And then you like slalom down, and apparently you just recorded the video, so I need to check that out a bit later.
And this is like my day three on the skis, so I thought I’d get like a slalom video. And I did like a lame, like 34 seconds. And then I figure I’ll go back and do another one, definitely at the end of my season, on my race skis, when I’ve got like three or four months of, like, energy in my legs, and I’ll see how much I can take off that time.
[00:06:47] Krzysztof: Oh, this is definitely premium Patreon footage right here waiting to happen. We need to see a badger going down the mountain. Uh, so I’m super jealous. Uh, it’s amazing that you [00:07:00] get to spend your days exactly how you want them. Um, beautiful. Meanwhile, here in Austin, it’s the first cold day of the year. It’s been kind of shockingly warm.
It was still like in the seventies in late December and January, but today it stopped freezing. And so what I did this weekend is I started doing some serious Legos. is stage one. You’ll see updates, uh, of this beautiful set, but that’s what monkey does in his spare time. Instead of going down
[00:07:30] Luke: Is this like a diving board or something? What’s that turning into?
[00:07:33] Krzysztof: this is going to be a ginormous, uh, Ninja go Ninja goes a cartoon thing. And it’s this massive edifice. It’s one of the largest Lego blocks. That’s ever made. So, uh, it’s just humble beginnings. Let’s see how it, how it goes for
[00:07:49] Luke: Hopefully it’s more structurally sound than those stacks of books behind you. Otherwise it’s going to be a disappointing end.
[00:07:54] Krzysztof: Well, you know how well I follow directions, right? When building.
[00:07:59] Luke: [00:08:00] You’re like, I got all these, I got these 50 pieces left at the end. What am I supposed to do with these?
[00:08:05] Krzysztof: So yeah, stay tuned to see my progress.
[00:08:09] Luke: Awesome. How is your progress in your quantum computing short? Do you want to remind us? So last week we did our 2025 predictions episode. Um, we also touched on a quantum computing stock each and you were super negative on the one you picked and so negative in fact, you said this is like a scam. I’m going to short this stock, i.
e. you’re betting it goes down. How’s it going?
[00:08:36] Krzysztof: Yeah, not well, not well badger, but here’s the thing. I knew going into it that the initial, timeframe was not going to go well no matter what. And that’s because, So the quantum computing industry as a whole just shot up massively, right? I mean, going, I mean, uh, thousands of percent, some of these companies, right? And so when you have that kind of volatility [00:09:00] options pricing, there’s something called the IV, which also shoots up based on volatility. So how much you pay for an option is linked in part directly to the yeah, the volatility.
So in the quantum computing basket, I would say there are. Most of the companies are legitimate, but nonetheless, you know, that huge change makes owning the stock precarious, but I think Qubit, Q U B T, is an actual fraud, is an actual scam, at least partly, at least partly, I’m not saying there’s like, you know, fraudulent accounting, I don’t know enough about that, but This was a this is this seems to be a group of people who got together intent on making a business they started out as a beverage company, which, I think I said to you might be one of the best quotes of all time that I’ve come across like it might go into the Hall of Fame.
[00:10:00] Of, uh, quotes. Uh, some analysts said the or I think it was in their report. They said this, this changing in their names from Innovative Beverage Group Holdings Incorporated to Quantum Computing Incorporated. Nine years later, these changes reflect. Quantum Computing Incorporated’s pivot from a beverage related business to quantum computing, a significant strategic overhaul.
[00:10:27] Luke: Significant strategic overhaul. So, uh, quick,
[00:10:30] Krzysztof: Yeah, yeah, yeah. And so anyway,
long story short, I think this is A company borderline worth little, nothing, but the stock shot up to something like a 27. So 3, 3 billion market cap. When I bought the options, Luke, uh, the Ivy was over 300%, which is really, really, really massively high. So I knew ahead of time that even if it dropped from say 27 [00:11:00] down to 14 or The options still wouldn’t move much because that would just reduce the IV.
And so, uh, but I bought anyway with, um, April, April date. So maybe I was a little bit, uh, ahead of myself, but because I gave myself to April, I’m predicting that between. Now in April that gives us four months the short the professional short sellers will start piling on Revealing that this company with no revenue Has no business being worth in the billions and then that the stock will buy April with which is 120 days from now approximately the the options will start paying out closer to that date.
But as of now, the way options are priced are not in my favor. So I’m, I’m under the water, even though the stock actually went down in the direction I planned. Did that make [00:12:00] sense? Or did I just confuse
[00:12:01] Luke: No, it did. Yeah. Essentially you’re taking like a three month bet that the stock ends up significantly lower than where it is today. and if I wanted to jump into this same bet. Would you recommend April or are there longer dated options or just does it get too expensive to buy a much longer dated option?
[00:12:17] Krzysztof: Right? So, uh, let me, let me try to condense what I said before. This is still a risky bet, even if I’m right. And the reason it’s risky is because everyone, the market makers call it also probably know this is fraudulent. So in order to get gains, they just made the options really, really expensive. Your question Badger is, is April enough time?
And, I feel queasy about that actually, because we know with something like in the world of GameStop, as when you get just pure money games involved, who knows how long it will take for the game to unfold back to the fundamentals. I went with [00:13:00] April because. That shoot up was so high.
I thought it might collapse, you know, within a month or within a week or within, you know, so I thought April is like a reasonable mid term ish. If you really want to be safe and you don’t want, you know, and I would just buy the furthest out and I’m not sure what that is. I could look it up.
[00:13:26] Luke: Okay. All right.
[00:13:27] Krzysztof: So April seems like a yeah, we got we got a shot.
[00:13:31] Luke: Good luck. Good luck with this one.
[00:13:32] Krzysztof: Yeah, so actually I, I, I’m looking at the qubit option chain now and I’m surprised actually they have options dated not only, uh, leap options through 26, but they also have some for 27, which is very unusual. I think for like a little, uh, so there’s, so there’s lots of money to be made. I would probably at this point, Luke, uh, by the January [00:14:00] 16th, uh, date. Pay more premium for the time, but you know, if this is a fraud as, as it probably is, or fraudulent, um, there’s money to be made here.
[00:14:08] Luke: I’ll check it out. Hey, Chris off.
So let’s transition to talking about batteries and I want to bring us into batteries by actually talking about solar or solar and batteries, because there’s a company I used to own and I did actually recommend for seven investing. Way back called Enphase Energy. And then sadly I had to sell it for my own portfolio.
And we also sold it from 7investing because the company just wasn’t performing very well. And I made a mistake with this one because I recommended it at a time when the world was going into Or you know, I was being stuck with like a persistently high inflation rate and interest rate environment.
That’s just not a good environment to be selling like high cost discretionary goods to households because it costs more for them to finance a solar installation. Plus I had my concerns about leadership and a bunch of other stuff. [00:15:00] So I sold Enphase and I think I’m on the verge of rebuying it. And I said this a couple of weeks ago.
So I did get a question from one of our seven investing members, Edog. And he asked me just to go a little bit deeper on my thinking around why my claim was Trump tariffs. might be good for Enphase. So let’s just touch on that. And I haven’t done anything with this yet. I haven’t re bought Enphase at all, but it’s on my list of things to think about.
And I think I want us to see like the change of leadership in the White House and see what comes of these tariff conversations, because they could be a threat as opposed to a solution. reality. But if the Republican administration does implement tariffs, let’s say on all imports, but specifically on Chinese imports, perhaps that’s his, his big like bugbear.
Well, like if you want to buy solar, then you can get very cheap [00:16:00] solar options from China. And so that makes it very hard as an American manufacturer. For companies like Enphase to compete with these like highly commoditized panels in from China. So if the Trump tariffs make it more expensive and onerous to import Chinese goods into the US, well, it’s going to be, it’s going to be a tailwind For domestic manufacturers.
Now it’s not clear cut because Enphase also does some of their manufacturing in Mexico. So you’ve got to look at the nuances of how these tariffs get set up. I just feel like there is a pathway here that could be beneficial for the company. And if nothing else. Like we know Trump is going to institute like a buy American sentiment and Enphase is an American company.
So like they’re going to get that support anyway. So like super thin idea really, I want to see how things play out, but that’s just [00:17:00] like the headlines on where my thinking’s at. Just going to kind of watch how this story unfolds.
[00:17:04] Krzysztof: Okay, fantastic. Uh, I’m curious. I’m going to add my segment now, and I’m curious if what I’m about to say about EOS has any impact on what you’re thinking about regarding Enphase because the two are tied together. So let me actually take a step back and let me go on a little bit of a deeper dive into EOS right now for many, uh, for several important reasons.
One is, you know that in the King of the Jungle right now, EOS, because of its run up, uh, is close, if not over 50 percent of my portfolio. and that one of my resolutions for the year is not to sell a single share, but it’s like, you know, this balancing act that’s going to be really interesting to watch how it unfolds.
Uh, point being one important thing though, is on one hand, it’s very risky to have that much allocation in anything on one hand, but on the other hand, [00:18:00] because I’m now so deeply, uh, in the world of EOS and batteries and the grid and solar and all these things combined, I’m digging, like, I’m digging pretty deep in source material.
And one of the things, uh, in order to think through this large position I did this weekend, I came across a podcast that’s highly specialized, and this is like a, it’s like a podcast devoted entirely to renewable energy and batteries and all this stuff that, you know, only experts listen to. And I came across the following quote.
Tell me what you think of this. This is a quote by Jigar Shah, who longtime listeners of, of, uh, of the show and EOS battery heads know is the director of the U. S. Department of Energy loan programs office. So he’s the guy that’s calling the shots who gets U. S. Money and who doesn’t [00:19:00] in terms of energy, right?
Quote. almost every solar company That I have talked to in the country is starting to recognize that they’re going to become a battery company next year. The solar is an add on to the battery, but every electric utility company wants the battery. They don’t want the solar and the roof. The solar and the roof is feedstock for the battery.
It’s a cheaper way to feed the battery, but what everybody wants to meet this load, but. Everybody wants to meet this load growth moment is the battery. I feel like the solar industry hasn’t quite pivoted. They’ve heard the pivot this year and next year, meaning this year it’s going to be right in their face.
And so, uh, from the perspective of EOS shareholders, this is another one of these gems that if you really take the time to understand what he’s saying, he’s saying [00:20:00] like if you think of EOS as just long duration, energy storage on its own, that’s fine, that’s a huge market in and of itself, but then you think.
If what he’s saying is true, and this is a, you know, an expert saying this, that also solar companies are in this moment of realizing they all need batteries too, because that’s what, where the real money is, then the market for eels just like got magnet, hugely bigger, hugely bigger. So I wonder.
[00:20:33] Luke: batteries are like those shipping container things, right? They’re not like things you stick in your garage at home.
[00:20:38] Krzysztof: Correct. They’re larger utility scale, uh, containers, but side note, you know, that one of the huge selling points for EOS is that they don’t catch fire. And so one of the future use cases will be, you could put one of these. larger containers in places where big batteries could never go before. [00:21:00] So I don’t know how it’s going to evolve.
It’s certainly not like a residential thing, but the kind of smaller, like one of those cubes isn’t actually that big. So I bet you there’s going to be all kinds of Yeah, solar companies that will use EOS. So my question back to you is, let me put it to you a little provocatively. you know, I’m a huge EOS bull.
You’re thinking about buying Enphase. Given what I just read, does, does, do you want to, Are you still thinking of getting back into Enphase or does this make you think, wait, why not? Why not invest in the batteries directly?
[00:21:39] Luke: No, that’s fair. Uh, I, I, I see them as totally different. They’re not, they’re not competing, like they’re different companies. And I do want to support, like renewables technology and they both support renewables. So that’s kind of the same in outline the same thesis. I suppose the thesis is different in important ways.
Like Enphase are selling to small businesses [00:22:00] and households. EOS are selling to, I imagine, you know, big industrials. So yeah, I just don’t know enough about that end of the market. So it wouldn’t tempt me. Plus I don’t want to stand on your territory, right?
[00:22:12] Krzysztof: Yeah, but I think so, to reiterate, if I’m understanding this quote right, This is the pivot that hasn’t yet happened. That’s that that Shaw’s predicting that all solar companies will now need to, in a sense, become battery companies. That’s almost like the solar part was just sort of like a first stage of, getting the foot in the door.
But really, they’re now it’s kind of I don’t know if this is fair. It’s almost like Tesla started as a car company. As a sort of not a fake, but right. It’s obviously legit, but really they’re an AI company and it’s the AI that’s going to be doing the cars. Seems like start with the solar panel on the roof, but really you’re [00:23:00] going to be a battery company.
And then you’re going to need, that’s going to be where your business will
[00:23:04] Luke: That’s fair. Yeah, I agree with that. But Enphase really are a battery company, like they sell like the whole end to end system, like solar and battery for your household, and it all plugs together nicely. And both of those are really commoditized products. Like it’s not like, unless you’re a real geek, you go into your garage and you look at it and you like stroke the battery and go, Oh, look at my, you know, Enphase or Tesla brand on the battery.
It’s just power. Like, you know, stuff works and you don’t care where the electrons came from. Right. Yeah. So, yeah, you know, I imagine most customers will just buy whatever’s the, the cheapest, uh, or the best, you know, ROI for them at the time.
[00:23:41] Krzysztof: I don’t know. I don’t know what to say. I’m not as interested in Enphase at this moment. because of what, uh, this battery stuff, even though I was a shareholder for a little bit before selling out, um, and might be because of the commoditization angle. I [00:24:00] just don’t know how to play that. So keep us updated.
[00:24:03] Luke: Yeah, yeah, probably. And I’ve, I’ve pulled the trigger on it anytime soon, I don’t think, you know, and I’m, you know, I’m not constantly trying to get you persuade you. that the companies I like are worth investing in. I agree, we have like different interests. You’re always badgering me to please buy some EOS, please buy some EOS, Luke.
You just want this like, if this, if Luke buys it, if badger buys it, it’s got to go up.
[00:24:28] Krzysztof: You know, I actually like that, that since I’ve persuaded you in some small ways in other holdings, because I actually like that, that, uh, That you and I kind of have divergent opinions on EOS. So, um, obviously between the two of us, my 50 percent position is big enough for the both
[00:24:49] Luke: Yeah, yeah, that’s for real. I mean, I have nothing to talk about if we, uh, if we both own EOS, what would we argue about?
[00:24:54] Krzysztof: Okay. So shall we move on to a really good listener question? [00:25:00] this is from Barbara, who, is trying to learn how to place orders in the market the right way. Okay. And we’ve talked about using limit orders before, so, uh, but it does get a little bit confusing. So her question is, I also kind of sort of understand, uh, using limit orders has something to do with market makers, but how much do I need to understand market makers?
Is that something I can just kind of sort of know exists but not be concerned about? And I’m curious in general how you decide what your limit price will be. So, can you, you want to take a shot at the market makers question first?
[00:25:40] Luke: Uh, yeah, you sort of hoodwinked me with this one, but yeah, for sure. Okay. like really. When you, when I sell a stock and you buy a stock, like you’d think these, these trades are being matched up and then thereby, like there’s price discovery and the transaction takes place, but someone has to get the market started.
So the role of a market [00:26:00] maker in a stock market is to be like the buyer of last resort. So they’ll own a bunch of stock and then they’ll sell it at whatever the prevailing market price is, and they’ll kind of create the market. But they’re. You know, they’re almost like the backup for the market. They make sure it exists and transactions can take place.
But really the market is driven by all the buyers and all the sellers having different opinions. That’s kind of what a market maker does.
[00:26:23] Krzysztof: Yeah. Um, so should, basically like a normal average investor worry about market makers and the fact that there’s, they’re kind of skimming a little bit off the top.
[00:26:35] Luke: I know, but because I’ve, I’ve sort of cautioned you in the past about like relying on brokers, like Robin hood without really looking under the covers and seeing like, are you getting. I forget what the official terminology is, but are you getting like a fair market price when you do it? When you execute a trade?
Because there’s a whole world of bad things, well, [00:27:00] different things that could happen with something called dark pool trading. And you don’t necessarily know who your counterparty is, like who’s the seller when you’re buying or the buyer when you sell. And I think it’s best execution, that was the thing I was looking for.
Like the brokers I use offer the best execution. There’s a whole bunch of regulations around what that means. So generally I can rely on the fact that I’m getting like a fair market price at the exact second where I hit the buy or the sell button. When you’re transacting on Robinhood and to a lesser extent, I’ve seen the same thing on Trading212, which is like my kind of Mickey Mouse broker, a little bit I’m using for my King of the Jungle portfolio.
It’s a lot less clear. how the price discovery, like how, how the price I’m getting derived. And so it’s small money. So I don’t really care too much, but if it was big money, I would be much more diligent about it.
[00:27:54] Krzysztof: Yeah, and so I think this is the takeaway answer for me, uh, Barbara. [00:28:00] There’s a pro and con to this and both are worth knowing about. One of the largest mistakes I think all investors make, I’ve made this plenty of times in the past, is You set, if you think in terms of being professional and using limit orders, you say to yourself, here’s the price that I want to pay, not a penny more, right?
Even to like, you want to give the finger to these market makers. That’s when you would set the limit order and then it would only execute at the price you put in. But how many times have we seen a stock that we really want to own Never hit that relatively arbitrary price and it’s cost you hundreds of thousands, tens of thousands of dollars because you missed buying it because it never hit that limit.
That’s a huge, huge cost that missing one of those is, is an absolutely devastating outcome. So that’s why [00:29:00] many times if you’re a legitimate longterm investor. You do your research, you go through the process, you say, okay, I’m in. And then you just buy the stock, right? You don’t play those games. And in those moments, I just pay the market price.
Once I’ve made my decision, I own the stock. I’m done. If you do want. Right. But if you want to get a little more technical and let’s say you’re adding shares or now you’re trimming shares or you’re doing a little bit of analysis and your man, you know, risk portfolio management, then using limit orders, encourages patients.
It encourages exact numbers. It encourages. the, you get outside of the market maker game and that’s when limit orders are useful.
[00:29:47] Luke: So let’s, um, let’s make it really practical. So let’s assume Barbara wants to transact like now she wants to buy a stock and she wants to follow good practice and use a limit order. [00:30:00] And so let’s say like the, like the price she sees on screen is a hundred dollars, like no sense. Like what, how should she navigate that?
How should she use a limit order there if she wants to buy now
[00:30:10] Krzysztof: Right. So, uh, most, well, I use Robin Hood now, so, uh, forgive me for that. That’s, that’s what I’m limited to. It’s been a while since I used like a proper Big old school brokerage, but on Robin Hood, anytime you click on the ticker, you’re, you can see the, the market order book, which tells you the bid and the ask price.
If it’s a popular stock like Tesla with millions and millions of shares trade all the time, that bid and ask is going to be tiny, the gap between those because there’s so much liquidity that basically the price you see is the price you get. If it’s a company that’s a smaller, much less volume, then that gap is going to be bigger.
And what you want to do in that case [00:31:00] is set your price right in the middle. So let’s say it’s a dollar bid and 2 ask. That’s a huge gap, but for example sake, you would put your price at a dollar 50 and odds are high. Uh, actually, let me technically odds are medium that you’ll get the, um, that you’ll get the share.
The higher the volatility, the, I’m sorry, the higher the volume, the more likely that the mid price will hit, but that’s a good place to start. And then the second part is, you know, I I’ll place that order. Wait an hour, right? And if I really want the shares and it hasn’t hit yet, then I’ll bid it up a little bit closer to the ask price to make sure that it does execute.
[00:31:46] Luke: and the way I see some of my brokers operate. If you buy like a market order, so this is not using a limit order, you’ll get like, I’ll see the price that I’m going to transact at when I click the button, and it gives me like a 15 second [00:32:00] countdown just to say like, yes or no. So that’s the other way to do it.
Because you’re getting the key thing here is you’re executing at a price that you know, as opposed to. Like a mystery price that just sort of happens and you could get caught with your pants down. Like if you trade outside of market hours, this is like the real time, you should use a limit order. Uh, if you trade outside market hours, wildly volatile things can happen.
You could find that if you didn’t use a limit order, you executed price that’s like way outside of market hours. Like the normal trading range for that particular stock, particularly if it’s a small volatile company. But it’s kind of okay to do that during the trading day, as long as your broker has this facility where they kind of give you the opportunity to confirm at that price.
So that’s the other way to play it.
[00:32:45] Krzysztof: Great point. I’ve made that mistake so many stupid amount of times the, the, you know, pay the market makers will take advantage of you. When there’s low volume. That’s maybe the lesson and to prevent that use limit [00:33:00] orders to say I’m not paying any more than this and if it’s after hours, it’s almost like mandatory.
So thank you for that that uh additional caveat.
[00:33:09] Luke: Great stuff.
[00:33:10] Krzysztof: Clear as mud Barbara? Let us know let us know on our patreon page if we If we clarified or muddied the waters for you.
[00:33:20] Luke: thing. all right, so Christophe moving on, I understand that you found something zen like in your research around stocks. What’s that all about?
[00:33:30] Krzysztof: Yeah. So forgive me, uh, that I don’t remember the source my fault for not labeling. I copied and pasted, but, I believe it was some. PhD researcher did analysis of finance and basically finance and behavior and emotions. And after many, many pages of insight, there’s one brief sentence that I think captures all of this man’s research.
And he said, this makes the difference, between [00:34:00] successful investors and basically everyone else. And the moral of his story is don’t eliminate emotions. Use feelings as information, not direction. Don’t eliminate emotions. Use feelings as information not direction. So let me unpack that a little bit and why it’s a Zen like thing What Zen training is It’s actually learning how to be with everything that is Rather than blocking things out or getting caught in things that take over your mind So that’s what you actually do when you’re sitting in Zen meditation.
You’re watching what your mind’s doing and kind of being that those things. And the more you do that, the more comfortable you get. It’s not about, it really is not about like some fake serenity, right? And fake peacefulness [00:35:00] where nothing angers you or nothing troubles you. that’s kind of like, that’s just not how life works and it’s not how humans work.
So what this guy is saying is in trading and investing, emotions will come up and oftentimes, uh, powerful emotions, sometimes upsetting emotions. You lose something on a trade, right? You get angry, you get upset, you feel shame, you feel guilt or whatever, or you find a new company where you’re all hyped up and you want to, you know, put it, you know, you want to risk the whole house on it.
If you act on those emotions, you’re following their direction, right? If something bad happened, you’re angry, you react from the emotion, you’re now just gonna let the motion dictate where you’re going. That’s not good, right? That, I don’t know if that needs any more explanation, right? You’re being driven by your emotions.
That’s going to lead to compounding of errors. [00:36:00] But instead of saying, okay, then get rid of all emotions in your trading. No, that’s robotic. That’s also not right, because emotions and how you feel about something is information, and that information, if you analyze, if you don’t just act from it, but if you sit with it and you ask yourself, why am I angry?
Why am I so excited? That allows you to kind of look in a particular direction, which then if you follow up on that, doing basic research and due diligence, You might either confirm your emotion or you might contradict it or you might get new, more information, but that is the beginnings of a sophisticated process using your emotions as a opening trailhead.
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[00:36:41] Luke: [00:37:00] Yeah. Okay. It’s a good, uh, refinement to stuff we talked about before. Cause we. Maybe in the past we said, Oh, you know, acknowledge your emotions, but don’t act on them, like don’t let greed and fear drive you into doing something in your portfolio because you’ll probably come to regret it. But that’s, uh, that’s maybe going down a level deeper again about.
Maybe a bit of analysis as to why do you feel that way? And does that tell you something that’s maybe additive to the thesis and to the kind of rational parts, the objective parts of the decision making process,
[00:37:59] Krzysztof: [00:38:00] Yeah, exactly. And I just thought of a, uh, easy kind of example of this. Most bad investing decisions happen from hope, I would say. Or, you know, like you hope something happens and then the thing doesn’t happen. if you can identify and be with, let’s say an upset, right? Then you might write the stock goes down.
You feel upset. If you stay with that upset, you might come to the conclusion. Why am I asked the question? Why am I so upset? Oh, because I was hoping that this company would X, Y, and Z. But in that moment you realize, Oh shit, that’s right. I was investing based on hope, which is a very poor investing strategy. And yeah. Right. And then you make refinements. Now you go back. Is the hope really just nothing but hope, or is it based on some fundamentals and you then, you know, go from there?
[00:38:59] Luke: [00:39:00] and maybe to make it concrete and hold yourself to account, just to like restate one of the basic things that all investors should do, it’s just like keep a. Keep a log of your decisions and your trades, and just write down like a sentence just saying, you know, why you did that thing, what you expected to happen, and then you’ve got something to go back and review, but just the process of having to articulate it, it’s going to, like, help you self identify if the reason you’re doing it is like hopium or some emotion as opposed to something more concrete that you could actually hang a thesis off of.
[00:39:34] Krzysztof: Yeah, absolutely. So, uh, I just. Last thing I’ll say about this, it’s a short, it’s a very short phrase, and I think most people will dismiss it as there’s nothing novel, nothing new important here. I think it’s really profound. Feelings as information. If you repeat that a few times, You might begin to kind of see and even feel why it’s [00:40:00] actually quite, quite deep.
[00:40:01] Luke: I suppose I can’t be worried like I’d see this as. Kind of ancillary supporting information, but it’s going to be like, it’s going to be anecdotal, right? It’s how I feel and if maybe I don’t know if this is what you’re saying But if you’re saying is oh, I’m really excited about like rocket lab space stock And if I’m really excited about it, probably everybody else is really excited about it.
And therefore in a small way That’s part of the thesis But that’s like my anecdotal opinion, which could be factually unfounding, you know, it’s probably going to be like confirmation bias. I might be excited about it, but the rest of the world might have their eyes open to the fact. That particular company is doomed.
[00:40:40] Krzysztof: Right. Exactly. So feelings as information, not direction. If you, if you think of direction as the bias, right, then, yeah, it’s the difference between information and bias. But you will need you need the the stimulus that’s the point you can’t get don’t get rid of your emotions Just [00:41:00] look at them differently.
Look at what they’re telling you differently
[00:41:03] Luke: All right. Good stuff. Well, you know, my emotions are telling me something quite wild at the moment because there’s been a big switcheroo upon us in the King of the Jungle portfolio. Do you want to bring us up to date on what’s going on there?
[00:41:16] Krzysztof: Well, don’t make me do this. You know, I’m but a humble monkey. I don’t like to brag. I don’t, I’m not here to, to make anybody feel bad about themselves. How about you? But if, okay, twist my arm, twist my arm. So, uh, last time we checked in on the king of the jungle portfolio was at the annual review after our first year.
And on the 1st of November of 24. Your humble monkeys portfolio was worth a meager 1, 600 bananas and badger. Meanwhile was whooping my ass, at 2, 760. Okay. So there was a, there was a gap of a [00:42:00] thousand, almost 1, 200 bananas. And the smirks, uh, and the claws and the, and the, just, just the overall stench of self righteousness coming from Badger’s, Badger’s lair was overwhelming.
Well, it’s kind of funny how, how things work, but, uh, a mere, what were two months later, we’re just about two months in Monkey’s portfolio so far since, uh, since the annual review. Is up a hundred and fifty seven percent, uh, at the moment, which is kind of preposterous and badger portfolio badgers portfolio ain’t doing half bad the second round either at a meager fifty six percent. So, um, those are just excellent numbers, yours, because this is just your continued excellence, and the magic of [00:43:00] compounding and so forth. Mine is more erratic, but I, we kind of knew that this was my strategy from the beginning. It’s just nice to see it actually play out. But most exciting for me is that right now, I am only.
About less than 200 bananas behind you overall. So we, we, we got us a competition, uh, yet again, so woo
[00:43:26] Luke: Yeah. I mean, look, that’s
[00:43:27] Krzysztof: team monkey.
[00:43:28] Luke: Incredible performance, 157 percent gain in two months. All right. Right. But that’s, you know, you’ve had to suffer through many months of underperformance and then suddenly it all happens all at once. That’s kind of the nature of investing sometimes. what do they say?
You take like the stairs up and the elevator down or something, or you’ve taken like the elevator to the roof all of a sudden in like that two months.
[00:43:53] Krzysztof: Yeah. And, uh, thank you for reminding us of, of a really important lesson [00:44:00] beyond the, beyond. This is just crucial. Remember how many comments, uh, we were getting on EOS and coherence as my two top positions. from YouTube commentators. and they were, they were doing what most people do when the price goes down.
They were panicking and basically calling the CEOs names and just, they were being driven by their feelings as direction. There you go. That’s a perfect example of that. What was I doing instead? I was continuing to do my research, I was continuing to follow the fundamentals. I was continuing to evaluate the thesis.
And despite, and then the hardest step really, was I continued buying more when everybody else was doing the opposite. Because that’s hard. It’s really hard to do that. I wasn’t doing it emotionally. I was just doing it based on my research, right? But it’s still hard. It was sucked, right? You know, your [00:45:00] portfolio is going up.
I’m buying more of these quote unquote shit codes and they continue going down. I was buying more, continue going down. That’s hard. That’s hard. So like to get this 157 percent in two months, it looks like, oh, he got lucky or like easy or investing is easy. No, no, no, no, no, no. It was a very hard journey.
It’s just that this outcome kind of happens. You never know how quickly it could happen.
[00:45:24] Luke: And a very uncertain outcome. Like I’m sure you doubted yourself many times along the way.
[00:45:30] Krzysztof: Oh, absolutely.
[00:45:32] Luke: intrigued, um, about how you’ll play it from here, because you’ve got, well you had a 50 percent allocation to EO, so I guess you’ve got a bigger than 50 percent allocation now that it’s up so materially.
And you said as one of your resolutions just last week, I’m not going to sell any EOS this year. Like, is, does this all still add up?
[00:45:53] Krzysztof: Yeah. You know, I was, this is what I was thinking about last night as you know, the way we as investors who do this so [00:46:00] much like in the, you know, subconscious, at one of my resolutions is like, I really, really, really hope I don’t sell a single share. So what happens if it keeps ballooning, which I think it might, my solution was, well, luckily we add 200 a month.
And by adding to the other positions, hopefully that’ll keep a little bit of the equilibrium portfolio wise. I think that’s a decent solution, right? I mean, I’m not complaining if my, if, if, if the reason The allocation is so huge is because it keeps going up and up. That’s a good problem to have, but I have so many more interesting companies.
I want to add to that still feel really undervalued. Relay therapeutics is an obvious, uh, candidate in, in others. So, um, I think over the year, the additional money will lessen the EOS allocation.
[00:46:52] Luke: remind me, like, what’s your approximately, what’s your allocation to EOS in your real money portfolio?
[00:46:57] Krzysztof: In my real money [00:47:00] portfolio, I could tell you exactly. it is 23. 3%.
[00:47:05] Luke: Okay. All right. So that’s not 50%. That’s still quite high. 23%.
[00:47:09] Krzysztof: That’s quite high. Yeah. So I have the same problem, but, if anything, you know what, uh, you know, peek, peek behind the curtain. I’ve actually had to. hold myself back from buying more shares, uh, at this point. I just figured now 23 percent is already very high. I’m going to let it do its magic and I’m not going to tempt fate in that way.
Just let it, just let it ride.
[00:47:36] Luke: your investing resolution apply to both portfolios or is that a King of the Jungle resolution?
[00:47:41] Krzysztof: I both
[00:47:44] Luke: Okay. All right.
[00:47:45] Krzysztof: both and it’s and it’s and it’s again on the back of selling so many winners that I found early over and over and over again and I you know, he also is my is is the next one I think.
[00:47:58] Luke: Okay. All right. [00:48:00] No shame in, um, trimming for like risk management and life preservation purposes. So don’t, don’t feel yourself held to that resolution.
[00:48:10] Krzysztof: Yeah, thanks for reminding me of that. And remember, all of this is contextual. So for you, who have already sort of won the game and you’re retired, you I think would be making a mistake if you didn’t trim. Because your background context is much different. I still feel whether I’m deceiving myself or not.
I’m still on the younger side. I still have like 20 something years of working, you know, in theory. Right. So I feel like I’m still in that more middle zone where I could let it ride for longer. I don’t need to preserve capital as much in this moment.
[00:48:46] Luke: Okay. Great stuff. So we’ve both done things in our King of the Jungle portfolio since last week. Is it worth doing a quick recap? Round robin on the trades we’ve made.
[00:48:56] Krzysztof: yes, I think so. Why don’t you start us off? You made a, a pretty good point. [00:49:00] A purchase, which in badger land is always significant news. So
[00:49:04] Luke: I rarely do anything. Yes, I’ve added a position in my real money portfolio and my king of the jungle portfolio. I’ve bought stock in NewBank, uh, ticker NU. And if you don’t know who NewBank are, just like the thousand foot view, they are Latin America’s massive, fintech, Kind of disruptor disrupting all the traditional banks.
They’ve got nearly 110 million customers, predominantly in their home markets of like Brazil, Mexico, et cetera. this is like a massive underbanked population. So, you know, they’re really targeting kind of people who don’t have access to traditional banking, but they got a smartphone. It’s like a really Kind of modern banking proposition, like a disruptive business model that just seems to be succeeding really well.
And a bit like one of my other FinTech favorites, like really high customer satisfaction [00:50:00] scores, an NPS score of 90, that’s pretty big for any organization. and, um, and they’re kind of an AI first company, so they’ve done, I don’t know the ins and outs of this, but they bought a company called Hyperplane, uh, middle of last year.
I’ve only just started looking into this properly. Evidently Hyperplane had like a whole bunch of tools to let financial institutions create like hyper personalized customer experiences based on individual customers needs and goals. So, uh, they, so NewBank, uh, clearly just sort of shows their aspirations of trying to be like the, the bank that’s right for their customer group.
Plus, I think I’ve said it before as well, like NewBank are now a partner with one of my other favorites, Wise, the, uh, international money experts. So I like that kind of partnership is, that’s one of the bits of news that really got my attention with NewBank and I’ve been watching it for about six months.
So yeah, a bit late to the party, but pretty happy to [00:51:00] start a position here.
[00:51:00] Krzysztof: excellent. And I think the shares have had a little bit of a dive recently. So you’re, you’re buying at a, you’re not buying at the top. question
[00:51:09] Luke: That is interesting. You’re right. I’ve kind of forgotten, but I was prompted because the shares have to have tanked actually. And they’ve tanked not because the company is underperforming, they’ve tanked because the Brazilian economy is like just a shit show at the moment with a massive persistent inflation kind of devaluation of the currency effectively.
So any company But makes revenue predominantly in like Brazilian real. I think that’s the currency, like they’re in trouble. Cause like the money they’re earning is increasingly worth less and less. So it hits the fundamentals, but the company itself is executing well. And customer growth is good. And all the other metrics we’re going to look at are good.
So this is kind of buying a solid company in a distressed environment. And that environment is going to turn around [00:52:00] at some point. And then I think we’ll see. new set new highs. So yeah, good reminder. Thank you. That’s why I jumped in now.
[00:52:06] Krzysztof: right. And, uh, and I’m going to take out some monkeys crayons to draw on my fancy chart. It’s actually a really nice chart. And that’s, that’s mostly because there was a recent high of about 16 something. It fell as low as I believe, 10 30. But then there was a nice, so remember the rule in looking at charts is you, you generally don’t want to buy against the trend.
So as the stock is falling, the basic assumption is it’s going to keep going that direction until at some point it switches. And it’s only after it switches and you get a confirmation that the momentum has stopped that that’s when you should, if you’re using some of this in your toolkit, buy so that you’re not continuing to write so that you know for sure that the momentum has switched.
So buying when you did, uh, [00:53:00] about what 11, it’s switched and now it’s about 11 is, is really nice
[00:53:04] Luke: Great. I got in at 10. 60. So hopefully that proves to be a wise buying price.
[00:53:09] Krzysztof: Excellent follow up question for you. in your professional career were, I don’t know if it’s technically a banker or like, how would you, you, you dealt with banks, right? Your professional career. Does that, do you feel like you have, like some deeper sensitivity to how banks work and which banks will may or may not be successful because of your, your profession, or is it so Is, is it
[00:53:38] Luke: Maybe, like I was a change guy, so like a program, like a, like a program director, basically like a super project manager for a global bank HSBC. Um, and I think the appreciation I built over a 25 year career, cause I wasn’t on like the, the customer facing side or front office or anywhere near the trading floor, [00:54:00] but my role was to.
Like fix massive, like global problems in the way the bank operates. And probably the main thing I came away from that 25 year experience with was this appreciation for how incredibly complicated and highly regulated the industry is and how hard it is to comply with all the regulations that are constantly changing in the hundreds of countries where you want to do business.
So that’s why I’m really drawn to companies like. Wise and new now and, um, Adyen and a few other like fintechs that I’ve really got my eye on because they haven’t started with this legacy of like chaos and mess and complexity and spaghetti they’ve had, they’ve been able to start like brand new as you know, hundreds of companies always, always coming in new entrance, but these guys have started from a clean slate and they haven’t got the legacy horrors and they’ve built what has proven to be like a solid [00:55:00] proposition that’s great gaining market share.
So like a true disruptor. And I like these companies like this because I actually think it’s impossible for the giants to compete. I think companies like HSBC and their peers can’t help but lose business to these fintechs because they they’re playing by a completely different set of rules because they don’t have all of the costs and legacy complexity that a giant bank frankly will never get rid of.
[00:55:28] Krzysztof: Yeah, uh, I, this, this is like a note to ourselves. I would really truly love at some point, maybe in 25, if you did a deep or deep ish dive on Robin Hood, because you know, there’s the like, because it’s like they have this history that’s murky. But when I use them, I just absolutely love their user interface.
And there’s so much stuff that’s complex in the middle that I wonder if you have, we had your eyes on it, whether you would surprise yourself [00:56:00] with what you find or whether it would confirm maybe, uh, your apprehension, but to be determined, right. Just putting that planting that seed based on that, everything you just said. Okay. Um, yeah. Monkey, uh, bought his first, uh, spent his first 50 bananas of the year. Uh, I’m trying to space out my purchases. So I purchased something for about 50 every week of the year, uh, 200 bucks a month. And so week one of 25, I bought an extra link token, an extra chain link token about which you will learn a lot more in an upcoming episode.
Thank you I bought an additional share of ASTS space mobile. I bought an additional share of a Vita medical ticker R C E L. And then just to torment you badger, I bought 10 shares of one of my previous stock safari [00:57:00] dives origin materials, which is like a hundred million dollar of sorts. And this is, this is actually a great test case that maybe we’ll talk about in a future episode of, uh, you know, um, Whether I’m buying, it’s a mistake to buy just based on the story and whether the financials support, uh, the story.
And so I did, I did more deep digging and I liked enough of what I saw to buy. 10 shares at 1. 26. So it’s like a 10 position, right? So it’s practically peanuts, but more importantly, it’s symbolic. Like I, I’m, I want to keep finding these 10 X potential stocks and I’m starting with origin material, uh, more on them, uh, probably in future episodes, their key to wealth is making bottle caps.
[00:57:55] Luke: Okay, no idea. All right. I mean, be wary of [00:58:00] saying that’s like badger bait when you say things like, Oh, you know, I like the story. I didn’t really do any work. I just bought some shares on our Patreon. I have just lambasted one of my close personal friends and shared like an anonymous extract from our WhatsApp conversation, uh, where he did exactly the same thing, uh, with a drone company.
And I kind of ripped it apart in like two minutes of financial analysis. So yeah, you’re going to do your homework,
[00:58:27] Krzysztof: Yeah, yeah, no, that’s I saw that post. That’s in part why, why I made this decision is because, because I want to tell our listeners that there’s an, there’s a, there’s a process to this, right? And if you’re It’s, it’s buying only, only based on the story is foolish. I did a lot more than just buy on the story and I bought a tiny little amount.
And at this point it deserves no more than that, but you can, it’s okay to start with the story and then as [00:59:00] facts unfold, You build the position or you exit, but it’s kind of a, uh, it’s more of a gray area. And now let me say this, um, one of the key data points beyond the story that allowed me to make this investment is a research recent insider purchase by the CEO, of many shares.
And usually CEOs or people that know their company inside and out do not buy shares in the open market if they know the company is worthless or is going to have a bunch of issues. Not always, but It’s a, it’s a useful flag.
[00:59:38] Luke: potentially, potentially. I mean, it can be done for signaling purposes and other reasons, but yeah, you’re right. Typically when an insider buys like that signals that they see strength. Yeah. Yep. Yeah. We talked there, we touched on. Like doing some basics of financial analysis. We did get a question on Patreon today, a request from one of our Patreons, Ant.[01:00:00]
And he’s asked us, um, if we could do a bit of a show and tell on how we do fundamental stock research. It’s a really big complex topic, but I wonder if we could boil it down to like the two or three or the five or 10 absolute basics that you kind of look for. Maybe we can do like a live demo on FinChat or something in a future episode where we can try and do that.
[01:00:22] Krzysztof: Yeah, absolutely. And it’s kind of like, I tried to just ad lib a bit of that process for this purchase of origin. But, uh, yeah, there’s, there’s, steps you can’t skip if you want to avoid investing merely on the story.
[01:00:39] Luke: Alrighty. Great stuff.
[01:00:41] Krzysztof: So yeah, it was great talking to you today, Badger. Uh, I want to end the episode with another heartfelt thank you from both of us for our recent Patreons. You guys really don’t know what a huge difference it makes for us to see you joining our [01:01:00] tribe. So shout out to Philip S. Marcus S, Kierthy U, Joe H, and then we have an amazing trio of nicks.
There’s Nick 1, I’m calling you Nick 1, then there’s Big Nick, and there’s a Nick with an email that has eggnog forever in it. So welcome aboard, uh, gentlemen, uh, Aaron H, Vishal, Magnus, H. Daniel D. Drew, Sam K. Joe P. Surge F. and Kags. Gentlemen, uh, welcome aboard. Uh, can’t wait to hear from you on patreon. com slash wall street wildlife, where we post all kinds of badger and monkey related shenanigans.
And the conversations are blooming. It’s just the joy to be on that platform with you all. So thank
[01:01:54] Luke: great stuff. Uh, clearly our Patreons are ready to become beasts of an investor, but Christophe, [01:02:00] are you ready to become a beast of an investor?
[01:02:01] Krzysztof: My journey already started here.
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