All rightie folks, let’s do this. Ask me anything.
Q. Cody, I have more than half of the funds parking in the money market funds, waiting for a meaningful pullback to enter for the mid-term. Could you please give some advice on where to park this money to get better returns while waiting? How about high yield bond/dividend ETF? I would really like some cash flow to cover the living expense.
A. Unfortunately, trying to find safe yield for your capital is, frankly, impossible right now with the Republican/Democrat Regime Federal Reserve forcing everybody to risk their money in stocks or other instruments in the name of “Saving your economy”. Anyway, the point is that you won’t be able to find any safe, reliable, easily-tapped instrument with anything more than 1-3% or so yield right now, and that won’t cover the living expenses. So, I don’t think you should risk your money or waste your time trying to get an extra 0.21% yield, because it’s just not worth it. If you’re planning on putting that money in the stock market anyway, then the only thing you probably can do is to put your money in a cash or cash-equivalent fund and just be ready to put it to work in the market the next time there’s a panic attack out there.
Q. Cody: the portfolio and 7/10 stocks have been lagging badly while the S&P is up 7% YTD. Is it time to shuffle things around? The tech sector is lagging badly while S&P and Dow are doing well.
A. I’m always actively managing and “shuffling things around”. I think it’s a fool’s errand to focus on YTD numbers, especially if you’re not managing other people’s money and especially if it’s only 42 days into the calendar year. Year-end, which comes around every 365 days, and year-to-date figures are arbitrary if you’re trying to focus on growing your capital as safely as possible for the next 3000 to 10,000 days. How many times have you read me preach over the years about the fact that you need to be prepared for weeks- or months-long stretches of underperforming, because every portfolio will underperform for random short-term stretches over the long-term. Frankly, I am as confident (or more) as I’ve ever been in my stock picking and market timing and economic analysis. And as I know you’ve been reading me for more than a decade, I think you believe we’ll have another big year this year, more importantly when we look back some 3000 days ahead, our strategies of buying the best revolutionary stocks when they’re cheap and/or down big while shorting the crappiest welfare companies on the planet when their bubbles are popping remains a great and unique strategy for me and my subscribers like you. Thanks for all the business and support over the years, Elad.
Q. CSCO long term opinion?
A. Cisco’s got some growth still ahead of it, but I like JNPR better. More upside potential.
Q. How important is CSCO’s quarter tonight for the overall market?
A. I don’t think Cisco matters to the broader markets anymore. Heck, the markets are at all-time highs without Apple participating. Why should yesterday’s horsemen matter to the cars today?
Q. I missed the opportunity to buy ZAGG about 1/3 of total target, should I chase at this point, wait for minor pullback?
A. Zagg’s up about 8% since I sent out that note yesterday morning. A lot of that buying pressure probably came from my subscribers, I would guess, as Zagg is a small enough float and market cap that we might have actually moved it. I always suggest getting started with the 1/3 position because that way you can sort of have your cake and eat it too. If the stock pulls back, you get the chance to buy a little more. If it pops, you’ve at least got a chunk at a lower cost basis to start. I don’t ever take a chance of getting in front of a new stock pick with you guys, so I’m just now getting my 1/3 tranche filled this morning too. So, yeah, I’d say it’s not too late to get started building a 1/3 chunk since I am myself.
Q. How do you figure ZAGG up 8% since your note yesterday? I make it more like4-4½% – – from about 7.20 or so to $7.54 now.
A. Okay, fair enough. I’d rather be paying just 4-5% more than be paying 8% more than my subscribers did yesterday. I just did the math off the top of my head and rounded the numbers as I was typing. Tough crowd!
Q. Cody, off the wall question: confident enough in ZAGG (you seem confident, for sure) that a small venture into long-term calls makes sense?
A. As long as you know you could lose everything if the ZAGG doesn’t go up before those calls expire, and you’re willing to risk losing 100% instead of a small portion of the trade if it doesn’t work out…then sure, some long-term calls are okay for the riskiest traders/investors who are willing to lose big money to try to make big money. Careful though!
Cody: thanks. Gonna take a (safe) stab.
Q. Read an article yesterday about the new wonder – “Willow Glass”. The author believes that use of this super glass for phones will make both the screens and the cases virtually indestructible, thereby eliminating the need for protective cases like Zagg makes… unless you have a passion for Zebra stripes or Leopard spots. Your thoughts on this please.
A. I think the future of smartphone display is projector and the way that we’ll interact with our smartphones is headed towards speech-recognition and motion gestures. In five years or so we’ll probably laugh about “touch screen smartphone technology.” Regardless, I think that ZAGG’s got plenty of growth potential over the next couple years.
Q. LNN is starting to recover from it’s drop 94 to 89. What caused the blip I couldn’t find any news that would explain it. Do you have a theory?
A. I think it’s mostly a waste of time to try to figure out why one stock might go down a few percentage points over a few weeks or months. For all we know some big mutual fund had huge redemptions and sold down their big winners of which Lindsay was one.
Q. What’s your take on Intel’s announcement this morning of doing a TV box? Do you believe that Apple will be able to do something significant in this area with all the competition . We also have heard this morning that Comcast is purchasing the 49% that GE owned. They must have plans as well.
A. Intel’s getting desperate to regain some traction in some growth markets since the PC growth is dead. I like INTC as a long-term investment anytime its in the low $20s. I think Apple’s going to roll out at least a couple new form factors for their eco-system to grow newly upon this year. Smart TV, Smart Watch, Smart Car (maybe a deal putting iOS in the dashboard of Ford cars or something?), Smart Enterprise Solutions…there are quite a few possibilities.
Q. What put options would you suggest for NTAP. Strike and date?
A. For an extremely RISKY trade, you could look at the February or March puts with $34 or $35 strikes. For a slightly less risky trade, you could go out to April and buy the puts with the $38-40 strikes. Either way you could easily lose 100% of the capital if the stock pops tomorrow. You could make a few hundred percent on the Feb and March puts and you could catch a double or triple on the higher-priced, longer-dated April puts if the stock crashes 15% or more tomorrow. Define your risks and know your upside and don’t do anything that will make you sick if you’re wrong on the trade tomorrow.
Q. What do you think about LOGI as a short now with all the new iphone universal remotes.
A. I don’t like LOGI as they still depend too much on the aforementioned PC market of declining growth.
Q. I think you mentioned buying physical gold last week if I recall correctly. What is the best way of going about purchasing gold w/o overpaying for it?
A. The best way to buy physical gold or silver is to shop around slowly but surely locally and every time you drive to another big city until you find a reputable dealer that’s not trying to scalp you but wants your continued business over the next few years. Then slowly but surely build up some gold and silver coins, bars, or whatever and keep it stashed safely away. One of the things I’ve been working on the last week and this morning is the idea of buying physical gold and silver and hedging that with GLD and SLV and/or other gold and silver paper certificates. More to come on that analysis.
Q. How to make money?
A. “How to make money?” That’s THE question, isn’t it. I’ve spent the last sixteen years of my life trying to figure out the answer.
Okay folks, that’s another edition of TWC Q&A. Rock on and thanks!