Join me at 2pm ET today for this week’s Live Q&A Chat. Visit the Trading With Cody Chat room on the Trading With Cody iPhone
Anybody else dizzy from the amazing rallies over the last couple months and last few days in our stocks like Nvidia, Axogen, Amazon and Impinj? How about the new highs in our stocks like Apple, Google, Facebook, Sony and Solar Edge?
Nvidia is now up 350% since we bought it fourteen months ago. As I wrote at the time: “Nvidia is positioned to become the de facto standard chip supplier for the Virtual Reality Revolution, the Driverless Car Revolution (part of the Drone Revolution, Artificial Intelligence Revolution — and it’s certainly in a position to ride the near-term hype in addition to being positioned to actually grow huge from supplying those revolutions.”
Axogen is up 300% since we bought it just over a year and a half ago. As I wrote at the time: “Trading at less than $5 a share, Axogen AXGN is a biotech company that’s pioneering a brand new way for surgeons to rebuild and reconnect and save nerves in all kinds of surgeries. My best friend from college from twenty years ago at UNM is nowadays a hand transplant and reconstructive surgeon in Baltimore and he’s been using this company’s nerve connect technology in nerve reconstruction…This is a tiny market cap stock at about $120 million and should be considered a very high risk venture capitalist investment that will take 3-5 years to play out.”
Apple’s up 14,000% since we first bought it. Google’s up 2000% since we bought it on the day it IPO’d. Facebook’s up 500% since we made it a Top 3 largest position a few weeks after it’s IPO. Sony’s doubled.
The biggest complaint from Trading With Cody subscribers right now is that we didn’t own even more big winners and that I didn’t catch Tesla three years ago.
Which brings me to today’s market topic. You don’t have to be all in or all out. You don’t have to be wildly bullish and betting your money and reputation and all of your retirement on stocks right now. You don’t have to be like this Trading With Cody subscriber I went back and forth with this past weekend:
Subscriber: “I read every thing you say. I have great respect to you as trader. I just think that nailing the top is impossible. Once markets will fall, it’s way too late. I don’t really understand how will you nail a top? I am closing ALL my positions as I am very afraid. Better safe than sorry.”
I wrote back: You don’t have to be ALL in or ALL out. Can’t we just trim and hedge a little for now?
Subscriber: “I see the euro/ dollar up from 1.035 to 1.12 in just 2 months. I see USD/YEN going down from 125 to 111 and that’s while the Fed is raising rates. Dow transportation is not rising with DJIA. Copper down, oil down. You are a much better trader than I am, are these not warning signs? And Vix at all time low. What do you think?”
I think too many traders and investors listen to too much noise. I think I’ve been reading about supposed warning signs from the same guys who missed the first three or four years of this Bubble-Blowing Bull Market that we were positioned for and benefitted from. I think we should always be worried about the next Black Swan and we should be aware that the stock market will crash again at least a few more times in my lifetime. But I don’t think that means we panic ourselves out of the stock market entirely right now.
I had a Trading With Cody subscriber who canceled two years ago because they want me to get bearish. “Hey Cody’s caught the bottom the last three times and the top twice since I’ve been following him for twenty years, but he missed this one. He missed the top that was put in.”
This guy had said he had been following me for twenty years and he was canceling because I missed the top. I think about him sometimes when I hear people on CNBC or Fox Business breathlessly talking about how stocks are at all-time highs and the economy is growing. And I’m like, you know..it is. And, until we really have something to freak out about like in 2007, when I was freaking out about real estate, you know, it still is. It is what it is. I hope I catch the next top. I am doing everything I can to catch it. There is going to be a top. There is going to be a crash in our life time. It might be this year. It might be in five years. But we can’t over-anticipate it before it gets here and we don’t want to just foolishly sell our stocks and be bearish because “Hey, my stocks are up and the economy’s been stronger for a long time now.”
Long-time subscribers remember when I did turn outright bearish back in 2007, closing my hedge fund and taking a job as a TV anchor on Fox. And they remember when I left TV and started loading up on Revolutionary Stocks again in 2010 and 2011.
One of the big advantages of our approach is that we can continue to find secularly growing companies that are revolutionizing the world even as we navigate the broader geopolitical, governmental and financial revolutions and the cycles, bubbles and crashes they bring.
We can have more cash and be a little lighter in our stocks vs cash weightings since we’ve had such a huge run and the markets are at all-time highs. We can also use our analysis to make sure we’re in stocks that are likely to go up huge in bull markets and not go down as bad as others in bear markets. And we can short some of those lesser stocks to help hedge right now.
I’ve got some very interesting new names for the portfolio that I’ll be adding this week and next month, both longs and shorts. And I’m laser focused on finding the next bear-market/Bubble-busting catalyst whether it’s a true Black Swan out of nowhere that we have to react quickly to, or one that we see coming like we did the real estate crash catalyst in 2007.
Put simply: Easy does it, is what I think 🙂
If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t been invested in all of our names while the markets have been continually hitting all-time highs this year, what should you do now?
Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.
If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.
Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.
