In this week’s episode:
🤏 Why small-caps will outperform in 2025
❌ A horrific, down-in-the-dumps share price does not equal a broken thesis. $CHRS
🧬 The trend is your friend in investing; is biotech an exception? $RLAY
📕 Bradford DeLong, Professor of Economics and author of ‘Slouching Toward Utopia: An Economic History of the 20th Century’ will be a guest on our show in the near future. Read his insightful book to get the most out of our conversation
🎮 Stock Safari: Badger channels his inner nerd and discusses Games Workshop $GAW
🚀 Stock Safari: Monkey pitches AST Space Mobile and the future of cellular connectivity: Space X + Phones $ASTS
E51
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[00:00:00] Introduction
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[00:00:07] Luke: Welcome to the latest Wall Street Wildlife. In today’s episode, why small cap stocks are set to win in 2025. Is it bad for your health to add to a biotech stock in a downtrend? what’s my can’t miss short term trade.
[00:00:26] Krzysztof: And thank you from the bottom of our hearts to our current Patreons, your generosity in joining the Wall Street Wildlife Jungle Tribe is really helping us. to make the show better. To support us, go to www.patreon.com/wallstreetwildlife, all one word.
Patreon questions go right to the top of the queue. We take them very seriously, and there’s a good chance that we will make your question a segment on the show.
[00:00:57] Luke: Let’s get to it, Christoph. Now, before we get into any stock related stuff, I’ve got a completely non stock question for you because it is my favorite movie of all time. Did you know today is the 10 year anniversary of Christopher Nolan’s Interstellar?
[00:01:13] Krzysztof: No kidding. I saw that on an airplane and thought it was pretty friggin great.
[00:01:18] Luke: You saw that on a plane. You saw this cinematic designed for full IMAX. I wouldn’t even dare see it at like a regular neighborhood IMAX. This is a, you’ve never seen this on the big screen.
[00:01:31] Krzysztof: I have never seen it on, on a big screen and I love this stuff. I study, uh, physics. Uh, did you know that I have a bad physics hobby, like a problem? Yeah. So this is so up my alley, you know, the nature of time and consciousness. Uh, and I thought the movie was exquisite and, and I didn’t understand a bunch, like, you know, watching it on a plane as, uh, once what makes it, what, why do you love it so much?
Yeah.
[00:02:00] Luke: It’s just, it’s a beautiful story. I thought you would love it. It’s like a story about love transcending time. I figured like it’s up your street. Uh, I love the hard science of it. They actually like real science was as a consequence of making that damn movie when they rendered like, what does a black hole really look like?
We actually learned some stuff about it. There was a guy called Kip Thorne who consulted, he’s quite a famous He consulted on the production of the movie. Um, and one thing I saw on Twitter today, which I thought was quite a fun anecdotal thing.
[00:02:33] Krzysztof: Hello, everyone. You
[00:02:46] Luke: in their spacecraft in orbit around it. And they leave like one of the crew on the spacecraft. They go do some stuff for like an hour down on the surface, and they come back and the guy’s like 30 years older. that?
[00:02:57] Krzysztof: Yeah, absolutely. Uh,
[00:02:59] Luke: So since the, if you had been on Miller’s planet, uh, you have not yet finished Interstellar.
You’re only like an hour and 15 minutes into watching the movie in the last 10 years. You’re halfway through.
[00:03:13] Krzysztof: I know. Don’t get me started right now in my classes. I’m actually talking about Martin Heidegger’s profound, world changing book being in time and time is not what we think. We, we are time, which is a really bizarre thing to think about. This is what Zen people said, uh, millennia ago. But if some of these ideas are too hard to understand, they mostly are because our common sense view is so different.
Then this is a great poke to go and rewatch this film because it does a great job in helping you visualize the relativity of time.
[00:03:53] Luke: Please, please, please go see it on a big screen if it’s showing as a 10 year anniversary in your neighborhood.
[00:04:00] Krzysztof: Cool will do and i’m a big by the way Small tangent one of my favorite movies of all time. It’s not my number one, but it’s christopher nolan’s prestige
[00:04:11] Luke: Yeah, that’s superb. That really is good. When everything he’s made has been incredible, even like his shit movies like Tenet are still incredible movies, but yeah, Prestige, uh, fantastic.
[00:04:23] Krzysztof: How many times have you seen that?
[00:04:25] Luke: Maybe five or six. I’m on
[00:04:32] Krzysztof: All right. That’s a good number
[00:04:34] Luke: a flight actually, uh, on Thursday, uh, I should, will give like another sport anecdote before we get into the stock talk. Uh, so we’re heading out to Vietnam to meet my buddy, Albert, going to record a little bit of content for the podcast, hopefully, but chiefly just to kind of sun ourselves and have fun and, and do stuff.
It turns out, and I promise my wife, if she’s listening to this, I doubt she is, but she’s that this was in no way engineered.
[00:05:01] Krzysztof: Mm hmm
[00:05:12] Luke: registration card.
I’ve, it’s not the best book in the world, but I’ve dug up Harrington on Holdom.
[00:05:18] Krzysztof: I’ve read that
[00:05:20] Luke: it’s kind of a tournament bible. It’s pretty good. Like there’s definitely better poker books, but this is, I figure I can refresh myself on my tournament theory on the flight over. but yeah, I will try and watch prestige on the flight over too, because it’s definitely ready for a rewatch.
[00:05:33] Krzysztof: Right. So 0. 1. Yes. What a coincidence. It just so happens, but, uh, our listeners, what you didn’t tell them is that you tried to, uh, I wouldn’t say bribe me, but you were so sweet and offering me Uh, to join you in Vietnam and it’s bloody hell, bloody hell. If I was solo, I would have, I would have joined you. I would have cancelled my classes.
Shh. I would have made it happen. But the, uh, the wife says we have a roof that’s being repaired and we have this, that, and the other thing. And, and the timing just, uh,
[00:06:09] Luke: man,
[00:06:10] Krzysztof: was not cooperating. But that would have, man, next year. Is this a yearly tournament?
[00:06:15] Luke: Oh, it’s a, it’s a tour that travels all around Asia. I’ve actually intersected it on a previous trip in Cambodia a couple of years ago. But, um, we will play poker somewhere at some point in our
[00:06:25] Krzysztof: Okay. Well, good luck. Good luck to you and I don’t know if I told you tournament style is, is what I, is the type of poker I got good at and hand to hand stuff. I could never, it’s kind of interesting because it’s usually the other way around, but, uh, good luck made, made the, maybe
[00:06:44] Luke: I will win anything or cash. My tournament game is diabolical. My cash game is good. My tournament game is not good. Yeah.
[00:06:52] Krzysztof: we’ll cut this on the editing room floor, but what’s your, because what I just said is, is the opposite that I’m strong in tournament. You’re strong in the cash. What do you think the, the mental frame is that’s different that why are you strong and weak there,
[00:07:08] Luke: I’m too inconsistent, I think, uh, like I will, I play a pretty strong, aggressive game, but I make a big mistake, like every couple of hours. if you’re, you know, if you’re unlucky, that mistake will wipe you out. But you just go in your pocket and you start over and you give yourself a kick and you carry on in a cash game.
In a tournament, you make a big mistake and that’s it, you’re doomed.
[00:07:27] Krzysztof: right? Whereas in the tournament, I think maybe because I like thinking systems wide, it’s not so much about my hand. It’s about like the hand relative to everybody else’s hand. So I get less, um, fooled by say, the, the strength of my hand. When I could think globally. So, you know, there are moments in the tournament, I know, you know, this where the right thing to do is fold a pocket pocket aces rare, but
[00:07:54] Luke: Yeah, what saying applies to, to me. Cash games in a way as well. Um, like you need to think about like the bigger situation and there’s someone just like taking a phone call from their wife and they’re like, Oh, I got to go. She’s got a, I got to go and fix the roof. Uh, these are, uh, so these factors do play, but you’re right.
They’re much more important than the tournament. So there are, yeah, there’s lots of reasons, complex reasons that probably podcast around the subtle differences between the two and why they’re
[00:08:22] Krzysztof: you know what, you know what, let me poke at this just tiny little bit. Uh, cash games, because they are infinite. It’s just hand after hand have a little bit more of the gambling, quality to it, that if you find a stock, you really like In that moment, it might look great, but it might fail or, you know, in, if you’re only looking at it, like, um, momentarily, I think that brings out some challenging investing problems, tournament style, you’re, you have to think.
Long term that the point is not to win many many hands, although that’s sort of true in the cash game But your goal is sort of like four days later You want to still be at the table and kind of diversified your portfolio? So I think there is a little bit of an analogy there that if I would say if you want to get Become a better long term investor you would master tournament play rather than cash games
[00:09:23] Luke: I would say the opposite. Um, this is now a poker podcast. Hey, sorry listeners. Uh, think cash is much more complicated than tournament poker. poker becomes, as you said, it becomes about the situations a little bit more. the key difference is like a hand of poker is much more complex when the, like, the money is deep.
Like if everybody has say a 500, a thousand big blinds. It’s going to be a complex hand and so you’ll have that at the start of a tournament, but in the later stages of the tournament, most bands are shallow. Like in the final stages, most people only have like effective stack of like 10 big blinds because the, the, the stakes have gone up so high.
so when you’re playing like a 10, 20, 30 big blind deep hand, hardly any decision making. It’s almost comes down to like, do I get this all in or do I fold? So towards the end, To me, in a tournament, you have to, have to be lucky, it becomes like a, you’re either folding or you’re all in kind of fest, and it lacks all the subtlety, and in a cash game, the subtlety is always there, every hand.
potentially deep and complex.
[00:10:36] Krzysztof: Yeah, okay, that’s, that’s good enough.
[00:10:40] Luke: Let’s talk about stocks. That’s why we’re here. That’s what they pay us for.
[00:10:46] Krzysztof: That’s right.
[00:10:47] Small Cap Stocks are set to Outperform in 2025
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[00:10:47] Luke: Christoph, small cap stocks are set to outperform in 2025. Do you want to hear why?
[00:10:54] Krzysztof: Yes. And I want to hear why I’ve been saying this for the last two years and while I’ll finally be right, I will finally be right, right. Right,
[00:11:05] Luke: mean, mega caps, like the mark, the indexes are dominated by the magnificent seven, maybe like eight, and they are objectively I highly valued. but as we’re moving around
[00:11:17] Krzysztof: highly valued, meaning expensive,
[00:11:19] Luke: expensive, expensive. Yes. Yep. Um, but as we’ve now have moved into a declining interest rate environment, and I’m going to caveat this by saying maybe rates are going to go back up again. I think it’s a bit unclear. Um, So if that happens, everything I say is now moot and forget it. But if we do stay on this trajectory of gradually easing rates, well, that’s typically a macro effect that is more beneficial for a smaller company.
Like smaller companies will typically have. Like more debt of that type, um, uh, like it managed allows them to manage like their capital position more effectively, makes it easier for them to raise new financing, which you typically need if you’re a young company, and the fact that we’re coming out of a higher rate environment, hopefully into a sustained lower rate environment, going to make the valuations of growth stocks more attractive.
And so like these little, talking about like your crazy ass, like hundred million dollar garbage, I’m talking, you know, mature ish companies between say 2 billion and 20 billion dollar valuation, that’s kind of my mental bracketing for a small cap these days. those kind of companies, as long as they’re quality companies, are likely to recover more, accrete value more, like the business will be easier to run.
And I’m expecting them to do a bit of a catch up on their mega cap big brothers.
[00:12:46] Krzysztof: Yeah, so a peel back behind the investing curtain. Most beginners, and I think maybe most, even if you’re not a beginner, but if you’re known as retail, retail in the stock market means retail. normal people who invest in the stock market with some extra cash that they hopefully don’t need in the next five years, but we’re not talking massive amounts of money.
What retail investors don’t understand usually is that when they buy or sell a stock in the stock market, it makes zero difference. Even if you usually combine a lot of retail investors, it still doesn’t make a difference because the majority of the price pressure supply and demand is, comes from what we call as the institutions, the hedge funds that run hundreds of millions of dollars or billions or depends on you know, but they’re known affectionately as the toots And it’s when an institution decides to buy or sell something that you really see the price move usually, unless it’s a tiny, tiny, you know, uh, stock with low liquidity, but we don’t, you know, usually mess with that,
[00:14:02] Luke: And it looks like the Wall Street Bets army gets behind it and GameStock meme like,
[00:14:08] Krzysztof: Yeah. Yeah. Which is why that situation was so interesting, but I’m telling you all of this because all of these. Toots like the stock market operate in cycles and seasons. So this is another instance where no, your history is, is a good thing. And so the institutions will in the cycle of say, mega companies drive the price as high as a valuation could sustain it.
And then there comes a moment where the money. Flows out of that particular kind of company and goes into the less valued companies and add and repeat and, you know, um,
[00:14:48] Luke: second.
[00:14:50] Krzysztof: the, trick is you, of course, can’t time this properly, but zooming way out. This is a thing that drives the market. And I would 100 percent agree with you.
That in this latest rally, it’s very clear that all the
[00:15:04] Luke: I
[00:15:05] Krzysztof: money has been sucked up by the videos and the apples and the Microsofts and the Googles. That’s why we say the market is very expensive right now. But most of the stocks that I hold Tesla aside has not benefited from this upcycle because I was so worried about the macro economy since last year.
And so I fully expect that I will be vindicated. In the coming call it, I don’t know, a year or two.
[00:15:36] Luke: There’s a, there’s a particular, maybe it falls below my definition of small cap, like coherence biosciences. I know we had a question about that from of our listeners a few days ago. Um, do you want to reflect on that one in particular?
[00:15:50] Krzysztof: Yes. Uh, so, and, uh, so I’m,
[00:15:54] Coherus is now a Penny Stock
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[00:15:54] Krzysztof: I’m paraphrasing, but the questions from one of our audience members was, Oh, damn. Coherence is a bust. And then, some smack talk about how bad management is. And I think that is a fundamental error because this, this listener is correct that at this moment, the stock has lost 90, whatever percent of its value.
it’s now technically a penny stock. It’s trading for 80 cents per share.
[00:16:26] Luke: book It’s a
[00:16:27] Krzysztof: And so it’s miserable. I’ve lost, uh, the king of the jungle portfolio. Looks like I’m not, I’m going to be buying you dinner precisely because coherence is 50 off by 50%. It’s my biggest holding, but
[00:16:40] Luke: been working on.
[00:16:41] Krzysztof: here’s the really key point.
[00:16:43] Luke: it on with the
[00:16:44] Krzysztof: Low price does not equal a broken thesis.
[00:16:48] Luke: book. Bye. Um,
[00:16:49] Krzysztof: Because like what we were saying price and price, and I’m going to go all wolf of wall street, uh, on our listeners, as Matthew McConaughey says, nobody knows if a stock is going to go up, down or sideways on fucking circles, least of all stockbrokers, right? It’s all Fugazi. You know what a Fugazi is?
Yeah, Fugazi. It’s a fake. Fugazi, Fugazi. It’s a woozy. It’s fairy dust. It doesn’t exist. It’s in, it’s land. It’s nomad. It doesn’t matter. It’s not elemental charts. They’re not fucking real. I think there’s a lot of truth to that. Most investors draw the wrong conclusions from price. And my point here is,
[00:17:31] Luke: the
[00:17:32] Krzysztof: arguing against myself in a lot of ways because of my fundamental understanding of company.
I see a major disconnect the price and what the company ought to be valued at.
[00:17:45] Luke: a
[00:17:46] Krzysztof: And simply because it’s 80 cents does not mean the the thesis is busted.
[00:17:52] Luke: I doubled my options position for January 2026, so I hope you’re right.
[00:17:57] Krzysztof: Even though I told you to buy shares outright, not told you, even though I, I suggested, why do you,
[00:18:06] Luke: not, it’s not real due diligence. Like I can’t bear to put, like, gamble, gambling shit in my real portfolio. Shall I tell you about another gamble I’m about to place? I wanted to test this thought with you before I do. I, uh, I, in the, in the intro I said,
[00:18:19] What’s Luke’s Can’t Miss Short Term Trade?
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[00:18:19] Luke: What’s Luke’s can’t miss short term trade?
Well, here it is. See what you think. Have you heard of a Mediterranean restaurant chain called CAVA? Supposedly the new Chipotle.
[00:18:31] Krzysztof: I have not heard of this.
[00:18:34] Luke: I think
[00:18:34] Krzysztof: fact, I thought it was Carvana. Okay.
[00:18:51] Luke: location? How the F? So let’s just reflect back on what I was just saying about small cap stocks are set to prosper. Like if we do at the same, at the same time as like, I hope the market goes up.
Uh, and if it doesn’t cause I’m a long term investor, if we do hit a recession and if stocks start to slide. Maybe precipitated by rates going up or some other factor. The fact that unemployment is rising.
[00:19:19] Krzysztof: I’m going to be doing a quick presentation on the um, the um, the um, the the the the the the the the the the the the the the the the the the the very much.
[00:19:37] Luke: it’s
[00:19:38] Krzysztof: I’m going to be talking about the, uh, the, the, the, the, the, the, the, the, the,
[00:19:57] Luke: for January 2026. So as I’m hoping our Cohera stock comes good, if the market takes a bit of a tanking, I’m almost going to use my Carver puts as my insurance policy against the rest of my portfolio.
[00:20:09] Krzysztof: The only, uh, uh, not advice that I would give you is the trick with, you know, buying putz. And shorting is market stays irrational longer than your dated puts can be reasonable. And the fundamental takeaway from something like, you know, technical momentum trading is that the trend is your friend. And until the trend actually begins to break or snap, you’re looking at It’s a losing proposition.
And when I’m looking at the chart right now from Kava, it seems like somewhere around August, early August, the stock was about 74. It’s now 140. So it’s gained 100%. And the trend is basically straight up. So here’s the advice. Here’s the advice that you’re going to ignore, but, but I hope you at least consider for a second, put kava on your watch list, set a.
Price at which it it um, you would look at the chart, right? You would need the chart and you would need to see the price reversing the trend and only after it starts to reverse, that’s when you would buy the puts.
[00:21:28] Luke: That doesn’t sound like any fun, I’m just going to buy my dampers. This is my gambling portfolio. This
[00:21:32] Krzysztof: Oh, We’re not. Okay. Alright.
[00:21:39] Luke: can I screenshot this? I’ll, uh, I’ll, there’s nothing like desperately private in here.
Right. Uh, forgive the highly sophisticated screen share using Microsoft Paint. It’s just an extract from my to do list. Like here, I do maintain a to do list of like real stuff I’m thinking about. I got some, uh, startup y type stuff there. Plenty and Zipline, like interesting companies. Horizon Robotics, interesting companies.
I won’t touch for like a ton of time. I’m trying to body. I think I’ve said before, Andrew Rell and SpaceX, um, I said, I think I said last week’s episode, uh, like I, I wanted to get into my small modular
[00:22:18] Krzysztof: Um,
[00:22:36] Luke: I think those could be both be desperate mistakes. you got a view on that, um, and, uh, and I want to buy some income investments.
I’ve got a couple of their games, workshop, black, so Smith claim dominoes, UK and L3 Harris. Happy to talk about those on a future pod, but there we are by Carver puts on the bottom. I want to execute that one, like next two days.
[00:22:58] Krzysztof: Go get go get it and then it’ll be interesting. We’ll see how it works out for you. Despite me being officially on the record that I think, uh, it won’t, it won’t be a good trade, uh, in the short term.
[00:23:12] Luke: There we go. I’ll give you a little smiley face. Remind me that crystal says no boy. No.
[00:23:17] Krzysztof: We shall see. Yeah. Hey, Luke, I realized that we forgot, I forgot to talk about something really exciting for us, is that
[00:23:26] Preview of our Upcoming Guest Interview
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[00:23:26] Krzysztof: we just wrapped up An episode recording an episode with, uh, Bradford DeLong, the author of slouching toward utopia, and we are very excited about this episode. I think it was full of all kinds of insights.
This guy is big league. This is, uh, this is, this is somebody that knows, you know, not just history, but finance and financial markets. So we’re, we’re we’re mentioning this now, uh, in the hopes that some of you will take the time and find this book, correct me if I’m wrong, badger, you’re not, uh, much of a reader, but you enjoyed.
Reading this book, not just because of the facts and figures, right, but because it’s written in a really interesting style. huh.
[00:24:28] Luke: bananas. Um, and we thought we were going to be, we had, we had a conversation two or three days ago, and I was a little bit nervous about focusing the conversation, looking forwards. Cause this on, paper, like Brad is an economic historian and his book is about like the economic history of the 20th century, ended up talking about some like futuristic type stuff.
Uh, it’s an exciting conversation. And he. Put my mind to rest on one aspect of what the future society could look like. And he also scared the bejesus out of me with another comment. So catch that episode. We’re hoping to get it out, think next week as episode 52, watch this space.
[00:25:12] Krzysztof: Right, and read the book, you’ll thank us.
[00:25:14] Is it Bad for your Health to Add a Biotech Stock in a Downtrend?
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[00:25:14] Luke: So, Christophe, let’s, uh, let’s bring our minds back to this week’s episode. Uh, you were going to answer the question, is it bad for your health to add to a biotech stock in a downtrend?
[00:25:25] Krzysztof: that’s a great question. And specifically, this was in the context of relay, one of my positions in the king of the jungle portfolio. And in my real world,
[00:25:33] Luke: therapeutics who are like a cancer diagnostics firm.
[00:25:38] Krzysztof: I’m not diagnostics. Uh, they’re trying to, cure cancer, especially their big assets in the pipeline are looking at breast cancer. So if they succeed, this will be This has a shot at being one of the huge, you know, mega caps in, in farm. And if you actually look at the biggest companies in the world.
[00:26:01] Luke: Okay.
[00:26:07] Krzysztof: if it succeeds, your gains are thousands and thousands of percent, but that’s in the future. Here’s the nuance I want to point out, I believe in relay therapeutics because I’ve done a massive amount of research on it. And I understand the science and it’s, um, it’s one of these things where what I know about the company and what the price shows is like worlds apart.
And this is a bet on the future. usually most of the time, like I was telling you about buying puts for Kava. The trend is your friend. So if the trend is going up, the odds are statistically, it’s going to keep going up. If the trend is going down statistically, it’s going to keep going down. So this is like trading one on one don’t bet against the trend because you’re not smarter than the market.
Biotech I think is structurally the one, I don’t know if it’s the only one, but it’s one of the few places I think in the market. where , the trend is telling one story that the market doesn’t believe in this company’s future, but the market usually doesn’t know all of the complex things going on behind the scenes of the science and what the people in lab coats are doing. And so if you really No, or have studied the kind of the nerdy stuff, then I would say the, it’s okay to make an exception investing in biotech during a downtrend, because, as you know, biotechs.
are binary usually, and they’re either going down or next day, if they, you know, release FDA approval, a PR, the stock jumps up like 80%, 200%, 300%, which obviously you can’t know about ahead of time. So TLDR, do your research, know your company. It’s okay to ignore the downtrend as long as the first two pieces are solid and you’re not thinking of it in a gambly type style.
So I’ve been adding to relay therapeutics despite the downtrend
[00:28:28] Luke: and
is there anything coming up in the diary for Relay Therapeutics investors to keep an eye on?
[00:28:33] Krzysztof: Yes, there’s lots of, uh, data releases and they’re getting in the coming, is it next half year? The data is coming, but the last result was also incredibly encouraging. So realize just getting closer and closer, they’re performing their, their tech platform is the best in all of biotech and it’s just a matter of time, pretty much.
And it’s a, it’s, it’s kind of a matter of how much more dilution investors will need to go through, but, uh, the next year should be a pretty, pretty good one with market realizes how superb the results are.
[00:29:09] Luke: Okay, very good.
[00:29:10] Stock Safari – Games Workshop
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[00:29:10] Luke: Right. Should we talk about a couple of stocks that we’ve gone on safari with for this week?
[00:29:15] Krzysztof: Let’s do it. Why don’t you start us up with games workshop. Okay.
[00:29:19] Luke: Yeah. Uh, so actually I got a Twitter comment the other day, one of our listeners suggested we take a look at Mattel, I think. Uh, and I responded to say, like, I’m looking at a company similar to that and that’s Games Workshop. reminder though. Like our stock safari segment, I think we’re going to make it a regular part of the show.
I’m finding it quite a good opportunity to go look at stuff I probably wouldn’t normally look at. these are not always investable companies, right? They’re things that are on our radar, but this one bubbling to the top, and it might be one I add to my own portfolio. So if you’ve not heard of Games Workshop, they’re like a dominant player in, you’ve probably heard of Dungeons and Dragons, right?
They’re like another, There’s a whole sort of game system which has been grown up in
[00:30:01] Krzysztof: Hello. Hello.
[00:30:25] Luke: And so like they’re making the money, mostly 90 percent of their revenues come from just selling these little figures at very high margins, because. It doesn’t cost more than a couple of cents to manufacture one of these things, I imagine, and they’re selling like a box set.
Like you really, your entry price is about a hundred bucks, and if you really want to build like a sized army, because you can play then the game when you own these things, like you could be getting on for four or five hundred dollars to uh, to be like a player, and every player needs like their own set.
there’s like a ton of cash. There’s been printing cash over the decades, but I think there’s something interesting coming up with them. So I don’t know if you caught the Dungeons and Dragons movie last year, the year before. I’m kind of a D and D fan. I’m a closet player. And the movie was superb, it was really, really good, very funny.
Um, well, there’s Amazon have been in a protracted conversation with games workshop for the last couple of years about bringing Warhammer 40k to either the big screen or the small screen. And so they’re still debating, like, can they get. Uh, a coherent creative vision they can agree on. They’ve gone around in circles a lot, and they’ve put a deadline of the end of this year contractually, if they can’t agree a creative direction, they’re going to forget it.
So we’re going to see some news around that. If you’re, if you’re
[00:31:53] Krzysztof: Okay.
[00:32:14] Luke: fan, like massive player of the game, uh, and a kind of ambassador for the brand. Like he’s a super fan of it. he’s attached as a producer if this thing happens. think he’s hoping to, You know, be one of the stars in it. So, uh, and he’s been pretty active on his Instagram lately about this.
So kind of hoping these might be some hints that we’re going to see some, uh, some good news there. So I might take a starter position in games workshop just on the back of. Um, that date that’s coming up. If they don’t agree the creative direction, the stock is gonna, you know, maybe slide a little bit.
But the margins and the financials are rock solid. Like this is a solid business with a fun bit of optionality right now.
[00:32:55] Krzysztof: Badger. What is the ticker?
[00:32:57] Luke: Uh, GAW let me just confirm that.
[00:33:02] Krzysztof: Yes, that’s correct. GAW. Ah, I see it’s a London.
[00:33:06] Luke: Yes, it is. Uh, and oh, the re, and that’s right, because the reason I’m looking at this alongside a few other stocks that I just showed you on my to do list is I’m actually looking for some paying stocks, some dividend stocks. I’m a bit of a, like, that’s like a vampire and garlic, me and non growth stocks, like I’m hitting in the corner and like the, the shiny light is shining on me and I’m turning the dust as this like, uh, these boring income paying investments.
I put off pivoting any of my portfolio to an income oriented portfolio, which arguably, like I should have done when I retired, I supposedly need some income, right? I put that off in 2022 because all my growth stocks took a massive pounding. I was down like 40 something percent. That was not the time to pivot out of growth at the bottom.
Now my growth stocks are actually looking pretty healthy, notwithstanding what I said about small cap growth. So this is probably a time, if the market does take a pounding, like we’re ahead of that right now, this probably is a time to switch a little bit into some income stuff.
[00:34:11] Krzysztof: Yeah, a couple of comments here. This is about a 4 billion business I’m seeing also has a really, really, uh, nice uptrend. So that’s good. historically, I know it’s kind of interesting. This is why I’m interested in Nintendo right now. I don’t know why we did a Doc Safari segment and I still haven’t gone really deep, but it’s so interesting how entertainment and the fantasy world of bait, call it fantasy worlds of what was Marvel Comics and now is Pixar and Disney.
That’s those. Can be wildly successful businesses and I was going to make fun of you, you know, because this is oh, so, you know, like, uh, you know, making fun of the nerds playing Dungeon and Dragons in their basements until I realized that my jujitsu teacher is one of these Dungeon and Dragon nerds himself and making fun of him is not a wise life decisions.
So I’ll spare you the ridicule and I’ll say Godspeed made this work out.
[00:35:15] Luke: Oh good, I can take it. I’m actually going to a place called the Arcanist uh, next month with my buddies. Like we used to play for, I don’t know, like an unhealthy amount of time, six or seven hours. a week on a Sunday. In fact, when I got my first job, I used to drive 150 mile round trip every Sunday, just to come back from Hampshire to London to play D& D with the boys on a Sunday morning, and then drive back and then try and be a productive member of society once again.
So we don’t do that every Sunday anymore. But we do get together to play something, generally like collaborative board games about once every six months. So we’re going to be at the Arcanist Tavern in London playing that in November.
[00:35:57] Krzysztof: So to all of our patreons and perhaps future patreons know that we have two tiers. One is the monkey tier and one is the badger tier, and we’re kind of using that to keep track of who’s on team monkey and who’s on team badger. So you now know. That a vote, that a vote for, for team badger is a vote for the dungeon and dragon playing nerds
[00:36:23] Luke: Hey, I wear the nerd badge with pride, buddy. No, uh, no slight take in here.
[00:36:27] Krzysztof: we’ll see. Right. And I’m the, well, it’s hard. Well, I was like, am I a cool kid? I’m not, I’m definitely not a cool kid and I’m not a bully. So I don’t know. I’m something else, but I’m certainly not a dungeon and dragons nerdling like you.
[00:36:40] Luke: My techno nerdism. Delivered a 21 percent CAG out over 20 years, right? I’m embracing the technology and the nerdism. So don’t you worry about that.
[00:36:50] Krzysztof: That’s right. It’s as they say, right? Uh, in high school, the nerds, uh, get wedgies, but then they end up ruling the world. So. All right.
[00:36:59] Stock Safari – AST Space Mobile
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[00:36:59] Luke: your, your safari stock is not remotely nerdy. Is it, what are you going to pitch to us this week?
[00:37:04] Krzysztof: Uh, well, it’s nerdy. It’s in its own way. I want to start with the caveat.
[00:37:09] Luke: I was being sarcastic. It’s highly nerdy.
[00:37:15] Krzysztof: of these, uh, Safari stocks. But one of our members really poked at me us to take a look at. A S T S. I’m sorry. A S T space mobile stock ticker A S T S. And this is a pioneer company building the first and only space based cellular broadband network designed to directly connect standard smartphones.
So the pitch here is that there’s a lot of people in the world that don’t have cellular connectivity. So This company hired SpaceX and is sending up a bunch of satellites into space where big, mobile network operators, MNOs for short, like AT& T, Verizon, Vodafone, and so on and so forth are teaming up.
with AST to provide cellular coverage to basically the whole world. So it’s kind of like Starlink, but for cellular coverage. And at the moment, um, I mean, I, I like these two quotes from the CEO one, he says, eliminating the friction of specialized equipment and spectrum bands from direct to cellular satellite coverage at broadband speeds.
is a transformational event for the communications industry. So that’s one, no special equipment needed. And two, not only do we expect to provide essential affordable broadband connectivity to everyone everywhere, we are working to expand the market to billions of individuals and devices. The fact that these guys are also working with American Tower, a stock I used to own, that these are the guys that basically provide real estate, uh, infrastructure to build towers on which cellular companies can expand their coverage is a good sign because American Tower is a legit company as obviously as AT& T and so on.
So this is to me a play on Like what happens if you combine SpaceX and rocket shippery with, cellular companies and you get the future of, I guess, communications, right? Like bunch of satellites floating out there, giving phone access to everybody. What’s interesting for me as an investor in this moment.
Is that we are, if you look at the chart that we’ll put up for you, we are in a moment that I call price discovery, where the stock, if you look at the majority of its life started up, people were excited about this. And then there was a long downtrend. And then all of a sudden, not too long ago, Uh, the stock was trading for not that much because it’s a pre revenue company for the most part high expenses, right?
Is it gonna make it yada yada and all of a sudden they had a bunch of successful technological milestones Satellites are going up right the stuff is starting to work and all of a sudden the stock shoots up massively And then goes down a bunch and we’re in this zone right now where there’s so much optimism about what this company can do, that what is the, what is a good value for this company is unknown.
And I guess this is the, this is the lesson to any beginner investors. As you hear a pitch like this. And you get excited about the possibility and you start reading about all these projections, how the stock might be worth tens and hundreds times more than it is now you’re buying potentially into hype and because all kinds of things could go wrong.
I mean, one of the first things I think what could go wrong is what if SpaceX decides to do this themselves, right?
[00:41:15] Luke: Well, they are, they are, right, that’s Darlink.
[00:41:17] Krzysztof: Right. I mean, they’re, they’re doing it for a very different kind and I don’t know enough about the company yet to know what the patents are. And, uh, I mean, there’s a lot more you need to learn about, but price discovery means the market right now is not sure what the company really is worth and you’re going to have real swings, both up and down, and it’s easy to lose your shirt.
If you only know the narrative. So what I plan on doing, uh, is buying one share because I really liked what I saw. I like the fact that this is, you know, the next frontier of communications. I love rocketry. We’re. Rocket lab, uh, enthusiasts were obviously SpaceX enthusiasts. Uh, but I, I myself am not going to get overheated and I’m going to start following the story for sure.
So thanks to our patron who put this in front of my nose. lots more to learn here, but I’m interested
[00:42:14] Luke: Great stuff. Well, that appealed to all my geeky predilections, so keep me appraised.
[00:42:19] Krzysztof: One side note. One of the first questions I had is, is it rocket? You know, I didn’t know because I’m a new to this. Was it rocket lab or like, I wanted to know how are they getting the satellites up there? So I asked and it turns out SpaceX has their business and I was a little, you know, that’s the next, this is what we were talking about last episode.
Once you get interested in a particular sector like rocketry because of Rocket Lab, all these other pieces start like adjacent pieces start interweaving in the story. So I was a little disappointed that it was SpaceX rather than Rocket Lab that got their business, but maybe that’s for now. Maybe that’s temporary.
I don’t know.
[00:43:00] Luke: rabbit holes there, right? Because, um, like I get, it makes sense that it’s SpaceX because actually they can put like heavier payloads in cheaper right now. Like, well, Rocket Lab can’t put anything above like the size of a, a fridge, fridge freezer. I don’t know how big ASTs satellite arrays are.
but I imagine they’re going into similar. Orbit that Starlink is because they’re LEO, like the Low Earth Orbit satellites. So you’d think they can piggyback alongside a Starlink launch. But something that’s interesting is, like we’re living in a time of antitrust regulations coming down really hard on some of the mega cap companies.
And it’s actually probably quite smart for SpaceX to be Supporting what’s objectively perhaps a direct competitor, like, really, do they compete or not? But if they are competing with Starlink, on the face of it, you go, Oh, that’s dumb. You know, why would SpaceX, do that?
But actually, it makes a lot of sense, because, like, you can imagine the regulator conversation in the future. Like other than like NASA and a couple of other countries, SpaceX are the only game in town. if they’re then denying launch capacity to competitors, you can see that being a tough conversation with regulators in the future.
SpaceX have the world’s first ubiquitous. satellite connectivity for mobile phones, which they, the technology is in place now. They just need to get the agreements in place with the carriers to enable it. Like my pixel nine can now connect to satellites. I just need my to agree the deal with Starlink and it will happen.
[00:44:44] Krzysztof: are interested in this company. And I could see why. Because even here in Austin, a major U. S. city. Some of my cellular coverage sucks. So you could, you know, imagine that basically the whole world needs cellular coverage and that means what’s your addressable market.
It’s kind of sort of like maybe everyone, which, which if you know, some of these regulatory things play out in its favor. This stock currently trading at, I mean, whatever its market cap is,
[00:45:14] Luke: Okay.
[00:45:16] Krzysztof: high already. 7. 7 billion. Regardless, if the entire
[00:45:21] Luke: Okay.
[00:45:23] Krzysztof: market in theory. There’s some price targets on the stock that seem mind boggling. Like, you know, this will be a hundred billion, 500 billion company. I don’t know.
[00:45:37] Luke: I know we don’t go, don’t go anywhere below surface level for a Safari stock, but are they revenue generating?
[00:45:43] Krzysztof: I believe they are, well, they’re, they have revenue, but some revenue, but they’re still operating at a loss,
[00:45:51] Luke: Okay. Yeah. Yeah. That makes sense.
[00:45:53] Krzysztof: do have a strong talent cash balance sheet of about, I think, 440 million. So, um, not that much pressure. Right now,
[00:46:03] Luke: Okay, and maybe AST might form part of your King of the Jungle part two portfolio when we restart the contest in a couple of weeks time. So
[00:46:13] Krzysztof: uh, quite possibly a STS is the ticker. Uh, I love investing. This is why we, we, you know, uh, we love to do this stuff ’cause you learn so many cool things about how the world is evolving and absolutely this could be a front runner for, uh, king of the Jungle, year two monkeys Revenge.
[00:46:35] Luke: you’re not officially throwing in the towel yet. We have got three more days of October, today’s the 28th to draw the line, but we do have a question for our listeners before we wrap up today. So we are now turning our minds to what next. Year of the competition will look like and, uh, yeah. So what would you like to see?
this year we had a thousand dollar starts. We added a hundred bucks each. I guess it’s a given like we’re going to start over. So we’re going to come to like parity, which means Christophe will add enough money to bringing up to my level at least. but let us know how, how you felt about King of the Jungle the first time around the track and, uh, how could we make this more fun and engaging for next year?
[00:47:16] Krzysztof: Right, and one open question, one possibility that we’re working through, and we want to get your feedback on this is. Um, this moment we’re adding a hundred dollars at the first of the month, would, would you as our listeners enjoy or find beneficial, say, more frequent additions of cash or a larger amount?
Or any feedback regarding, you know, the structure of it with, uh, an additional, I guess, not a caveat, but we’re still going to continue tracking our portfolio from the start. Cause we want to see where we are from inception till, you know, 10, 20 years from now. But we also want to. while continuing the journey, we also want to each lap around the track to be reset to zero.
So we have to consider how we’re going to try to do both. Any ideas around that would be greatly appreciated and welcome.
[00:48:13] Luke: Well, I hope you enjoyed today’s rambling episode of Wall Street Wildlife. Uh, we are on YouTube if you wanna see our furry faces. You can also find us@wallstreetwildlife.com, where we’ve got our 10 laws of the investing jungle, uh, for your download.
Delectation
[00:48:28] Krzysztof: Indeed. Check us out on patreon.com/wallstreetwildlife. That’s the place where what we like to call our inner circle goes, goes to hang out.
[00:48:39] Luke: our tribe. Uh, but you be, everyone can find us on x. That’s our favorite place to chat. I’m at seven Luke Hallard.
[00:48:48] Krzysztof: I am Math 7 Flying Platypus.
[00:48:50] Luke: Are you ready to become a beast of an investor?
[00:48:52] Krzysztof: Your journey starts here.
