Here’s the transcript from this week’s wide-ranging chat.
Man, things be changing quickly round here… “Everyday it’s a-getting closer, Going faster than a rollercoaster, Love like yours will surely come my way, A-hey, a-hey-hey, Everyday it’s a-getting faster, Everyone said, “Go ahead and ask her,” Love like yours will surely come my way, A-hey, a-hey-hey.” Buddy Holly.
Q. Cody: “Man, things be changing quickly round here…” Kurzweil’s singularity is approaching. At what point can’t we keep up? My brain needs rebuilding just to keep up, Oh, I understand, that service too is on it’s way. Must be the ‘law of accelerating returns.’ Understanding is the first step. Kudos to you, Cody.
A. Haha, good point about the Kurzweil rate of change in the markets. Maybe we need to become a full simulation to keep up.
Q. All – just to share, this is Kurzweil’s site maintaining a list of the most current peak technology discoveries + esoteric tech ideas on the planet. First article today is about Cerebras, AI, and the world’s largest chip in form and function! So can TSM corner this market by capacity and capability? At times when I read these things I think Kurzweil’s site is for those willing (occasionally) ‘not to understand’.
A. TSM makes the chips for Cerebras: “The price will depend on how efficiently Cerebras and its manufacturing partner, the Taiwanese-based TSMC, can build the chip.”
Q. Hi Cody, do you use the covered call strategy as a hedging method? When you use it, when do you use it and how? if you don’t use it what are your reasons not to use it? Thanks in advance for answering my question!
A. I might occasionally sell a few covered calls against a large common stock position if the premiums on the options are high. TSLA might be a good candidate to short a few calls instead of trimming common stock if/when it goes into spike mode.
Q. How badly do you think the next black swan or other financial event will hit the economy with all the leverage that people and governments have taken on? Or will they just print their way out of it which will destroy the $$$ and savings. I could see a large revolt by college age kids and millennials who can’t buy homes/pay school debts with their useless degrees.
A. I wonder if we’re looking at the wrong potential black swan. I have a feeling there will be some new tools and otherwise new tricks for governments to use to try to save the system if/when the next financial black swan does come though. And to keep the millennials (or any other specific group) happy — the Republican Democrat in power at the time will use the bailout playbook that worked for the banks and the farmers and everybody else the last fifty times.
Q. Once again, I’ll (we’ll?) be a little light (if at all) on put-option protection after the 9/20 option date. (Spoiler: their protection wasn’t needed recently. But that’s OK.) Within your (I assume) continuing slight near-term market optimism, any suggestions on puts further out – which ETF, timing, and specs? Still liking SMH considering the sector? Others? Thanks.
A. I’ve mentioned that I’ll probably remain a little bit lighter on puts/hedges. I suppose that can change, but for now, I’d probably look to just add some puts/short hedges on IWM and SPY and maybe the IGV if you’re looking for more protection.
Q. What are chances the dollar is NOT the reserve currency in our lifetime. Assuming we live another 40-50 years. This chart says time is almost up.
A. Cool graph. Wonder how they define “reserve currency” back in the 1400s though. The fact is that as the demand for oil dries up in coming decades in favor of renewables, that alone might end the concept of the US dollar as the “reserve currency of the world.” Bitcoin is the most likely reserve currency in 40-50 years. By the way, that chart you linked us to is seven years old itself.
Q. Hi Cody, thanks for the Trade Alert on WORK. I was curious which CWr (Cody Willard rating) you would give WORK? You were very enthusiastic in your mail, so i suppose it’s a 8? And are you planning to make it a core holding?
A. Yes, maybe close to a 9/10 rating for WORK when it’s below $25. Yes, I plan on making this a core holding.
Q. Does the Microsoft discussion effect your WORK strategy?
A. Microsoft’s Office products are trying to copy Slack (imagine Microsoft trying to imitate something that works…) but I think it’s likely a duopoly for enterprise communications at worst. Slack is most likely to win outright if anybody is likely to win outright.
Q. Good morning Cody. How do you want to treat the bet on WORK? Give it one year and we shall see, like CALX e.g. or want to hold it for a decade?
A. CALX is a small cap telecom equipment company. WORK is a global phenomenon. I don’t think they compare. I do plan on holding WORK for a long-time if they execute.
Q. Hi Cody..Will TMUS benefit from 5G? as compared to VZ?
A. Yes, T-Mobile + Sprint just might be using frequencies and technologies for 5G that just might be quite a bit cheaper and more effective/reliable than Verizon’s own 5G frequencies and technologies. I like T-Mobile here for the long-term.
Q. Your updated analysis on PANW please.
A. It was a better quarter than most of the downtrodden expectations were set at. I plan to continue to hold PANW here for now but I like SPLK better.
Q. Any names you might pull plug on soon?
A. I think about cutting BA often but then I want to just be patient with a duopolistic airplane maker… and maybe ZEN.
Q. What is up with SNAP would you nibble here?
A. I don’t know why the stock has been slammed the last two days. But I’d trimmed some higher and I can think of worse ideas than nibbling on some around $14. I own enough from lower levels that I’ll mostly sit tight.
Q. ZEN drops 5% today, below 200-day moving avg…don’t really see any news…you tempted to add at all, Cody?
A. No, I’m afraid that I’m not feeling very about ZEN right now.
Q. What is going on with SEDG?
A. Maybe it just got ahead of itself. I nibbled some yesterday.
Q. A while back, a sub mentioned NovoCure (NVCR) as a truly revolutionary healthcare sector spot (I agree), and you thanked and said you’d look into it. Any analysis/opinion? As of mid-day today, its huge upward arc turned into a 7% dip: no news I can discern, and seems excessive. What do you think of company — and might this be a buy opportunity?
A. This sounds like something Nikola Tesla pioneered 100+ years ago: “Tumor Treating Fields is a cancer therapy that uses electric fields tuned to specific frequencies to disrupt cell division, inhibiting tumor growth and causing affected cancer cells to die.” I don’t know the cancer treatment industry well and I typically stay away companies like this, but it sure looks interesting.
Q. Cody – Good morning. Please give me your thoughts on GH I have a huge gain, but it is drifting lower. I bought it as a long term holding, but the big drop has me wondering a bit.
A. Again, another cancer company outside of my wheelhouse. Looks interesting, but it’s far from profitable and trading at a rich valuation of more than 30x next year’s sales estimates.
Q. HI Cody. I think TTD is changing advertising. Down about 70 from highs. At what price do they become interesting?
A. I’m not a fan of TTD. Too much privacy invasion in their model amongst other things.
Q. How do you view current risks for GOOG in respect to recent Antittrust and other Regulators scrutiny? They all want to suck money from big techs.
A. Not sure I view those antitrust and regulatory “scrutiny” from the notoriously corporatist Republicans and Democrats in power is ever going to matter to GOOG or other giants. The giant trillion dollar tech companies just pay the government off and use the new regulations to stifle new competitors. Rinse repeat.
Q. Crypto-Cody rankings check-in… of TWC’s crypto holdings, how would you rank Ripple, Stellar and Ethereum behind Bitcoin (assuming BTC is still tops)?
A. Bitcoin, bitcoin, bitcoin, bitcoin, Ripple, bitcoin, bitcoin, bitcoin, stellar, bitcoin, ethereum.
Q. Fairly recent: Hyperledger Unanimously Approves First Ethereum Codebase For Enterprises. Seems long-term bullish for $ETH. Have you done any more work on it lately?
A. I’ve not been doing much work on cryptos not-named-bitcoin, because only bitcoin has futures that trade that I can use for the hedge fund. I’ll sit on the other cryptos I’ve got but not focused on them much right now. Also, I think Bitcoin has mostly won the de facto standard place as a cryptocurrency/store of value.
Q. Yesterday I got into a little twtr debate with someone who said…. the action in the software/cloud names was that of a bubble bursting top….. my side of that was…. this market has had many bubble type stocks burst and correct and the indexes continue to power higher or like yesterday stay stable…. BS aside at what levels do names like TTD MDB COUP become attractive? And which side of the argument would you take…. bubble bursting top? Or healthy correction.
A. It could be both at once. The winners are screaming buys on this sell-off. The losers will continue to crash. The hard part is sifting the winners from the losers.
Q. Now with the services of Antonio Brown, can anyone stop the Patriots? The only team I think is close could be the Chiefs.
A. This seems like both the question and correct answer in one spot.
