Following up on Joby Aviation; An interesting speculation from the Value Investing Seminar; Switzerland's mean vs. median wealth per person; My three days in Kyiv, Ukraine
1) On July 4, at the Value Investing Seminar in Italy, I said the stock of electric-aircraft maker Joby Aviation (JOBY) was a "promising speculation," despite the fact that it was up 90% since I pitched it at the seminar a year ago.
Normally, my team and I share our best ideas exclusively (or at least first) with Stansberry's Investment Advisory subscribers. But Joby is too speculative for the conservative strategy we use in that newsletter, so I included it as a freebie in my July 8 e-mail.
It was a great call, as the stock has skyrocketed 56% in less than two weeks thanks to this press release, courtesy of Business Wire: Joby Expands Manufacturing Capacity in California and Ohio, Adds New Aircraft to Its Fleet. Excerpt:
- Will double production capacity in Marina, CA manufacturing site across 435,500 square feet of total space
- Ramping up newly renovated facility in Dayton, Ohio to manufacture and test aircraft components
- Leverages Toyota's manufacturing playbook to drive scale, quality and efficiency
- Adds new aircraft to Joby's fleet, showcasing acceleration of production
With most stocks, at this point I'd be carefully assessing my intrinsic-value estimate and, if the stock had exceeded it, likely start trimming the position.
But investing in a speculation is different. I have no idea what Joby's intrinsic value is.
Rather, as I've explained in previous e-mails about my theory of "Catching a Particular Type of Moonshot: Market-Leading Companies in Sexy, Exciting Sectors That Appeal to the Media and Retail Investors," I think Joby is going to report all sorts of good news over the next year or two that will excite media and retail investors.
It might be tempting to sell after this initial run-up, but that would be a bad move. Given that many speculations go to zero, the only way it makes sense to invest in them is to let the winners run and become multibaggers.
2) Speaking of interesting speculations from the Value Investing Seminar... Thomas Goetsch of small-cap activist firm Hoop Capital pitched I Grandi Viaggi, a small Italian company that trades on the Milan exchange under the ticker IGV.
The company is a tour operator that also owns resorts and hotels – mostly in Italy, but also a few in East Africa. You can see his entire presentation here.
The stock has been a disaster long term... But if you look closely at the chart below, you can see that it has tripled this year alone, due in large part to Goetsch's activism:
Goetsch believes the stock is hugely undervalued based on book value and acquisitions of comparable hotel businesses on a per-room basis:
Even with the stock's recent run-up – from 0.82 euros a year ago to 2.85 euros (as of yesterday's close), Goetsch argues that it's worth between 4.20 and 4.80 euros:
I don't think most U.S. investors should spend much time looking at an Italian small-cap... But it's an excellent presentation – and it's worth noting that you're much more likely to find multibagger opportunities in the nooks and crannies of stock markets, especially overseas. (That said, be careful to stay within your circle of competence.)
3) As you read this, I'm on a flight to Italy from Switzerland, where I spent the weekend visiting two friends and their families in Saint Moritz. Fun fact: Switzerland has the highest average wealth per person of any country, but only the seventh-highest median wealth, as you can see in this chart courtesy of Charlie Bilello:
To understand the difference, imagine a country with five people: four with a wealth of $10,000 and the fifth with $1 billion. The median (person at the midpoint) is $10,000, whereas the average wealth is a little more than $200 million.
4) Before coming to Switzerland, I spent three days in Kyiv, the capital of Ukraine, visiting friends and delivering $200,000-plus of aid from my many generous American friends to my many brave and inspiring Ukrainian friends.
I was expecting to hear lots of drones and explosions every night, since Kyiv had gotten pummeled the previous week... But Russia didn't attack the city at all last week because U.S. special envoy Keith Kellogg was in town.
On Tuesday night, my friend Chad Gracia hosted a showing of the new documentary, A Simple Soldier, by our mutual friend Artem Ryzhykov. I went jogging with Artem, passing by the memorial in Independence Square, and took a dip in the Dnipro River (see photos below).
On Wednesday, I went to see Esper Bionics, a cool tech company that makes robotic hands (sadly, a high-demand item in Ukraine). Then I went to a dinner with two-dozen defense-tech entrepreneurs, who are doing some of the most incredibly innovative things (again, sadly because of the terrible war).
My visit ended on a high note... On Tuesday, I had met a very cool American journalist, Audrey MacAlpine, who said she used to be a musician in Nashville. When I googled her and saw how talented she is, I had the brilliant idea of asking her to do a concert last night at Chad's apartment (where I stayed). It was a magical evening...
Less magical was my bus ride back to Warsaw... The overnight sleeper trains were sold out, so I made the mistake of booking a bus – which ended up taking 23 hours! I expected an hour or two delay at the border, but not 10-plus hours (eight on the Ukrainian side, the rest on the Polish side). There weren't even that many busses ahead of us – just understaffed.
Here are some pictures from Kyiv and the bus...
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.