First a personal note — I’m going to take the family, including little Amaris, up to a cabin for the next five days. I’ll be back full speed Monday. I think it’ll be good for me to get a little distance from the screen for a few days, though I will obviously be working on the hedge fund a little bit while I’m gone. I’ll send out a brief Trade Alert if I make any moves.
Here’s the transcript from this week’s Live Q&A.
Q. Time to trim stocks? I also know much of the time when I want to trim the market continues higher. Your thoughts would be appreciated.
A. Yes, I think trimming some here is a pretty good idea. Maybe 5-10% of some of your positions if you’re worried about having too much exposure. Now, with the markets at all-time highs, is a good time to remember the last time the markets tanked and you were losing sleep because you were too long.
Q. Did I miss Cody’s thoughts on cannabis stocks?
A. I’d mentioned a few weeks ago when pot stocks were at all-time lows and just hated, that I was no longer bearish on the sector and am even bullish on a few select names like CGC, GWPH and maybe CRON.
Q. Thanks for your timely advice on stock buying and selling; I appreciate your commitment to your subscribers. What is your view on overall market? up? down? sideways ? pick one.
A. Depends on the time frame. For the rest of today, probably flattish to up. For the next two weeks, maybe flattish to down. For the next two years, maybe mostly uppish.
Q. Cody, is TWLO revolutionary enough to be considered for your portfolio? It’s 39% off its high post earnings and currently growing top line 75% this past quarter versus last year. Still trading at better than 11 times sales though which probably answers my question. I just wanted to get your thoughts.
A. TWLO is definitely an interesting company and I like the growth rate and gross margins in the business. The lowered guidance and then silly need to correct said lowered guidance is not exactly confidence inspiring. That said, if the company can keep growing and things go right, this sell-off will turn out to be a buying opportunity. I’m a bit on the fence in the name for now.
Q. Morning hope you a chance to look at BZUN ?
A. Yes, I did. It’s an interesting play on China e commerce but without being in China and/or using the company’s services, I have a hard time betting on a small $3 billion market cap stock. JD and some of the biggest Chinese e commerce plays might be a bit safer.
Q. Would you consider buy ing some TLT puts at this level?
A. Probably not. It’s already down quite a bit now.
Q. Thoughts on Uber earnings? Q. Are you buying Uber today? Or waiting another day as the stock lock up expiration is tomorrow?
A. Wrote a whole article about it last night for you guys: https://tradingwithcody.com/2019/11/04/pre-trade-alert-uber-looking-uber-interesting-here/
Q. In your opinion, Which is more undervalued right now, TWTR or UBER?
A. Under-valued, probably TWTR.
Q. @Cody: Re Uber, you mentioned in your pre-trade alert that you would look to buy a tranche if it got hit 10% or so. So did you buy another tranche?
A. Yes, as planned, near $28ish.
Q.Thoughts on JD breaking out?
A. I just don’t see stocks as “breakouts” very often. I’m still holding most of my JD steady. Might be time for a trim, if the past pattern of how it trades to $33ish and then backs down below $30.
Q. With the potential of Skylink launching 5G satellites, how would you rate TMUS now? Is it still a 7?
A. Yes, probably about a 7. Skylink’s satellites aren’t technically 5G, but are perhaps even better and faster and more upgrade-able than 5G.
Q. What is the potential for WORK in 3 years?
A. If WORK can tap into its customer base and grow its major corporate client base AT ALL, the growth rate could be much faster than Wall Street is expecting. Most analysts somehow see these facts as negatives, when they should “FLIP IT” and see the obvious flipside positive of these facts: “Only 15 percent of its customers paid for the service. Of those paying customers, 575 clients paid more than $100,000 each for their Slack subscriptions. That means less than 0.1 percent of Slack’s total customer base accounted for 40 percent of the company’s revenue, according to its offering prospectus.” That means that Slack has 99.9% of its customer base that it can grow to meaningful size. That means that there are thousands of big corporate clients around the world that are already using Slack but haven’t started paying for it yet. I expect Slack’s penetration rate and monetization rates to be better than most analysts expect. If that happens, the company would likely be doing about $2 billion in sales in 2022, up from $600 million this year and that the stock would likely be a double or more from here. If they don’t deliver on the fundamentals, it’s trouble for the stock from here.
Q. Thoughts on this video: Teams Vs Slacks = Explorer vs Netscape?
A. I just watched the first half of that video. I enjoy that Scott Galloway’s stuff most of the time and I’ll finish watching it later. I tend to think Slack’s much stickier than Netscape and that it’s going to be able to stave off Microsoft Teams.
Q. Why is $SQ falling again just prior to earnings? AND Q. Are you bullish on SQ before earnings or rather trim and then buy lower?
A. I don’t know why the stock has been sold down 3%ish in the first hour of trading this morning compared to where it closed in the last hour of trading 15.5 hours earlier. I’m mostly sitting tight on SQ as I’ve done some purchasing as noted in Trade Alerts around these levels and a bit lower.
Q. What is your take on quantum computing? For example Honeywell+MSFT is a new entry in the field. IBM might be a shot.
A. IBM seems like a loooong shot to ever do anything meaningful in tech again Quantum computing will be very Revolutionary in coming years. 5-10 years before much of an impact, I’d guess though.
Q. Correction coming soon?
A. Maybe? But maybe not just yet? The markets don’t feel too frothy despite their all-time-ness.
Q. Any thoughts/reaction to Stellar’s announcement of burning half the supply of Lumens?
A. Seems like they had no choice but to really shake things up if they wanted to stay relevant and/or make Lumens valuable. Maybe it works? LOL. Bitcoin bitcoin bitcoin.
Q. Cody is UAA now a buy after the recent sell off?
A. Accounting irregularities usually make me run for the hills. I’m staying away from the stock, though I did just order another pair of my favorite Under Armour golf shoes.
Q. GOOG calls might work out after all??
A. Unlikely, but possible. No jinxing, please!
Q. I bought some QRVO a few months ago. Looking smart so far. Thoughts on them long term?
A. Too much dependence on one sector, few customers. Good company though.
Q. Cody, never did thank you for VZ. While you mentioned that you could revisit it at lower level, together with the dividends, it was a great hold/trade.
A. Rock on and thanks!
Q. Please name one or two stocks you missed out on but would love to buy if the price was right? What is the price?
A. MSFT and maybe I’d buy it at $110 or so. SHOP and maybe I’d buy it at $150 or so. ROKU and maybe I’d buy it at $100 or so.
Q. Might want to take a look at TEN. I’m sure the financials of buying Federal Mog look bad, but cars on the hwy avg about 12yrs old, the auto parts business should boom. I bought some below $10 and again at $12. What do you think.
A. I just looked at TEN, it’s very inexpensive but I’m afraid that it’d be like trying to pick up pennies before a steam roller hits them in the next five to ten years as the whole world is going to be doing less fixing up of old cars/trucks and as electric vehicles take market share.
Q. Another thing killing traditional cars vs electric that I recently realized. I have a BMW 535i, nice $65k car that’s fun. I had the start of injector issues a couple weeks ago, BMW wanted $3500 to change them. I studied it, bought injectors and tools needed for $1000 and did it myself in 4 hrs and really enjoyed the project. You’ll never have to do that maintenance to a Tesla. Lack of routine maintenance is going to kill auto parts and service businesses and that’s probably 5 or 10 years down the road.
A. Yes, exactly my point…electric cars make car maintenance a secularly declining market.
Q. Favorite song from TEN? I go back and forth between Porch and Black. Depends on my mood.
A. TEN the album, not the stock, haha. I first heard Pearl Jam when I was walking down a hall way at Blinn College in 1991 and “Alive” was playing on someone’s stereo. I went in and asked the dude who that band was and went out and bought the album that day. Alive is probably still my all-time favorite PJ song.
Q. Gronk still coming back before the playoffs? GRONKOIN ICO date?
A. Yea, he’s coming back this year, I think now. Why not?
Q. Will you be looking deeply into quantum computing as a potential revolutionary investment trend in the near term?
A. Yes, am doing so now and will probably write a bunch about the best ways to invest in The Quantum Revolution.
Q. Any thoughts on Richard Heart’s HEX that launches (supposedly) this month? Seems like he’s trying to do a Bitcoin-CD-type thing.
A. “Free money?” What can possibly go wrong? Richard Heart on Twitter: “You should follow @HEXcrypto . I hear they’re launching in October. Who doesn’t like free money” OMG, how bad is this HEX coin going to be when John McAfee is your co-hypester?