I am back with another general discussion post! Topics discussed today (warning, rant incoming!):
- General market conditions and Ukraine
- AITX – more dealers, more orders, larger production runs
- ALPP – share price dip
- SIRC – going big in EV
- Rant – investor expectations
Off we go!
General Market Conditions and Ukraine
I wrote a whole article on the Russian invasion of Ukraine which you can read here. I wrote this right as the invasion began and I wanted to revisit what I wrote in there.
So far, and it’s unfortunate, but I have been generally correct so far in how things have played out. Not patting myself on the back here, I just read the news like everyone else and that seemed to be the general consensus. The conflict has stayed very contained to Ukraine and no spillover into a NATO country has occurred yet.
Because the nukes haven’t started flying, the market has stayed relatively calm all things considered. The US, the EU, and many other countries have hit back at Russia with economic sanctions. So while Ukraine has probably been set back 10 years because of this conflict, the Russian economy has been completely decimated without a single shot being fired within its borders.
Economic sanctions are a tricky thing to roll back, but capitalism always finds a way for short term issues to be solved. So, in my opinion, if this war turns into a long, drawn-out war of attrition, expect these economic sanctions to be here for a while. They’ll likely even get worse. But in my opinion any logistical / trade inefficiencies caused by this conflict will not be long-lasting.
What do I mean by that? I mean that Europe is going to find some other way to get energy, whether that’s renewable, other sources of fossil fuels, etc. Any other raw materials out of Ukraine/Russia which will be impossible to access will be replaced in time, and life will move on. So if you here doomer takes saying that Europe will collapse or the world is going to fall apart because we can’t, for example, get neon out of Ukraine is just stirring excrement.
Yes, it may suck for some period of time, but capitalism has shown time and time again that it can weather even the worst of storms. Stay bullish on the market, you’ll thank yourself in 30 years.
Once again, my thoughts are with the Ukrainian people. For us readers in a relatively sheltered existence like myself, remember to take this as a moment to be thankful for everything you have.
AITX – More Dealers, More Orders, Larger Production Runs
This didn’t really warrant an article in itself, but AITX has been relatively quietly (all things considered) plugging along with its plan. We’ve seen more dealers added to the roster which is really cool. The bigger the dealer networks gets, the greater the odds of more orders and even the ever talked about “100 unit order”.
As along as a dealer isn’t going around saying that ROSA can mow your lawn, or a ROAMEO is safe for the interstate there is never anything wrong with more dealers.
To add to that, we’ve already seen some dealers come through with more orders this week. Plus, Steve has hinted at one more this week. I still really believe the ROSA 3.0 will be flying off the shelves this year, which brings me to…
The much talked about 1,000 unit ROSA production run is confirmed and under way! I wrote an article going through this ad-nauseum here, but I really think you should all read the press release on this. The cost savings I mention in the article seem paltry compared to those anticipated by the company.
We’re talking about 50% reductions in per unit cost for an even newer and state of the art unit. What else can you ask for as an investor! Better product, cheaper, amazing.
The implication here as well is that AITX is expecting to sell a lot of these units this year. Current the company has somewhere around 225 units deployed. So a full deployment of 1,000 ROSAs would be increasing deployments by about four times. This doesn’t even consider ROAMEOs, SCOTs, AVAs, etc. that could be sold.
All in all, great stuff from AITX and keep up the good work!
Quick one here. ALPP has had a bit of a roller coaster of a share price over the last few weeks. We first saw a dip around 1.3-1.4 when the NASDAQ took a big hit a month or two ago. Then, ALPP surged more than 30% after news releases on their battery and drone programs. Now, with the silence of news, many have begun the age-old tradition of ALPP and sold due to impatience.
Full disclosure, you can see my Tweet, but I had to sell my shares at a price slightly above where it is today due to an investment property down payment. Either way, with the share price going down, I’m content to buy back in. Hell, I would’ve bought back in above $2.0 per share. Why is that…
Impatience. I’ve said it once, I’ll say it again. I have never seen investors so impatient with a company than those with ALPP. From my experience on the dark corners of message boards, there is still this ridiculous notion that ALPP is all hype, fluff, not really doing anything, etc.
This is mostly because people haven’t seen real deployments and sales yet of drones and new battery technology. That, coupled with a relatively flat Q3 which is the last financial filing we’ll see until the 10k in a few weeks.
While we’d all like this to be deployed sooner, and we’d love to see some profitable quarters, this stock is getting beaten up over some very temporary pieces of “negative” news. If you truly believe in a company and where it’s going to be in 2-5 years, but can’t stomach a quarter or two of losses during the ramp up, man you need to re-evaluate your investment thoughts.
So to all of my ALPP longs, including myself hopefully soon 😊, please be patient and just remember all of the really cool stuff this company is doing. Think of the price right now as discounted due to general impatience, you’ll thank yourself later!
SIRC – Going Big in EV
There was a really cool PR today from SIRC which outlined their plans to greatly expand their EV charger installation business in the near future. Current estimates are for an additional 100m in revenue annually from these businesses based on current sales pipeline, not factoring in growth. This is likely where much of the current Arbiter money will go towards.
This is awesome to see as it not only is extremely complimentary to the roof solar panel business, but it is an unbelievably fast-growing industry. EVs are the future, and SIRC is placing itself right in the middle of a revolution in the automotive industry.
So if you want some nice exposure to the EV industry, but don’t want to be tied down to a single company like Tesla, or gamble on Ford, etc. developing the next great EV, give SIRC a thought!
SIRC is likely my next planned buy once my real estate venture gets running in the next few weeks, I will of course disclosure once I invest!
Rant – Investor Expectations
Warning rant coming up, so skip if this isn’t your cup of tea. I posted in the SIRC Discord about this as well so you skip as well if you already say my retort.
I wrote an article on SIRC going through a long-term price target here. I used some very conservative estimates as one must do as a prudent investor. I came out with some conservative scenarios of annualized returns ranging from like 20%-25%.
Somehow by me telling people that with conservative estimates you could be looking at annualized returns of 20%-25%, people got angry. That’s right, like actually mad at me and personally offended that I said you could earn annual returns like that. Like by me saying you could potentially earn more than double the expected return on the SP 500, it was a bad thing and I have personally bashed the company. I am still very dumbfounded by the controversial sentiment there.
Granted, I think a lot of people understood what I was getting at and actually read what I wrote when I said CONSERVATIVE ESTIMATES. But I had people blasting me saying they thought they’d be no doubt earning 1,000% – 2,000% returns in one year and that I was an idiot for not thinking that.
Like okay, if that’s what you truly believe, fine. It’s your money. But my god I think there are people in the microcap community that have some unbelievably strange expectations for what a company can and can’t do. I’m telling you now, if you go into every investment expecting 2,000% returns in a year, you are not in for a good time. Play the lottery if that’s what you’re expecting.
As my current readers know, always underestimate what you think a company can accomplish. If the investment still makes sense, then you have a great shot at some nice returns. And by nice returns, I’m not talking about 2,000% in a year. I’m talking about healthy annualized returns of 20-40% over an investment horizon of at least ten years. Those kinds of returns reward an investor plenty for the additional risk of investing in the OTC/microcaps.
Listen, I genuinely hope they blow my expectations out of the water. But even if they don’t and they’re a bit slower than the 1,000% returns people, you’re still good!
So again, I’m not a SIRC basher, my article was not a personal affront to SIRC, and I’m actually very excited to invest. If you think you’re getting 1,000% returns on all of your investments in a year, you’re in for a bad time.
In conclusion, I think the stock price is undervalued right now so I am a bit antsy that I can’t invest yet. So count yourselves lucky, you have a great buying opportunity! With my luck, I’m sure the share price will be well above 0.50 by the time I’m able to finally buy some shares 😊.
That’s it for today and thanks for reading!
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DISCLAIMER – AT THE TIME OF WRITING THIS ARTICLE I HAVE A LONG POSITION IN $AITX AND I DO NOT HAVE A POSITION IN $ALPP AND $SIRC. THIS ARTICLE IS NOT FINANCIAL ADVICE AND IS INTENDED ONLY FOR EDUCATIONAL PURPOSES. I AM NOT A FINANCIAL ADVISOR. AT THE TIME OF WRITING THIS ARTICLE, PERSONS AFFILIATED WITH THE COMPANY ANALYZED ABOVE MAY BE PROVIDING MONETARY COMPENSATION AS MONTHLY PATRONS THROUGH MY PATREON. THIS COMPENSATION IS NOT PROVIDED IN RETURN FOR ANY SERVICE, WRITING ABOUT A PARTICULAR TOPIC, AND/OR FAVORABLE OR UNFAVORABLE OPINIONS. MY PATREON SUPPORTERS HAVE NO INFLUENCE ON THE CONTENT OF MY ARTICLES.