It’s time for our Weekly Q&A Chat even if I didn’t get a chance to send you guys a blast reminding you earlier. What’s what?
Q. I won’t be alone in thanking you BIG TIME for $GTAT. Thought i missed itwhen i didn’t buy as quickly as you did, left the .80 order there till end of day, and it got scooped up at the last minute! Etc. Etc. Question: having witnessed the back and forth between $GTAT and Apple, etc., is there a chance for another post-BK-announcement play in this? A new family of shorters maybe still there or coming in? Or do we just move on? Second question: could you quickly explain the Fear Index: what it is, where one finds it and, especially, how one reacts to big moves init in either direction. Especially because you’re such a big contrarian, if it goes in one way (e.g., it rises immensely, fear grows) do we take the opposite tack of what the “normal world’ would do
A. Rock on with your G-TAT self. Thanks for the kind words. And yes, that was amazing how it came all the way back and filled a bunch of us in the .80s at the close on Monday. I have no idea how the bankruptcy process will work out from here, and that $GTAT BK trade was literally as easy and huge and quick a BK trade as I’ve seen in several years now. I will listen to the GTAT call and read all I can and try to figure out if there’s a chance to invest in the remainder common stock or if the common stock will be completely wiped out, but I will not be trying to game the near-term short-squeeze BK trade again.
You can find the Fear & Greed Index here – http://money.cnn.com/data/fear-and-greed/. I don’t think it’s anything revolutionary or extremely helpful even for day-traders or swing-traders, but it’s certainly interesting and I welcome any and all data I can get most of the time.
Q. But, Cody, do you look at it (fear index) on a contrarian basis?
A. I’ve just started noticing the Fear & Greed indicator and like I said, I’m not sure there’s much edge to glean from it, but it’s worth knowing about.
Q. What would be your top 3 buys right now at these prices, Cody, besides $AAPL, $FB and $GOOG which are your top 3 holdings. What in your mind are the three most massively oversold stocks that are going to tear back?
A. You asked two different questions there, yes? 1. Top 3 Non-FB/GOOG/AAPL Buys Right Now: $AMBA, $SNDK, $SNE. Top 3 Most Massively Oversold Stocks That (Might) Come Roaring Back: $FB, $INVN, $YELP.
Comment: Giants are what’s what! Town’s going nuts in October again
Comment: First of all, it’s all about Baltimore.
Cody: As in NY or SF or the Little Giants? http://youtu.be/ixsXkrBV80A
Comment: SF Giants, of course! The perennial underdogs that win in even years. 😉
Cody: Perennial underdogs? The SF Giants? Hmm. https://www.google.com/#q=giants+world+series Real perennial underdog in baseball? I would say the Cubs are that. https://www.google.com/#q=cubs+world+series
Comment: Cubs with back-to-back World Series! Not too many teams can make that claim!
Comment: When I say perennial underdogs, I mean that in the context of the playoff teams…Giants always the playoff series underdogs….2010, 2012, 2014…who just win when it counts…Giants/Bruce Bochy has won his last 8 playoff series if I’m not mistaken…and they are still the underdogs…
Comment: Cubs with back-to-back World Series! Not too many teams can make that claim!
Cody: Not too many teams, even outside of baseball, can make the claim that they haven’t won a championship in over 100 years of showing up and playing each year either. The Cubs can make a lot of claims that not many times can!
Q. $FSLR continues its downward trend. Any interest in buying at this level? How much of the $FSLR fall would you say is sector related?
A. All the Solar Stocks have been hit lately and $FSLR no exception. My cost basis is still quite a bit lower on $FSLR and I’m not looking to build it up anytime soon. If it got way oversold near-term, I might reconsider that, but I do think it’s a good core holding for the Solar Revolution.
Q. What’s the potential of an $AAPL disappoint at earnings this quarter, and growing concerns about an Apple Watch flop..? On a scale of 1 to 10 how confident would you be that April and January 2016 calls would be winners?
A. iWatch isn’t coming out to next quarter anyway, so 0% chance Apple misses earnings estimates because of it this quarter. That said, we’ll have to see how the iWatch demand plays out, but I sure think it’ll be through the roof.
Q. What are your thoughts on how the $GTAT BK will impact $AAPL watch production?
A. I can’t imagine that the $GTAT BK will impact Apple watch production at all. I’d expect only 10-20% of all Apple watches to have sapphire glass anyway, and they’ll get that from $GTAT and someone else if they have to.
Q. You rated Stratysis, Calgone, Lindsay and Himax at 7 during your last position updates. Can you give us the reasons? I get the long term arguments for these stocks. Has anything changed in your viewpoint?
A. Let’s tackle each one of those stocks. Calgone and Lindsay, our two Water Revolution stocks, have been rather disappointing compared to most of our other stocks. I see another water company, $AEGN at 52-week lows today and I’m doubling my homework on $CCC and $LNN to try to figure out if I’m missing something. $SSYS, is up huge and very expensive right now. Himax is a very risky high-potential reward play whose catalyst, Google Glass going mainstream, isn’t even on the horizon yet.
Q. You wrote “Himax is a very risky high-potential reward play whose catalyst, Google Glass going mainstream, isn’t even on the horizon yet.” Is this, in essence, a continued Hold (if we’re willing to go with the risk) or, like before, should we tranche a little of the profit off?
A. I’m holding my remaining $HIMX steady. Sold it down when it popped above $10 recently.
Q. Not early to this party as there is a lot of press about it but do you have any interest in betting against the bubbled Canadian housing market which now has surpassed the absurdity of the 2008 US market
A. I haven’t read anything recently about a Canadian Real Estate Market Bubble and it doesn’t sound like something I would try to play from down here in NM, but if I lived in Canada and I thought there was an RE bubble, I would look at trying to figure out what markets will crash the worst when the crash comes and then try to figure out what companies and banks have the most exposure to those markets.
Q. In Vancouver Median Home price in north of $1MM and the median family income is $67K. Something has to give. Home Capital is the Canadian equal to Countrywide.
A. Good info and good luck if you bet against Home Capital.
Q. Cody, what percentage of your $JRJC puts do you still have left?
A. I think I’m down to about 1/5 of the $JRJC puts I had initially. I’m likely to take profits on the last of them out with the stock now down 50% from where we bought the puts.
Q. What are the odds that a big overbought pullback in $GPRO would have a significant negative affect on $AMBA?
A. High odds that a big pullback in $GPRO would hit $AMBA for the near-term too. Longer-term, the two stocks will be mostly uncorrelated.
Q. Cody: a revisit to a couple of old friends (?) — any thoughts on prospects (downward? of $BKS (Barnes & Noble) and $RSH (Radio Shack)? I just can’t shake the idea that RSH will be a viable BK play for us come first quarter of next year (when their holiday sales aren’t up to snuff) — they’ve had their “rescue” and people aren’t thrilled with it, right? I’d short it now, but no shares available. BTW — a question: When there are no shares available to borrow/to short on a stock, does that absolutely necessarily mean the level of shorting is high?
A. I still think $BKS is in big trouble and shouldn’t be trying to figure out a tablet strategy. $RSH, yes, feet to fire, I’d say it goes BK in the next half year or so. As for this part: “When there are no shares available to borrow/to short on a stock, does that absolutely necessarily mean the level of shorting is high?” Probably yes. But it’s possible that every shareholder has asked for his stock not to be lent out and then the brokers conceivably would only be able to offer it for borrow to short for traders by “naked shorting” it meaning that they didn’t borrow any shares to lend out to shortsellers. Naked-shortselling is very illegal. Or at least it used to be until the last five or ten years when the SEC and the DOJ and the NYSE and whoever else is supposed to regulate that stuff decided it didn’t matter anymore.
Q. Mac Daily News said this morning that Google glass has “disappeared” will this affect Himax? I share the same “fear” about google Glass. Hence my Q about $HIMX… (for what it’s worth). -to-wear-even-though-it-does-coool-stuff” reputation. Cody, is there another product out there to rescue $HIMX if necessary?
A. Google Glass ain’t for sale anymore? According to MacDailyNews? Hmm, maybe somebody should tell Google to quit sellling Google Glass at the only place that Google Glass is sold: https://glass.google.com/getglass/shop/glass. Go back and read all the stuff I’ve written about HIMX — they have other projector display technologies and other chipsets they sell, but the Google Glass and its long-term potential is the reason I own HIMX.
Q. I am puzzled as to why MacDailyNews would make that kind of statement? Do you have any insight on this?
A. Somebody should have read the full article. It’s all speculation! “Personally I’ll be surprised if Google does not pull the plug on the product within the next 12 months,” Dvorak writes. http://macdailynews.com/2014/10/08/google-glass-has-disappeared-almost-overnight/
Q. What is your thought on the FED meeting today? and also what is the direction for $GOOGL and Amazon near term?
A. The Fed met today? Couldn’t care less. Nothing substantial will change at the Fed anytime soon. $GOOG I like a lot here. $AMZN I like here but not as much as $GOOG.
Q.How about $LNN earnings tomorrow? What do you think they would look like and its impact on their stock?
A. No edge on $LNN’s earnings tomorrow…I’m curious as you are about it. See my prior comments about my concerns about the Water Revolution but my comments there are not about tomorrow’s earnings report from $LNN.
Q. What’s your take on $CRUS now it below 20?
A. I like $INVN below $20 better than $CRUS below $20.
Comment: Hi, great call on $gtat, thanks and regards
Cody: $GTAT rocked it — a 150% one day gain…why didn’t we put our whole life savings in it? Just kidding!
Okay, thanks all! Rocked it.