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 firstname.lastname@example.org
Q. Which candidate do you think is better for the market, Hillary or Donald?
A. Did you see my article about who is better for the market? Spoiler alert: “whatever Hillary or Trump spend our future generation’s money on by borrowing trillions will probably seem to work well at least while rates are this low. Meanwhile, our lives, jobs, the Fed, the EU, the currency wars, energy, tech, innovation, and everything else that makes up these cycles, these economies, these societies we live in will go on. We’ll have to continue to freshly analyze the economy, cycles and markets regardless.”
Q. If one is overall bullish on the Nasdaq but wants to limit stock specific exposure, what do you think of buying QQQs?
A. $QQQ is composed of: “Top 10 AAPL Apple Inc 10.70% MSFT Microsoft Corp 8.21% AMZN Amazon.com Inc 6.51% FB Facebook Inc 5.19% GOOG Alphabet Inc 4.83% GOOGL Alphabet Inc 4.25% INTC Intel Corp 2.96% CMCSA Comcast Corp 2.90% CSCO Cisco Systems Inc 2.79% AMGN Amgen Inc 2.32%. I’m long some of those companies but wouldn’t want to own them all personally.
Q. Can you imagine DOW 30,000 in the next 5 years? That number sounds crazy, but possible, right?
A. It’s certainly possible, but I wouldn’t want to be my ranch on it.
Haha – I wouldn’t want you to bet your ranch on it either!
Q. Emailed question: Cody, do have a few sites where I can check the health of a company? What metrics do you like to look at? Thanks.
A. I use Scutify and/or Yahoo Finance to look at balance sheets, analyst estimates, cash flows and other high-level health information about a company.
Q. Your thoughts on NVDA Is it a candidate for trimming, as well?
A. Yes, I’ve already trimmed some $NVDA.
Subscriber follow-up: Morning, Cody. Could use some guidance here. When you say you “trimmed some NVDA already,” can you state that in more quantitative terms –are you now mostly out of it? Only, say, a small fraction of a tranche out of hit? Or what? Since when you guide us on purchasing, it’s often in terms of a fraction of a tranche, can you quantify your exits in that way as well? Or at least for NVDA? Were you ever at 100% (a full tranche)of what you aimed to buy? Thanks. And will we ever see that “Cody’s weekly trading report” we’ve been told is being worked on? Thanks.
A. Here’s the link to the Trade Alert when I trimmed some $NVDA about 10% lower than today’s quote. “I’m also going to trim about 1/5th of my Nvidia common stock, as it has been on a huge tear, up more than 60% since we bought the stock back in April. I see a lot of hype around this stock right here right now, and it’s just sensible to lock in some profits when the charts are straight up anyway.”
Q. Think $NVDA will smash earnings tomorrow after the bell?
A. I think $NVDA has strong demand from Tesla and other customers including VR-computer makers. That said, expectations are so darn high for this stock right now that I wouldn’t be surprised to see it sell off 5-10% even if the report is pretty good. It’s gonna have to be great to prevent some profit taking from momentum traders.
Subscriber follow-up: Thanks for the heads up regarding $NVDA, Cody!
Q. Cody, I have purchased a bit off SPXU as a hedge against a 3-5% downturn. It is a leveraged ETF but it’s easy for me. No shorting and no options. I realize this is less specific than shorting and put options on stocks. But does it make sense for someone adverse to shorting and options? Not trying to beat a dead horse but I value your knowledge. Thanks.
A. Yes, that makes some sense for those who don’t want to short or buy puts. I wouldn’t use a leveraged ETF tho, I’d just use a short ETF.
Q. I have a friend, very wealthy, who has spent his whole career in electronics, and he says DRAM pricing is getting stronger and MU at $14 is looking like a good buy. May take 2 quarters but this could be a nice investment. Any thoughts? Thanks.
A. If you bet on $MU for a trade over the next few months on the premise the DRAM pricing will be strong and demand too, and you turn out right, the stock could end up in the$20s. If you’re wrong, it could be back in the single digits
Q. FSLR down 10 percent in 2 days. Should we be adding small? Thanks.
A. I was thinking about nibbling on some $FSLR this morning and didn’t pull the trigger. Patience for now for me.
Q. What is the best way to play the $VIX for the volatility of the market? I was looking at being$VIX calls. They are fairly inexpensive and the VIX is sitting very low at 11.50 My guess would be there is a move much higher in the next 3-5 months. Is buying $VIX calls dated Nov, Dec figuring the VIX will go back up to 14-16 or more a good way to do this?
A. The problem with buying out-of-the-money call options on the $VIX is that the call options don’t typically move nearly as much as the $VIX does unless the $VIX REALLY spikes and/or doubles from here. If I were going to play the $VIX it’d probably be for a very short-term horizon, maybe no more than a week or two. But even then, the call options won’t make you money unless you get a serious move in the $VIX. That’s why I’ve been using puts on the indexes rather than calls on the $VIX.
Q. Any thoughts on the $TWTR jump today. I feel like it is really starting to gain some momentum here.
A. I think $TWTR is probably a candidate for trimming, as we’re up 30% in a straight line despite the company not reporting a good quarter.
Q. Cody, could you address HUBS add to short? close the position? If we don`t get a summer pullback may keep running.
A. I’m sitting tight on $HUBS as I don’t want to commit more to it while it’s in an uptrend.
Q. Any interest in FSLR at this level ($37.33)?
A. I should have nibbled some $FSLR at the exact time you asked, nice bottom call!
Q. Thoughts onCypress Semi ($CY)?
A. $CY isn’t a bad stock here…but not terribly compelling either. The stock trades at 12x next year’s earnings estimates, has a clean balance sheet and is growing their topline 10-15% per year. It could easily get to $20 if they execute and meet estimates for next year.
Q. Got a lot of respect for Marcin. Have you looked at SYNA or QRVO lately?
A. I too have a lot of respect for my friend and sometimes business partner, Robert Marcin, and thusly I’ve been looking at $SYNA and $QRVO off and on for the last few months. They are cheap and could go nicely higher if the deliver on their estimates for next year or two. But I just haven’t pulled the trigger.
Q. What are your thoughts on $PANW as a long term investment? If you like it, at what price would you be looking to start a position in?
A. I like $PANW a lot and am likely to nibble on it soon. It’s the best of breed in cybersecurity.
Subscriber comment: I did it, Cody! I not only trimmed, but I also sold my entire $IPHI position. Why? Because I originally bought it for a short term trade, held on to it for a few months while it did a whole lot of nothing. And then the lion’s share of its gains came after ER on huge volume, and am thinking there was probably a lot of short covering. Typically, trading volume is around 500,000 — it did over double the volume yesterday. I’ve seen days when it only traded 80,000. This stock isn’t a fast mover (other than yesterday’s 15% pop), so I can always revisit it later if I like, when it settles.
Never let a trade turn into an investment. And congrats, btw.
Thanks, Cody! You really are helping me with the discipline aspect of trading! Profits booked and safely to shore.
How quaint this sentiment I expressed seven years ago now seems.
Okay folks, that’s a wrap for today then. I’m gonna grab a soup before my next meeting.