Here’s the transcript from this week’s Live Q&A Chat, including more discussion on Tesla, portfolio positions, and a bit more 5G.
Q. Hi Cody, we have been closing out many short positions since 2019, are you OK with the very long portfolio? Need some hedges?
A. Yes and/or more cash.
Q. TSLA earnings better surprise and forward looking statements be positive, otherwise we are looking at another mea culpa from you?
A. I’m not sure I’ve ever been in a stock with worse sentiment around it. I tend to think of all this negativity as probably bullish, as much of it is probably already priced in (and then some). It’s definitely possible you get another mea culpa from me on TSLA and/or any other stock we own, I suppose. If earnings for Tesla after the close tomorrow are even worse than everybody is expecting (just yesterday, a bullish sell-side analyst lowered his price target for TSLA and declared that this quarter will be a “trainwreck”) and/or if the company throws a curveball that the market doesn’t like, the stock could get hit Thursday and perhaps hard. More likely, anything that’s better than terrible, the stock can stay steady here and/or even pop. All that said, how well the first 90 days of business went vs expectations in the fourteenth year of existence for Tesla is no reason to buy or sell this stock. Read my analysis about why I think we’re on the cusp of a long-term Tesla Driverless Revolution and that’s why we’re in it, likely for many years to come.
Q. Cody – saw your post and tweets on TSLA and you are buying boatloads for your hedge fund and private account. You mention TSLA at lows while market at 52 week highs. If market pulls back or has some serious correction, don’t you see TSLA become more of a bargain? or do you think while the market is pulling back, the money might rotate in beaten up plays like TSLA ? thnx
A. I didn’t say “boatloads” (and wouldn’t it be “carloads” in this case anyway haha). If I had to guess I’d expect that TSLA would also trade down in a down market.
Subscriber #2: I’m sure Cody will answer but I do remember when the December market meltdown happened, $TSLA was quite strong. It’s gone quite the opposite of the market lately… suggesting it’s “driven” by its own story rather than the overall market. (pun not really intended).
Subscriber #1: Good point Gambler….TSLA seems to be in its own space.
Q. Cody – does TSLA look similar to AAPL back in 2009 when Steve Jobs got diagnosed with cancer and they beat AAPL down to 40-50s ?
A. I get worried about all the Elon Musk/Tesla = Steve Jobs/Apple analogies I see. Let’s just try to analyze Elon and Tesla on their own merits.
Q. Your first take on TWTR earnings?
A. My first take on Twitter’s earnings report is that it’s quite good. EPS of 37 cents for the first quarter means analysts could start looking at $2 earnings per share in another year, which would mean this stock is trading at 18x those estimates here at $36 as I type pre-market. I’m holding most of my TWTR steady.
Q. Hi Cody, any comment on CIEN as a 5G play?
A. Yes, I’ve studied it this year, but I don’t like the margins or the competitive landscape for Ciena here. Also, I found a report I wrote back in 2010 about The App Revolution in which I’d cited Ciena as a possible trickle down beneficiary. CIEN is still at the same levels it was back in 2010, while the actual pureplays of The App Revolution are up like 5-20x. I decided to find purer 5G Revolution plays than CIEN.
Q. Hi Cody. Any new targets for Qualcomm now that Apple has capitulated and Intel is out of 5g?
A. I don’t like to put price targets on stocks because then we think about selling it when they hit them. I think QCOM can go higher this year and for the next few years.
Q. Hi Cody, INTC announced their exit from 5G modems. How does that fit into of them participating in the 5G future?
A. Intel will make most of its 5G money from chips that help run the infrastructure and with Internet of Device chips.
Q. Cody: What are your thoughts on VZ earnings?
A. Haven’t had a chance to look actually. Surprised it’s down nearly 3% though.
Q. CPB: your investment case is based on leveraging of the company’s platform. However: 1) would a slower than expected asset disposal affect your long-term view on CPB? 2) would having an activist investor at board level push more for short-term remedies rather than long-term value creation?
A. Great questions. 1) I’d actually prefer that CPB doesn’t dispose of some of the assets they’ve been disposing of. 2) Yes, this worries me.
Q. DELL looks strong premarket. What do you envision a good strategy for our June Calls? Many thanks!
A. I’ve been trimming my DELL calls as it’s run up and have just a few left. Holding all the DELL common for now.
Q. I know you’re not big on crypto exchanges, but any thoughts on Binance coin $BNB? Quite the diverse crypto with multi use-cases… payment, store of value, utility to name a few. Also seen as an alternative to Ethereum in some cases as the upgrades/updates are taking a while to implement.
A. Do you have a link or two you could share so I can learn more?
Q. Cody – what’s up with Bitcoin latest surge…seems awfully strong from the bounce at 3k level?
A. Nobody knows for sure, but maybe The Great Crypto Crash was over. That’s why I had started buying Bitcoin futures a few weeks ago.
Q. Morning Cody. Does the big drop on TST this morning have anything to do with the special dividend and the reverse split? Thanks.
A. Yes, they paid us a $1.77 cent one-time dividend and the stock dropped $1.63, so essentially you could think that the stock is up 15 cents today, I guess.
Q. You mentioned XLNX before. I dipped my toes at 111. Wish I went in head first. Anyways, interested in buying more. What price would you consider buying them?
A. I like XLNX, wish I’d bought some a long time ago. Great trade, I’d probably hold onto for a while at least.
Q. Quite a run for semiconductors recently, what’s your thoughts on the semi sector right now? Thanks.
A. Semi’s are overextended and I’d rather trim and maybe short a few of them than chase them right here.
Q. Gold sucks. I have been holding for 10 years and it hasn’t done anything. Biggest investment mistake I made was thinking gold was an investment. It is not. It is insurance. With that being said, I think everybody should have some in portfolio. Buy a few ounces here and there. It adds up.
A. Yes, great point.
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