Here’s the transcript for this week’s Live Q&A Chat. Join us next week at 2pm ESTat TradingWithCody.com/Chat.
Q. Cody any opinion on FEYE?
A. I like FEYE enough down here after its huge crash today coming on top of its huge recent crash before today that I Voted Bullish Sentiment on Scutify’s $FEYE page for the next 30 days. But not enough to have put my money in it yet. I’m thinking about creating a basket of $FEYE, $SPLK and another crashed name or two that will likely go bubblicious and rally big time from here if the bubble-blowing bull market ain’t over yet.
Q.Whats your read on the $FSLR QTR and #’s. Any further interest after the decline today to add at some point?
A. My cost basis from when I was initially tranching into FSLR is much lower than today’s quote. And recall that I’ve bought and sold FSLR with my usual tranche playbook approach. I’d bought a tranche a few months ago when it had crashed below these current levels too. The quarter was strong and I didn’t see anything there to make me change my stance on FSLR so it’s steady as she goes there. I’d probably consider adding a tranche or two to it in the mid $50s but not anywhere near the current quote just yet.
Q. You mentioned recently that things have gotten too bearish and perhaps it’s time to flip it. It feels so bearish out there and feels like buying anything is 100% wrong, have things gotten too extreme to the downside at these levels?
A. Yes, it’s definitely getting bearish on the extreme, at least in the highflying momentum tech names. That’s partly why you saw me take a flyer on $TWTR yesterday, add to my $INVN, $JDSU, and buy some $YELP today. I want to start getting more aggressively on the long side than I was at the top.
Q. Hi Cody, what signals or prices are you waiting for to buy additional shares in some of the positions you own, namely $FB, $CIEN, $INVN, $JDSU.
A. There’s no set science or easy paint-the-numbers signals or prices for adding to any of my positions. Any time you see me add a tranche or trim down a position it’s for a multitude of reasons, including overall positioning in my portfolio for each of the traded stocks, my outlook on the markets and near-term moves in the markets, my risk-tolerance level, etc. I’d bought a tranche of $FB at $56 a few weeks ago that I’d sold when it’d gotten above $70 a few weeks before that. And $FB is currently my largest position in my stock portfolio, so I’m not likely to add another tranche here or to trim another tranche here until the stock makes some big moves from these current levels. Meanwhile, you saw that in the Trade Alert Monday I bought a new tranche in $JDSU and $INVN at these current levels because they are still relatively small positions in my broader portfolio. It’s an art, not a science.
Q. Cody, why is $SMH so strong this year–up 5 %?
A. $INTC makes up 19% of the $SMH and it’s up 10% on the year. $TSM is 12% of the ETF and it’s up 12% on the year. $MU is 5% of the $SMH ETF and its up 25% YTD. That’s why $SMH is up 5% on the year.
Q. Hello Cody, I’d like to know your thoughts on Google self-driving car technology. Where do you think it will be at as a business in 5 years?
A. I consider the Google Unmanned Car technology to be a Drone Revolution business. It will likely end the low-end cabbie and limo and delivery businesses entirely and make city street grids incredibly more efficient as it reduces gridlock and butterfly effects on the streets. Probably will be at least ten years before it’ll be mainstream in downtown NYC and downtown Rome, etc.
Q. Cody thanks on $FEYE. Do you feel the same on $DATA and $WDAY, thanks.
A. I’ve not followed either $DATA or $WDAY as closely as I’ve been following $FEYE lately, so I just don’t have a value-added opinion on those two for you currently.
Q. Hi, Cody. Saw what you told Elad re $TWTR. But another question relating to it: when you recommended an admittedly speculative move into calls a day or two ago, you referenced it could bounce back when “panicky longs and growling shorts” stopped doing their thing. Since your Alert, the calls have continued to drop big time. How do you gauge when “panicky longs and growling shorts” trends have stopped — and when it DOES stop, do you still see a “recovery'”back to where the shares/calls were the other day from these levels ? (In my case. down roughly 45% and 52% already for June options at $38 and $40.) (Maybe that makes me a “panicky long” in another way, huh?)
A. Your existential realization that you are probably a “panicky long” too is a very important one. Good for you. We will gauge that the panicky longs and growling bears have stopped and are reversing themselves when the stock moves up again. As for “when”? Well, obviously I thought we were getting close when I bought the call options yesterday when the stock was between $32 and $33. I didn’t think we’d nail the bottom and I don’t ever even try to do that. So the fact that the stock is down and the call options are down over the last 24 hours since we bought the call options isn’t exactly a shock to me. I’ll ride it out ’til the options expire or until I win on them over the next 60 days.
Q. Hi Cody. It seems to me that we missed a big opportunity to short these momo stocks. An opportunity that it feels like you wouldn’t have missed a year or six months ago, IMO. What do you think? Is that a fair assessment? It feels like you have a lot of other things going and TWC is not at the forefront. Just some feedback coming from a subscriber of a couple of years.
A. I had a baby who is now 16 weeks old and have raised a bunch of money for Scutify and have been trading and writing and analyzing and frankly making you guys some rather insightful market calls. I told you repeatedly when the momentum stocks first started crashing that it was time to build shorts in the highflyers like Pandora and Plug and others. So to answer your question. No, that is not a fair assessment at all and if I were an emotional guy, I’d probably be upset about you even asking and writing that. But no worries, I do know that I’ll make mistakes and that I’ll miss tops and bottoms and will have subscribers disappointed in me and my analysis at various points throughout the cycles of my career, including right now apparently.
Q. Cody: any investigation into/knowledge of Illumina ($ILMN) as a possible med-tech Revolutionary investment? The Fool has been high on this, and recently re-iterated: “For a science technology company, Illumina (NASDAQ: ILMN) is looking flashy these days. The company introduced an instrument capable of sequencing an entire human genome for just $1,000, a long-sought-for goal, and 100 have been ordered — twice as many as expected. Illumina might even be capturing nearly all sales for new sequencers, according to growth fund manager Ron Baron. Even if that’s not the case, it shows how strongly Illumina’s performing. The genomic medical revolution is coming, and Illumina is leading the way. What are you waiting for?”
A. I used to go to dinner with some of the earliest employees at $ILMN back when it was a small cap stock. I was good friends with Paul who was in turn good friends with the head of ILMN’s investors relations chief. Paul had a Master’s in biology and chemistry from Duke and a degree in pre-med from Harvard or something like that. I do not have a degree in biology or chemistry or pre-med, so I stick with technologies and areas that I do understand and can game and predict better. I have no doubt that DNA mapping and all that kind of stuff will continue to be huge. But I have no idea how the governments controlled by these corrupt corporatist regimes like the Republican/Democrat Regime here or the Regimes that run Iceland where ILMN was founded, are going to regulate and patent these things. Good luck either way!
Neglected to mention there that Paul was running a wildly successful biotech hedge fund and spent 120 hours a week studying genomes, DNA and regulations. And he still eventually went on to an easier way to make a living and now runs one of the world’s largest global consultancies.
Q. Cody what new products do u think $AAPL is coming out with later this year?
A. I could recite the same rumored upcoming products for $AAPL like the iWatch and an iTV and a bigger iPhone. Most importantly for the near-term I think is that they need a brand new, hugely updated and innovative iOS operating system for the iPhones and iPads already out there in the market place. And I think easy-to-speak-to voice recognition and capabilities have got to be better on the new iOS too. Meanwhile, I am waiting patiently for somebody like Apple to roll out speech- and/or gesture-recognition technology that even works with your iPhone or iPad from inside your pants pocket or purse so you don’t have to constantly be holding some device and staring at digital screen with blinking lights. And when am I gonna get my holographic and/or projector form factor from my iPhone and iPad too? Anyway, iWatch and iTV and all that. Sigh.
Q. But when i see “iWatch and iTV ” it sounds a little unspectacular-big-deal-you’re-not-the-first” to me. Will anybody perceive that as a game-changer for Apple?
A. Good question and unless the iWatch and iTV and bigger iPhone’s operating systems are crazy cooler than the current version of Apple’s iOS, no, they might very well fall flat with consumers.
Q. What gauges do u use to feel sentiment has gotten to negative or bullish? friends? newsletters? other?
A. Truly, all of the above is helpful in trying to gauge sentiment. The more data you have, the better.
Comment: Just want to chime in to Cody and Elad that this is the most valuable subscription that I have for investing purposes. You are so smart and responsible in your ideas and I really appreciate it–especially on scary days like today.
Cody : Thanks, Susan. Steady as she goes and keeping emotion out of it will lead us to the promised land of profits and out performance over time.
Elad: Thank you. This investing gig is NOT easy and especially on days like today and times like we have been having with specific names it is excellent to have someone to ask questions, advise from and to get some perspective.