Here’s the transcript from this week’s Live Q&A Chat. Not much fear in the chat room and that sometimes makes me a little bit worried.
Q. Do you think there will be decent pullback? (Different from panicky sell off).
A. At some point, definitely. Whether that starts today or next week or next month or next quarter, is a tougher question.
Q. Cody, I sold some over the last few days. Mostly, since I own more than just your Cody stocks. I sold other stuff that you don’t own, but trimmed a bit of TSLA. Where I am not huge in your stocks, I will ignore your trims, of say Appl or SPCE, because I am still small ish in them anyway. And I don’t love buying puts as my merchandise is spread out over 4 accounts, so I hate to hedge one without hedging all 4. So I prefer to just raise cash, as you get more or less cautious. So long winded question, how much cash and puts do you have here as a % of your holdings?
A. I have more cash and hedges in the hedge fund account than I do in my personal account which is a reflection of the risk/tolerance and goals of a hedge fund vs a personal account for someone my age with my risk and goals profile. I don’t like to talk too specifically about how much cash or hedge allocation I have in either the hedge fund or my personal account because I think it would be misleading for my subscribers in their various risk and goals profiles. Someone 25 years old from a wealthy family starting a new job making $200,000 a year with lots of upside potential and living in a rental property probably doesn’t need to hedge her personal account the same way someone 80 years old retired with $1 million in stocks and a fully-paid-for house.
Q. I sold out of AAPL and TSLA on their meteoric rise. I simply couldn’t believe how high how fast how crazy. As I’m out of them, I’m assuming I should wait until a pullback to enter? The issue is that there never seems to be a reasonable pullback.
A. Well, the fact is that it’s hard to advise you when you didn’t follow my advice about just trimming them, not selling all of AAPL and TSLA. As I always tell people, if you want to own a stock, it’s usually best to start with a partial position and then scale into more over time. That’s what I’d suggest here with AAPL and TSLA.
Q. I took all of my profits on SPCE. I am looking to get back in. Buy here?
A. Let’s slow down here as this is the second question today and the third in the last two weeks that entail people asking me how to get back into a stock that I never sold. I trimmed SPCE, TSLA and AAPL and hedged AAPL with puts but I still own core positions in all of them. You all don’t see me trying to trade entire positions like you’re doing here. It’s hard enough to navigate the markets using the approach I use, and I don’t think it’s good idea to trade so aggressively around positions that I am investing in for the long-term. So all I can advise you is the usual: If you want to own a stock, it’s usually best to start with a partial position and then scale into more over time. That’s what I’d suggest here with SPCE.
Q. Any thoughts on ENPH?
A. I’ve been working on ENPH as another solar play. Strong topline growth rate, profitable, but trading at 30x next year’s earnings, it’s not terribly cheap. I’d like to buy it in the mid $20s to have some margin of safety.
Q. As for UBER, I’m in Los Angeles. I used to use UBER all the time but their prices have gone up and LYFT is consistently cheaper. I went from using UBER 100% of the time to using LYFT 100% of the time in January. LYFT is always cheaper in 2020. So… does this change your thesis on UBER? That prices in CA have gone much higher and people (drivers confirm this) seem to be switching to using LYFT over UBER in CA. AND I used to find Uber to be a bit cheaper than Lyft, but one of my credit cards recently provided a free subscription to Lyft Pink, which gives 15% off all Lyft Rides, plus 10x points for Lyft, so I pretty much use Lyft all the time now.
A. Not really, I expect I UBER and LYFT are both gradually raising prices. That said, if there’s a marked shift in market share, UBER would probably get hit. I’m holding my UBER steady though.
Q. Can you tell how retail investors can invest in SpaceX?
A. It’s getting harder for even institutional investors to get into SpaceX right now. The latest minimum size investment to buy SpaceX is $1 million.
Q. What about NOC for a space play. I saw they spent 10 billion on pure play space company so that tells me they aren’t messing around.
A. Yes, I’ve looked at NOC a lot. But these old fashioned bureaucratic military industrial complex companies don’t seem like they’re really in a position to compete against the startups like SpaceX and Blue Origin and others that are leaping by them. NOC might be the Lucent of The Space Revolution (that is, it might end up being a fraction of itself before The Space Revolution is over).
Q. It seems a few months back you rated WORK a 9/10 below $25. Do you still have the same conviction at this time with WORK? Also, you sent out a trade alert a earlier today that you are selling 5% of most of your positions…does that include WORK?
A. I rated WORK an 8/10, not a 9/10 in the Latest Positions. I still believe that the company is very well positioned to grow its user base and to start monetizing its user base, but the company needs to a good quarterly report or two to get Wall Street seeing the same thing and to prove I’m right. I sold less than 5% of my WORK today, but yes, out of discipline, I took a little bit off almost across the board today.
Q. Any interest in AMD on this sell off?
A. Not yet, as the stock is probably still trading around fairish value here. The company is growing topline 25% per year and the stock is trading at 30x next year’s earnings. I’d get interested in buying AMD near $35 or so as it’d be a relative bargain at such a level.
Q. Do you have a SNE update? You said you were either looking at it again or you were going to look again.
A. Sony has no topline growth for the last couple years and that’s got me staying sidelined on it for now. SNE’s P/E is relatively cheap vs, say, McDonald’s which also has no topline growth, but this is another one, I’d probably wait for a pullback if I’m going to buy it.
Q. Do you like Livent at all?
A. The problem with LTHM is basically the same thing that’s the problem with investing in gold miners — you’re exposed to all of the market risk of a pure commodity, in this case lithium, as well as the additional risk of execution and management mistakes, etc. Last year, Livent had negative 10% topline growth because lithium prices were weak. Short answer is that I don’t have any interest in investing in LTHM. Sorry.
Q. Any thoughts on algn….if you want to play earnings calls or puts??
A. Seems like a great company with increasing competition. No idea how to play the earnings on it though.
Q. GE a buy here?
A. Here’s what I wrote a year ago when I turned from bear to bull on the stock: “GE might even finally be a decent buy down here below $8 per share, though I’m not personally buying it. If nothing else, let me just go on the record today as going from long-time GE bear to newfound GE bull.” That said, I’m not looking to actually risk capital on the stock.
Q. Have you built full size position in SPOT? Or are you still building? What size you currently have (1/3, 2/3, 3/3)? Thank you.
A. So far, I own probably about 1/2 or 2/3 of how much I want to own SPOT.
Q. Any comment on XLNX and LSCC? Both are the pure plays on FPGAs.
A. I’d rather stick with QCOM and TSM for most of my semiconductor exposure. XLNX and LSCC are great companies though.
Q. Hello, Is Cody still in WFC? Or did I miss a Trade Alert selling that one? Also I’d love to have an updated list of “where I’d buy more” on each stock, when time allows.
A. Yes, I sold it. Here’s the Trade Alert: . I’ll try to do a list of “Where I’d buy more” in the next week or two. The list would be more interesting if the stocks were closer to the levels where I’d be looking to buy more instead of trimming them like I did today.
Q. Hey Cody, I just want to thank you for your mentoring us the way you do. I’ve made many millions $$ and lost many millions because I sucked as an investor. I’m very capable as an entrepreneur, but didn’t know the principles for successful investing. For the first time I’m finally succeeding, thanks to your insights and wisdom. Just want you to know that…
A. Thanks and I’m happy to hear it. That said, please consider taking a little off the table when it feels this good.
Q. If you had no TSLA stock and wanted to play earnings call or puts?
A. Can’t Do Nuttin’ For Ya Man. In other words, I have no idea. I loved TSLA in the low $230s as an investment. I’ve trimmed it down since its tripled off its lows though. Here into earnings, it’s a crap shoot but the calls and puts both have huge premiums, so it’s tough to try to make money on the earnings report. I’d suggest nibbling a little TSLA common instead of trying to game the next two week’s stock’s moves.
Q. Hi Cody, Just writing to say thank you; I am in a very high pressure job and have not traded for i don’t know how long. I logged into my account and was surprised it was up by about 60k since I last checked. Thank you!
A. That’s terrific to hear. But unfortunately, one of the many lessons I’ve learned over the years that I’ve been writing about my trades in public is that whenever people are congratulating me on all our success, it’s often a good time to take some profits. On the other hand, you’ll see me get wildly bullish whenever people are mad at my picks! LOL but not LOL.
Q. Chiefs or 49ers?
A. Chiefs by 30.
That’s a wrap folks. Thank you!
Be careful out there. I preach caution and not greed right now.
