Let’s run. Won’t be easy. But we can get there. Rocky Runs Up the Stairs. Hoohah.
Q. With the “ugliness lurking” would you wait to add tranches of stocks that is pulled back. Seems like that would be prudent. Seems like everyone is waiting for a big shoe to drop….but VIX just dandy today.
A. Two points to try to answer your questions/comments. 1. I am indeed being patient about scaling into any new tranches even though I’ve been increasingly cash heavy over the last month. Seems prudent, to quote you. 2. Everybody can sometimes be exactly the contra indicator you’re looking for in a short-term move, as short-terms move are often driven by sentiment primarily. So that’s sort of a bullish counter point to the ugliness lurking.
Q. Cody, out of all the stocks that you are long which one do you think has the most upside potential over the next 10 years?
A. Tough question, my oh my. Hmm, let me look at the list. I’m going to go with the “most upside potential”, which will probably mean one of our RISKIEST stocks. Hold on. Drum roll please. Wait for it…wait for it…
Most upside potential in the “Latest positions” is actually a rather safe bet too, IMHO – “Media and other private investment/business holdings (9+ because betting on yourself and running a biz is always a best bet)” Hoohah. Hold on, still looking…
Is FB your answer?
I’m even gonna surprise myself with this answer. Because to truly have a 10,000% return like I did with $AAPL from $7 to $700 (didn’t get it all sold at the top, as you guys know 🙂 and still holding some) I suppose you’d have to look at smaller cap stocks like Apple was at the time when I bought it at a negative enterprise value (meaning they had more net cash in the bank than the value of the entire market cap of the stock) and so….I’ll go with $LNN and $XONE. Both risky but both could be 10-100 baggers over the next decade.
I know, I was too, when I chose ’em!
XONE already has had a 20% haircut in 2 days! that’s extreme.
Q. Hi Cody, I have not bought any 3D printing stocks yet. I’m thinking about getting in on the basket right now. Do you have think it’s a good opportunity to start the first tranche now? Thanks.
A. I love how you phrased the question, knowing that it’s not an “Do I buy the 3-D stocks right now or not” binary question. It’s more nuanced than that, as trading and investing always is. Yes, with a big pullback in all of them in the last week, I think a 1/3 or 1/5 tranche first buy-in of some 3-D stocks from the basket is probably not a bad idea. Scale in using tranches slowly but surely if you want to own these highly-overvalued, but highly-growing stocks.
Q. Cody, do you like any software companies like data –tableau software?
A I like software stocks a lot when you catch them early in a new secular Revolution Investing growth cycle and/or when you catch them near a cyclical bottom. I’ve read about $DATA a little bit, but I haven’t dug in much. There’s no estimates on Yahoo, but I’ve seen some at some of my brokerage analysts. Do you have anything you can send me to read and research on $DATA? It only IPO’d a few months ago.
Q. Nothing Cody. What did you think of CTXS getting deal with google glass?
A. I don’t think I’d call it a “Deal with google glass” because here’s how this news about it broke, “The South Florida Business Journal broke the news that Citrix is developing business-related apps for the Glass. Citrix VP of mobility solutions Chris Fleck told the paper that the firm is very interested in wearable technology and sees plenty of opportunity for Google Glass, especially in record-keeping: ‘For example, doctors or nurses could interview a new patient using Google Glass, and it would all be recorded, hands-free.'” Check out: scutify.com/CTXS. I like Citrix the company and I like that they’re getting way in front of the Google Glass train, but just sayin’.
Q. Cody, I’m looking to add some more of either CREE or TQNT. Which do you think would be the wiser move right now? Also, with the pullback the last few days, would you support adding more XONE right now?
A. I like both $CREE here after this pullback. Technically speaking, it looks like its trying to put in a new bottom around the $55 level or so. $TQNT is in a great secular growth duopoly as new 4G phones take 3G market share as people upgrade. Its management is feeling the pressure from shareholders to deliver and I think it’s got more upside potential over the next year than $CREE probably does, if only cuz $CREE’s already/still expensive on a sales and/or earnings to price basis. CREE’s management has proven themselves over the years and its a cleaner long-term secular grower than $TQNT. I’d do a bit of both in a tranche buy and then do more later in another couple tranches.
Q. Hello Cody, do you have any opinions on QIHU? It reports on the 25th and I’ve been reading lately that it’s taking a lot of business away from BIDU, which had a good recent quarterly report.
A. I don’t have much insight on $QIHU, as I haven’t done much homework on it and don’t often invest in anything non-US-based…but here’s my insight into the quarter for you to ponder – when you see two headlines on Yahoo Finance like this in a row heading into the quarterly report “Baidu’s Biggest Competitor AND Is Qihoo Gaining Search Market Share, Or Not?” I’d be concerned that any market share upside potential as a catalyst to pop the stock is already priced in now. Know what I mean?
That makes a lot of sense. Thank you Cody.
What else you guys want me to think about?
Q. Precious metals.
A. Short-term, precious metals seem to be victim to a major weighting/ceiling. Mid- to longer-term, there’s now nearly 70 paper claims in the GLD for every ounce of gold that GLD actually has. That and every other “paper promise” of gold or silver is probably worthless at some point and the value of gold will spike when the corrupt TBTF banks scramble to cover.
Q. Is GDX common still a viable trade down in the 23s?
A. Here’s what I wrote when I put that $GDX call option trade on my own sheets: “So here’s what I’m doing. I’m taking the proceeds of that winning VIX calls trade and using them to buy slightly out of the money call options in the GDX (strike prices from $25-28 and expiring in January 2014, paying about $2.50-$1.50 respectively each). See, if gold comes back 10-20% in the near-term, or even if it just finally finds a bottom, the GDX can rally back to its recent higher lows. Meaning, the GDX can pop 30% in the next few months if gold can just find its footing and/or actually rally. In some sense then, the GDX is a good levered-up vehicle for trading gold into year-end. Using call options for the trade makes it even more levered-up. So as usual, this options trade is very risky and probably more so than usual. But when I see an opportunity with a good risk/reward ratio like this, I want to sneak in for a trade.” Trade Alert – Rolling profits into a risky options trade. I don’t have the common and I’m about to lose 100% of the GDX calls that I held after selling some for big profits in a tranche sell soon after I’d bought them.
I’m still here, anything else? Doctor says I probably broke a rib a couple weeks ago, when my twice-shattered and many-times sprained right ankle gave out in the kitchen when I was trying to turn on the oven light to catch my pizza. Still hurts. But the point is, I’m hungry and I’ve got some left over sloppy joes for lunch. Hoohah.
Q. Last thing, JNPR, still favored?
A. Yes, but this is probably the “Show me” quarter for me, as in, the company better deliver and show some nice demand growth or I’m about to give up on ’em.
Q. Any thoughts on CIEN leading up to their ER on 12/12.
A. See my comments on Juniper, but know that Ciena’s done some delivering growth and Showing Us already. Don’t know how it’ll trade into earnings and let’s wait to see what the set up is closer to earnings if you’re considering a CIEN earnings report gamble.
Thx; appreciate it.
Q. Closing question for me Cody; you have mentioned that certain times you tell your mother to trim 10% or more from her 401k. Does it feel like its one of those times again?
A. Yes, I sure do, and I told my father-in-law, on Monday that he should probably trim 10% of his retirement portfolio mutual fund exposure to the stock market.
Okay folks, I’m outta here for now. See on the Subscriber Chat room https://tradingwithcody.com/subscriber-chat-room/ during the week and see you back here next week.
Cool, thanks Cody!