No Nikola News Is Good News?
Great Stuff Picks: Electrifying Update
Regular Great Stuff readers — aka the Great Ones — know that we run this little side business called Great Stuff Picks.
OK, it’s not a “side business.” It’s a key feature that you get for FREE alongside stock market commentary, rants, song lyrics and market memes. Since Great Stuff Picks is free (yes, free!), you don’t get all the nifty bells and whistles of a paid trading service.
But you could get solid returns … and bragging rights to all your friends online.
I’m no rocket surgeon like Banyan Hill’s own Michael Carr (One Trade! Get it now!), but I hold my own. In fact, Great Stuff Picks sits on a total average gain of 43.7% since inception, with an overall win rate of 79.3%!
Not too shabby, eh? Right now, Great Stuff Picks has gains of:
- 191% on Advanced Micro Devices Inc. (Nasdaq: AMD), recommended back in June 2019.
- 108% on Wix.com Ltd. (Nasdaq: WIX), recommended in July 2019.
- 107% on Crowdstrike Holdings Inc. (Nasdaq: CRWD), recommended in January 2020.
Now, every trading research service under the sun talks about its winners ad nauseam. But how many actually talk about their losing trades? Hmm?
Today, that’s exactly what we’re going to do. We’re talking about one of our worst-performing stock picks — Nikola Corp. (Nasdaq: NKLA), down about 14% since July 7 — and why you should consider holding NKLA … for now. A few of you wrote in with questions after the company’s earnings report, and we hear you loud and clear. (Ahoy there, Rick L.!)
Without any further ado, let’s get this pity party started.
Nikola Corp. is what we in the industry call a “growth” stock. That’s often code for “This company has no revenue or earnings, but it has great potential.” This is exactly the case with Nikola.
Last night, Nikola released its first quarterly statement as a publicly traded company … and its green roots were on display for all.
I’m not talking about “earnings” — the company posted a loss of $86.64 million on the quarter. Losses are expected from a company still ramping up for production and taking on investment capital.
These green roots were readily apparent in Nikola’s lack of any meaningful news. There were no production updates. No vehicle model renders to get excited about. No preorder information on the Badger electric vehicle that got investors so excited last month.
No nothing, really.
What’s more, CEO Mark Russell was cagey and often abrasive when questioned by analysts. “You have to trust us,” Russell told J.P. Morgan Analyst Paul Coster, after Coster was all like “Is this all we get?”
Russell is clearly no Elon Musk when it comes to insulting analysts, and maybe that’s why investors came away from the earnings call with even less enthusiasm. There’s clearly a right way and a wrong way to attack your critics. Maybe Russell can take notes?
What was encouraging was commentary from Nikola Founder Trevor Milton: “We run a really tight ship here and we do spend money, but only when it’s needed,” Milton said. “That’s why we’re going to succeed and others have failed. They spent money like it’s just handed out.”
For Great Stuff Picks investors, this is the nugget we were looking for. The diamond in the rough from this rather rough quarterly financial report.
We didn’t get into Nikola for short-term gains. We got in for the long haul. It’s good to see fiscal responsibility these days, especially in a startup like Nikola.
Sure, we’d like to hear more on anything from Nikola … but there weren’t any concrete negatives either. The company remains on track with its stated goals, and our original reasoning for buying NKLA shares remains.
What we’re seeing right now is market volatility. This will pass, and NKLA will continue to grind higher. Patience, reader.
Now that we’ve talked up the Great Stuff Picks we dig — and which are surely great ‘neath the volatility veneer — does it matter where you buy said picks? Like most investing questions, the best answer is “eh, kinda.”
We’re talking about brokerages in today’s Poll of the Week — the wheelers and dealers of stocks, options and all sorts of devilish delights. If you think I’m going to sit here and go into the nitty-gritty of retail trading accounts, you’re absolutely right.
The brokerage world is in a golden age — for me, you and the whole stock-flipping crew. Discount brokers such as Schwab keep discounting fees further to keep up with new free trading apps that let anyone trade anywhere, from the basement bathroom to the passing lane on I-75.
The fact that any young buck can pick up their stimulus check and hit Robinhood’s yellow brick trading road liberates us from the $10-a-trade world. But, as we’ve pointed out after the free app’s crashes and dashed millennial dreams…
Even the decentralized trading world’s saving grace — dearly beloved Robinhood — has an Achilles’ heel of its own. The New York Times put out a piece recently that highlights how the platform’s “payment for order flow” far outstrips how much other discount brokers make off their users’ trades.
If you have a second, I seriously recommend you read this in-depth explanation on the wily ways that Robinhood sways traders to trade away, all the while scoffing at any implications that it stokes the gambling desire fires in many beginning traders’ hearts.
With all that said … we’re curious which platforms you use! From the greenest of beginning investors to the Wall Street lifers, we appreciate all kinds of traders around here. So, where do you trade?
Click below and let us know!
Psst … we don’t care if you put “Robinhood” up there, honestly. Even the Great Stuff team gets down with the no-fee, no-fuss, no-info app sometimes. (It was for the free Ford share, obviously!)
Keep reading Great Stuff, and we’ll keep dishing out the best picks for you to put in that portfolio of yours.
Great Stuff: Did We Mention It’s Free?
Thanks for answering our poll!
We’re incredibly grateful that you chose to share your thoughts with us. And of course, we love hearing from you in our inbox just as much.
Why not drop us a line and join in the conversation? We’re looking for our last and best contenders for tomorrow’s edition of Reader Feedback, and I want you to be a part of it.
- Have you invested in any of our Great Stuff Picks?
- What do you think about Nikola (and that whole electric car thing)?
- What other free e-zines do you read? (We’re not jealous … promise.)
- Did you start investing when free trade apps like Robinhood came around?
Until next time, stay Great!
Editor, Great Stuff