Here is the transcript to this week’s Live Q&A Chat. Visit the Trading With Cody Chat room on the Trading With Cody iPhone App, the Trading With Cody Android App or in the Chat Room. If you have any questions about our service, just email us at support@tradingwithcody.com
Q. Can you please let us know the percentages of each position for your overall portfolio. That and your ratings would be helpful with following your trades. Please include a cash position percentage.
A. I don’t think it’s wise to give too much specifics about how to weight each position in my own portfolio as it’s likely not very relevant to most subscribers who each by definition have different risk tolerance, income levels, upside income potential, inheritances, wealth, etc.
Q. With SPY at all time high, what are your thoughts on a small hedge? How far out is usually best?
A. Interesting phrasing to your questions. 1. I wouldn’t just want to buy puts because the $SPY is at an all-time high, but to your point about putting on a small hedge, that’s not a bad idea. If only because you’re asking, you might want to add some small hedge to reduce your overall risk profile. 2. I don’t think we should use a “usually” in our answer to what kind of hedge you should use because each time and set up is always different. That said, I would probably look out to September or October and look just a few % out of the money for your strike prices. But I’m not adding any put hedges myself just now, by the way.
Q. Thoughts on the never ending upward moving market? I’m itching to put on some shorts though the market doesn’t stop its upward trend. I live in LA and many people I know are struggling to make ends meet. Rent is up. Housing is up. Food costs are up. Wages seem stagnant other than lawyers, bankers, etc. Plus there is so much construction around, I have no idea who’s going to move into these places. It all seems off to me? There’s a disconnect it seems. Thank you, Cody.
A. We had a discussion about whether the increasing salaries at the big corporate law firms are indicative of anything…I’m not sure they are. But it’s interesting that this is now the second time I’m seeing lawyer pay discussed in a stock market context.
Q. Hi Cody, On FEYE, I came across this recently suggesting they have now worked through the cliff of changing from a “box sale” to a service model. Has been very positive for others like ADBE that went through this.
A. Great find, thanks. You are right that the transition for $ADBE, $ADSK and other software providers who have had to transition to a service model have had some big success after the transition period. I like the application of this concept to $FEYE here. Good stuff!
Q. Thoughts on $MBLY?
A. This is from April, still applies: “I don’t like to invest in overseas companies like $MBLY which is based in Israel. Ignoring that part though, let’s analyze the stock. Analysts expect the company to grow revenues 40% per year for the next couple years and to earn upwards of a $1 in 2017. I can’t find the company’s balance sheet information easily and that keeps me from even being able to get a cursory analysis on the stock for you. I would rather be short $MBLY than long it, but I don’t plan on shorting it.”
Q. Cody do you thing $SQ is going to be acquired ?
A. I could see $SQ being bought by $PYPL or $V or $MA or even $AAPL or someone. I don’t own it though.
Q. Cody, I’m still holding a few $HUBS DEC 45 PUTs, which are ~50% underwater. Do I double down at this point (stock is $51.45)…or do anything else? I assume you are expecting a big miss for them in August when they announce numbers?
A. I might consider adding some puts on $HUBS soon, as I’ve been patient waiting to add to this short position. I don’t have any particular insight about the company’s next earnings report though.
Q. What do you think about ONVO? Is 3D bioprinting the future?
A. Bioprinting is going to be huge in another ten or twenty years. Bioprinting is probably the biggest threat to $AXGN‘s cadaver nerve salvaging business. The problem with $ONVO is they are projected to have only $4MM in sales this year and $8MM next year and the market cap is nearly $400MM. If you have met the company and/or are comfortable that they have a sustainable growth business model, they might be a great long-term venture capital-type investment. But very high risk, regardless.
Q. Any thoughts on WATT or ARTX? With all of the new electric things going on… smartphones, CARS, tablets, you name it… everything that’s connected needs power. IOTS needs power. So batteries and wireless charging methods have to improve, right? WATT does wireless charging. ARTX does lithium and zinc-air batteries. In my research, I think the future in battery technology is lithium-air batteries, but I can’t seem to find companies that specifically do that. These are the two best names I found so far.
A. I’ve been reading some on $WATT and it is as I wrote a few weeks ago: ” WATT is a speculative venture-capital-like investment. The company is burning millions of dollars per year but sales are supposed to go from a couple million last year to $4 million this year and over $12MM next. I’m not sure that the company wouldn’t STILL need more cash even if it grows that fast. You’d have to have a lot of faith in the management and/or the technology if you’re going to risk on your money on this one.” I don’t know $ARTX but it’s got a measly $70MM market cap and revenues were down 5% last year and it has $8MM in debt vs $10MM in cash and it’s probably not one I’d want to invest in.
Q. What are your thoughts on SYNA going forward? Is it getting back in the wheelhouse with it dropping so much? Thanks.
A. $SYNA investors have to deal with the on/off again acquisition rumors which seem to drive the stock more than the fundamentals do these days. I’d rather be long than short $SYNA at $52 right now, but I don’t have a position in it.
Q. Nice jump on ISRG today – sold 1/2 my calls for gain of 100% and bought some higher up – still targeting $850 as I showed on technical set up before.
A. Good for you and smart to take some of the profits.
Q. Would you hedge going into apple earnings? I’m concerned that I have a big position there.
A. I’d say the same to you about hedging that I wrote in a previous answer today to someone else: “If only because you’re asking, you might want to add some small hedge to reduce your overall risk profile.”
Q. $MZOR recently a hot stock does, something in the ballpark of ISRG. Have you looked at it?
A. Here’s what I wrote about $MZOR in my ebook “12 Stocks for the Robotics Revolution” back in August 2014 and it still applies today I suppose. — Mazor could be considered the poor man’s Intuitive Surgical. That is Mazor Robotics is a leading “innovator “in spine surgery. Their idea is to somehow transform spine surgery from freehand procedures to “highly-accurate, state-of-the-art procedures that raise the standard of care with better clinical outcomes”. I’m not a big fan of this company’s and the hype that seems to ooze from their press and investment materials, but if the company’s products do eventually catch traction, you know that things like “minimally-invasive spinal stabilization procedure enabled by Renaissance, an intraoperative 3D imaging system that is an add-on to C-arms (operating room imaging systems), and expanding clinical applications such as cranial procedures, i.e., cranial biopsies and deep brain stimulation implant placements” are going to have a whole slew camera modules and other input and sensor components. Revolution Investing Rating: 4/10
Q. Have you picked out the stocks you are going to highlight in your presentation at the MoneyShow in San Francisco?
A. Nope, gotta wait til we’re closer and see what looks best.
Ok folks, that’s a wrap. Thank you all!