Okay folks, so in this video we got to give a violent update on the market in place. And then I want to talk about number two, what Elon Musk just did with the tweeter. And then lastly for the main entree. This lovely evening, I want to discuss one twelve dollar stock that has been heating up massively and searched today on a big catalyst.

What was that catalyst? And will it continue? or is it just going to dump the next couple of weeks? This one is a little bit more interesting to cover because this is actually one of my worst picks from 2020 and 2021. I'll give my perspective on it and whether or not I still like it. Okay, Marquette a very pretty day. I saw Dandelions and Roses all the major indices up the Nasdaq up almost two percent.

Interestingly enough, you've seen Growth Tech in the Ark Fund solidly hold its upper direction after failing to hold much if any support since November, Some of our high conviction but risk off bludgeon stocks like your charge point and your palantir have been recovering very, very nicely. Tesla up another five percent today. In the past we've seen massive inflows into Tesla actually go and predate moves that then follow into the rest of the growth sector. Usually it starts with Evs and then charging station stocks and then you start getting into broader growth.

And that way Tesla is kind of like the daddy if you will of the growth sector. Let's move on to Attur. So this morning we briefed on after because it was showing some proof of concept in the pre-market on high short interest and retail hype over the weekend. We briefed on it 30 minutes prior to market open.

At about 250 ish, it ended up selling off a bit into open, bouncing off the 250 support level and then into an upward direction over the red directional Sma that took it to 393. that's approximately a 57.2 jump. Why did we brief on it though? What was it that separated this stock from thousands of other stocks? Well, for starters, it was one of the top training on social media forums, specifically Reddit this morning. I believe it was number three according to ape wisdom.

It was also designated by Fintel as one of the top short squeeze candidates this morning. You have a massive short selling battleground at the same time where retail is paying attention to it. Meanwhile, their reported revenue and book value was pretty damn high compared to the actual market cap of their company After's market cap closed at about 144 million on Friday, but their full revenue last year was 247 million, which was like 1.7 times the entire market cap of the company. Now you go over to their balance sheet and you want to find book value.

They reported 312 million in assets and 86 million in liabilities at the end of the year. Which means if you gutted the company tomorrow and sold off at least it's posted asset value and then paid off the liabilities, how much money would you have left? Well, approximately 226 million. But the market cap of the company was again 144 million. And even the jump that happened after our briefing, it still is trading at only 234 million bucks.

What happened? Here's something that we've been seeing week after week. Short sellers got extremely greedy on a lot of these small and micro-cap plays in a risk-off environment. Short sellers take advantage of the fact that time horizons get shortened from five to ten years to six months or less. They take advantage of the fact that nobody wants to be in smaller micro-cap companies that are forward-looking during periods of time where people don't even trust the bigger companies.

They know when market conditions are tight, these companies get gutted because nobody wants to risk their capital. But at the same time, gutting these companies wasn't enough. Short sellers wanted these down to zero. The problem is though, when you get into very, very aggressive shorting at very, very low prices, all of a sudden, you get into this area where you can have a massive ricochet effect if you're shorting something below and far below its net book value.

All of a sudden, you're in the situation where, hey, if somebody realizes what you're doing, all of a sudden, you get a massive, massive bounce back. That doesn't mean that that's going to continue, and in fact, most of these battlegrounds actually get bludgeoned afterwards. But it still means that they're very solid battlefields to trade off of. So a lot of people.

They think nothing of the fact that a lot of these companies will trade hundreds of times over their book value during risk-on environments, and then they don't even want to trade at one times their book value or half their book value during a risk-off environment. I wouldn't trust that company with a single dollar. I'd rather burn it. But the reality is that both of those are huge inefficiencies Now obviously runs on.

Any catalyst that drops in the morning is going to be based on the market condition for that day. We don't have control over that, but we do have control over making sure that we're informed on what is dropping so that we can be aware of number one, why it's running if it starts running and number two, what standards we have for playing that move. If it does fit our criteria, that's my goal in the daily morning briefings and Zip Trader U, and that should be your goal as well if you're not somebody that joins our group. Other events to know about: Today was Mullen's appointment of a former Tesla executive to Head of Global Manufacturing and Strategic Planning.

Say what you will about this company and I've said plenty, but they know how to handle Pr and get attention. This was already somebody that worked at the company, but promoting this person gives Mullen the smell and taste of potentially borrowing strategy and expertise from Tesla. Lucid is one that really played this card well in terms of pitching investors. But with Lucid, you actually had a Ceo that worked on the Model S and had 30 years of industry experience.

I think that's what really separates the bark from the Bite and the hype trade from the Conviction trade. You can bark up a storm and get a lot of investors in and make a ton of money on the appreciation, but at the end of the day you also need to have that bite. Okay, next the tweeter. Or as some people say, Twitter.

So the Musk of Elon has discussed his worries on the infringement of free Speech for a while and he tweeted back on March 25th quote: Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? Then he said the consequences of this poll will be important. Please vote carefully. While interestingly enough, apparently at this time, he had already bought a ton of Twitter shares.

It was reported by Twitter Sac filings this morning that Elon Musk had acquired 73.486 million shares of Twitter stock, which is roughly 9.2 percent of all shares back on March 14th. Musk is now the single biggest shareholder and owns four times as many shares as co-founder and Ceo Jack Dorsey, and a lot of people are speculating that Musk is going to use this newfound power to enact some huge changes at Twitter to support more freedom of speech on the platform. Obviously, in the Us and in much of the developed world, there's this big debate going on over should we or shouldn't we have free speech and what does that look like? Obviously, a lot of people are pro-free speech, but when you get down to it, people are like, well, yeah, I like free speech, but what if somebody says something that I disagree with and then that makes me feel bad? You know, shouldn't I be protected from that freedom from other people's free speech? And what's interesting about our system is usually in a lot of foreign countries where they restrict free speech, it's the government that restricts it in the Us. it's big tech companies, and there's also this problem of gatekeeping.

Most social media companies that have decided to go into censorship or even banning people from their platforms oftentimes do not apply standards evenly or transparently, and this is an issue that everybody should come together on both left and right because if they can ban somebody on the opposing spectrum, they can easily ban your people. The minute that one person gets banned for speaking freely is the minute right before you get banned for speaking freely. And Elon Musk, a self-proclaimed free speech absolutist, is seen as somebody who could help usher in changes to Twitter. Although we haven't gotten much in terms of specifics yet, but that's been enough to reinvigorate Twitter's share price to say the least.

I also think there's that dynamic where hey, Elon Musk is seen as having the golden touch. Anything that he touches seems to get a lot of capital invested into it and seems to turn to gold. Love or hate. The guy.

You have to admit though, this is the guy that really takes action to try to fix problems that he sees with society. Okay, next, the Joom of the Ia is back in the news today. It doubled in the last week and it was up 25 plus percent today at highs on news that I'll get into in a momento along with context as to why this is one of our worst performing plays pretty much ever and where I went wrong with my analysis. But the main bullish case for African E-commerce company Jumia was their logistics infrastructure Africa.

Even the richest countries in Africa are some of the hardest to penetrate. Because you can't move product, the infrastructure is too weak. you can't get the transported goods, you can't get your goods transported effectively and safely. But Jumia made the investment to actually make that infrastructure possible.

And they've built it. Which means that at full maturity, Julia could end up being one of the biggest monopolies on the entire continent, which could be very lucrative in some of the richer countries in Africa that have massive, massive growth rates year over year. right now, if Jumia has the necessary logistical infrastructure to make something happen, they have command over that market. In a lot of developed countries, you had one or two companies that went and developed trade routes, and they basically owned those trade routes for the next 20, 30, 40, 50 years before that country then got more mainstream.

But back in the day when I was analyzing Jumia, the main thing that I focused on was their e-commerce ability, their ability to move their own products listed on their own service, connecting buyers and sellers yes in their marketplace, but also acting as a payment service provider that provides standard payments in Africa similar to how Paypal and Square and the likes have done that in the United States. But what I really underestimated and overlooked and what the market really woke up to today is how many and how much companies are willing to pay Jumia specifically to use its logistics network. I was thinking it would be Jumia versus all these new competitors over the next 10 years, and nobody could possibly beat Julia because you have such logistical infrastructure advantages. But in reality it seems like all these competitors instead of going trying to build their own networks, they're just going.

And depending on juniors, one of the most bullish segments of Julia's future right now is logistics as a service. the ability to offer the logistics to move things around Africa to your clientele. We saw some big proof of concept today. Jumia bounced off on news that the Ups has partnered with them.

Yahoo Finance sums up this right here. Quote: This partnership will allow us to leverage the extension network of Junior Drop-off and pick up stations to expand the Ups reach and coverage across more towns and cities in Africa. You look at Jimmy's earnings reports. In Q4 of 2021, they had 990 clients, large corporations and Smes who use their logistics services to deliver packages.

3.3 million packages in total, but back in Q1 of 2021, that segment was extremely small. They had just rolled out a pilot in 2020, but they were only reporting 0.8 million packages and 250 clients. Three quarters later, they basically tripled all of those numbers and the latest round with the Eps completely completely changes the game for the early quarters of this year, and we're looking forward to seeing those reports in hindsight. First thing I went wrong with Jimmy is: I did not see the real value proposition here.

I did not see logistics as a service being the main value add. I saw the value in the logistics network, but I did not see that as being the driving factor of how Junior could really monetize at these early stages. Now, Jumia was never a risk off play, and I do enjoy risk on play specifically because of the challenge they present and the opportunity. but we do have to give full context here because there's a lot that went wrong with my original analysis and I think there's a lot that all of us can learn from it.

full context. We started briefing on it and liking it back in the 20s per share back in November of 2020, when a lot of capital started chasing emerging market growth stocks. I looked at the company, looked at its revenue growth, made some projections, I looked at its near monopoly in a huge market which would be very, very difficult to compete with because of again, the cost of building infrastructure, and I looked at the fact that it was led by experienced folks in the European market and the company was headquartered in Berlin and it looked like a pretty convincing venture capital style play in a market condition that was rewarding. that and during that period of time it was a lot of fun.

It ran, and it ran, and it ran. And then I later on made a cringy video that was titled this Stock Will Double where I boldly proclaimed my diligence as to why I felt the stock would likely double in the near future. I thought it was a good opportunity to make that video because its momentum had cooled down from 41.4 to 36.75 right before that video, which meant a good dip buy opportunity both on a short term technical basis and a broader risk on market condition that was causing these stocks to rally up and factor in more and more years of growth. Right now, the markets are like, yeah, if it's not going to earn this or that in the next three weeks, we don't want it back then it was like, well, if it earns it five years, ten years, that's fine.

Overall, risk on Risk Off is more of a pendulum that swings back and forth. I tend to look at it more on the middle. I did an analysis on similar companies that expanded massively in similar markets with similar spending capacity like South America and Developing Asia and compared that to what Junior would be able to do if it got a monopoly in some of the wealthier countries in Africa. I discounted its Africa potential quite a lot just because I knew it was a very, very challenging market.

But still, I felt like even if you discounted it dramatically, it still had a huge amount of potential. Now, after that video, it did almost hit my bold prediction of doubling. It went from 36.75 to just under 70 in the next six or so weeks as risk on trading had flourished. But the multiple expansion that caused that prediction to be right a lot faster than we thought it would also ended up biting Jumia in the rear end when the multiple started contracting dramatically.

And here's really the problem with my analysis and where I went wrong. It wasn't so much in the original uptrend, it was more so in the downtrend. see when you started getting that massive risk off environment. I continued focusing on what we always focus on with High Conviction Trades, which is growth rates potential in that market and overall how they're scaling up.

My philosophy on finding good deals on conviction stocks is finding ones that are growing business-wise a lot faster than the rest of the market and also are being discounted a lot faster than the rest of the market. Ideally a big reason is because if you look at the data on what the biggest long-run driver of stock market performance is, it's not free cash flow or short-term profit margin. It's 74 sales. So when people say oh, you know, don't care about the sales numbers, growth of a company, and how many customers you're reaching, that doesn't matter at all.

What they're really doing is saying oh, I don't really want growth because I just want stability investing. And stability investing is just focusing on profits, right? Which is fine. There's nothing wrong with that. Some of the companies that I like are ones that are mature and have good profits.

But the thing is, if you're growth investing, especially if you're venture capital style investing very, very aggressively with something like a junior. Well, in the first year, almost half of the valuation is based simply on the multiple the market is willing to pay, so sure in the first four or five months that I really like Jumia, you got into that environment where multiples expanded dramatically and so it benefited that play. But then on the flip side, during that next period, you got a massive, massive contraction. So I try to find arbitrage opportunities between revenue growth scaling up and contractions of multiples.

That way you can get both the long-run driver of actual stock market performance for the cheapest price possible. The problem with Julia that I did not see coming and why I did still like it when it hit back down into the 30s and 20s was specifically because I did not see how fast the pendulum was going to swing from aggressive risk on to risk off. I thought you'd see it switch back to a little bit below average, but I didn't see the mass dysphoria that followed in 2021 and 2022.. And unfortunately, we got to an area where even Tesla had gone down 50 percent actually a couple times in the last year or so, and that energy hit venture capital stocks so much more.

And I also overlooked the fundamental ability of Jumia to offer more value in logistics as a service versus direct e-commerce That said, as far as high-risk emerging market plays go, I still see a massive opportunity there. I have a hard time believing that you're not going to see massive growth opportunities in a lot of these harder to penetrate markets that are emerging when you're talking about Julia. A lot of people think that this is more sketchy now than it's ever been, but in reality it's down a lot. and I have a hard time believing if you look out five plus years after we've gotten out of this whole inflation inversion, russia Fed tightening, and overall fear cycle that this doesn't end up being a massive growth story, especially with all the new clientele, depending on their logistics and how fast they're scaling up and how big of a advantage they have over literally any other competitor in the space.

If you're somebody that wants to reach this market, Jumia is the one that provides the best solution for you. And I think given how low the market cap is trading out, I think you have a decent amount of risk factored in there. Now that doesn't mean that tomorrow if capital just gets swarmed out of the market, that this isn't just going to go right back down. In fact, I think that the farther out your stocks are looking, the more volatility you're going to have over the next year or so.

But if you look at how the company is managing itself in its market, I think that they're doing a pretty decent job. For me, a small portion of stock should be allocated to emerging markets that make you feel uncomfortable, but don't risk your entire portfolio or risk substantial damage. I think that we should all be challenging ourselves, not necessarily with Jumia or anything specifically that I like, but with something that you like that is high risk and high reward that you've done your research on and you have a lot of conviction in over the long run. I think that if you don't open yourself up to being wrong, you'll never learn anything number one, but you'll also never find the next big winner.

You don't have to agree with my industries or markets that I like or overall focus, but at the end of the day it's very difficult to be above average if you don't break the comfort zone that everybody else is in. Anyways, folks that caps off today's video. If you have any questions, feel free to reach out to us below or join us on Ziptrader's circle. If you'd like to learn how to trade with our step-by-step lessons, private chat, daily morning briefings as well as our full price target list, I'll put a link to Zip trader you below coupon code.

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