Howdy y’all. Let’s ride.
Q. I was late to this bull market Cody. When’s the next one coming and how high does it take us?
A. I don’t think this current bull market is over yet. I wouldn’t be aggressive, but if you don’t think you own enough stocks (or any for that matter) then I do suggest scaling into some of the best stocks you can find, including some of my highest-rated stocks in my own personal portfolio. See my Latest Positions for those ratings. Just don’t go all in, and don’t rush in either. Steady as she goes as this ongoing bubble-blowing bull market seems to be on pace for more for a while at least.
Q. TWTR analyst meeting happened today and stock went up 8%. Do you think its bullish signal for TWTR to buy for short term into year end run? What is your overall take on it?
A. I don’t know if today’s 8% pop in TWTR portends more rally ahead of it into year-end, but it’s a good point — the shorts and momentum traders have loved being short this thing and its far from loved right now. I’d sure rather be long than short $TWTR into year-end, that’s for sure.
Q. In the “Latest Positions” update posted Friday, November 7, you had dropped your rating of $AMBA to a 6. Is this because you view $AMBA as fully valued?
A. I don’t think I’d call $AMBA “fully-valued” as it’s on such a huge growth trajectory right now that it’s hard to gauge when/where it’ll truly be “fully-valued” for the next few years or even ten years from now. But I did drop the rating because it’s just been on such a tear of late and all year and the stock could easily pull back 10-20% for no seeming reason at all and it’d be back to where it was just a couple weeks ago and still up huge from where it was last year.
Q. When $AAPL split there was a lot of talk about $AAPL moving into the Dow Jones 30 but no recent rumblings. What are you views on this happening and if you think it is likely, any “feet to fire” forecast on timing.
A. For a stock as widely-owned already as $AAPL is, being included in the DJIA probably wouldn’t be much of a stock mover. I wouldn’t even dare try to profit from that probable, eventual headline. Feet to fire forecast on the timing for AAPL moving into the Dow Jones? Next two years.
Q. You acknowledge that INVN is a great company representing the drone/wearables industry. Does management have a chance to turn this story around?
A. I don’t think I’d call INVN a great company. It could grow into something great, but they’ve mismanaged investor expectations and stumbled by overbuilding inventory and selling components to $AAPL at a profit margin that was so low it changed its long-term profit trajectory for a lot of model’s including my own. If, big if, they can get margins back up and/or just continue to maintain current margins but grow revenues huge over the next few years, the stock will be a good one. But I think the long-term potential returns are probably less than what I’d expected to see when I first bought that stock and won’t be as good as they could have been.
Q. Hi Cody. How would you recommend a situation where one has March or April call options that are red…here at all-time highs. Many calling for a pullback which would hurt even more…in these situations do you recommend taking lumps or riding these kind of options out? P.S. They are in some of your highly rated stock picks…
A. I think I should tell you first and foremost that you should take another break from options trading. I know you’re young and upwardly mobile, but I myself have pulled back from options trading lately too. As for the existing options you have, if you don’t want to just sell them and catch your breath, taking a break from owning/trading options entirely, I’d guess that there’s still room to run between now and March/April. Even those mid- to longer-term bulls like myself are a bit hesitant embracing the current set-up. I wouldn’t suggest trying to game that sentiment and/or market move for the next 120 days, which is your time frame for those options, but it is what it is. Good luck my friend!
Q. Great commercial on sirus radio
A. Thanks. There’s actually three commercials that I voiced and three from Rebecca Diamond. You can hear them all here: https://soundcloud.com/cody-willard/sets/scutify-radio-commercials. Scutify has actually added several key new features in the four weeks since we recorded those commercials.
Q. Thanks Cody. On a similar note, lots of warnings from you and other All-Stars on Scutify regarding all time highs…Kirk Spano just bought VXX calls and SPY puts for what I’m assuming as a short term trade…any inclination to participate in similar positioning?
A. No, I’m starting to think we get another melt-up, maybe to DJIA 18k before we see DJIA 17k again. Again, I’m in a less aggressive mode for now, but feet to fire, if this bubble-blowing bull market is to keep on blowing like I think it is for the next year or two at least, why not a total melt-up into and above 18k before year-end? Stranger things have happened. Not trying and wouldn’t suggest trying to game that though.
Q. Hi, Cody:looking at your various recent comments — advice to tranche a but out of stocks that have had great great gains, and your comment above to Jahmon about going slow with options, here’s my situation and question: when you recommended January $105 calls on AAPL, I did my first tranche of only 2 contracts. They’re up more than 125% — thanks muchly for that — so my question to you is do I let it ride until closer to January or do I trim – – I never added another trench, stupidly, so the only way I can trim is half of my investment ( one of two contracts).. Should I stay with it for a while or take half out? or even add to it? Or sell it all?It’s my only Apple holdings. “Toughest trade” for sure.
A. How about let’s try to have our cake and eat it too and also save a piece for the time capsule? Here’s how: You could sell 1 of your 2 AAPL call options and lock in those big gains. Then go buy 1/5 or 1/3 of a full position of AAPL (whether that’s 10 or 30 or 100 shares or whatever) and step back and let a little time work for you and see where you are in January. A more aggressive approach of having your cake and eating it too but not saving any of it for the time capsule would be to sell your January $105 call options and go back some $120 call options dated out into January of next year or close to then. Good luck!
Q. You mentioned you were trimming tech holdings due to your position in Scutify which makes sense but perhaps puts you out of synch with those of us who enjoy and profit from your analysis on technology companies. We would still like to know if you have your eyes on any thing that you would be buying had you not been overweight in tech…am I making sense?
A. Good question. To be clear though, the Scutify position in my portfolio is not the primary reason for me pulling off the tech gas pedal after five years of leaning heavily on it. I think we can be a bit more opportunistic in finding our next Tech investment and/or trade rather than holding onto some of the laggards we had in the portfolio. Likewise, I’m looking at moving some money into other sectors that aren’t “tech” but are being revolutionized and undergoing demographic revolutions. I assure you guys I am working night and day as always to maximize our returns and minimize our risks as best as I know how.
Comment: Thank you – whatever you are doing it must be sinking in because I have found myself exiting positions lately just prior to you recommending same. I still hate FSLR though.
Q. I don’t want to dominate the conversation, but not very many questions today. Gold is such a hot topic right now with technicians in heated arguments about where gold is going…You think the Fed is shorting gold via banks to prop up the dollar? That’s a formidable opponent, isn’t it? Swiss Referrendum won’t pass, will it? What catalyst changes the game here? What do you need to see to invest in GDX as you have mentioned wanting to? I have already invested and am planning to wait it out…dark as it is right now. Think I will avoid gold moving forward once I get out of this mess…has not been a fun nor “reasonable” investment…
A. The Swiss Referendum has as much a chance of passing as the Scotland secession did. As for a gold price catalyst, how about just a steady drip higher as the universe/markets work to balance themselves and the Fed/banks who have allowed gold paper promises to build up to unfathomable levels of leverage grow complacent about a slow-and-steady increase until one day that tide is so far out there that we see who is really naked in the waters (as Buffett would put it). Anyway, the lack of a catalyst in $gold getting above $1500 an ounce in the near-term makes the gold miners lack the profitability to spike their stocks, ala, the Gold Miner Index, GDX. If Gold can’t stay sustainably above $1200/oz for the next few months, we might see some serious hard-times in the gold miner stocks and at that point, it’d be time to pick among the wreckage. Maybe the bottom won’t come for the GDX until the first major gold miner stock files for bankruptcy.