Despite the bounce yesterday, I’d still be careful out there in trying to catch a bottom and I wouldn’t chase these stocks this morning.
Here’s the transcript for this week’s Live Q&A Chat.
Q. Feet go fire where are FB and AMZN trading in 5 years.
A. FB could grow topline 20% per year for the next five years. That’d be $170 billion in revenue and probably around $30 per share in earnings. Throw a 12-15 multiple on that and FB would be trading at $350-400 per share in five years. AMZN should grow even a bit faster than that over the next five years, which would put revenues for AMZN at $750 billion in five years and I think AMZN margins would actually go up quite a bit over that time frame too, so I could see EPS hitting $150 per share. A 15-20 multiple on $150 is $2250-3000 price target for the stock or so.
Q. 5 years (or more) out, where do you see shares of $NVDA if they execute well? Past this year’s highs?
A. If NVDA chips dominate some of the Revolutionary industries like Driverless, AI, Data, etc, then NVDA could grow topline 15-20% per year for five years. That’d put their likely earnings per share at about $25-30 in five . years. Throw a 15 P/E multiple on $25 per share and you get a $375 or so price target for the stock. I think that’s possible.
Q. Thoughts on AAPL over the next 3 months? Any interest in adding a few more call options out to Feb?
A. You know I think AAPL is headed higher over the next three months or I wouldn’t have bought those now-loser call options on it a couple weeks ago. I might add a few more call options if AAPL drops below $170 or so.
Q. AAPL, NVDA, VZ downgraded recently, are we on a wrong ship?
A. Did the guys who downgraded AAPL buy it at a $1 like I did? Or the guys who downgraded NVDA, did they have a strong buy on it at $30? Why do we care what sellside lemmings are doing with their ratings on the stocks they’ve never accurately analyzed before?
Q. I got into NVDA only after your recent trade alert and is up modestly though my investment is just 1/4th of total position. Do you think its good time for me to get another 1/4th position or wait for better pitches?
A. Tough call. NVDA is up nearly 15% in a straight line since we nibbled some shares below $150 last week. I’d probably wait for a bitter pitch before the next nibble, but it’s an art to build a position, not a science. So good luck.
Q. Are you still keeping hedges?
A. Recall that I sold all my higher price QQQ and SPY put hedges when they were up huge (when the markets were down huge). And that I slowly started to roll into some lower price QQQ and SPY put hedges and I still have those. But I sold all my AMD puts the other day too. I still have some hedges and a good chunk of cash, but I have less hedges on today than I did in late September through November.
Q. Is 3D printing dead? I remember you being excited about it some time ago?
A. Great question! I’m going to dig into 3D printing industry and stocks today!
Q. (I know) it’s Chinese, but any thoughts on $NIO?
A. Here’s what Andrew Left and Citron say about NIO: “After years of battling the “Tesla Story” Citron learned to recognize the opportunities created by total industry disruption and to disregard today’s numbers when considering the value of the disruptor. We also learned not to be short a disruptor with a cult-like following and a large outstanding short interest alongside a patient investor base.” I’m wondering if their having “learned to disregard today’s numbers” is a signal that the Bubble-Blowing Bull Market is just about over. I don’t know NIO well enough to make a value estimate for the stock and unless you’ve been to China and attended an NIO conference and/or driven an NIO car, I would suggest sticking to something you can analyze better. Here’s a link to the Citron Research piece on it.
Q. Hello Cody – have you looked into or plan or exploring ZCASH?
A. I’ve looked at ZCash a bit, but haven’t seen anything in it that made me want to buy it. It’s another cryptocurrency that is down 90% from its highs, just like I’d predicted it would be. I’ll take another look though.
Q. Also, does it appear bitcoin bottoms sometime 2019?
A. Maybe. Could bottom in 2018, here around $3000 or so. Probably more downside first though
Q. Ever look into the MakerDAO? It’s quite early, but it seems like it’s a revolutionary idea when it comes to banking.
A. I’ll take another look at it. MKR is only down 75% from its highs so it’s been a cryptocurrency outperformer! LOL
Q. Hi Cody, new subscriber, hello all. Have never invested in cryptos but been following for some time and catching up with your columns on the subject. Is best and most reliable way to invest via online wallet at Coinbase? Are there better alternatives? Saw an interesting interview yesterday on Bloomberg with dude from Quoine about Liquid a new crypto platform…
A. I don’t have enough faith in Coinbase or any other cryptocurrency trading platform to suggest using it over another one. That’s one of the reasons I’ve been so bearish on cryptocurrencies since I flipped from crypto bull to bear. I find it interesting that I’m getting so many questions about and that are still asking me about cryptocurrencies today!
Q. Is XLM a good buy at 16 cent range? If BTC bottoms around 3k, I am sure XLM will surge with it too.
A. I think that’s a big assumption that bitcoin will bottom around $3000, but it might. I like XLM as a good long-term cryptocurrency play (I’ve said it could be the Amazon of cryptos), and I’m going to buy another tranche of XLM (Stellar Lumens) at some point. Be careful though.
Q. Just wondering, how not speculators, but “normal” people can start using cryptocurrencies in a common life, when it is so volatile.
A. Give it five or ten more years and cryptocurrencies will be more understandable and less volatile.
Q. Does it look like Oil can bounce into year end and into early next year? seems very beaten up. Thanks.
A. Yes, if I had to trade oil here, I’d rather be a buyer than a seller at $50 a barrel if your time frame is a few weeks. That said, I have long told you guys that oil is a cyclical commodity in secular decline and there’s no reason to invest in anything oil-related IMHO.
Q. Offtopic – How can Kareem Hunt be unemployed while Bathroom Ben R, and fiancee beater Tyreke Hill have jobs and making millions?
A. The only reason Hunt lost his job is because TMZ released video evidence of him attacking a woman at a hotel. Not a fan of Bathroom Ben R and I wasn’t aware of the Tyreke Hill incident until you just mentioned it. Alas: “Chiefs receiver Tyreek Hill gets engaged to woman he pleaded guilty to assaulting. Three years after pleading guilty to charges stemming from a 2014 assault of his girlfriend, who was eight weeks pregnant with their son at the time, Chiefs receiver Tyreek Hill is now engaged to her. Sep 28, 2018” So I guess I have to quit cheering for him too now. Geez, it’s hard to be a fan of a billionaire-welfare-stadium violent sport these days isn’t it?
Q. Your Super Bowl picks Cody?
A. It’ll be Saints vs Steelers in the Super Bowl. Saints win in a blowout 40-17.