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. If the market doesn’t follow through with this ‘would be’ correction, do you think that when one does come, it will be a lot deeper than this one might have been? I’m thinking the longer we go without a sustained and meaningful correction, the more painful it’ll be later on.
A. Depends on what time frame we’re talking about. A short-term pullback can happen at any time and I don’t think each short-term pullback in the markets is necessarily correlated with how the markets were trading directly prior to such a pullback. On the other hand, longer-term, I do expect that when the Great Economic Reset (new term I just coined) happens and the fiat currencies, the central banks, the collateralized securities, the market manipulations, the M&A- and low rate-driven oligopolistic profiteering, the corporate-welfare tax code, the tens of trillions of dollars of government debt and all that mess that the Republican-Democrat Regime has created for our economy and society…well, the longer they’re able to kick the can, the worse the eventual crash/depression might be.
Subscriber follow-up: You put forth some scary thoughts. The latter is the one I want you to make sure we investors sidestep! BTW, love the phrase you just coined, “The Great Economic Reset” — we know it’s coming, it’s just a matter of when. It’s like Jaws, lurking deep underneath the surface, just biding its time. In the meantime, we’ll just keep ridin’ the bubble-blowing bull market. Yeehaw!
Cody: Sometimes it seems and will seem like the “Great Economic Reset” is more like Bigfoot than Jaws!
Subscriber follow up: Sorry Cody — but this guy got to The great Economic reset” before you didhttp://modernsurvivalblog.com/… On the other hand, he seemed prety hype-y and dumb in most other respects. (Spain should have fallen by now, for example.) And the Dow hasn’t done half bad since 2012. Think it closed around 13,000.
Cody: Darn it. We could still buy TheGreatEconomicReset.com and/or start a bunch of social media accounts branded as “The Great Economic Reset” and/or put out an app called “The Great Economic Reset”. But I don’t have enough time, so maybe I’ll just use it sometimes from now on and just not take credit for it!
Q. Please remind me again — when you recommend an initial fractional buy, say, in a short like $EWY (one-fifth in this case), will you get back to us each time you add to that initial tranche or are we on our own in that judgment?
A. I send out a Trade Alert whenever I add to a position, long or short or options.
Q. What percent do you have in cash right now?
A. I have a lot of cash in various places and have pretty good cash flow too and that makes the concept of “what % do I have in cash” a bit murky and even misleading to try to answer. I have a much higher percentage and much more cash today than I did in, say 2011 or 2012, and little higher percentage and little more cash today than I did, say, two months ago.
A. Sick to my stomach at this point about $FSLR, but am still holding it steady for now.
Q. What do you think of $TWTR now that they continue to push on live streaming so quickly? Don’t know if it’s effective yet, but from what I hear the future is all about LIVE Streaming and they seem to be in a good place to take advantage.
A. Yes, today’s news that $TWTR is going to stream live events on AppleTV, Amazon Fire and XBox1 is exactly what I’d predicted a few weeks ago when I wrote my column about how Twitter is becoming a TV station: “Twitter is installed on billions of devices, including smartphones, tablets, smart TVs, and smart streaming devices like Apple TV…”
Q. AAPL: The Samsung battery debacle is helping Apple’s stock. Yes…I am pointing out the obvious….but one more point to ponder. Apple is the largest company in the world. I think it is a safe thing to say that most LONG ONLY funds are underweight AAPL vs their benchmark and using the money to overweight other tech names. Why? Because the iPhone 7 is not really all that different vs the iPhone 6s or 6. Similar form factor…so not that great of an upgrade cycle for AAPL. So use it as a source of funds. Apple’s stock move over the last two days is really hurting the long only funds that are underweight. They will be forced to cover their underweight. Today’s move especially will cause pain. Just my two cents…
A. Great points!
Q. Just thoughts-Samsung announcing problem Sept 1. APPL announcement and price rise after the 7th. Rise in APPL price may be 80% IPhone 7 and 20% Samsung battery problem as both stories gain momentum. A rearview look. I’m still overweight AAPL and own an alternative HTC ‘Droid’ phone.
A. How do you like the HTC Android phone you use vs Samsung? Have you ever owned an iPhone?
Subscriber follow-up: Never owned Apple computer or IPhone. Being a techie, I always liked the versatility (and headache) of managing apps and independence of maintaining my hardware pertaining to my desktop. So I’m not typical. The HTC gives most everything I need except good camera …. Samsung was my go to if I wanted a good camera. Might say I’m a cheapskate when it comes to Apple (except for owning the stock … such a hypocrite).
Cody: Nothing hypocritical about being opportunistic by investing in $AAPL even if you don’t use their products! That’s not being hypocritical, that’s being opportunistic.
Q. Your thoughts on PI? Answers appreciated. Thanks.
A. I’ve been working on $PI but dang it, I hate chasing a stock that’s on the move like this one. I’m still finishing my overall assessment. Will finish up analyzing $PI, the company, and its sector by this weekend and will publish my analysis for you guys whether I buy it or don’t.
Subscriber follow-up: I see that about PI, but if your work on it shows real “revolutionary” value at this point, maybe this isn’t much of a chase, right? (Was it FB? GOOG? AMZN? that you got in at an equivalent of $1 a share at the time?) Just want your overall assessment.
Q. A comment more than a question. Seems to me like the low expectations going into the iPhone 7 launch have been a good thing for the stock, which has responded nicely in the days after the announcement, which is a bit of a reversal for $AAPL.
A. Yes, so true. That and the fact that Apple’s biggest competitor, Samsung, is suffering from their phones literally blowing up, which is about as bad a PR nightmare, not to mention very expensive to fix, as I can imagine. Seeing these stories about Samsung phones blowing up might remind me of a SNL skit if they weren’t so tragic.
Q. Stuck my toe into a couple hedge shorts, IBB + EWY. Now a bit more prepared for a “nauseating selloff”.
A. Not sure we’ll get a “nauseating selloff” but it’s always best to prepare for one when others are being greedy. Just hedging the portfolios a little bit like I have been doing.
Q. I like the $EWY thesis quite a bit, thanks.
A. One other reason I like the short $EWY thesis is that we’re not only shorting Samsung, which makes up 20% of the $EWY, but we’re also shorting the South Korean stock market itself, which is probably a good hedge. If there is a stock market sell-off in the US, I would expect other stock markets around the world to sell-off even more than the US stock market would.
Q. I’ve never shorted a stock and probably never will. Knowing this, would you recommend puts in $EWY? And if so, which strike and date?
Subscriber follow-up: Great-$EWY puts — I’ll watch for your Trade Alert as to when you buy. Thanks.
Q. @JesseLivermore scuttle: A man must study general conditions, to seize them so as to be able to anticipate probabilities.
A. Yes, I agree with that quote and you know that’s what I spend a large amount of my time doing — analyzing general conditions to anticipate probabilities.
Subscriber follow-up: And it’s paid off in spades, and we benefit from your dedication. Thanks! “Yes, I agree with that quote and you know that’s what I spend a large amount of my time doing — analyzing general conditions to anticipate probabilities.”
Q. Cody, I’m also looking for two reports from you: (1) Amaris; and (2) your presidential campaign: how’s your health?
A. 1) Amaris is doing great! She has had a couple episodes lately where she cries so hard that she forgets to exhale until she finally lets it out. Sometimes I wonder if she can’t figure out why she’s not hearing herself make any sounds but with a trach baby, it’s just not going to happen for now. She and I have quite a special little bond and a lot of little games we play — our favorite lately being where she reaches up to my face and I make a loud, long kissing sound as I kiss on her palm. She cracks up and pulls her hand away and then puts it back out to do it again. Lyncoln, the 32-month old older sister has potty-trained herself and is starting to really form sentences. But boy can she be bossy! Oh, and right now we remain a mostly Buddy Holly household, with some Beatles and lately some Richie Valens on shuffle too. I’ll take a picture of the two of them together if I can get Lyncoln to sit still with her for a shot tonight and send it out tomorrow.
2)My health is better than Trump’s or Hillary’s. PS. I would be the farm that when all their debts vs assets are totaled, that Hilary Clinton is worth $100MM net and that Trump has a negative net worth. So who’s the better business person? PPS. Trump has now essentially risen to tie Hillary in the polls yet he’s hardly had to spend any money on ads and is running quite a different kind of campaign. So who’s the better politician? PPPS. They’ve both lived their lives using and abusing the system and I won’t waste my vote on either one of them. PPPPS. Here’s my write-in candidacy page on Facebook: Here’s my write-in candidacy page on Facebook.
Okay folks, that was fun! Thanks and see you in the Chat Room.