Before we jump in, let’s hit on a couple Trade Alerts. I’m buying more PANW today, a pretty big tranche. The company’s topline and gross margins both look to be accelerating.
I’m selling my DY for a loss. We got a nice bounce off the lows post-earnings blow up, and I’m being disciplined and culling the portfolio.
Here’s the transcript from this week’s Live Q&A Chat, including a discussion on gold and the additional stocks I promised to review and include.
Q. Hey CW, we are always talkin’ what can bring the markets down, My question is, what can keep us going up and your time frame on surpassing the highs on the indices?
A. Great question! And that’s sort of what I’ve been hinting at all year so far — maybe the markets won’t “top” and come down for a major correction/pullback and/or crash until all the permabears and hedge fund managers and pundits become bullish and get long too. Not something I’m trying to game per se, but as a framework for how much exposure to have, I’d rather be long than short on this analysis.
Q. Cody, Given everything both professional and personal that you have going on right now, what do you rely on or how do you try to achieve some sense of balance? Do you go to a particular place, are you spiritual, do you turn to music, sports, blazin’ (lol)…
A. The truth is that for the last 60 days I’m not sure my wife or I have had a chance to achieve much sense of balance. With the time/travel/intensity of the hospital ICU visit along with the time/intensity of launching a new hedge fund, I just put my head down and kept going forward for the last month. I do love to play a little guitar and/or hit some golf balls, but I bet I’ve gotten a total of 3 hours of guitar and 1/2 hour of hitting golf balls (hit them on Friday at lunch last week) so far this year. We are trying to catch our breath now.
Q. Cody, a lot of positive comments about Xilinx lately, but isn’t Intel’s Altera an equally good play on 5G infrastructure semis? Your thoughts?
A. We don’t know who’s going to win the 5G infrastructure semi wars just yet, but yes, Intel’s my favorite play on infra semi 5G for now. https://newsroom.intel.com/press-kits/5g/#gs.T8VnIQCv
Q. Can you elaborate more on what you are expecting from $Dell to give it a 9 rating? It’s debt doesn’t concern you?
A. Dude, I gave Dell a 9 rating when it was in the $40s. I’d probably rate it an 8/10 right now instead of 9. It’s run a bunch. And yes, of course, the debt concerns me, I outlined that in the original Dell Trade Alert. https://tradingwithcody.com/2019/01/17/trade-alert-moves-from-the-hedge-fund-with-commentary/
Q. Hi Cody – the Dell Earnings report provided lower guidance. Has that changed your enthusiasm at all? Do you have an end of year price target?
A. I think Dell guided higher for the year: “Dell reported fourth-quarter revenue of $24 billion, above consensus estimates of $23.8 billion. The company also guided for 2019 revenue of between $93 billion and $96 billion, slightly above analyst estimates of $94 billion.” Just barely higher, or inline, really. But anyway, see my notes above on DELL. I plan to own it for the end of the year. I’d mentioned it could go to $80 by the end of this year, but I doubt it. Maybe I’d say my year-end target is the mid-$60s if I had to put a price target for an arbitrary amount of time for one particular stock with billions of dollars of moving parts.
Q. Are you planning to hold your $Box puts? Though still in loss, it recovered well from its lows! Should we sell it for loss or ride it out until June?
A. I’ll probably just ride them out, as the company’s guided down and still looks like it could be in trouble long-term.
Q. When you get time, can you send latest positions update?
A. It seems like I’d just recently sent out a Latest Positions update but then I just checked and it’s already been a month! January and February have been so whirlwind with the hospital and hedge fund, I guess that makes sense. Anyway, yes, I will, I’ll do one this week for sure.
Q. Cody – do you think the pullback in gold is done and its ready to march back up again? wanted to nibble on some GLD….wondering if it’s a good spot to add more? thnx
A. I don’t know if the pullback in gold is “done” but I do think gold and GLD are more of a buy than a sell looking at both the short-term and long-term setups here. Short-term GLD looks a bit oversold, the stock markets are perhaps complacent and in a few weeks if volatility spikes in the stock market at some point, people might rotate into gold. Longer-term, all this debt (both on balance sheet and off), all the fiat currencies racing to devalue endlessly, all the potential for more Trade/Currency Wars in future decades, all the shipping of physical gold from the US/Europe to India/China/Asia — these things mean that gold will probably be worth $5000-10,000 per ounce at some point in the next 10,000 days. Might be a decade or two before we get to those levels though!
Q. Cody – any targets for gold at the end of 2020?
A. Hmm, maybe $1350-1450. Call it $1375 for the “target” though I don’t see the world in a way that people will ever make big money by putting price targets for an arbitrary amount of time on a particular shiny element.
Q. Thnx Cody – any guesstimates on GLD price by end of 2020 ?
A. $135ish, I guess.
Q. Cody – Thanks, but I thought you had $150 by end of 2019 from previous chats…..have you revised it downwards?
A. My whole point in the way I’m talking about why I don’t put price targets for an arbitrary amount of time on an element that people collect and use for jewelry and industrial purposes for thousands of years is because I don’t really have a year end price target for GLD or gold! I’m just trying to give you a sense of where I think it might be. So yeah, I guess you could say I have revised my year-end target for GLD downwards since the last time I gave you a feet-to-fire guess in a chat for it.
Q. Cody did you a chance to run CEVA through your algorithm or dig into the 5G play any?
A. CEVA didn’t grow much this year but it’s a very high margin business model that I found interesting enough to take another look at.
Q. How about CTNX?
A. Looks like it’s in trouble. Unprofitable, missing growth targets, I’d rather short than buy this one.
Q. Hi Cody, I sold SNE last week because you wrote you were going to sell it during the week, have you changed your view and decided to keep it? Thanks in advance.
A. Not really. I keep going back and working on it and I end up thinking, I don’t know that I’d want to buy this thing here. But do I need to sell it all? And then I look at the revenue growth at basically 0% again and I’m like, I should sell it. So yes, I’ll probably send out a Trade Alert and will sell my SNE this week finally.
Q. Cody, COMM, KEYS and UBNT went straight up over the last 2 mths. Do we need to wait for the pullback or just buy??? Thx
A. Like I always tell people, I usually go ahead and buy like 1/3 as many shares as I want to eventually own when I get started on a stock. I’d probably look to buy another couple tranches if the markets would take these three stocks down. I don’t have “full” positions on in any of those three yet.
Q. Hi Cody, OPRA had a good run and is now pulling back. Would you recommend buying more here? Thanks
A. No, I’m cooling on OPRA. Will hold most of it for now, but am more likely to trim some or even just selling it than buy more.
Q. It’s a new month, so how about the latest Crypto-Cody Roundup. 1) For how you rank them, are you still at Stellar, Ripple, Bitcoin then Ethereum in a distant 4th? 2) Five years from now, which do you believe will have the biggest market cap? 3) If you were to add to a TWC crypto holding today, would Ripple still be tops on the list? 4) Lastly, do you still put your odds at an 80% chance Bitcoin goes below $3000 before the crash is all over, and 70% chance it goes below $2000?
A. 1) Yes, still the same on that ranking for the top 4 major cryptos. 2) Bitcoin, I’d guess. 3) No, probably Stellar. 4) Yes.
Q. Any thoughts on ZUO?
A. It looks interesting enough after looking at it for the first time today and running it through my WilPOWR and WiNR algo’s that I’ll do some more work on it.
Q. @Cody: Now that you are warming up to Chinese stocks any thoughts on BZUN. VERY impressive client list to say the least and very reasonable valuation.
A. Not sure I’d call it a warming up to Chinese stocks. Might stick with just one or two if at all. Will look at BZUN.
Q. Cody I already have almost full position in PANW, 238$ good point to fully engage?
A. Oh man, I’m dealing with the same issue in the hedge fund. I’d like to buy some more here but I’m not in a rush. I don’t think it’s wise to try to catch the exact bottom, so yeah, maybe 1/2 as much as it would take you to get to the amount that you want to fully own.
Q. Good morning Cody, With WalMart and Target figuring out ecommerce and thriving and other retailers catching on as well…. could Amazon possibly be a short at some point?
A. Amazon retail business isn’t the reason you own AMZN these days. AWS, shipping, Alexa are more important to AMZN the stock than whether or not Wal-Mart and Target are competing.
Q. Cody Any take on the “Facebook Coin” that’s supposedly coming later this year? Kinda comical that a company who can’t handle our personal data now wants to handle our financial transactions, but hey…
A. Not sure I believe the hype.
Q. Cody, what are your thoughts on SEDG these days?
A. I’m thinking of swapping SEDG out of the portfolio and putting FSLR or another solar name or two in.
Q. Cody – notice QCOM sitting near its lows…do you see a major move coming sometime later this year in anticipation of 5g potential….used to be a volatile stock long time ago…wonder if volatility returns to this stock.
A. I imagine more volatility around QCOM is coming. Hopefully in a generally upwards direction.
Q. Any thoughts on DATA? My financial guy speaks very highly of them. I am sure it is expensive like all the others but he says they are a leader.
A. I like DATA and have considered buying some myself. Ran it through the WiNR algo and it comes out at about 22%, which is interesting enough that I’m doing more homework on this one too.
Thanks all that’s a wrap.
