I’m doing some trimming, just maintenance. Will send out a Trade Alert after the chat. Too much to do!
Here’s the transcript from this week’s Live Q&A.
Q. Last week, I felt like a day trader and we did pretty well. Any new short term ideas?
A. You bring up an important theme here for me to hit on. That is, the markets got really volatile a couple weeks ago and as that started, I made some short-term bets. The volatility got extreme and we kept our cool and took advantage of the swings in both directions rather successfully and then today’s big pop even adds to that, given that we’d been buying and covering yesterday. But that’s a function of how wild the action got and I’m not sure that volatility is going to stick around. It might be time to chill as the markets just might chill for a while themselves. This is what I mean when I preached for weeks that we were waiting for the right pitches before getting more aggressive. We got pitches, we hit ’em. Let’s see what pitches get thrown our way rather than just looking for another trade.
Q. Any other positions you would be trimming here during this rally??
A. Yes, most of the positions we’ve nibbled on *checks charts* uh, yesterday.
Q. Are you worried about the Hong Kong situation not settling down soon and its effect on global markets?
A. Yes, at least for the short-term. It’s something to keep an eye on and perhaps to hedge a little bit for.
Q. Feet-to-fire what positions have best chance of being 3-baggers ++ in 3-years?
A. Three years, 3 baggers? Man, that’s a high bar. Maybe TSLA, Qualcomm and TWTR. But don’t hold my feet to the flame over this prediction. Wait, what?
Q. I read (SA column) there is heightened risk in SQ due to maybe slower growth, sale of Caviar, and big competitors. Still believer long term? Of course your latest positions will clue us in. Thanks.
A. Square has sold off since their quarterly report included guidance that Wall Street was clearly disappointed in. Then again, the company might just have reigned in expectations and they’re now back on for UPOD (under-promise, over-deliver) for the next few quarterly reports. Theoretically, at least. I also think the Square Cash App, which is now a more than $1/2 billion dollar a year business and growing quickly. I bought more SQ recently around these levels and would buy more below $60.
Q. Hi Cody, any updates on PANW? You were going to check on it a little while back. Thanks.
A. I’ve been worried that the residual business of selling appliances to protect networks is holding back Palo Alto. That said, I made a few calls about it and I want to give Palo Alto another quarter or two to see if their recent acquisitions and their pure cloud offerings can catch more traction. I’m not about to buy PANW unless the next quarter is good.
Q. Hi Cody, what’s your view on Zillow (Z)? Is recent weakness an opportunity? Thanks in advance.
A. I just don’t like the risk they’ve added in flipping real estate now. If the real estate cycle booms, the stock will be a homerun. If the real estate market tanks at some point, it could be game over.
Q. Cody – UBER is getting crushed. What do you see that the sellers aren’t?
A. Headlines like these get clicks, but the analysis doesn’t do you investors any good: “Uber lost over $5 billion in one quarter, but don’t worry, it gets worse.” Uber’s investing for the long run and the company is either going to end up being a de facto standard people-and-things mobility platform worth hundreds of billions of dollars or it’s going to fail trying. I think it will succeed but it might take a few more years. I might buy more Uber at $35 or so.
Q. Are you sitting tight on $TLT puts here or considering adding a bit more since it continued to move up?
A. Sitting tight.
Q. Cody – Does Musk connection with Epstein hurt TSLA in short term or is it just noise?
A. Elon’s and Tesla’s names get lots of clicks, so news outlets feature it whenever they can. It’s nonsense. There’s no connection.
Q. Have you looked into TSLA’s solar roof product? We are starting to look at solar roof vendors for our home and while Elon’s product is pricier, it seems like it’s higher quality (lasts longer and more efficient) than competing products. Given that the Cody community has such good feedback on the TSLA, any chance we can hear what they have about the TSLA solar roof?
A. Yes, and if Tesla can start producing, delivering, installing their solar roof that looks like a normal roof, then it might be a positive for Tesla. That said, they’d have to sell a helluva a lot solar roofs to move the needle compared to the Model 3 for example. As for asking the Trading With Cody community, I’m all for it, although I bet there’s a small fraction of the people who own a Tesla car that own a Tesla solar product. Trading With Cody subs, do any of you own Tesla solar products?
Q. Hey C.W, any analysis on CSCO? Bought some also, earnings are Wednesday.
A. Cisco is a the de facto world leader in routers and Internet infrastructure that’s not named Huawei. Huawei’s losses are Cisco’s gain just as 5G and IoT are about to roll out mainstream in the next few years. Cisco’s trading at 15x next year’s earnings, growing about 5% or so right now, but that might accelerate with 5G and IoT and the Huawei ban.
Q. What do you think about Huawei threat for Google regarding their Android replacement? Still bullish with the GOOG DEC calls?
A. I don’t think Huawei will be able to pull off the miracle of replacing Android with a homegrown OS. It’s a terribly difficult proposition to get all the developers of new apps to build for yet another OS.
Q. Trim JD after earnings?
A. Yes, at least a little bit probably. I am.
Q. You mentioned possibly selling VZ in favor of TMUS. Still considering that?
A. Verizon and T-Mobile (now that TMUS is acquiring Spring) are likely going to waste AT&T and any other competitor in 5G. AT&T is distracted with trying to rationalize the content and satellite businesses they stupidly overpaid for (feels like 2000 all over again for AT&T). Verizon and T-Mobile will pick up the pieces. Dish Network is a dark horse competitor in 5G but as a long-time unhappy Dish Network satellite customer who can’t fathom that their remote controls and set top box interfaces somehow keep getting even more user-unfriendly over the years, I’m doubtful the company will be a leader in 5G. So I stick with a little Verizon and might buy more Verizon near $50.
Q. Cody – Do you think we get a decent pullback in gold or it’s mostly going to be consolidation and slow uptrend that we have seen?
A. I’d imagine that you’ll be able to buy the GLD at $140 again this year. But I don’t know if it will pull back 15% or so.
Q. Any cannabis stocks you feel comfortable nibbling on after a pretty significant pullback??
A. CRON and CGC would be my picks.
Q. I am looking at adding some more high dividend stocks (low beta) as a hedge in my portfolio. I’ve got QCOM and VZ. What about some of the higher paying REITS like CHI and SBRA? I am looking at some stocks with higher dividends.
A. I’m not a big fan of REITs, but if you find a good one, you might take a small investment. MO has a big dividend too, but QCOM is my favorite big dividend stocks.
Q. Hi Cody I’ve been a subscriber to your revolution investing newsletter for several years and thank you for helping me think differently about investments and making me money! I was surprised to read on 8/2 that you don’t like Shopify. You featured it as one of your revolutionary companys and I was surprised you never opened a position in your newsletter . I did at $133 and am glad I did! Why don’t you like it now and think the company will be in trouble in a few years?
A. I just think there’s too much hype and overvaluation in the name. And one of my favorite smart hedge fund managers, who is Canadian, has turned all bearish on the name, partly because it’s in Canada. Haha. No, I’m not terribly bearish on the name and I am perhaps having some sour grapes about not having owned it.
Ok, thanks all, that’s a wrap!