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 ho, crazy days, what’s the story morning glory?
Q. How much more correction do you see?
A. Feet to fire, I’d be looking for a temporarily range bound market here for a few days maybe, and then maybe a headfake of a 1-2% up day in the markets and then after that we’ll have another down whoosh of 3-5% or so and then I’d look to start scaling into some of our long positions and new trading/investing ideas with some tranche buying. Let’s see what the market brings us though, because it will do what it will do and let the prices and timing of our stocks dictate what trades we make next.
Q. Cody, this is a difficult question—how high do you think nasdaq goes below the bubble pops?
A. Good question — I could picture the Nasdaq getting close or just above its old 5000 high from the dot com bubble in 2000. That’d give the chartists all a big ol “Double Top” pattern to talk about.
Q. The chart for the day in your email this morning showed the last two huge sell offs; Y2K, and 2008 Financial meltdown. Are you suggesting we should prepare for an occurrence of similar scope? Frankly I am a big fan of your Jan/Feb 5-10% correction theory. Are you rethinking it?
A. No, with Today’s Chart of the Day, I’m not suggesting that the markets are topping out right now and are about to crash like they did in 2000 and 2008. I am just showing how tiny the current pullback has been in the grand scheme of things and that we shouldn’t think seeing a few of our stocks on discount from a few weeks ago is somehow a magical opportunity to load up.
Q. Hello Cody, I heard something about Facebook pro? Any idea if this can hurt linkedin’s business? Have you tried the new FB paper app? Thoughts?
A. I haven’t heard anything about a Facebook Pro, but that would surprise me if they were to go that route. LinkedIn and Facebook aren’t competitors and probably won’t be, as they’ll always have core business differences of biz-first vs consumer-first models.
Q. Cody, how do you see JDSU as a wearable play? Also, how big could wearables be? Wired says as big as the smartphone market?
A, I see JDSU as a Drone play. Not sure it’s got much wearable traction or road map, but if Drones become huge in the consumer, business (and someday travel) worlds, JDSU’s gonna be a must-own along the way.
Q. What are your thoughts on beacon technology? (i.e. apple iBeacon) Is it a game changer and if so is there a play on it?
A. The iBeacon technology that enables blue tooth and other tracking abilities on iPhone needs more developer support to go mainstream and make a difference. That is, it’s far from critical mass for now. I’m not sure I’ve gotten my arms around where Apple is trying to go with it and am open to suggestions.
Q. Good afternoon Cody. Early this morning I saw that 3-d printers were down substantially. I bought XONE at $49. DDD was down approx 25 Percent and XONE was down 15 percent. What’s the reason for the pullback? Is the pullback coming from panic of the stock market ? Or is it from something more directly with 3d printing ? I was going to wait until XONE draws back to $30 -$32draws. Your thoughts?
A. Great minds think alike? Trade Alert – A basket buy plus a bunch of must-reads and commentary and 3D printing stocks print an ugly.
Q. TQNT would you initiate now or wait until after earnings if no position?
A. I always advice buying a first tranche and then giving yourself room to buy more. Maybe a 1/3 or bigger position before earnings if you don’t have any TQNT at all, but this earnings report isn’t likely to be full of huge upside anyway, as smartphone inventories are high enough that sell through for TQNT is going to be a bit affected. I own TQNT as a potential triple over the next two years, but obviously, it’s also a risky semiconductor kind of play.
Q. Feet to fire prediction on TQNT earnings tonight?
A. Feet to fire on TQNT, the report is inline and numbers tomorrow by the analysts model out bit soft for next quarter and perhaps raised for the full year. As for the action tomorrow, maybe a 2-5% potential downside and 10% potential upside. To be clear, as I mentioned above, “I own TQNT as a potential triple over the next two years, but obviously, it’s also a risky semiconductor kind of play.” Esp in regards to tonight’s report.
Q. Would you hold February call options through earnings on TQNT?
A. I don’t know how to answer the TQNT earnings/short-term market action in any more detail than that. Sorry. Good luck tho!!
Q. Cody, just connected, haven’t read today’s chat yet, hope you haven’t get same question already. 🙂 Can you please comment on Zynga?
A. With $ZNGA up 40% in the last three days, I’m likely to trim some down just a bit. $3.5 billion valuation for Zynga right now. We’d bought the stock under $3 as a “never-ending call option” on the company, and at $4.50 it’s still priced like a call option, I guess. But I liked it a lot when it was closer to its cash balance, which by the way, took a big hit when they spent all that cash making the purchase that sent the stock up like this over the last three days. As usual, I prefer to be at odds with conventional wisdom and this spike after that purchase is exactly that, I suppose.
Q. Cody; I hear ya on ZNGA. But, unfortunately, my average buy price was about $4.05, so I’m up a little under 10%, not as much as you. Would you still advise a trim (with a chance to buy back if/when drops), or should I hold on?
A. Again, I would be doing you a disservice to pretend that I could possible know how to advise you with exactly how you should be trading an individual stock/option in your portfolio. I would need to know your income, income growth potential, how much you have in stocks and other instruments and your age and your risk-tolerance, etc. I can just tell you that I’m holding most of my ZNGA for now. 🙂
Q. Hi Cody.
Q. Hi Cody, Who do you think is better positioned for mobile gaming , ZNGA or GLUU?
A. Neither, really. Mobile gaming gonna be tough to make money on, I do think. Like I said above though, I own ZNGA from below $3 as a never-ending call option on the company and I don’t have any position in GLUU.
Q. At what point would you consider buying more Amazon?
A. AMZN’s been a big winner and a big position for me and I’m not ready to buy more yet. Maybe around the $350 level as a small tranche starting point, but I’d be patient. Market might challenge AMZN in a “show me first” kinda way til next earnings report, still three months away.
Q. Any thoughts on LOCK?
A. $LOCK has about $2 per share net cash, no debt and is growing the topline faster than 20% per year. Trading at 50x next year’s earnings tho and that’s because there’s so much hype/press about identity and card info theft ala Target. If they can deliver on that kind of 20% CAGR for the next few years, the stock will double or triple from there though.
Q. What about $CREE? At what price would you add to your position?
A. I like $CREE here in the mid-$50s, but I am not adding to it for now. Below $50 and I’d likely be a buyer of another tranche.
Q. What are your thoughts on $Yelp and their earnings tonight? Would you make a small first tranche buy before the ER?
A. I’m not a fan of the YELP stock, though I do think the YELP apps are pretty great. Not sure YELP can fend off Google long-term.
Q. I bought some TWTR on the day of the ipo would you buy put protection?
A. Maybe a little bit of put protection, regardless of where you bought it. That said, “may you lose money on all your hedges” as a wise mentor of mine used to say.
Q. Cody any thoughts on FSLR and possible price you would be looking to add at? Thanks!
A. I’ll probably look to buy back a tranche of my $FSLR if it gets closer to $45.
Q. Any thoughts about FEYE?
A. I like FEYE a lot and am working on whether I want to buy it. Evaluating management, etc for now.
Q. Any idea on FUEL? And I really want a biotech stock pick are you working on it? I thought you were before.
A. FUEL ain’t making any money this year or next, but revenues could double. Lots of potential upside, but very risky play too. No position in it for me.
Q. Hey, Cody: last week you suggested looking at TLT and TBT (in addition to Sept. IEF puts) as additional plays on the expected interest rate rise. Can you briefly explain the difference between TLT and TBT — and is one of them already a contrarian play, ergo, no need to short/put it? The explanations I saw weren’t entirely clear to me. (Of course, I’m sure it’s just me.) Thanks.
A. Sorry if I confused you. Okay, let’s just stay away from the TBT entirely, as you are correct that it’s already a vehicle designed to go up with leverage, at a higher beta, than Treasuries themselves, if rates on Treasuries go up. Whereas the TLT is simply an ETF that buys/mimics the 20 year Treasury bond. I don’t like UltraShort ETFs and would rather just buy puts on the TLT than try to use the TBT as anything but a daytrading vehicle and I can’t imagine trying to profit from day trading Treasury rates. That all clear?
Q. Yep, clear on TLT. Thanks. And you said to go into 2016 with them? Any suggestion on strike price and whether in- or out-of-money?
A. I’d go slightly out of the money on the TLT puts and that’ll give you some nice leverage/upside if rates go way high, and you won’t be crushed by a huge capital loss by being able to buy more puts for less money than you’d have to if you bought puts with higher strikes. Of course all option buying comes with 100% risk possibilities.
Q. How do you buy Bitcoin, Cody? Not interested at this level, but how does one buy them?
A. Read this and I think you’ll have all the answers you need about Buying BitCoins: Everything you need to know about Bitcoin
Q. Can you give advice on Bitcoins / Dogde coin? My 14year old wants to trade it .
A. Only bitcoin is seeing enough interest to bring in more new merchants which brings in more new developers which brings in more new users to get it to critical mass anytime soon. The other cryptocurrencies including DogeCoin and LiteCoin and the rest are lottery tickets at best. I do think there will eventually be other successful cryptocurrencies, but I think they’ll have some entirely new innovations and changes that the challengers to bitcoin today lack.
Q. Is Mark zuckerberg the best CEO period?
A. Making a start-up social network into a $150 billion company in just ten years is pretty dang incredible and whoever leads a company to that kind of success and valuation is a great CEO. As for BEST tho? Let me ask you this, is Jordan or Kareem or Wilt or Bird or Magic or Russell or someone else the “best”?
Q. Hi, is there an instruction sheet on how to get the full use of the SCUTIFY SITE.
A. Take a tour of Scutify and see what you can do. Learn how to use the website/app so that you will get the most out of your experience. Remember Scutify is a new approach to analyzing and dissecting the market as well as keeping up to date with the various markets out there so you never miss a beat: Take a Tour of Scutify
Okay, I’m gonna go eat some lunch! Peace love and happiness.