Here’s the transcript to this week’s Live Q&A Chat.
Q. I do see your latest positions with ratings 1 to 8. How should a new subscriber with no positions in any of the stock look at it in buying perspective ? Should we start small tranche in all the stocks with highest rating ? All those stocks are great picks but few have moved much higher from the price you got than other few.
A. Slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.
Q. Lowest volume days of the year, Gobel’s readings at 99+ peak overbought. Markets still trying to go up then snapping back. Doesnt it feel like something about to snap? I am having a hard time buying or holding much long right now. Thoughts?
A. Maybe a churn in the markets around 17500 for the DJIA and/or 4900 for the Nasdaq is what would surprise the most traders and is therefore the most likely to happen? Heck, the very fact that we’re focusing this much on the near-term markets’ actions is probably bearish.
Q. Are you expecting a 5% correction in the nazz?
A. I am, feet-to-fire, expecting a pullback of 5% or even more for the Nasdaq, but if the Nasdaq were to break above 5000 soon, the path of least resistance for the markets would probably be higher from there. Trying to game short-term 5-10% pullbacks has bankrupted many a trader.
Q. What is your take on qcom right now? Supposedly its baseband IP is not in the latest Galexy release.
A. With $QCOM down from $80 to $67 in the last year, it’s been a steady slow drip lower for shareholders. The company’s got $18 per share net cash and the stock yields 2.5% right now. They’ll earn $5 per share next year, which means we’re looking at $67-18 = $49 and $49 divided by $5 is less than 10. So it’s got a P/E of less than 10 when you account for the net cash. It’s cheap, that’s for sure. I’m going to consider buying some QCOM, but not yet.
Q. I noticed your scuttle re QCOM being relatively cheap at these levels. Do you still feel it would be a good buy knowing that Samsung is slowly pulling away as a primary customer and the potential that Intel may get the baseband chip win on the next iPhone ?
A. You just nailed the reasons why I’ve not added $QCOM yet despite it being cheap: “Samsung is slowly pulling away as a primary customer and the potential that Intel may get the baseband chip win on the next iPhone ”
Q. What do you think about another tranche of xlf puts?
A. I’m not ready to pull the trigger on more puts personally, as I’ve done my hedging with them for now and don’t want to put more hedges on the sheets yet. If I didn’t own any$XLF and/or $IBB puts, I might nibble on some to get a bit more hedged.
Q. Hi Cody – $P has been on the watch list as a short play for a while now, any new thoughts? It has been steady on the decline for almost a year, but popped recently with upgrades from analysts who think the CRB ruling on royalties will go in their favor. Still does not seem like a sustainable long term model in a very competitive market..
A. I’m glad you brought $P up, as I hadn’t noticed this pop from $14 to $17. I think $P‘s headed back to the single digits and I’m still as bearish about the company’s long-term prospects as I ever was. Might be time to nibble some puts and/or short some $P common. Let you know if and when I do.
Q. What does splk do well? and how’s management?
A. Learn more about $SPLK here at http://www.splunk.com/. Their security division (http://www.splunk.com/justask….) is part of reason I want to own it, but I also like the data analytics sector and Splunk’s becoming the de facto leader in data analytics.
Q. Subject: TWTR. I know you think it’s way undervalued long term, and we saw how it reacted to the takeover chatter (BTW – do you believe?) My question is the short term: I have $52.50 June calls, and was smart enough to cash in on SOME of them with the jump. Q – do you think it will see this level again before then? Does it even make sense to add to those calls? Perhaps some further out? Or, june not being that far off, should I bail and stay with just common?
A. Nicely done on your profit taking –selling while you can, not when you have to. I don’t know if $TWTR‘s gonna be able to keep this big rally going — it’s up 30% plus in the last few months. I think it could range between $45 and $55 for a while, but I’m planning on just holding my TWTR steady thoughout for the next few weeks.
A. I typically tell people to use a smaller tranche when they’re buying a stock that’s bouncing as $SNDK is right now. Don’t rush into it, but as I’d outlined after its recent tanking, I think one to two years out looks good for SNDK. https://twc.scutify.com/articl…