Tesla (TSLA), Bitcoin, DermTech (DMTK) and Dollar Cost Averaging

Podcast Transcript

Hey this is Jeffrey with another edition of Stock Smart the February 8, 2021 Edition. Going to start out with some bits of news today. No Super Bowl talk here, except one thing. I’ll tell you book makers were probably pretty happy, most of the money 67% or so, I don’t have the official numbers went to the Chiefs. So, the dumb money if you want to call it that, lost, so, The Bookies were definitely were happy on Superbowl Sunday. You know, SPAC attack recently speaking to someone at NASDAQ. I was informed about SPACs and in terms of new offerings they have about a hundred and nineteen ish new offerings so far this year 70 of them have been SPACs, the other 49 were traditional IPOs. So that’s a very interesting again.

[00:00:45]
You’re seeing the trend it’s obvious and again when you buy a SPAC as a stock you do not know necessarily what company the SPAC will be purchasing. So just buyer beware. other interesting news Tesla has purchased over 1.5 billion in Bitcoin, since the beginning of the year. Tesla changed their investment strategy to include this, there is a lot of interesting talk about it if Tesla because Elon Musk has tweeted about it if he’s influenced the stock in any way. I’m sure there’ll be some type of an SEC investigation, but it may not go anywhere. It’s pretty interesting again, they also mention and this is even becoming this is of more interest actually, Tesla talked about accepting Bitcoin for payment of its vehicles going forward. So that’s very interesting. Wanted to talk about one thing as people are getting ready for their tax planning.

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If you have, there’s an interesting little tax law and I would have to tell you, would accountants and tax preparation people do not understand this one rule. It’s 475(f) and it’s called Market to Market and it allows for a deduction of your losses. Like if you have losses this year like a capital loss. It’s generally limited to $3,000 per year. But if you have a larger loss than 3000 and you wanted to deduct it in that given year, you generally have to carry that forward to deduct it in another year because you’re limited to 3000, with the market-to-market rule, which is again 475(f) that allows deduction to be considered an ordinary loss.

[00:02:19]
And then you may be able to take more than the 3000 limitation, now again, talk to your CPA or tax preparer to research if you’re qualified for it, but it’s an interesting concept and something you might want to see, if you had losses this year.

STOCK WATCH

Stock I’m looking at today is DermTech. So over the weekend I had a chance to play tennis with a friend of mine, who’s a plastic surgeon and he was telling me about a new company called DermTech that he’s invested in. DermTech very interesting. So DermTech is essentially treating when you think you have a mole or something or skin growth somewhere on your body,DermTech has a tape and adhesive that essentially you can put on the mole and then rip it off.

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sounds violent but it’s not what I meant you could pull it off and essentially it will show if it’s cancerous and so this avoids the biopsy process which would be scraping or cutting or whatever and sending it to a lab and then testing it, this is a much simpler process and it’s a very interesting stock the market cap on this company is only 1.3 billion, they’re just starting to gain revenue, and their growth, it’s happening now as we speak, is a very new product, technicals are extremely strong, I think you have to watch it a little bit right here, because it’s had some runs, its run a lot, 2-300% in the last month so it is in play as we say, it’s getting a lot of attention so it’s ticker symbol DMTK, technicals are strong, I mean the chart is absolutely

[00:03:53]
breaking out, it was up about 20,25% on Friday, today it’s already up about 10%. One of those concerns would be, when it does start falling a little bit, because it’s getting into an overbought condition, the support is a ways away support is in the 20 range, so it could fall a little bit as the buying stops a bit. So be careful, you may want a dollar cost average in which brings up the question of the day

THE AVERAGE INVESTOR

from Michelle. And Michelle wants to know what is dollar cost averaging. Essentially, it’s an investment strategy and thank you again for the questions, if anyone has questions were getting 20 to 25 questions a day and appreciate it, getting a lot of downloads, we’re up over a thousand downloads, pretty exciting. I’m happy with it. Again,

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If you want to send questions, you can send them to Jeffrey@JeffreyKamys.com and you can send the questions in and we’ll try to get to as many as we can. So Michelle again wants to know what is dollar cost averaging, well essentially it’s an investment strategy in which you the investor divides up the total amount to be invested, and then you over a period of time, you purchase or you purchase an equity that you’re targeting, so for an example if you have $12,000 you want to invest in Apple and it’s over one year you would essentially spend a thousand per month, buying as much Apple stock as $1,000 would buy and you buy that for exactly on the same day maybe each month, maybe the 1st of every month, you buy $1,000 worth of Apple stock.

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Now the strategy, what you’re avoiding here is market timing. There is always risk in the market and if you buy lets say, you buy that Apple stock and you put all 12000 in Apple stock same day. And then Apple all of a sudden loses 20% you know, you’re down $2,400, where if you had purchased $1,000 worth of the Apple stock and then it goes down 20%, you’re going to get to buy it at a lower cost. So your next thousand, you can buy you know an additional thousand you buy it at a lower cost. So if you spaced out your purchase, you’ll have some of the stock at a lower rate. So that’s essentially what the aim is for dollar cost averaging, so that you can avoid the market timing and volatility and over time buying the stock perhaps you’ll have more shares at a lower price.

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So thanks again, appreciate all you listeners and people who are reaching out to me. Have a great day and we’ll see you next time on Stock Smart with Jeffrey Kamys.