Here’s the transcript for this week’s Live Q&A Chat.
By the way — First, make sure you download the Futr Messaging App, and use the “Find” function to search for “Cody” and Follow me on Futr. (Click here to download the Futr Android or click here for the Futr iPhone app.) I’ll be sending out some 1 minute video clips with some fun/funny markets, stock, political and other commentary to my Futr followers. Don’t worry, it’s not a requirement and I won’t be posting any Premium TradingWithCody stuff on there. The stuff I’ll post is mostly just for fun. Check Futr out, if you haven’t yet. Android –https://play.google.com/store/… iPhone – https://itunes.apple.com/us/ap…
Q. It feels to me that the market may be following a pattern I used to see in some previous quarters where the market rallies for the most part through earnings season (up some days in response to good reports; down on other days in response to not so good reports) only to find some excuse to sell off after most of the reporting has been completed for the quarter. What is your feet to fire feeling for the market as a whole over the next month or so?
A. I’ve been a bit bearish about the near-term markets “Path of Least Resistance” and I’ve been wrong. Feels like the markets want to run higher near-term now, but as usual, I’m not trying to game that anyway.
Q. Hi Cody, I have some questions regarding your use of paired trades and specifically the reason for the pairing of YNDX/P this week as they do not seem to be in exactly the same industries. I understand that we all make our own decisions but I would like to have a better understanding of your thinking here. I have numbered the questions for convenience; please respond to all.
(1) Is the intention of the pairing simply to add equal dollar amounts of long and short (hedge) so as to not increase the net long exposure of the portfolio?
MY ANSWER: Not necessarily, but in this case, yes, that was what I was looking to do by using the paired trade set-up.
(2) Please explain why you have chosen to make YNDX/P a paired trade and not two separate investments.
MY ANSWER: Mostly just because they are both Internet/app companies and one was set up for a buy and the other was set up for a short and so I took the opportunity in front of me.
(3) Does this mean that you eventually intend to unwind this paired trade simultaneously? This doesn’t seem to make much sense to me.
MY ANSWER: Not necessarily. In a true “pair trade,” I suppose that is the case, but in the particular case, I will let each position, the long YNDX and the short Pandora, ride on its own merits.
Q. So if these two can be so easily delinked, would it be fair to say that this is more of a simultaneous trade rather than a truly “paired” trade.
A. “Simultaneous trade” it is, then! 🙂
Q. Thank you for the clarification. Consider that your words can at times take on more significance than you intend and like the fed watchers your community parses everything most carefully for its true intent and meaning.
A. Haha, thanks and very funny.
Q. I took a tiny YNDX call/stop loss position in YNDX a few weeks back as a flip but no Russian corp should be thought of as an investment. Russia operates as a mafia organized crime state under Putin and since the YNDX founder was forced out and replaced by a Putin stooge they have had successive declining earnings. We should keep eyes wide open that YNDX isn’t just another mafia slush fund for putin like Gazprom.
A. Well-phrased, yes, agreed. I’ll ride $YNDX while it looks like a good risk/reward but won’t confuse it with a typical “Revolution Investment” stock.
Q. Google goog earnings next week—is all bad priced in??
A. I would think that it would take a pretty bad miss from Google in their upcoming earnings report for the stock to get hit too badly. Sentiment around $GOOG / $GOOGL is pretty awful right now and the EU leaning on them is adding to that. I don’t know that I think$GOOG is running to $600 anytime soon, but I think it’s a screaming buy if it gets back to$500.
Q. Any chance of goog to pay a dividend?
Q. Hello Cody! $SYNA What’s your take on SYNA’s TDDI chip? Is it really so promising? – I read an opinion describing SYNA as a potential multi-bagger from current levels.
A. $SYNA Synaptics’ management has definitely been pitching the TDDI big time. TDDI means that Synaptics’ chip has an “Integrated Touch and Display Driver” rather than two components which saves space and money for smartphone and tablet and future wearables makers.
Q. I have downloaded the Futr app and added you. The interface looks sleek and neat.
A. Thanks for download the Futr app and for the feedback. Please get a few of your friends/family to download it and send them a few messages into the future too!
Q. What’s the upside vs downside into Apple’s earnings?
A. Apple’s earnings would have be way better than expected and they’ll need to have a lot of great stuff to say about how many Apple Watches they are selling if the AAPL stock is to pop after earnings. Unlike for GOOG, where sentiment is horrible, sentiment around $AAPL seems very strong.
Q. In your ‘Latest Positions’ list you downgraded Sony and Ambarella to 6. Is this just related to recent price gains or perhaps there is something else you are concerned about?
A. The ratings for each stock is an art, not science. With $SNE, it’s a very different set-up than $AMBA as one is a value stock and the latter is a high-growth stock. But yes, the 6/10 rating they got is partly because they’ve rallied so hard so fast of late.
Q. Let’s just say a guy made a rash bet a while ago on June $90 FB calls and let’s say he’s taking a bit of a bath right now (down 30% or so) on those, would you counsel him — let’s just say he’s a friend of mine –to get out and move on, or should he hope to recoup some of that? Theoretically speaking, of course.
A. I’d suggest selling at least 1/3 of those call options and seeing if you feel any better about it. Don’t have to be all in or all out on it. Good luck!
Q. I’m up 500% on SNE Jan 16 calls with initial investment already taken off the table. What a great call – thank you! Did you happen to view the Bass presentation on the disaster brewing in Japan that Spano posted on Scutify? Any thought of looking at inverse Japan bond ETFs or a bet against the yen to hedge our mostly long positions?
A. Congrats on the SNE trade and for successfully and smartly managing it so far. You might want to consider selling some of of those calls and just nibbling on some common stock or rolling into some higher priced calls to take some more of that 500% gain off the table. Didn’t watch the Bass presentation but I’m not looking to bet against “Japan” per se.
Q. Do I have to register on the Futr app? Has any existing login info been ported from TWC?
A. You just use your Facebook login or put in an email address to register on Futr.
Q. Simple (maybe not so simple) question on energy (oil). Right now, today, with the recent up moves, would you counsel someone with no energy in his portfolio to start tranching in somewhere, long or short-term, and if so, where? Or is it still wait and see…
Q. And just like that, I got your Futr video on (sort of) the same oil subject! Still would like a harder answer (if it exists), though. (Good to see the Cody “headquarters,” though.)
A. Ha, yes, just happened to have sent out a video on Futr to my followers this morning saying there’s no reason to try to time a bottom in oil. I don’t know why we have to try to catch a bottom in energy stocks. Let’s find the next $AAPL (or just buy more $AAPL) instead of fighting the energy collapse. An old friend of mine who recently died started as a oil field hand and eventually bought and sold some of the same handful of oil co’s several times. He’d get out in the boom times and inevitably buy ‘em back out of bankruptcy years later. I still think it will take years for oil to get back to its old highs and then some time after that before the jobs/boom come back to oil towns.
Q. As long as I brought it up…how exactly is “Cody headquarters” set up/configured? how many screens/devices do you have workin’ at the same time? Surely not just that one I see in Futr.
A. I’m pretty flexible when it comes to my set-up. I need one of my MacBookPro Air’s with me and my iPhone and I can move mountains. In my main office, I usually have two MacBook Pro’s open along with an Samsung 8″ Galaxy 4 Tablet with my iPhone and an iPad or two around my desk sometimes too.
Q. I know you avoid Chinese stocks in general. I hold $BABA in loss. What would be its short term and long term prospects?
A. I don’t like how complicated $BABA’s management made their company’s structure set-up. I don’t have faith to invest in Chinese stocks, and especially not Chinese-based companies who are based out of the Cayman islands that also own lots of stakes in other publicly-traded companies in China, etc. I think $BABA’s too tough to try to game short or long-term. I haven’t fully gotten my arms around whether I’m a BABA bull or a BABA bear, and I’ve just moved on since it’s not something I want to own anyway. Sorry I can’t be more helpful to you.
Q. Any thoughts on SWKS and QRVO? In particular, I have seen several people dissing qorvo as old technology and praising swks? Both are in the rf circuit world.
A. I keep getting asked every week about SWKS and QRVO. But I’ve got no edge on those two since I’ve got $SYNA, $SNDK and INTC for my chip exposure and am not looking to add more.