Here’s the transcript from this week’s Live Q&A Chat. I’m selling my Altria MO today, more details below.
Q. Best guess. When are negative interest rates coming to US? Will that crash the stock market or blow bubble even bigger?
A. If the negative interest rate infection comes to the US it will be because the Republican Democrat Regime and the bankers who help run it are desperate to stave off utter collapse. I don’t think negative interest rates are coming to the US anytime in the next decade, but I am open to the possibility. I would think there’d be a bubble and a crash or two or three of each in the next decade regardless of whether the interest rates in the US ever go negative or not.
Q. Hi Cody, Do you still think we set up for a rally come q1 2020?
A. I’m now I can even try to accurately predict what the market set up will be in another four months, and then to predict what it will do in the first 90 days on the new year from there. I outlined my short-, mid- and long- term risk/reward scenarios for the markets in an article this weekend: https://tradingwithcody.com/2019/08/25/tariffs-trade-wars-tweets-and-trump-the-4-ts-driving-our-economy-and-markets/
Q. If MO merges with PM, what will happen to MO stock price? Thanks.
A. Frankly, I’m just about sick of being a shareholder in this addiction-peddling company. I think I’ll take the pop in the stock today and move on from this name. Consider this the Trade Alert. I’ll put another mention of this Trade Alert at the top of the chat transcript when I send it out later too.
Q. Cody – how big can the cannabis revolution be once stocks like CGC and other eventually bottom. Can cannabis stocks deliver AMZN like return in a 10yr period ?
A. Part of the answer to your question will depend on how far these cannabis stocks fall before bottoming. If CGC bottoms at $20 and it goes to $50 in five years, that’d be 150% gain. But if it drops to $10 before bottoming and then runs to $50, it’d be a 400% gain off the bottom. I do think the cannabis winners that do win will win big over the next 10-15 years. But most, say 70%, of the cannabis stocks that you can buy right now will go to $0 over the next 10 years.
Q. Any comment on this TSLA article from Vanity Fair (https://www.vanityfair.com/news/2019/08/how-elon-musk-gambled-tesla-to-save-solarcity)?
A. Yes, another ridiculous hit job from a reporter who’s made millions of dollars and gained fame from the one time a short-selling hedge fund source told her about Enron back when she still worked at Fortune. Further, she quoted these clearly discredited and silly twitter users from the $TSLAQ community and didn’t talk to a single long or fan of the stock. I was shocked at the lack of rigor in that article and then when I finished reading that article and then looked at the author’s name I was even more shocked at the lack of disclosure. Here’s some enlightening tweets about this article and the author: https://twitter.com/flcnhvy/status/1165953112990990338 and https://twitter.com/tesla_truth/status/116636346550772531
Q. Cody, GOOG seems stuck by regulators and other fears. Do you see any catalyst near term for our GOOG dec calls, which are now on red?
A. The December timeline is my biggest concern with the calls, but as for GOOG itself, I think the stock is cheap, ready to go much higher in coming months and years. If the markets can stay steady/strong into year-end, I think GOOG will outperform the Nasdaq and could be the best performing of the FAANNG names into year-end too. That said, if the markets tank or just falter into year-end, our GOOG call options will likely be complete losses.
Q. Interested in your take on GLD; it has had a good run.
A. What a run in GLD. Back in February this year I wrote: “I continue to think that gold and GLD are probably going to be up 15% from these current levels over the next year as rotation from cryptocurrencies to gold as The Great Cryptocurrency Crash continues and as Geopolitical tensions are on the rise. $120ish lows and $150ish highs this year, I expect for GLD.” https://tradingwithcody.com/2019/02/01/latest-positions-including-a-few-trade-alert-updates/ And when I bought GLD back at $112 originally back in September last year I wrote: “If you don’t own any gold and/or GLD, you might consider nibbling some of it sooner rather than later too.” https://tradingwithcody.com/2018/10/18/trade-alert-and-a-playbook-for-into-year-end/ We’re there now. I’m a holder of GLD, not a buyer. Might trim some more near $150 if it gets up there.
Q. Many see crypto fiat (i.e. government controlled, permissioned cryptocurrencies) becoming quite the battleground over the next 5-10 years. With China leading and some other big western democracies to follow, do you think Bitcoin will be affected in any major way?
A. No. The reason bitcoin is attractive is precisely because it’s not fiat/government-controlled. A government-controlled crytpo currency is an oxymoron and is also moronic. Maybe that’d be a good name for the US/Federal Reserve/UN/EU-sanctioned crypto: Moronicoin.
Q. Do you believe that privacy coins such as Zcash or Monero will be around in the next 5-10 years? While there is definite value in privacy, these types of cryptos seem like ones that the US gov’t would target for banning in the name of fighting terrorism/drugs/etc.
A. They’re doomed.
Q. Will Gronk ever return to play in the NFL?
A. What’s a Gronk? Just kidding. That dude was amazing on the field and hilarious off the field. Yea, he’ll be back in the next 24 months, at least for part of a season, IMHO. Gronkoin? The price of the Gronkoin is always set to 69 Bitcoins.
Q. Cody, do you see any impact on TWTR that Mr. Trump forced so many people to follow him to be updated (traders at least)? many could hate him, but for twitter DAU it could help not only short term I guess.
A. I think Trump’s tweet addiction and the follow/report-on-his-tweets addiction from the mainstream media has already helped TWTR go from $14 to $43. It continues to help too, but not sure it’s enough all by itself to keep the stock a-moving like this near-term.
Q. I know you mentioned before you like DATA. How about CRM now after the buyout?
A. CRM is an amazing company that I should have owned for years. It’s just felt like it’s always been too expensive and still is, at least for me.
Q. $TLT keeps going straight up. When would you think about buying puts again? It has to come down, right?
A. I can think of worse ideas than buying some TLT puts again, but I’m not doing that myself right now.
Q. The odds of a no deal with China until the election seems to be going up. If that happened, which stocks in our portfolio will be effected the most both positively and negatively. How would AAPL compete with Samsung?
A. Hmm, I tend to think the odds of a deal with China have been pretty steady, at likely. Samsung’s a loser in the handset wars long-term. Apple is a winner.
Q. Hey, Cody — thanks for the best-guess-but-wise analysis of the near-, medium-, and long-term market/me moves. Good stuff. Interesting quandary: in/for the short term, as you recommended, I’d like to cover some of my shorts and take the gains in some of my ETF puts — but having trimmed similarly already during the recent gyrations (mostly successfully, thank you), that would leave me with little (or no) downside ETF protection. Yet at the same time you seem more positive in the longer term. So . . . would it make sense now to roll into later-out ETF puts at adjusted strikes? Any guidance? September 20 isn’t that much further out than your definition of short term! Thanks.
A. I think it’s good to have some of these ETF hedges on, despite my cautious bullishness. Maybe take your own advice and roll into some September dated puts, slightly out of the money, but not with too much cash.
Q. Fresh update on AMZN?
A. Jeff Bezos is a genius. Amazon winning. AWS is the biggest creator of value at Amazon, followed closely by Alexa, followed closely by data and ads, followed closely by retail.