Howdy, y’all. Let’s ride.
Well good morning! welcome back.
Q. Cody, Do you still think the market will have correction before the year end? How do you think AAPL will perform with all the china news into year end. I don’t see any action in AAPL with this china deal yet.
A. AAPL’s gone up nearly 200 points over the last few months, partly discounting that China Mobile deal. Calling the markets’ action for the next three weeks’ time frame into year-end is not a way to make money, I don’t think. Feet to fire, I could see the market dropping another 2-3%, DJIA at say 15600 or so, and then off to the Bubble Blowing Bull Market races again next year.
Q. Looking to get into some AAPL calls dated out 6-12 months… First, do you think that’s a good idea, and second, if so, what strikes and dates would you suggest?
A. If the Bubble Blowing Bull Market continues apace like I expect it to over the next six months, those AAPL calls could make you some nice money. I’d look at June $650s to $700s or so, but know that would be wildly risky.
Q. Cody, what do you think of GOOG at this price into the year end? I read a news article couple of days from fools.com that their top 3 stocks are LNKD, MKL and GOOG in their portfolio. I am excited about GOOG, but it already went up so much recently.
A. Yeah, that GOOG ain’t cheap no more. The Android, Google Glass, GoogleNet, GooglEverything Future is what keeps people buying that stock though. I wouldn’t want to plow blindly into a bunch of GOOG right here right now, but it’s still one of my largest positions as it has been for many years now and I am okay with that.
Q. Cody, what are your thoughts on MRVL going forward?
A. Too much exposure to hard drive storage makers and not enough wins in the new smartphone/tablet revolutions. It was great when it crashed on the court rulings against the company last year and we were able to sneak in and buy MRVL near its lows in the single digits. Not a fan of it right here right now though.
Q. Hello Cody ~ Do you have any thoughts on CIEN as it reports tomorrow?
A. AT&T’s cap ex spending was a little softer than expected in the last quarter of the year here, and that might weigh on CIEN into this week’s report. I think a lot of any such weakness in demand for the last couple months has probably been reflected in the stock pullback over the last couple months too. I’d like to buy more CIEN if the stock comes down near $20. Holding the CIEN I own steady for now.
Q. Any thoughts on BIDU at his point?
A. I’m still kicking myself for not having held onto my BIDU last year. It’s a great play on China tech/Internet growth, but I just have a hard time trusting the accounting and fundamentals and future of other countries, especially ones with a history of fraud and communism as China does.
Q. Good afternoon, Cody. For this week’s Q&A: I saw your comment on GSVC and understand it. Seems to have stabilized/gone a bit up today. What would you advise for a guy who’s tranched out of his March ’14 $12.50 puts (still holding 20% of what i had), making nice $ along the way? Are you optimistic enough for a climb of the puts from here to perhaps get back in at these prices, or should i just hold on to my final chunk and be happy? I guess it revolves around what happens with TWTR and some other holdings, huh? Advice? I’d go back in if you think the time frame and optimism (pessimism) is enough.
A. I’d probably just ride that last 1/5 tranche of your original GSVC puts out to March. I do think the stock is headed back to single digits (under $10), but it was a home run hit when we first put those puts on back when the stock was above $15. With the GSVC stock already down 30% in a straight line since we bought the puts, I’d just cruise control it for while here.
Q. Hi Cody, any thoughts on TWTR?
Agreed, would love your current take on TWTR…I can’t figure where you stand, don’t want to be involved still?
A. I think Twitter’s more in danger of being another MySpace that flames out as users move to better technology and better social networks than Facebook ever does. We own FB, LNKD, ZNGA and have made huge money on social networking/Internet stocks over the years by sticking with the best and cleanest growers. TWTR doesn’t turn me on and frankly the company’s seeming complacency and overconfidence scares me. So I don’t invest in it.
Q. Cody, would you, though, do anything of a shorting nature with TWTR right now?
A. No, not in this Bubble Blowing Bull Market. There’s too much upside potential to risk shorting it. I just don’t like it and I’m probably going to just remove TWTR from my stock screens for a while. Plenty of fish in the sea and plenty of stocks in the market.
Q. Cody would you add 2nd tranche of FSLR here?
A. Yes, a second tranche of FSLR while it’s down seems like a classic playbook move here.
Q. IEP ran since you mentioned it what would your trade on it now be?
A. I’d rather be a buyer of IEP than a seller here, as the yield is still 3-4x what you get over Treasuries. IEP’s dividend yield was nearly 8x treasury when I highlighted it for you guys: The Five Best Dividend Stocks on the Planet.
Q. Hi Cody, as you know, I’m unfortunately over-exposed on January Pandora puts (Lesson learned, I hope). Big bump today but I’m still down 3%, 27%, 60%, 80%. What advice can you give regarding when to “cut losses and preserve capital”? Do you see the pullback continuing? $P options don’t expire until January 18. Any thoughts on the subject and in the general strategy would be appreciated.
A. I usually advise using some varied time expirations for the strikes on a trade like those Pandora puts. I think Pandora’s a great hedge for our many highflying bubble long stocks as it’s bubbled up despite all kinds of competition heating up in mobile/Internet radio. Trying to guess whether the market decides to quit paying up for Pandora in the next six weeks before your particular puts expire is a tough call, but I’d still rather be short Pandora than long Pandora here near $30 a share. If that stock can crack down below $25 here in the short-term, it sure could fall to $20 by end of January though. Good luck!!
Q. Good afternoon Cody, Hilton IPO are you fan? If so at what price?
A. Ever read the Conrad Hilton biography? It’s a great read, and I’ve eaten many an Owl Bar green chile cheese burger over the original Oak Wood bar that still sits in San Antonio, NM where Conrad opened his first Trading Store which eventually became the Hilton empire which culminated when Conrad bought the Waldorf-Astoria in NYC as his empire’s “crown jewel” and where I hosted 528 TV shows for Fox. Anyway, I love the Hilton back story. Not so much a fan of the modern day Hilton’s though. That said, the stock is coming public with too much debt for my liking, so I’m not going to play the Blackrock shell game.
Q. Hello Cody, I apologize in advance for the very long question. If this is not suitable for the weekly chat I don’t mind waiting a day or so for a response. I have recently been considering a first tranche purchase of physical gold. I had avoided the issue because for a variety of reasons including storage, difficulty of resale, etc. So I first read your book and began to investigate the actual purchase. Your recommendation is to pay no more than about 5% over the spot price at a reputable local dealer. You also recommended using eBay auctions for purchases from a reliable seller and recommended one name for that purpose. When I posted questions in the daily chat there were also potential issues regarding the ability to sell merchandise back to a dealer. Some also recommend coins over bar.
A. Yes, I also prefer coins to bullion right now, but that’s partly because the premium on the coins vs. the quoted spot price isn’t much worse than it is on the bullion right now. You can almost always find a reputable dealer in your area that you can build up a relationship with and who will buy your gold back at above the quoted spot price too. But buying gold coins and bullion right here right now is about a long-term, multi-decade protection/investment and I’ve got no plans to sell any of my gold coins and bullion for many years.
Q. I think we’re getting into a time where a bulls v. bears would be informative. My vote is bulls are more scared.
Too early to vote, Cody? I think the bears are more scared short-term (which is what you want, i think), but it’ll come to the day when the bulls are. (Of course, as we’ve all discussed before, I’m a little swayed by a guy named Cody so that’s a little research bias…Would be great if someone were to execute/fund a test of people not previously schooled by you!
A. We haven’t had a 90% plus majority on either Bulls More Scared or Bears More Scared on our Who’s More Scared Poll in many months. I’ll poll my readers and subscribers again and hopefully we can see some numbers that give insight finally.
Q. Cody. When you tell us what you are buying, could you please include a price range to buy, e.g. Buy xxx between $x and $y. If we can’t make the trade when you do, it will provide a price guide. Thanks.
A. Great suggestion, yes, I’ll try to do that everytime from now on, on buys and sells.
Q. Is the chat at 11 AM Pacific time?
A. Yes, the weekly Live Q&A Chat with Cody is at 11am PST/2pm EST each Wednesday.