My Love Story
Hello Traders,
Happy Valentine’s Day!
One of my closest friends went on an Ayahuasca trip in Peru. Afterward, I asked him what he learned. I am a big advocate of psychedelics and their experiences, so it was important for me to learn what he took away from that 3-day intense experience. He said he learned that the true meaning of happiness comes from two things: partnership and community. Money can certainly bring comfort and some experiences, but definitely not happiness.
In 2020 when the pandemic hit and market volatility went to extremes, I made most of my money. But that became a curse for my personal life, and my partner left me, cashing out on the lottery. Since then, I have been in search of love, but have hardly found it. For those fortunate enough to have a loving partner, I hope they show their appreciation, perhaps by buying them flowers. As for me, I bought one for my mom, as she invited me over.
I may not have a partner yet, but I truly feel blessed by having Bear Bull Traders as my community. I don’t have much financial incentive to wake up every morning and prefer to travel the world and climb mountains, but I am super excited to see everyone, joke together, and continue building BBT, an example of collaborative trading, much like Wikipedia.
The market is really surprising everyone. We are seeing some things that I cannot believe seeing. After the bell yesterday, ridesharing company Lyft reported fourth-quarter results that were good, not great. But the stock immediately shot up and notched as high as a 60% gain before anyone realized what happened.
Did the company just invent a cure for rare diseases? Are they pivoting to crypto or semiconductors? What was the cause of this?
While everyone was trying to figure it out, those reading the press release while listening to management’s conference call quickly realized the issue. A typo in the company’s press release indicated that management expected adjusted EBITDA margin expansion of 500 bps YoY.
For a business struggling to achieve profitability, that’s a damn big deal, causing the trading algorithms to furiously buy up shares at any price.
Unfortunately, if it sounds too good to be true, it often is. On its earnings call, the company’s CFO acknowledged the snafu and said the correct figure is 50 bps, not 500. That sent shares tumbling, but they did manage to settle nearly 20% above today’s closing price.
Like we said, the earnings were pretty good despite the major distraction. Adjusted earnings per share of $0.18 beat expectations of $0.08, while revenues of $1.22 met estimates. First-quarter estimates for gross bookings also came in higher than anticipated.
Ultimately, the company is on track to be full-year free cash flow positive for the first time in 2024. So it’s making progress, just not as much as its press release initially indicated.
Time will tell how investors adjust positions in the days ahead. But one thing is for sure: someone’s head is rolling in the company’s investor relations department. That is not the type of excitement you want to see after earnings, especially when your results were pretty good to begin with.
Today, I traded very nicely with LYFT, alongside Brian, Paras, and Jared as well. Thor made a very nice short at the open on Micro Futures of SPY, and our community was super happy with the trading.
Watch my short recap on how we traded today.
Tonight, a very nice Valentine’s gift to yourself is Jared Tendler’s presentation on Psychology Wednesday called: “Mapping Your Pattern Workshop.” at 8 pm ET.
Your patterns of greed, FOMO, anger, and other emotions occur in a predictable manner, much like price movement, once you’ve studied the patterns. To help you complete the first step of Jared’s program, “Mapping Your Pattern,” join us for this workshop to see traders like you get feedback as they complete a Map of the emotional problems affecting their trading.
Last but not least, we have a special deal at Bear Bull Traders for our Elite membership, offering over 60% off! Enjoy one year of full access to our community for only $999. This offer is available until this Friday. Don’t miss out! Join us for a full year of learning and camaraderie.
To your success,
Andrew
