Here is the transcript to this week’s Thursday Special Live Q&A chat. Join me next Wednesday at 2pm EST at https://tradingwithcody.com/chat or send me an email with your question at email@example.com.
Howdy, let’s rock n roll!
Q. Any themes for 2014 that differ for 2013?
A. The biggest difference heading into 2014 vs 2013 is the lack of fear in the markets. Throughout 2012, there were constantly mini-sell-offs and panics with “Debt Crisis in Europe/Debt Ceiling in US/Whatever”, but in 2013, it’s been, especially in the last half of the year, a steady bubble-blowing upward rally. With many of our stocks up double or triple from what we paid for them at the lows in the last few years, there’s much more downside risk and less upside potential over the mid-term. Other than that, I do think the bubble blowing bull market is already locked in for the next year at least and that we’ll still want to mostly be long and strong for 2014.
Q. Hi Cody, I am a new subscriber and noted you list the positions in your model portfolio. Do you normally recommend equal percentage positions? I was asking as there are no percentages assigned to each stock. Thanks.
A. I don’t think its wise to give too much specifics about how to weight each position in my own portfolio as it’s likely not very relevant to most subscribers who each by definition have different risk tolerance, income levels, upside income potential, inheritances, wealth, etc. I suggest getting started by buying a small tranche of about 1/3 of a full position of some of the highest-rated and/or largest existing positions in my portfolio and then slowly but surely dipping your toe in with other tranches and/or following me when I add/trim or short or whatever to my own portfolio.
Thanks Cody. Makes a lot of sense.
Q. Cody, when you say long term social , do you recommend to buy leaps?
A. I’d rather just buy the common for a long-term basket but leaps do give you more potential upside as they give you a 100% potential loss downside too.
Q. What’s your favorite short?
A. Favorite short is probably the IEF if you’re looking out over the next two years, as I think rates will continue steadily climbing higher.
Q. There are many currencies coming out daily. Even JP Morgan is planning a new currency like bit coin. What are your thoughts?
A. The issue for any new currency, especially a crytocurrency like Bitcoin is whether or not it’s going to reach critical mass. Wikipedia says, Critical mass is the amount of fissile material needed to sustain nuclear fission. More generally, “critical mass” is similar to the tipping point concept. The good news is that the more generally accepted crytocurrencies of any sort become, the more likely whatever cryptocurrency you own/use is likely to hit critical mass. I think Bitcoin’s technologies and parameters been proven safe enough to likely make it one of if not THE de facto crytocurrency of the future. There will be more than one major crytocurrency used around the globe this time next decade though.
Q. You looking to add to your JPM short at these levels?
A. No, not yet. JPM’s got too much government protection, welfare and the pendulum just hasn’t stopped swinging its direction yet.
Q. Cody – What is your take on Mastercard? I have been playing in and out over the past year with good results and was thinking of buying some leaps to go through the split and to hold for a while after the split. Risky or do you think it will continue to do well in 2014?
A. MA and V have lobbied the Republican/Democrat Regime and the Fed to protect their giant duopoly beyond any semblance of legality. Both stocks are riding the bubble blowing bull market higher and certainly can participate in it til the pop comes, when it comes some day, some year. I think when the financial system finally has a reset and all these financial companies that are operating criminal and/or civilly outside the spirit of our laws are going to get crushed. That’s a long way off though.
Q. So it is NEW year and last year I bought into BIDU with you and then you decided you were out. I kept my position for awhile and went it down into the 90s I took the loss and boom it is touching 180 today and so I could not have timed this investment any worse. I am feeling that the lesson here is to make sound investments for the long haul and have the tenacity to stay the course. Would you consider buying into the google of china again?
A. I had to remove BIDU from my screen for a while after it started moving up after it finished bottoming without me. I do think BIDU is likely to remain a highflying bubble blowing bull market favorite for the foreseeable future, and if you’re willing to ride the tide while the bubble blowing is good, it’s likely to participate. More to your point, if you plan on holding BIDU for a decade or more, I sure think it’s one of the best/safest ways to invest in China technology.
Q. Would you weigh in on SCTY and PLUG as energy play? Thank you.
A. SCTY is an expensive, but viable company that will likely benefit from any new/continued/lobbied-for welfare subsidies for the solar industry. Elon Musk has learned to work the system/regime/laws/industry-welfare game like few others and with him driving those factors for SCTY, as long as the pendulum continues swinging his way, that stock will probably benefit. PLUG looks like a small cap hype play that my spider senses say RUN FOR THE HILLS away from that stock. Press releases like this that drive a penny stock up 35% in a single day are scary at best: “7:00 am Plug Power announces it has met order targets set for the fourth quarter of 2013. Orders for the fourth quarter of 2013 totaled ~$32 million, and includes contracts with Walmart (WMT), Kroger (Briefing.com(Thu 12:12PM EST) Plug Power meets its 4Q order targets AP (Thu 11:09AM EST) Why Plug Power (PLUG) Is Gaining Today at TheStreet(Thu 10:31AM EST) Plug Power Meets Projected Order Targets for Fourth Quarter of 2013”
Q. Thanks Cody. Also, what is your thought on SINA as they possess the product called Weibo, which is essentially the Chinese version of Twitter. Thank you and Happy New Year.
A. SINA’s not a bad China tech bet either, but BIDU has more critical mass at this point, IMHO, though I’m not in China! 🙂
By the way, thanks for the advice on PLUG. I dumped 90% of what I got at 1.77. Only kept a small trench.
Q. Hi Cody, what’s your take on NQ for the short and long term? Also CROX? Thanks!
A. I think an $NQ short paired up with a BIDU long might be a good long-term way to play China tech. I don’t trust the NQ story or financials and would rather bet with the Muddy Waters short guys on that stock than the longs. Seen this play before: Sino-Forest Long-Term Investment Setup. No opinion on CROX as I’ve not looked at it in years.
Q. What is your take on NVDA? Same question for AMD. I am considering dumping NVDA (at a profit). Not too sure about AMD.
A. I like NVDA but dumped it for TQNT a few weeks ago. AMD has WAYYYY too much debt and too little financial flexibility for me.
Q. With AAPL getting hit again today would you consider buying calls yet? If so what dates and prices?
A. As always, be VERY CAREFUL WITH OPTIONS. But yea, I like AAPL on the sell-off today and feet to fire I’d say the June $600s or $650s would give you lots of potential upside and limit your potential losses to 100%.
Q. Cody, any thoughts on YELP?
A. YELP is one of the biggest bubbled stocks out there right now. I think, like Zillow, it will crash hard at some point, and that makes it a decent short side hedge to our highflying stocks.
Q. I’m thinking about getting into some calls on the GOOG. Any strikes and prices that catch your eye? I was looking out to the March 1300s looking for a good earnings report this month, then a run up into the next report in April.
A. I just don’t like the chasing of a stock like GOOG that’s doubled and tripled and/or quadrupled from its lows a few years ago and just keeps powering along at all-time highs. I’m not selling my long-held GOOG common, but I have no feet to fire prediction for the call options over the next three months. It’d likely depend on the broader markets continuing to bubble along for those to pay off. I think the aforementioned AAPL calls are probably a slightly better bet, but any 90-day or 150 day time frame option trade is going to be inherently wildly risky, so good luck!
Q. Cody, if the chat is happening now, I will pose my Amberella question -Cody, nice to see you here today – Happy New Year. Would love to get your take on Amberella. I am holder bought at 17.14 in August. It has had a nice run into mid 30’s. One of the main reasons I ask, is that the Google positive partnership announcement surprised me, as I was not looking at the stock from that angle but more from the improved Hi def tv chip side. Look forward to hearing any thoughts you might have?
A. AMBA’s got $3 per share net cash, trading at 30x next year’s earnings estimates and growing the topline at 15-20% per year. That ain’t cheap, but if you believe that the growth can continue for three or five years at that rate, I think you’d have a least a double in the stock. I don’t know it well enough to have an valuable opinion about those 3-5 year prospects for this particular stock though.
Q. I don’t see my question. Hmm…I was asking about Vjet and is it worthy of the 3d basket?
A. I like $VJET just fine, but with our 3-D printing basket already flying high and full of risk already, I’m just going to stick with the three we’ve got for now. I would be willing to swap VJET into the basket for one of the other existing names if the fundamentals of any of our DDD SSYS and/or XONE don’t continue to grow and boom.
Q. Cody, Any thoughts on Uni-Pixel (UNXL)? The stock is near 52 week lows with the exit of the CEO and CFO.
A. UNXL looks like a disaster. Profit estimates turned to loss estimates and losing executives and a small cap unproven company…it’s a lottery ticket if anything, I guess. Not for me though.
Q. Any thoughts on PANW?
A. I like PANW but haven’t looked at it or met the management, so no position for me.
Q. Cody any thoughts on yahoo? It has run a pretty good ways.
A. I think YHOO might be getting to be a good-looking short bet here. For all the hype about Marissa Meyer the latest CEO turning that company around (and don’t get me wrong, she’s done a lot of good stuff), the topline growth for YHOO this year is….-(0.4%). Yes they are shinking still. Next year the topline is supposed to almost match the growth of the US GDP. I’d like to sell Scutify to Yahoo sometime before the bubble pops again though! 🙂
Q. Cody, any thoughts on ONVO? 3-D printing of living human tissue?
A. Futuristic biotech bets are best left to those who do that for a living. I know lots of brilliant doctors and scientists who spend their lives analyzing and gaming the laws/regulations/approvals and technologies in biotech and most still lose their shirts, frankly.
Q. Its a new year I thought I would be more active with my portfolio this year. First time catching a chat… TWTR put options? or will it keep growing?
A. TWTR will certainly continue to grow membership, readership, revenues and eventually earnings. I don’t like TWTR as a long or a short here though, as the stock’s just too battlefield-ed right now.
Q. Is SNDK still a buy?
A. I still like SNDK long-term as I wrote in the portfolio review the other day, but as always I suggest using a tranche system of buying just 1/3 of a full position to start.
Q. Happy new year from Rio de Janeiro! I would like to innate a new position in either FB CREE INTC or TQNT. Would you recommend to buy at today’s prices or may the stocks sell off further in the next days?
A. HNY2Y2! I suggest buying about 1/3 position in the stocks you’re wanting to get started in and then slowly but surely adding to them over the next few days or weeks.
Q. TWTR by March time frame?
A. Anybody’s guess! No way to game TWTR for now in my opinion.
I agree I was just hoping someone would know. Ha ha!
Q. Have you seen the wolf of wall street Cody, will you see it? I heard its a great movie and you it was around the same time you were working on wall street.
A. I might see Wolf of Wall Street at some point. I’m not much of a movie watcher though and I’ll probably just get angry watching the mindless revelry and theft and greed and etc.
Q. Cody, I know it’s not the time or place, trying to wait for the end of chat, but can you confirm anything about Montana?
A. I wish I had any update at all about Madison Montana. She has been missing off Twitter and Scutify for the last week now and people have written that she has passed, but I am praying and hoping it’s just a misunderstanding and that she went off grid for the holidays.
Okay wow, that was a blitz! I thank you all for joining us for another very insightful and friendly chat. Prayers for Madison for now.