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 WithCody Android a
Q. Would you say we are nearer the end of this downturn and that this is not just the beginning of a big downward move?
A. Yea, feet to fire, I’d guess we get a markets pop into/after the election.
Q. Should we be selling our puts anytime soon? Mainly the November puts we bought?
A. I’m planning on holding most my puts as hedges regardless of my feet to fire that the markets could breakout comment above.
Q. Markets are very oversold. Do we see a rally coming?
A. Yes, I wrote a note that was just sent out that explained why I could see an upcoming rally into year-end and next year. Not making any major changes based on that though.
Q. The market has been flat the last week or so, yet so many individual names have been hammered. Is this the beginning of the big downturn?
A. Here’s an interesting thought — what if we’re nearer the end of this churn/downturn in the broader markets rather than the beginning of one?
Subscriber follow-up: Then we should be backing the truck up…
Q. Is $HLF falling on anything specific today?
A. Looks like somebody long $HLF is worried about earnings tonight.
Q. Is it too late to get in on the $HLF short?
A. I wouldn’t rush into shorting $HLF when it’s down 20% in the last two weeks and 10% today, but I do think it’s headed much lower in quarters ahead.
Q. How about $Z? Time to add to $PI or get rid of it?
A. $Z I’d add to under $30. $PI I’d add to sometime around $25 but am in no rush.
Q. $Z doing nicely after earnings. Your thoughts? Add or just play our current position? Thanks.
A. I’m just holding my $Z position steady. I haven’t dug into the quarter yet though. If I decide to nibble on some I’ll let you guys know of course.
Q. $FSLR reports tonight – estimates for 2017 are pretty negative based on subsidies being reduced at end of 2016 and a rush to get them. Zacks shows revenues falling by 1bn from 2016 to 2017 and earnings halving as a result. Do you have a view on how close the industry is to being profitable without subsidies?
A. I think $FSLR has a very bright future regardless of subsidies for the net 12 months. First Solar is the de facto pure play in this industry with the best balance sheet. I would think that the market has already priced a lot of that in.
Q. $FB looking weak prior to earnings tonight. Seems strange to me. Your thoughts? Thanks.
A. In quarters past on the day when $FB has reported, I’ve seen $FB drop, pop and flatline and it’s never been correlated to anything that I can tell. I don’t think it’s strange.
Q. If $FB were to get spanked tonight would you be a buyer? I know you personally would not as it is your biggest holding but if you were sitting on a half position, would you add?
A. Let’s just see what the earnings call holds before we make any decisions.
Q. Cody, I see $AMBA getting spanked a tad. Good spot to add a tranche or wait a bit longer? Thanks.
A. If you’ve been wanting to nibble on some more $AMBA, it’s probably not a bad idea to do a small tranche when it’s down and getting ugly. Give yourself room to do another tranche a few dollars lower though.
Q. Cody, I haven’t visited this subject with you for a while. Any feelings on the near/mid-term prognosis for gold and silver (tho I know you prefer holding the real stuff), and whether silver has more momentum behind it than gold? (Now that the Feds have left hands off the rates.)
A. The near-term chart on gold has turned up and there’s some upward pressure on the price. The general longer-term fundamentals point towards ever higher gold prices in my lifetime too of course. If gold were to break above $1400 it could get to $1500 in a hurry.
Q. Thoughts on silver?
A. $GOLD and $SILVER prices are likely to be loosely correlated in months, quarters and years ahead with a higher upside in $GOLD than $SILVER.
Q. Cody, the three public gene splicing stocks – $EDIT, $NTLA and $CRSP – are all around their IPOI prices – do you have any views on starting to nibble on them here?
A. I don’t feel like I know enough about the industry or business of gene splicing or these companies’ models to be able to give a good answer to you. Sorry. Best to say I don’t know sometimes!
Great quote from Benjamin Graham: “Successful investing is about managing risk, not avoiding it.”