Trading with Cody Kiss & Tell: June 17th, 2015.
Q: I have no gold exposure. I am looking into buying one of the major miners…most likely Goldcorp (GG). Any thoughts or a better option for gold exposure?
A: I don’t like the idea of betting on a higher price of gold by investing in any single gold miner. For one thing, I would want to see their mines and their operations and meet the management but more to the point, I don’t think the gold miners will be able to make much money until gold gets and stays well above $1300 or so per oz. I think it makes more sense to just put maybe 5% of your long-term money into some gold coins and gold bullion. I also do not like the gold ETFs such as GLD which is a paper promise from a bank that they will deliver real physical gold to you at some point…I don’t trust banks to deliver on their promises in the next crisis. Make sense?
Q: How do you handle your loses as per $SNDK, $TWTR?
A: SNDK isn’t a loss for me, as I bought it at lower levels than $60s its trading at these days. I own stocks that get hit by 20-30% all the time — it’s part of owning stocks. AAPL for example, has been down 20, 30 even 60% at various times from its highs while I’ve owned it over the last twelve years. I don’t expect any of my stocks to go straight up without pullbacks. As for handling the losses we have in TWTR right now, well, you’re seeing me handle them in real-time. I’m holding my relatively small common stock position in TWTR steady for now as I still think the company has so much upside potential long-term. Shorter-term, TWTR needs a CEO probably before the stock can really turn higher sustainably.
Q: Talk to us about $AMBA. Time to trim some more? Is some of this climb an ongoing mini-short squeeze? When will this delightful madness stop?
A: The problem with trimming $AMBA too much is that you’ll end up with too little exposure to the upside that we’ve enjoyed as this stock has run nearly 400% in the last year while we’ve owned it. Trimming 5-10% here and there isn’t a bad idea, but we also have to let our winners run sometimes.
Q: I Only have half a position in $TWTR would you add here to common or maybe some longer dated calls?
A: No I wouldn’t rush into another tranche or $TWTR just yet. I’ve been disappointed as a shareholder in the way this Twitter CEO change has been handled. I’m not pleased seeing Twitter fire their CEO and not bringing in some one to shake the house up. And on top of that, the new interim CEO, co-founder of Twitter/CEO of Square says he’s not going to change anything. If nothing needed to change, why did Twitter fire the CEO?
Good idea about doing a $TWTR revenue and earnings model based on my own user-growth and revenue-per-user-per-day assumptions to see where we end up with a potential $TWTR valuation in two or three years. I’ll work on that for an article next week, so stay tuned. And yes Twitter’s Periscope Live Streaming Video App is exploding and real-time streaming of copyrighted events like live sports is going to be a big deal to figure out for both Twitter and the sports industries.
Q: As I asked, any guess as to whether the $AMBA run-up is “real” at this point or partially a reflection of thwarted shorters?
A: The market dictates what’s “real” and the print on $AMBA right now is indeed over $120 per share, so that’s as real as real can be. To hit on the point you’re asking about tho,$AMBA‘s market cap is still “only” $3.8BB and I think if it were a privately-held company, it might be able to raise money at that or even higher levels. A $10BB market cap for $AMBA in a few years doesn’t seem unreasonable.
Q: Cody, how do we get $TWTR and Dorsey to “see the right way”, which in MHO is appointing a CEO who understands and has time to deal with customer needs and technical plans. It appears he is stretched with his next golden egg a 32% interest in Square (a potential integral part of the $AAPL Way strategy) . Is there a possible way to invest in Square? As always, thanks for all you do for TWC.
A: I’m not a fan of Square — the market place is passing it by and Dorsey doesn’t seem to have figured out how to make Square a De Facto Standard while he had his head start ahead of Apple Pay and Google Wallet and Android Pay, etc. Chris Sacca should become CEO of $TWTR. He’s Twitter’s largest shareholder — read this article he wrote about $TWTR :http://lowercasecapital.com/20…
Q: Would U think a GREEK default will literally leave the Greeks with no money overnight and have that country breakdown in civil / social order? or small pain for longer gain if out of the Euro and long live the Drachma?
A: The threat of what would happen if Greece defaults is probably much worse than the reality. Some of Greece’s people benefit while others suffer from being in the EU. People working and creating value will happen if they just let people work and create value.
Q: Any comment on (if you noticed the articles posted by Lucy and Elad, earlier today) $WFM‘s new “rating” system of their suppliers/products based on factors beyond organic — something the suppliers pay a fee for (to be rated) and for which THEY give the info? Seems to have the biz in a bit of an uproar. And between that and the growing competition, it just feels like $WFM’s reputation and lustre have been affected. Any comment beyond what you’ve already said about $WFM?
A: I’m getting sicker of being sick of $WMF‘s sickly stock price. No change, not selling it quite yet, but I’m not impressed with this new “pay to be rated” idea that Elad and Lucy are talking about today. http://www.forbes.com/sites/he…
Q: What has made $SYNA jump from a rank of 7 to now a 9 in your latest positions write-up ?
A: I think $SYNA‘s fundamental businesses are probably on fire right now. This is an email Robert Marcin who also owns SYNA sent me yesterday: “Syna announced 200 millionth finger print sensor shipment last week. At $3-4 current asp since most are $4 touch vs $2swipe, that suggests $600mm, cumulative past tense revenues. They had maybe $25mm under Validity the company they bought. This is much more than whats in forecast for June and Sept quarters. Some revs maybe spill into Sept qtr as they ship sensors to odm who then needs to assemble them into touch pads, but I cant imagine the June qtr and sept outlook not better than estimated from this announcement. No one on the street has commented about this. And the beat cant be just $10 or $20 million, it has to be much bigger. Now maybe other divisions softer than expected, since no preannouncement. But maybe one coming?”
Q: Cody, do you still own $SYNA Jun ’15 calls that you bought a while back? If so, what do you plan on doing with them? Thanks.
A: I sold the $SYNA call options for big gains at the same time I sold my old TWTR call options for big options (before Twitter had fallen). Read this “We’ve had some big winners of late and it’s time to take some more profits on most of the remaining call options I’ve got in the portfolio. We bought Synaptics $SYNA call options before its earnings report and the stock has blown past our $75 strike prices and I’m going to take the rest of the profits on those call options now, leaving me with my common stock $SYNA position. And We had bought our Twitter call options back in December when the stock was in the $30s. It’s now near $50 and I’m going to take the profits on all of our call options here too and let my $TWTR common stock position do its work for me.” https://tradingwithcody.com/201…