Highlights from my presentation yesterday at ValueX Klosters: Joby, Willis Lease, and the Stinky Six

1) As always, I'm greatly enjoying the annual ValueX conference in beautiful Klosters, Switzerland...

It's hosted by my old friend Guy Spier, who turns 60 today – Happy Birthday, Guy!

The conference runs from 2 p.m. to 10 p.m. every day so that attendees can have some time to ski, hike, or sleep in a bit. Here are a few pictures:

Over the course of three days, 62 of the roughly 150 attendees give short five-minute presentations, followed by three minutes of Q&A.

Everything is off-the-record by default. But I got permission from some of the speakers to share their presentations, which I'll be doing in upcoming e-mails.

I was one of the first speakers yesterday. And I shared the highlights of what I've been writing about recently in my daily e-mails...

2) I started with what I wrote about yesterday, namely that "OpenAI will encounter financial distress – probably later this year."

I emphasized there's a clear spending bubble in the AI sector. We've seen wild speculation, unproven business models, massive losses, and circular investments.

(Again, regular readers are familiar with this... In my January 27 e-mail, I shared the reasons I think the AI bubble will burst this year.)

And I highlighted a couple more points from yesterday's e-mail:

• Microsoft's (MSFT) 10% drop on Thursday after reporting earnings – and disclosing that OpenAI accounts for a shocking 45% of its commercial remaining performance obligation ("RPO") balance

• The recent bombshell from the Wall Street Journal about how Nvidia (NVDA) is getting cold feet about pouring endless money into OpenAI

I want to emphasize, however, that I remain a big believer in the power and impact of AI...

Heck, AI may have saved my father's life two weeks ago – it's an amazing story that I shared recently.

And, even if I'm right that OpenAI blows up and the AI bubble bursts, there will be winners amidst the inevitable turbulence...

Plenty of AI stocks will suffer a lot when the bubble bursts. But AI is a generational phenomenon. Certain stocks will emerge from the rocky times as leaders in this industry. So that's why it's important to be selective.

Even when it comes to Microsoft's stock, I'm cautious at today's levels – but that doesn't mean rushing for the exits if you own it. Recall what I said in yesterday's e-mail:

Microsoft is still an insanely great, cash-generating company, so I'm not saying to dump the stock. It's the very definition of a "buy and hold forever" stock, so a potential 20% dip is nothing to worry about.

In fact, Stansberry's Investment Advisory subscribers who followed our team's advice to buy it in 2012 are up 1,364% since then through [Monday's] close. (If you aren't already a subscriber, you can learn how to become one right here.)

And if Microsoft can take over OpenAI at a distressed price, it could even increase Microsoft's value.

And as I added yesterday:

Meanwhile, I still think Amazon, Alphabet (GOOGL), and Meta Platforms (META) will be winners amid all this – as I discussed in last Wednesday's e-mail on the investment implications of the AI bubble bursting.

3) Moving on in my presentation yesterday, I also focused on my favorite speculative stock – Joby Aviation (JOBY).

Here's the slide I shared:

Regular readers will recall that I last wrote about Joby on Friday. As I concluded in that e-mail:

After a huge run-up, the stock has been nearly cut in half from its recent highs four months ago. I think the market is overreacting to the short-term news and giving a gift to investors with the courage to buy.

But, to repeat, this is my favorite speculative stock... and should be sized appropriately.

4) I then discussed another one of my favorite ideas – Willis Lease Finance (WLFC).

I shared this slide on it in my presentation:

As longtime readers know, a friend of mine who runs a highly successful hedge fund focused on the financial sector gave me the idea for Willis Lease back in February 2024.

I've written about the stock a dozen times over the past two years (archive here) – most recently on January 9. It closed at $155.82 per share that day.

Yesterday, Willis Lease closed at $186.74 per share. I still like the stock at these levels.

5) Lastly, I discussed my "Stinky Six" stocks to avoid. As a reminder, these are:

1. Palantir Technologies (PLTR)
2. AppLovin (APP)
3. Tesla (TSLA)
4. Carvana (CVNA)
5. Signet Jewelers (SIG)
6. Hims & Hers Health (HIMS)

I shared this slide in my presentation with the latest on them:

In another slide, I showed how poorly these stocks have done since I first warned my readers about them in my October 29 e-mail (note that I added CVNA on December 12):

I updated the current prices to yesterday's close, which reflects the 6.8% jump in Palantir after the company reported blowout fourth-quarter earnings...

Revenue soared 70% year over year during the fourth quarter. And the company forecasts 61% revenue growth this year to $7.2 billion. Put simply, considering how I feel about the AI bubble, I'm skeptical of guidance like that.

Meanwhile, Palantir's valuation is astounding...

With a roughly $376 billion market cap as of yesterday's close, the stock is trading at about 52 times forward revenues and 121 times consensus analysts' expectations of $1.31 per share in earnings.

Sure, Palantir is an impressive company with bright prospects. But it's the most overvalued large-cap stock I've seen in my career. Avoid it!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.