Q. Cody: As a contrarian, how do you/how should anyone read measures of Sentiment? If one looks at those gauges you cited, (a) how does a contrarian vote in them and (b) can the “reader” assume it’s basically the opinions of non-contrarians?
A. I don’t think you can successfully game near-term market moves by simply going against extreme measures in the popular sentiment polls. I use those along with my own personal “Hate-O-Meters” and my own personal gut feel to sometimes use sentiment to make a trade, but rarely do they all come together and give me confidence about trying to do so.
Q. Hi Cody, I’ve been increasing cash position for the past weeks following your playbook of trimming while you can..about 45% cash right now. What do you think is appropriate cash level under the current market condition? any stocks to nibble here for long-term play? Any short-term protective plays you have in mind?
A. There’s no way for me to know what’s an appropriate level of cash for you personally without knowing much more about you, your career, your age, your income, your savings, your existing portfolios, your family, etc. I do think having maybe twice as much cash right now as you did this time last year is probably a decent way to answer your question.
Q. If one were sitting on mainly cash now – what stocks would you buy at todays levels? Essentially think of it as creating a portfolio like you have but what can be bought today?
A. I’d start by slowly scaling into most of the positions in my existing portfolio, using small tranches to get started in each of the highest rated stocks and then on down the list of stocks from there. I’ll be sending out a Latest Positions article update later this week too, by the way.
Q. You said you were working on some short ideas (not just shorts as a hedge). Closer?
A. Yes, getting close to pulling the trigger on a short trade and a new long trade or two soon. Like usual, I’m just making sure I really like the next pitch before swinging.
Q. Cody, do you think that Google will pay a dividend?
A. I’ll throw out a feet to fire guess that $GOOG/$GOOGL will start paying a dividend in 2019. Doesn’t much change my own stance on $GOOG/$GOOGL whether they pay a dividend or not tho…just as long as they remain dominant and quickly growing and highly profitable, I’m in.
Q. Do u see aapl having a 3 to 5% pullback??
A. I think it’s more likely that $AAPL struggles in the $120s for the next couple months but a 3-5% move in any single stock is mostly noise anyway, so would be tough to game.
Q. If you see AAPL struggling with the 120’s for the “next few months,” would you say it’s wise to cash in on July $120 calls?
A. I think from the tone of your questions about $AAPL that you might have too much exposed and are too heavily weighted in your $AAPL positions right now so yea, maybe take some of the calls off the table. That said, remember that I gave you a feet to fire take on a 3-5% short-term move in AAPL and my guessed prediction on that near-term possible move isn’t something I’d want to base a trade on.
Q. Actually, not. I have a modest amount of common AAPL, and only ONE (!) contract left of the 120’s. Happy to hold common for a bit — time to reap what I’ve made on the one contract? (Made a lot of earlier ones.) ( Writing that out makes it an easy decision for me — sell, right?)
A. Only you know what’s best for you in that kind of detail on your own personal portfolio. Good luck and remember that “Bulls make money, bears make money and pigs get slaughtered” so just be strategic and not emotional in your decision.
Q. When do you start to worry about amba’s valuation?
A. I’m always worried about every company’s valuation. As for $AMBA itself, well, the earnings estimates for next year have to go up after last night’s blow out earnings and consensus will likely move north of $3/share for next year, making this stock trade at about 20x earnings. Yesterday, the current estimate for AMBA next year’s earnings per share was about $2.60, meaning its P/E yesterday with the stock at $62 was an even higher that it is today even accounting for the stock’s 8% pop this morning.
Q. SNDK is acting very nicely last few days, but way far away from the peak old days. Time to start with a first tranche, or is it worth a wait to see if it settles?
A. You should know by now that I’ll suggest starting with a 1/5 size position in any stock you want to buy, including $SNDK. I think it does look like SNDK wants to rally back to its old highs in coming weeks, but who knows when it comes to that short of a time frame.
Q. It feels like we should have a basket of security stocks ala the 3 d printing basket the last couple of years. Do you have ideas on this? I know the ETF $hack could be way to go. Thoughts?
A. I’m bullish on cyber security as an industry, but have been late on $PANW and$CYBR mainly because I have plenty of tech growth exposure already but I’ve had $PANW on the Long Watch list for months now. I don’t know anything about the $HACK cyber security ETF but I’d rather stick with best of class than an ETF.
Q. I guess I think we should have cyber security exposure in the revolution investing portfolio as well as wireless power which seems to be technology that will explode.
A. Nikola Tesla was probably just a few years away from inventing “wireless power transmission” when he died. You know it’s the future, at some point. When, years or decades is the main question. http://youtu.be/5x5qyaXX3Zc
Q. “Pictures, voices, moving through the air. You want me to believe that?” — a Tesla detractor. This is one zany clip.
A. It is zany, isn’t it? Thought provoking too tho.
Q. What are your thoughts on QRVO, as it is the result of TQNT / RFMD merger. We unloaded TQNT due to management before the merger around $17.
A. I’m just plenty exposed to tech right now and I’d probably want to sell a long position to replace it with QRVO but I don’t think QRVO’s got the upside potential and has too much downside risk compared to my existing longs. It’s a great merger and very profitable and I’m bullish on QRVO, just not enough to pull the trigger in my current stance with my current analysis overlaid on the current economy and stock market set ups.
Q. Any view on cy??
A. I haven’t done much work on $CY since we sold it a few years ago, but what I have read in the sellside notes recently has me interested in looking at $CY again soon. Here’s a note from Bear Stearns from last month about CY: “For 2015, Cypress expects growth stemming from the continued traction of its PSoC family (notably PSoC 4), design wins and introduction of new products within the automotive and industrial sectors, and ramp up of its Gen6 touch family in the mobile sector after Q1. Cypress also remains on track to complete its merger with Spansion in mid-March or mid-April of 2015 and expects to achieve significant cost synergies through the merger. ”
Q. I heard or read a very interesting article about the VA automating some of it’s patient transport functions to eliminate worker’s comp. claims from nurses getting hurt moving the patients. As there any health care robotics plays out there of which anyone is aware? It seems like a space with tremendous growth potential. From patient beds that transport themselves to micro-robots administering chemo at a cellular level, the money spent is going to be huge and already is. The value is human longevity, which has always carried a premium.
A. Very good top down analysis recognizing a sector that’s about to revolutionized by technology. My biggest concern in this particular — patient-moving robots– would be that they might not be very high margin compared to other sectors. Will do some work on this idea and try to find us a name or two. Thanks!
Finally, a note from Elad, Chief Moderator and Head Coach on TradingWithCody:
We are looking for testimonials for the TWC site. If you can, what would you say Cody and I have done to help, advise, coach you that was different from other sites you may have tried? What features of the TWC site do you find most compelling? Live daily chat with a moderator who is a portfolio manager LIVE during the trading day? Since I am a portfolio manager the TWC members have access to me 5 days a week during the market hours and get live feedback on any questions and investments based around Cody’s tech revolution portfolio? Accessibility to chat live with a portfolio manager? links? data we provide? teaching tools? the coaching in how to buy when to sell how to do both in stages etc? We appreciate you sending us feedback to email@example.com For those who sent some in, Thank you in advance.
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