Here’s the transcript to this week’s Trading With Cody live Q&A chat.
Subscriber: Cody, Just want to say thank you for all you do, I’ve learned a lot from your trading style and make money from your stocks. I really want to subscribe lifetime trading with Cody but I have two children in college right now, my husband and I are paying for their tuitions. But I’m saving money for your subscription, save me a spot ok. I’m 46 year old and have about $400,000 in my retirement account, the market is so crazy right now so I put 100%in mutual funds. What can I do or how I can invest with that money? Love to hear from you! Thanks again!
Cody: We do have a few spots left if you’re interested in becoming a Trading With Cody For Life member, but I’ll probably get a few more lifetime subscribers because we are mentioning it here now, so you better sign up soon. As for your question — A couple points I want to make here.
1.) Putting 100% of your retirement account into mutual funds is NOT a way to avoid craziness in the market. Rather, putting all of your money into a bunch of mutual funds actually pretty much guarantees that you’ll be participating fully in any market craziness, since a portfolio of mutual funds will always pretty much mimic the market (minus fees). That’s why I don’t personally use mutual funds very much at all and I stick with trying to find the best, most Revolutionary companies on the planet while taking advantage of the economic/market cycles. I don’t mimic the market with my picks. Now, that doesn’t mean that my stock portfolio would somehow be immune to a market collapse or that my picks will always blow away the market the way they have over the past nearly twenty years that I’ve been doing this.
2.) As for what you can do or how you can invest that money? Well, isn’t that what I’m trying to do every day, all day, every year here on Trading With Cody?! And actually, if you sign up for the Lifetime Trading With Cody subscription, you can send me more details about your portfolio and life before we talk and then we can spend 30 minutes discussing your situation and trying to answer these very questions for you in detail. Alternatively, you can also sign up for a Deep Dive where I will spend much more time working with you individually and I will put together a personalized playbook for you. Thanks for the kind words and good luck!
Subscriber: Say I allocate some fixed amount of money and treat it as my portfolio whether it is 20k or 200k or any other number. Would it be possible to provide approximate % for your holdings when you publish “TWC latest positions” report?
Cody: It’s actually counterproductive for me to provide “approximate % for my holding” for many reasons. 1.)I have other money, I make lots of money, I have other investments — how do I account % for those? What if I have $10 million in my checking account and just $1 million in my stock account? You see, “approximate %” is relative in many ways. 2.) Next, my 82 year old retiree readers don’t need to be putting anywhere near as much %-wise into TWC stocks as my 29-year old subscriber who’s an investment banker at Goldman Sachs. I just provide you as much detail about my personal approach and try to help guide the rest of you a little bit for your approach. Finally, if any of you want to do a Deep Dive, let us know, and I’ll actually help you figure out some of how better to allocate your own portfolio and create a personalized playbook for you, email firstname.lastname@example.org.
Subscriber: Cody, I have (hopefully) more specific question then. If I purchased 1/3 + 1/3 and accumulated 2/3 position in Intel @ $35 a piece. Over time it went up to $50 a piece which brings me very close to 5% allocation. Once you send a trade allert to buy 1/5 th transh, do I follow? As if I do I end up with total 6% allocation.
Cody: It’s not science, it’s art…so the answer really just depends on you and your own risk-tolerance, goals, life, etc.
Subscriber: In the past I have not allocated my portfolio evenly in the stocks you have bought. For example, I underinvested in AXGN (which is up over 280% from when I invested). Do you generally recommend putting the same percentage of an individuals portfolio in each position when we enter a new trade? (I know there are exceptions, such as CALX, but in general?)
Cody: I also didn’t own nearly as much AXGN when I was buying it before it went up 1000% as I did own of FB common stock and call options back when I was loading up on it before it went up 700%. I think I’ve been clear that I didn’t load up on AXGN or TST like I did FB or Amazon. Just like I’m not loading up on CALX compared to how much I’ll be buying of VZ.
Subscriber: Fully tranched to me means you have committed the total funds you want to a given stock. Does that mean FB for example is the same as AXGN is the same as TST? To me that makes no sense. Some stocks are obviously more favorable than others and say warrant a full commitment of 5%. Whereas others, say CALX are more speculative and the most you ever want to commit is say 2%. So it is not just your risk appetite but good solid growth opportunities versus more of a speculative bet that factors into how much to put into each stock.
CODY: Correct! Not to mention that $FB has gone up like 700% since we bought it and $AXGN like 900% while TST has so far only gone up 150%. It’s art, not science!
Subscriber: “I couldn’t resist attending presentation her in London yesterday by ‘huobi’ = crypto exchange and development group. was great to be in a room with super energetic, responsive, forward-thinking minds. Not at all inspired to try and game the space without expertly informed playbook. Can easily see Cody’s point re eg 90% of current ICOs/ coins being worthless : not only dodgy projects, but so much scope for crypto development potential and scalability/security/social fairness improvements and paradigm innovations.”
Cody: Daisy, you’re going to have to contribute to the chat room more often, when you’re bringing insights like these!
Subscriber: Hi Cody! What do you think of the recent uptrend of Stellar? And why do you think that Stellar could be a great cryptocurrency one day?
Cody: I don’t pay much mind to the recent uptrend in Stellar or any other cryptocurrency. I still think there’s much pain and lower prices for most any existing cryptocurrency that the public can trade before the Great Cryptocurrency Crash is over. As for why I think Stellar could be a great cryptocurrency one day, I’ve seen several companies, ideas, blockchain ideas being built upon the Stellar platform. I think Stellar’s focus on being a payments/banking platform and how they’ve built it and how they’ve positioned it is all coming together to put the company in a POTENTIALLY winning position in the next ten or twenty years as blockchain and cryptocurrencies revolutionize our world and banking systems and computer networks and so many other things. I spent an hour on the phone with a Stellar founder just last week as I continue to do my homework on which cryptocurrencies and blockchain companies we will eventually start buying.
Subscriber: Any plans to add to our hedges or shorts in the near future?
Cody: I am comfortable with our current hedges in place as they are right now, with a few puts and a few shorts. But I’ll see what the market brings us so stay tuned!
Subscriber: A few months back you mentioned the possibility of Palo Alto hitting 250 this year, however you were more cautious on $PANW in your recent update. Have you reigned in that 2018 target a bit or do you believe it’s still attainable, even at its current valuation?
Cody: Remember that PANW was 50% lower than its current quote when I predicted that it could hit $250 this year — so it’s already had a big move towards that price. Also, I don’t think this sounds more cautious, from my Latest Positions round up on PANW, which is one of only 5 stocks rated a 8/10 or higher right now, for crying out loud: “Palo Alto Networks ( –Shoulda, woulda, coulda bought more Palo Alto every time I talked about for the last six months. Another valuation that’s stretched here though, as it trades at 8x sales.” But anyway, sure I think PANW could still hit $250 this year.
Subscriber: What is your expectation for FB into earnings report next week?
Cody: No idea, really. So many moving parts, so many various things the market might focus on, such a battlefield stock right now. I don’t expect that FB will hit another new all-time high in 2018 though.
Subscriber: Hi Cody, you’ve mentioned having been invested in $GOOG since it became public. Since I started being part of TWC (6 years now) you never mentioned any IPO and we never participated in one. Is there any specific reason you avoid IPO or is there any future IPO you’re interested in?
Cody: I don’t invest in many IPOs, as I usually like to let a stock come public, trade a little bit, report a quarter or two of earnings and get to know the stock a little bit before investing in it. Also, most Trading With Cody subscribers can’t participate in IPOs anyway. I do sometimes make exceptions and will buy a stock soon after or maybe even the day of its IPO, but not often.
And actually, that’s exactly what I did in Google’s case back on the day of its IPO in 2004, as I outline in detail in this story I wrote here on Trading With Cody back in 2013 when GOOG first crossed the 1000% return level. ” just two days prior, I’d gone on CNBC and told Maria Bartaromo that I didn’t plan on buying the stock until after the dust settled. But by the time the stock hit the open market, I’d done a bunch more research on the long-term upside potential for Google and published a big mea culpa and told everybody that I’d had decided that I needed to get in early using my tranche-buying system. So I did a first tranche that first day at about $95 a share and the stock never went lower than that so my next tranches were up in the triple digits.” Read the full story here.
Subscriber: It looks like FB and Goog are going to struggle for a while and with those 2 stocks being such popular stocks and so much a fabric and % of the market (i.e. such a high % of the S&P), the “market” almost has to struggle a bit till they are healthier. does that sound right to you? other popular stocks Amzn, NFLX, the semis, security and cloud stocks (PANW, FTNT, RHT, ADBE, NOW) look healthier which makes me ask is your cautiousness more related to the struggles of a few key stocks?
Cody: No, my recent cautiousness started a few weeks before the Google/Facebook backlash started. I’ve outlined repeatedly in many posts over the last three months why I’m more cautious now than I have been in years (but that I’m still not outright BEARISH), and I’m not sure what I can add to that here.
Subscriber: Cody, You’ve expressed your fondness of VZ over the past few months… do you think a price of 60 is doable within a year? Looking out, say, 5 years, how do you see the company/stock price playing out if they indeed do become “Supreme Leader of 5G”?
Cody: Sure, I think VZ could and probably will be at $60 in the next year. And I think the stock could go to $200 in five years if it wins 5G in the US.
Subscriber: Cody, any thoughts about Snap?
Cody: Owned it, sold it. Not a fan of management. Not a big believer in the stock.
Subscriber: Cody, any concerts this year? If so, who?
Cody: Dead and Company in Albuquerque this summer, I suppose. Not sure what others — got a medically-fragile kid at home!
Subscriber: I am always amazed with how in touch you are with the markets and your feel around the direction it is heading. Inside my 401K account, there is no option for me to go to pure cash, with a Money Market fund as the next best alternate. All the other options are bonds or other funds. (my current allocation is into US Large Cap funds). Based on your feel of potential softness in the near term, might it be advisable to move a % of that into the Money Market fund as a hedge?
Cody: Thanks for the kind words. I can’t advise you specifically without much more information, but you know that I do think more cash/money markets vs how much you had in cash/money markets this time five years ago or just a year ago is a good idea.
Subscriber: Cody, do you see a possibility for Tesla going bankrupt near-term? If so, do you think it could spark market sell off? Thank you!
Cody: No, I don’t think a $40 billion market cap company is going to go bankrupt anytime soon.
Subscriber: You were going to give another look at FFIV maybe a year or so ago. You recommended, then sold and it is up nicely since then (about 60%). Any thoughts on them?
Cody: I think I’ve got enough tech/app/cloud/networking stocks right now.
Subscriber: Cody, any thought about IBM as blockchain technology play?
Cody: IBM is to tech what GE is to industrials — a big ol’ conglomerate loaded up with debt to overpay past executives while making stupid acquisitions and managing earnings to juice the stock performance in decades past. Cows, home, roost.
Subscriber: Hi there. Do you see any promise with P’s purchase … for video ad growth? My first thought is to modestly increase my short position since it is at top of it’s range.
Cody: No, I don’t see any promise for Pandora. They can’t compete.
Subscriber: Looks like $LRCX was next in line to drag Western Digital down. At this rate, maybe most of the negative will already be priced into the $WDC report next week, heh…
Cody: WDC still my smallest long position right now, wouldn’t mind the chance to buy more after earnings if it gets hit.
All right folks, that’s a wrap! Thank you! I’m beat.