Friday Four Play: The “Bourbon Bounty” Edition
Today, Great Ones, we’re talking bourbon and options — two of my favorite things. You knew it had to happen sooner or later…
As most of you know, I fancy myself a bit of a bourbon connoisseur. I also started my financial career in the options market. Surprisingly, the two go hand in hand rather well … as you’ll see in just a minute.
First, let’s get to what kicked off today’s discussion. Great One Tony T. wrote in yesterday:
Tony, thanks for writing in! And that is some fine bourbon you have there. If you bought it near the retail price of about $40 per bottle … you have some considerable potential.
You see, around these parts, Elmer T. Lee is very hard to find at retail. Now, I don’t know what the aftermarket looks like in your neck of the woods, but in Northern Kentucky, it regularly sells for between $300 and $500 per bottle.
Since we’re talking investments here, that’s a potential 1,150% gain!
But if you still doubt bourbon’s investment potential, just listen to what my friend and colleague Ted Bauman, editor of The Bauman Letter, has to say:
The thing that makes bourbon so interesting as a collectible is that there are two ways you can play it. You can invest the traditional way in the finished product, the way you would with stamps or art, and wait for it to appreciate.
For example, a bottle of Old Rip van Winkle 25-year-old bourbon that sold for $1,800 not too long ago currently retails in the United States for as much as $25,000.
The other way is to invest in barrels of “white dog,” which is basically corn moonshine, which are aged to produce Kentucky bourbon. You can even buy bourbon bonds to do that. So, I’d say if you’re an investor, bourbon is for a lot more than just drinking.
My confession here is that the $1,800 bottle of Rip van Winkle example comes from yours truly.
I had a chance to snap up a bottle at that retail price a few weeks before Christmas. I passed because my lizard brain couldn’t justify nearly two grand for Rip … and my wife insisted that I already had a brand-new bottle of bourbon at home (Weller Antique 107, for the curious).
I could’ve had a 1,300% return on that bottle of Rip. I might’ve had to drive to D.C. to do it, but … damn. Missed opportunity.
Who am I kidding? We all know I would’ve just drank it. Aye, there’s rub, right Tony? To drink or not to drink? That is the question. My best answer for you hinges on whether you like drinking Elmer T. Lee bourbon or not.
If you don’t like drinking it, the choice is clear: Sell the whole lot. You’ll clearly enjoy the returns more than the bourbon.
But, if you enjoy drinking it, maybe save one for personal use and sell the rest? You could always use the proceeds to buy more and repeat the process. (Or maybe even send one to your favorite financial e-zine writer?)
My point is that bourbon is more than just a refreshing beverage. In the right market, it can offer the same kind of lofty returns that options provide. Yes, there is a high risk involved that you might not get the return you want, depending on where and when you try to sell. But the potential is there.
You don’t want to get me started on a full-blown options rant right now — we do have stocks to cover here, you know — but you can time-jump back to our deep dive on the options market right here!
And like bourbon, you need a guide when investing in options … or you’ll get burned and miss opportunities … stupid Rip van Winkle. With options trading, just like bourbon investing, the secret is aging — erm, timing. Just ask Ted Bauman! (Again.)
For the past two years, Ted’s worked on a special project: a new trading system that aims to help you make more profit in each trade than the S&P 500 has in the last five years. In fact, Ted’s closed out six winners since mid-November, with zero losing trades.
Right now, you’ll discover how this system works and how Ted tracked down “the No. 1 trader on Wall Street” to help him build it. Don’t miss out — click here now!
And now for something completely different, here’s your Friday Four Play:
No. 1: The MicroStrategy Crypto Correlation
While we’re talking about off-the-wall investment ideas, have you seen MicroStrategy (Nasdaq: MSTR) lately?
Last year, the company bought $1 billion worth of bitcoin (BTC) and, ever since, MSTR has traded in near lockstep with the popular digital currency — as you can see from the chart I conveniently included.
With bitcoin hitting new all-time highs north of $40,000, MicroStrategy turned its $1 billion investment into more than $2.9 billion. Sounds more like a macro strategy to me. Am I right? (Get it macro … micro? Whatever…)
Anyway, MicroStrategy specializes in enterprise data analytics software and services. In other words, it crunches gobs and gobs of data. That’s a lucrative business in its own right, but investors completely threw that idea out the window.
MSTR is now basically a proxy investment for bitcoin. So, if you ever wanted to buy bitcoin as an investment but weren’t able to on your particular trading platform or were just too uncertain about bitcoin in general, MSTR is your pathway to digital rewards.
Or you could just listen to what Banyan Hill guru Ian King has to say on the topic!
If you missed out on your chance to see Ian’s Next Wave Crypto Fortunes the first time around, listen up. In this special event, Ian King will show you how you can play this new crypto boom to potentially multiply your money 12 times in just the next 12 months.
The crypto boom is a lot bigger than just bitcoin. Click here to hear it from the crypto king himself!
No. 2: Print on DDDemand
Can you smell it? Can you smell what the Rock … wait. No, that’s the faint whiffs of earnings season drifting on the breeze!
Next week earnings really start to heat up, but for now, we have 3D Systems (NYSE: DDD) and Micron Technology (Nasdaq: MU).
The purveyor of printers, 3D Systems, went on a press release rampage yesterday, first announcing it had sold off its Cimatron and GibbsCAM software businesses.
The company also reported preliminary quarterly data, notably a 20% revenue rise across its segments on the quarter.
Then, 3D Systems paid off some of its outstanding debt and called it a day. The market, however, said “nay nay” and sent DDD soaring over 121% before the rally rolled back some. Not to be outdone, the stock went on to surge another 38% today … before investors got smart, took the money and ran.
Overall, the Street celebrated how 3D Systems continues its plans to streamline business: reorganize into simpler health care and industrial divisions, trim off the fat (software, in this case) and bingo bongo, you’re 3D printing like there’s no tomorrow.
I sense a “but” coming, Mr. Great Stuff.
This is all tremendous news, but is it “rally over 150% in two days” kind of news?
If we were a slightly different newsletter, I’d tell you to short the ever-loving heck out of DDD right now (at least short-term). But we play things a bit more conservatively around here, believe it or not.
If you’re interested in 3D printing for the long run — and DDD is on your watchlist — you might want to wait for today’s rally to ease up some before you join in. Profit-taking time already began.
No. 3: Mulling Micron
It’s been quite a thrilling week for Micron.
The stock was double upgraded on Tuesday from sell to buy at Citigroup, which set a $100 price target. What’s more, both Deutsche Bank and RBC lifted their price targets ahead of this morning’s quarterly earnings report.
And boy, did Micron live up to the hype. The company’s fiscal first-quarter report was a beat and raise, with earnings of $0.78 per share on revenue of $5.77 billion, crushing Wall Street’s expectations.
What’s more, Micron put current-quarter earnings and revenue guidance above the consensus estimates.
The icing on the cake was Micron’s expectations that DRAM and NAND memory chip prices are firming up and should see strong growth by 2023. In layman’s terms, those little memory chip thingies in your smartphones will get more expensive, and that’s good for Micron.
Maybe not so good for your wallet if you’re buying a new phone in the next year or so, though.
What’s good for Micron’s bottom line is good for investors, and MU quickly surged more than 4% following the report. But it seems that a little bullish fatigue seeped into MU late in today’s session.
Profit-taking settled in after this week’s run higher, and MU finished well off today’s highs. After a double upgrade and three price target hikes, what’d you expect?
Still, once investors digest this week’s flood of bullish news, MU should resume higher, and a break above $80 could send the stock back to all-time high territory near $100.
No. 4: An Apple a Hyundai Keeps the Cars Away?
Name a better duo than the Wall Street rumor mill and those nameless, infamous “people with knowledge of the efforts.” I’ll wait.
Today, carmaker Hyundai announced that it was in early talks with Apple (Nasdaq: AAPL) to potentially work together on an electric vehicle (EV).
It’s Hyundai’s biggest trading day since 1988 — at least on its home Korea exchange. The company trades over the counter here as HYMTF, and those shares were up 30% today.
The news comes from Korea Economic Daily, which wrote that Apple suggested the tie-up, and Hyundai Motor was reviewing the terms. Allegedly, the collab would feature both battery development and actual EV production.
Now, this is all nice and dandy, but Hyundai has already backpedaled on the news, instead claiming that it “received requests for potential cooperation from a number of companies.”
Personally, I wouldn’t be surprised if the HyundApple chimera ever came to fruition. Killer tech is coming out of South Korea right now: 5G, hydrogen power, solar energy, semiconductors and whatever else have you. It’d make sense for South Korea’s leading carmaker to strike a deal with Apple to innovate in the EV space.
For what it’s worth, Hyundai is the next Toyota (NYSE: TM), in my opinion. While Volkswagen and its high-shinin’ Audis might be more of a “brand fit” for Apple’s market, Hyundai’s quickly catching up to the top tier automakers, and this could be a major deal if it doesn’t dissipate in the meantime.
The iCar that y’all derided and delighted over in our inbox won’t be ready for those ultra eager early adopters anytime soon. Those “people with knowledge of the efforts” have said that Apple will take at least a half decade to launch a self-driving EV — with the original report spit-balling a 2027 release.
Apple isn’t hurrying this one, and these rumors might fall through after the big publicity blow-up. You know how much Apple, like Gandalf, likes to keep its secrets until the newsworthy moment is right.
Great Stuff: Black Dog, White Dog
You made it! First week of the new year, in the books. Now, you go on and let me know in the inbox how late is “way too late” to be saying “happy new year!”
Or, you could hit us with something a bit more interesting … such as what you think of investing in bourbon, trading options, buying bitcoin or the oft-rumored Apple Auto.
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Until next time, stay Great!
Editor, Great Stuff