Here’s the transcript from Friday’s video version of our Live Q&A chat. You can watch the video in its entirety here. Also, I’m supposed to do a Fox Business appearance from Ruidoso Monday around 10am or so.
Cody:
Hello everybody and welcome to another weekly Live Q&A chat for Trading With Cody. Look, market’s down a little bit today, but boy, it sure has been a big rally off those loads from earlier in the year and from the Covid Crisis Crash. And especially a lot of our names have just doubled or more. Some of our new buys have been great, but I keep mentioning that I don’t like valuations anymore and things have doubled that means valuations have doubled Unless somehow the earnings trajectory has also doubled and that’s not the case here.
Cody:
The bullish argument — and maybe if you really want to believe that the market’s discounting something six months a year, year and a half, or even two years into the future, which it’s not a smooth line, we’ll probably have some major pull backs along the way no matter what happens with the economy and corporate earnings including what this bullish thesis I’m about to lay out here — isn’t it possible that because of all of the working at home and other measures that have been taken, even in the shopping world, the ability to have apps, to order through apps, curbside pickup, more and more delivery — it is possible that the convenience factors from the Covid virus are actually going to be beneficial for growth rates, for consumer touching and Enterprise touching corporations.
Cody:
It’s possible that the use of Zoom for meetings and allowing people to work at home will allow corporations to save more money, use, perhaps, less real estate. On the other hand with the real estate I would note that it’s also possible that corporations will need more real estate because the people that they do send to the offices will need more space to feel comfortable and for safety measures.
Cody:
But, if because of more convenience in interactions with consumers and corporations makes people spend more than they would have otherwise, possibly creating higher margins, then you’ve got a nice recipe there for bullishness. Growth plus higher margins. That’s what makes stock markets… well, that’s what makes stocks, individual stocks go up. And individual stocks going up is what makes stock markets go up. So, there’s a bullish thesis for you. Then you layer on the Fed pumping the fiscal trillions of dollars of checks being sent out and all of that hitting and you’ve got the potential for inflating a bubblicious-bubble-blowing-bull-market-extravaganza-blow-off-top set up here.
Cody:
I want to just check all of that a little bit though and let’s bring it back down. A lot of that’s being priced in already with these doubles and triples and more and our stocks and other stocks. I mean, it’s hard to find a chart that doesn’t go… a one year chart mostly up, boom, slammed down in March and a stair step straight up 90 days since then. And then you could look at some of these small caps and the frenzy in non-Tesla electric vehicle related companies and you add it all up and it feels already like we might be in the bubblicious part of this. It can always get bigger and I’m continuing to ride most of our alongs — although nothing wrong with trimming them down yet again guys. Raise a little more cash if you’re worried like I am about not only valuations. But see the other side from the long term bullish ramifications from the Corona virus and the reactions of corporate America to those trends, some of which will stick around.
Cody:
I’m concerned that the lack of seriousness from the mass of the United States public about Corona virus and COVID-19 right now is about to lead us to an eminent spike in infections and more shut downs. Texas tried to open, cases spiked, now they’re shutting the opening back down. Arizona’s spiking. These, not just states, but nation wide, it seems to be there’s this partisan thing about wearing a mask and taking it serious and if you do take it serious are you anti-Trump or something or? I’m getting confused on the partisan takes on just taking care of society by wearing a mask for a while . There’s real death that happens when we transmit this stuff. And scientists have found a method that might reduce transmission of COVID-19 by 70% or more.
Cody:
It’s miraculous. This new scientific breakthrough. It’s called wearing something over your face. Keeping a little bit of social distance, not jam packing into protests, rallies, whatever.
Cody:
Going to restaurants, having a drink at a bar. If you do it, it’s fine. I mean, you’ve got the right to do that, but maybe wear a mask. Cut down on the transmission by 70%. And if this happens too fast, if the rate of infection happens too fast like they’re seeing it again in Huston, like they’re seeing it again in Arizona, you run out of capacity to take care of the people.
Cody:
And maybe we’re all going to get COVID-19 eventually because the vaccine’s not going to be here fast enough. Maybe the vaccine will be here in three or six months and miraculously most of us will get immunized and be okay. But more likely at some point over the next year or two we’re probably — most everybody, no matter how careful you are, unless you’re a complete hermit — it’s going to be hard to avoid getting Covid-19. But if we flood the system again in the next two to three, four, five weeks in certain areas because of carelessness right now there will be more death than there otherwise would have been. And I don’t want there to be more death in our country or any country.
Cody:
And I don’t like the economic or market ramifications of that set up right here. Feeling like it’s bubblicious, valuations through the roof, penny stock, speculation spiked, everybody feeling rich (except for the hedge fund managers who got short at the bottom). The question then is what do we do now for the markets? How do we set ourselves up? Maybe it’s time to buy a few more puts. Revisit the index puts, the puts on the index and maybe buying a few puts on some more individual stocks. I sent out a list of 10 names right about at the top two weeks ago. I’m not sure that trades over yet. Those things will come down, most of those stocks got hit in the last two weeks. Some of them rose before they got hit, but I think there’s going to be some pain doled out by the market. Might not be a straight down swipe, which is why puts don’t always make sense because then you got to get the timing right.
Cody:
Maybe you put on a few more index short hedges too. Raise a little more cash, trim a little bit more. I feel like I’ve been having my cake and eating it too with the stock market lately in the hedge fund and the personal account because I’ve tried to be defensive and things keep going up and we keep getting more defensive and things keep going up. Our stocks keep rising and we haven’t been too cautious and hadn’t turned net short or anything. But it’s just… it’s not a set up that I like to be aggressive with here. I see a lot more stocks I’d rather short than buy at this moment. From a trader’s perspective and even from an investor’s perspective, I see a lot of junk out there that’s probably going back to junky and/or penny stock status. And some stuff that wasn’t a penny stock, like Nikola Motors. I mean, I don’t think that things’ got a chance of ever justifying the valuation it’s at right now. Even if it’s in its best case scenario.
Cody:
But speculation runs rampant, raking in rallies. I always love to fit in a little alliteration. A little alliteration.
Cody:
All right. Let’s also not lose momentum on trying to change society and taking the racist problem that has been here for centuries and the momentum that the society has in trying to tackle some of the structural racist problems that we have. And I don’t know what the fixes are yet of course, but at least if we could acknowledge it and keep some momentum going that improve the racist problem here and make the world ever better. And that’s what we want to do. Let’s keep trying to make the world a better place. And make money while we’re doing it. It’s Trading With Cody after all I guess. It’s what I do for a living. Run a hedge fund, analyze stocks, write about it.
Subscriber:
With all the debt that is being built up with the airlines and the cruise companies and the difficulty they’re going to have, I believe the equity will be worthless at some point in most of those companies. Have you shorted any of them? Do you agree with me?
Cody:
I agree with you. I think Warren Buffett agrees with you or he wouldn’t have sold them. The structural change to… the flipped side of going back to bearish problems of structural changes that COVID has caused, the corona virus crash has caused — how do airlines ever get back to the growth in revenues? How do they get back to having as many people on the planes at the price levels they used to pay and keep costs lower than they used to be somehow as they address COVID-19 in future virus concerns? So, I don’t see how the profitability of the airlines comes back, even if the equity doesn’t go to zero, I have a hard time understanding how we can imagine that there’s value creation in the next three to five years maybe.
Cody:
And again, all this stuff can change, right? Vaccine hits, everybody start traveling again, there’s new technology to keep airplanes clean because they’re closed space or something. Maybe at some point it will be easier to keep closed spaces COVID free than open spaces COVID free because all the technology being spent, all the innovation, all of mankind’s power of mind and energy being spent on solving these things. But yeah, when I sent out that note about the puts, buying puts and then the next day in chat everybody was like, “Cody do you got more put ideas?” I was like, “Look, I have about 20 of them” but the trading with Cody audience is not… I don’t think it’s good risk, reward for the average retail reader of Trading With Cody to go out and buy puts on 20 different positions. And I didn’t buy puts on 20 different positions either even though I sort of wanted to. I found about 20 stocks I wanted to buy puts in or short. I sent out a note mentioning 10 of them. I probably did 12 or 13, maybe 14 and one of them was JETS, the ETF for airline-like stocks and it was when it was through the roof, right? It was over $20, bought a couple puts.
Cody:
And again, this is one of those, I look at it now, actually those puts expired and I’m short, tiny bit of JETS. I think I’m going to have to cover it because it’s expensive on the borrow and it’s so small. I just had started buying those puts and the thing crashed immediately and so I’ll take it. But it’s always a problem being a hedge fund manager, you feel like an idiot no matter what you do even when you get a trade perfectly right. It was never big enough. In this case it was very not big enough.
Subscriber:
What do you think about infrastructure plays going forward? If you had to pick a sector do you think there’s a play for infrastructure, especially with some of the new bills that are going to be suggested going forward.
Cody:
my approach as you know is trying to find the most revolutionary trends and companies that you can find and getting in front of them. The government may be or may be not spending billions of dollars in finding the cronies that are big enough and close enough to the federal government that they’re going to win the most of those contracts. Or even going down further and trying to find suppliers to those. It’s not my thing. I have no interest in doing that.
Cody:
Now, if I could come up with a that was somehow enabling the ability of rebuilding bridges using a platform from the cloud that every infrastructure related company would end up using too and it hit critical mass.
Subscriber:
That makes sense.
Cody:
So, yeah. You get it. It’s just difficult and I don’t think it pays over the next 10,000 days for me to try to figure out the right cycles that are happening inside of traditional economic and stock market approaches. That would just make me another analyst. I don’t know how you’d outperform doing it.
Subscriber:
Microsoft, they’re closing all their stores. I know you’re not a big fan of Microsoft, but do you think generally that’s going to be a trend with, say, Apple following soon or others in light of the COVID situation?
Cody:
No. Honestly I saw that news, what was it, maybe an hour ago that came out, and my first thought when I saw the news was I don’t know that I’ve ever seen anybody in a Microsoft store. You go to the really trendy area in Albuquerque or you go in the really trendy area wherever, midtown Manhattan, and you’ll find an Apple store and right next to it somewhere close will be a Microsoft store. Because back when it was Steve Ballmer running Microsoft, he spent most of his time copying other companies like Apple, anything he thought was working for them.
Cody:
So, he created this stupid Microsoft store idea which there was never a need for and still isn’t. So, I think it’s unique to Microsoft. Every Apple store is packed and no Microsoft store has ever been packed. Have you ever seen the line outside the Microsoft store when they released the new Surface? No? Me either. Next question.
Subscriber:
For the next question. I’m going to the chat room. Oh, this is great. First comment in the chat is “Cody for President” and next comment is “I second” and the third comment there in the chat room today is “He’s too logical”.
Cody:
I am running for president. Honestly though, and I need to update my website or Facebook page or whatever I’ve got for Cody for President, which I do every four years as a write in candidate. Feel free to vote for me. But, in this time of partisanship, with the partisanship of masking your face makes me, among other things, just realize how out of touch I am with mainstream America. That wearing a mask could become a partisan thing. Because to me I’m not partisan anyway. I don’t believe in either party at all. I think they’re totally corrupt. The concept of the two party system is corrupt.
Cody:
Like I was saying in the note last night about Trump with his approach to not masking or not masking. I mean, clearly, not masking is his approach, which is terrible from a risk reward scenario for the President of the United States. Maybe this is indeed maybe too logical, but the risk reward of him saying, “Look everybody wear masks and socially distance, but get the economy back open immediately” versus the way it became that he blamed Democratic Governors who were following the federal governments guidelines, but then they weren’t doing it fast enough or not opening back up fast enough or reversing against the federal government guidelines that they were supposed to be following fast enough”. And now it’s “Don’t wear a mask and come out to these rallies”. And now if, and I hope I’m wrong, but if we have a spike in Covid-19 here before the election and people die — way more than should have — that’s not good risk reward for getting reelected. If his goal is to get reelected then this would have been very straight forward approach to handling the Coronavirus Crisis to me this seems: try to save as many lives as possible before the election.
Cody:
I don’t understand partisanship. Seems to me a lot of people have started putting party before country. It’s okay to admit that both parties are equally bad and equally wrong and both candidates are awful. It’s okay. It’s okay to then decide: “Yes I’ll vote for the lesser of two evils because I think one is way more evil than the other.” Personally, I’m not going to do that, I don’t think. But even if you do vote for one party’s corrupt candidate, it’s okay to just acknowledge the reality of it. You don’t have to just be part of a political party tribe and be like, “This tribe’s great.” Instead you can be like, “Well, I’m sort of leaning towards what one of the tribes, but I do know they’re both really bad.” I wish we had a solution. I wish we could implement some more change to make the world a better place. Be more prosperity for all of us if we did. Stocks would go up. But seriously, they would.
Subscriber:
I’d love to hear what percentage cash everyone is. Is that appropriate to ask?
Cody:
Now, here’s your problem with the answer, no matter what you get. Some of my subscribers as you see here on this plethora of pictures in front of us are old. No offense. I won’t say any names. But some of us are young. What difference does it make what everybody at Trading With Cody’s cash position is?
Cody:
You can ask. It’s not inappropriate, but I’m not going to ask because it’s misleading, it’s not helpful to you. If your number is smaller than that you’re going to be like, “maybe I should sell something” and if your number’s bigger than that you’re going to be like, “maybe I sold too much” Relax. Relax. It’s okay.
Cody:
Next question if you guys want to jump in here, great, if not I’ll go to the chat room.
Subscriber:
Good. I guess I talked to you during chat probably about three weeks ago when we talked about the 401K and since that time I went 80% cash. And at times I feel like, “man, I missed the rally.” At times I’m like, “I’m glad I’m 80% cash.”
Cody:
Correct me if I’m wrong, what our discussion was about, you had most of your IRA in the IWM small cap index ETF.
Subscriber:
Yeah. Yeah.
Cody:
It was basically all of your IRA was in that and I espoused a rather bearish view at that moment about the small cap ETF index. It’s pulled back about five or 10% since that point. So, probably you’re feeling pretty good, pat yourself on the back. Now, the next point I want to make though is that’s again not what I do though, right? I’m not trying to time the market.
Subscriber:
Yeah.
Cody:
And I don’t suggest you do either. That just happened to be an individual discussion and I don’t remember I certainly didn’t say, “Hey, sell it all” or something.
Subscriber:
Right.
Cody:
But you did and now you’re sitting there and you’ve saved five or 10% because it went down and you were out of it. Now, you’re sitting in that cash. The approach is always is to look out over the next 10,000 days and figure out the best way for you to maximize the risk reward of your money. And to me, that always means buying the most revolutionary companies in the world, the best stocks I can find, and that as you know is meant for the last year. We bought Tesla when it was crashed. Boy, I’d love to find another company like Tesla. It’s truly revolutionary that’s down while the market’s up. That was what Tesla was last year and it’s not that case right now, but maybe buy a little bit of Tesla. You buy a little bit of Facebook, Amazon, Apple, Google, these names we owned. We owned Fame before they were Fang. Nothing wrong with getting a little bit back into some Fang.
Cody:
But give yourself some time and when you see me buying new stock or when you see me buying more of a name that you wish you had more of or that you didn’t own yet and wished you did, sneak in there and buy Spotify when it’s down 20… oh man, Spotify doesn’t ever go down anymore. But something like that. You’ve got to be careful and slow and take your time and don’t try to time the market.
Subscriber:
The real story I’ve been following is the DVAX. I mean, we got in at low fours. I mean, been loading up man. I think that was the best thing out there with-
Cody:
Here’s the problem with DVAX. The reason we like DVAX is because it’s a platform play on vaccines. It’s technology is being used in by 10 or 20, 15 or 20 different entities, corporations or not for profits that are trying to develop these vaccines for governments. And that’s great, but there’s actually 150 vaccine trials going on. So, you’re still maybe one in 10 that you got the right one or something. And so you’ve got risk there. It’s not like this thing is going to work no matter which vaccine wins. So, got to diversify. Got to be careful, especially as this is a rare unique example of me going into a small cap, less than five dollar stock at the time, but you know me, I’m opportunistic. If I find a company that’s got a play like this that I thought was a good pitch to swing at, swing a little bit at it. Just be careful.
Subscriber:
It kind of reminds me of the AXGN play that you did.
Cody:
Yup and that thing went from $4 to $40 and then it’s come back. Right? So there’s risk. You can’t ignore it. And that doesn’t mean that every time I buy a stock small cap speculative biotech stock at four dollars that it goes to $40. We’re one for one, now we’ve got another one that looks like it could make us two for two, but really, do you really think two for two’s going all the way from four to 40? No. Take a little bit off the table right now. Trim a little. Things more than doubled in a month. So, woo hoo. Raise the roof, take a little off the table, catch your breath. But you are to be in cash already, but hey, so be it.
Subscriber:
Beautiful. Thank you.
Subscriber:
Cody, I’m curious about Twitter and Snap in light of what’s happening at Facebook, meaning are Twitter and Snap going to benefit from the possibility of advertisers bailing on Facebook?
Cody:
Yeah. Seems reasonable to me. It’s not like the corporation… it’s not like Verizon… I got speaker view. It’s not like Verizon is somehow going to stop spending hundreds of millions of dollars on social media advertising in the next three months and they’ll shift it a little bit, but let’s not get… a lot of this stuff’s just for show. It’s a PR campaign by corporations trying to profit off of… (let’s be a little less cynical) — corporations that are trying to embrace the momentum of the anti-racist movement in this country and that’s great to embrace it, even if it is for cynical reasons.
Cody:
But I don’t know how meaningful the budget moves they’re really going to make that are going to end up in whether Facebook is really going to get hit. Facebook’s probably a buy today when it gets sold off of news like this. But, yeah, Snap, Twitter, Pinterest, probably benefit a little bit on fringe.
Cody:
Nobody put the Zoom in the chat room for the old school subs. Fine guys. Someone has to care for our subscribers and I guess it’s going to be me.
Cody:
Nobody’s even laughing today. Boy, tough crowd. Here we go.
Subscriber:
We’re all on mute.
Cody:
Ah. Sure. Good excuse. Good excuse. Or I’m just not that funny.
Subscriber:
Ha. Ha. Ha.
Cody:
I’d rather not get the laugh than a patronized laugh. Reminds me of when I was playing for the Lobos basketball. That article I told you guys in chat about a few weeks go where the front page of the paper it’s like, “Cody, Cody, Cody, walk on hates the chant of the crowd” or something like that. In I talked about the chant is meant in good spirit, but to me it felt patronizing. Play me because I’m good. Don’t play me because crowds chanting. Give me a break.
Subscriber:
I noticed lots of volume on the $10 January 21st call options on DVAX. Do you ever play the call side on stock?
Cody:
I do sometimes, yes, and DVAX, maybe when we bought it I would have bought some calls, but when a stock is already gone from four to eight in a month and it’s up 10% today, there’s always going to be lots of call buying options on a stock like that that day. And that’s typically the day you probably want to sell calls, not buy. So, I’d suggest stick with some DVAX common and don’t be greedy.
Cody:
I can never overly emphasis how difficult it is to make and keep money in the stock market over the long run. I once had some training on public speaking and one of the most interesting things they taught you was that if the crowd is loud, say you’re doing a TV show, the crowd’s loud, or you’re speaking in front of people and the crowd is loud, rather than getting loud yourself, get quieter. Flip it. You guys know I’ve always loved to flip it. I’m whispering right now because I wanted to emphasize the point.
Subscriber:
Cody, some of us are senior citizens and have a little difficulty in hearing.
Cody:
You’re going to have to wait for the transcript to know what I just said. Sorry. Next question here.
Subscriber:
Hello, Cody. I’m noticing that a large amount of people are talking about moving out of the cities. People I never had imagined moving into the suburbs are now exploring it. Is this worth something looking into? Any suburban real estate stocks come to mind? Thank you, David.
Cody:
I will repeat what I said earlier. That would be a trend that is a cyclical thing, noting revolutionary about it. If there was a revolutionary technology platform, something that enabled people to move out of cities to the suburbs, you could maybe say Zillow. Zillow would maybe be a play on that. The problem is Zillow’s got the added risk of buying and flipping real estate now. Man, when they were a pure play app, I liked that stock. I don’t like this added risk of owning real estate, which anyway. I don’t know. I’m sure there are other plays, but it’s not my thing unless it’s a revolutionary way of enabling it.
Subscriber:
Cody, if I can ask, again, are there one or two stand outs in the Republic.co stable that you believe have the market that have the most potential?
Cody:
I will get into this this weekend. Republic just released their coin, their note, their crypto. Go to republic.co check it out. I’m a partner with them, full disclosure. But yeah, check out the Republic note and go check that. I suggest maybe starting buying a little of the Republic note and then maybe one or two companies too, but I’ll do both.
Subscriber:
So, right now it looks like the market is poised to turn around finally after a long extended run. If that happens, what approximate level do you start to nibble again on some of your revolutionary names? And as a follow up question, what approximate levels would you be buying in big time on them?
Cody:
We are so far from a place right now where I feel like I would be excited enough to go aggressive. The answer is if the stock market were to pull back five or 10% I would probably start nibbling. Some of our names individually, if they pull back 10 or 20% I might buy back a little bit, a third of what I’ve sold or something. The broader stock market, I use it as a hedge and I would probably cover some every time it goes down five percent from wherever it is. I’m going to cover a little bit of those hedges if I’ve got them on the sheets like I do right now.
Cody:
I’m going to have to take the pitches as they come because part of the problem with the answer is I don’t know where we’ll be when those stocks are priced where they’re going to be. If the worse case scenario of a spike in corona virus crisis happens in the next few weeks I’ll probably still be a little more patient because then we’re talking we really get to a year or two of S&P earnings problems. If the third and forth quarter of this year are bad, I would expect next year’s also going to be even more problematic and it might already be. So, I don’t know. The answer to the question is I’ll have to see where… we’ll have to see what the actual environment at the ball park is when we’re getting the pitches.
Subscriber:
Hey, Cody. I remember you about a year ago during check giving a good amount of examples of how both republicans and democrats pander to big government corporate interest etcetera. I loved how you showed that they both suck and are hypocrites. I’m lazy, so I will ask you. Can you name off a bunch of examples, although the dems and republicans are different they are really the same? I want to have a few go to’s when I’m at a party or something and everybody is saying the other side sucks.
Cody:
A couple of go to’s: War. Incarceration. Bank bail outs. Federal reserve support. Tax code tricks. Lobbyist power. That’s six, seven? I got more. Let’s stop there.
Cody:
How many drone bombs did Obama dropped his last year in office? Tens of thousands. It was a lot. Here’s something, I haven’t Googled it, but I will after this, and I hope I’m wrong because I hope the trend has already reversed, but do you think there were fewer or less people incarcerated when Obama went in office or when he came out of office? I do not know the answer to it, but given my experience, was Obamacare for poor people or was it for the corporations who wrote it and who’s stocks went up 10 fold afterward? Trump, I mean, guys, Trump’s in power right now. So I am commenting on his policies more often than not, but military, again, are re-bombing children in the middle east every day. Are you okay with that?
Cody:
Are we giving trillions to banks every year in welfare and emergency lending programs under Trump? Yes. Did we do that under Obama? Yes. Did we do it under Bush? Yes. Did we do it under Clinton? Yes. I want an alternative. Together we can change the world guys. We got to figure out how to do it. Those are your go to’s. I’m shaking a little bit after that. Made me emotional. My shaking gene has kicked in since the highway thing. Look at that. Interesting.
Subscriber:
Hi, Cody. Wanted to tell you that I’m going to Illinois tomorrow to pick up my new red Tesla model Y. They will not sell them in Wisconsin. When I ordered it two days ago they told me it would be a month or two then the next day they called and they said they had one. I’m very excited, but a little nervous. There is a lot to learn. I tried to put you as a referral, but they said they’re not doing referrals on the model Y.
Cody:
Is that true? Come on. Not that I need the referral, but that just seems like some BS. You should get the referral. I don’t care if it’s a model Y or not. I sent you to Tesla. And you get something. I don’t know what we get. Thousands of miles of free charging at super stations or something, but whatever. Whatever they give I’ll take.
Cody:
So, you should be really excited. But I have to tell you, there’s really not that much to learn. I didn’t even watch a video. I didn’t do nothing before I got in my Tesla. The day I got it my wife was like, “Look, push down, put the break on, that makes it drive. Push up, that makes it reverse. Push that button, makes it park.” Pretty much everything else is awesome. Careful with the self-driving thing. Stay alert. It’ll scare you a couple of times if you don’t. You’ll love your Tesla. It’s really a revolutionary product.
Subscriber:
Next question. Cody, what are the black swans you see out there, crash of the dollar inflation, anything else?
Cody:
I don’t know if the dollar crash is. It’s the best fake corrupt currency in the world. So, if you’re going to own, going to be stuck in a fake fiat corrupt currency it should probably be the US dollar. And I think that’s a consensus world around. Bitcoins probably a better long term currency than the US dollar, but you buy bitcoin and the US dollar crashes against bitcoin and the gold. Maybe we’re saying the same thing, but I don’t think that there’s a play of buying a basket of other currencies against the US dollar. Asset inflation would be a derivative of the crashed dollar probably. Inflation probably. Gold going through the roof. Bitcoin going through the roof. We’re living through a crashed dollar. Gold and bitcoin are through the roof. I mean, maybe that black swan’s already here.
Cody:
Other potential black swans, the potential for the communist in power in China to lose poser or to feel like they’re starting to lose power and control is a black swan. I mean, that’s not the black swan, but their reaction to that could be a black swan. It’s hard to guage. It’s hard to guess what’s in their minds. The go to is “we’ll start a war somewhere and get nationalists fervor”, but those guys have seen those play books play out and maybe they’ve got other ideas or different ways of manifesting a war these days.
Cody:
What about Japan? How about Japan as a black swan. What about something that seems stable suddenly not? Japan’s very important to the world. What if it suddenly had some political crisis, economic crisis. I don’t know. I’m not predicting that. Just you’re asking me for black swans. Black swans are things you can’t predict by definition.
Subscriber:
Cody, what is the impact on BTC and crypto on the frequent occurrences of trading platforms being hacked and coins stolen? Folks simply getting smart with gold storage or scaring people away from all of it?
Cody:
I’ve had gold coins stolen. I’ve lost more money… I think I lost more money on bitcoins being stolen then gold being stolen, but I’ve lost money on both items being stolen. I haven’t lost money on bitcoin being stolen in a very long time. That was years ago when I had coins at Mt Gov in Japan. It got hacked. It was fraudulent. I lost my coins.
Cody:
But I really haven’t been hearing too much about bitcoin hacking lately. I haven’t been hearing more stories about people losing coins than I used to, right? I think bitcoin’s getting safer all the time. I don’t think it matters long term.
Subscriber:
How’s this for a dollar crash scenario? The reopening causes a surge of Covid cases in the US at the same time that other developed nations are getting healthier, causing the US to be less competitive globally.
Cody:
Hey, yes. I like it. I mean, I don’t like that scenario. I hate that scenario, but your analysis, yeah. That could be a scenario upon which, in which, the US dirty shirt is no longer the cleanest dirty shirt in the fiat corrupt currency laundry basket. I wouldn’t want to play it though.
Subscriber:
Right now, which is better place to drop a few bucks, GLD (literally) or bitcoin? Both seem to represent potential near term and certainly beyond.
Cody:
I didn’t get the GLD literally joke. You can explain it. You know what they say about explaining jokes. Let me explain what I mean by what people say when they have to explain a joke. It was a joke about the fact that if you explain a joke it’s not funny. So I’m explaining my joke about not explaining jokes, which means that if you have a deja vu that is not a deja vu of a deja vu then it’s not a real deja vu. The only way a deja vu is a real deja vu is if the whole time during the deja vu, you’re going, “Oh my Gosh. I’m having a deja vu just like the last time I had this deja vu.” Literally.
Cody:
I don’t have a favorite of GLD or bitcoin. I don’t like GLD as much as bit coin long term because GLD is a bank product, it’s centrally controlled and they don’t have nearly as much gold as they promise that they have when you buy GLD and someday we’ll have to sell our GLD when they systems actually going to be problematic. Bitcoin does not have that problem. Bitcoin futures have that problem. Anything you’re dealing with the bank is not actually a hedge against the failure of a system. If you don’t have bitcoin in the cloud or in your pocket, physical pocket, it’s not real. You will lose it when the system crashes. Same thing with gold. If you think your gold deposit receipt thing GLD ETF stuff represent or the ETF GBTC are supposed to represent for bitcoin — if you think those things would actually work when the system crashes, think again. And I don’t think there’s a when for the system crashing, but if you’re using GLD or GBTC or bitcoin futures as a hedge against the system crashing, that’s not going to be a good hedge against the system crashing because those things are tools of the system.
Cody:
Bitcoin itself, not a tool of the system. The gold coin, not a tool of the system. You can actually keep those. As long as the internet works your bitcoin’s going to work. GLD and bit coin, I like them both. Go ahead.
Subscriber:
Well, my screen isn’t showing up, but this is David. I have a question. I’ve owned Apple stock I guess for 25 years or more and over the time I paired it down and right now it’s still a big percentage, around 33%. And what’s going on now with the price earnings ratio and so on, the greedy part of me is thinking should I long term I believe Apple still has a long way to go over the next 10 years, but the greedy part of me is thinking something doesn’t seem right now. Should I try to… again, I know you’re really against timing the market and I’m wondering is it the type thing is so out of wack right now maybe sell some and try to pick it up 20 points lower or should I just continue on my road?
Cody:
Both. So, maybe one fifth as much as what you were just picturing in your head.
Subscriber:
Okay. All righty. Thanks.
Cody:
Here’s a note from an analyst I just got two days ago from Apple, title of it lot of gas left in the tank for Cupertino with iPhone 12. Raising price target to $425. It’s the same analysis he’s been using for the last $200. And most of his analysis sure feels priced in to me. That being said, as always, you can’t time the market.
Cody:
You could try to trade Apple around at $15. If you bought it at a dollar like I did, then try to time it the $15 to $13 move. What good would that do you? If you bought it at $25 and you timed it from $150 to $80, what good did that do you?
Cody:
So, nothing wrong with trimming a little, but I wouldn’t really try to game the market moves with my entire-
Subscriber:
No. If you taught us anything you taught us that.
Cody:
Yeah.
Subscriber:
And I appreciate it. Thank you very much.
Subscriber:
Thank you. Here’s the next question. Lately I’ve been suffering from deja vu and amnesia or have I told you that already?
Cody:
Hey, that’s pretty good. That’s pretty good.
Subscriber:
What you just said about bitcoin, does that also apply to buying it via the square cash app?
Cody:
I don’t think so actually. I think square cash app is probably a pretty direct way of owning it. It’s not probably perfect, but.
Cody:
Cody, would the US be better off with or without a federal reserve?
Cody:
Name one thing that the federal reserve does that helps me or you. You can’t. Federal reserve is a tool of the biggest banks to make sure they remain the biggest banks forever. It’s not constitutional. The federal reserve is not constitutional. The federal reserve does nothing ever to help you buy a home. Every time the government gets involved in an economy, it’s entirely for corrupt purposes. There are people that profit off every government program. Who makes the most money off of EBT checks? EBT, food stamps. Who makes money off of food stamps? Follow the money. JP Morgan does. They make a profit off every transaction of EBT that happens in this country. Why? Federal reserve / republican, democrat partnership.
Cody:
Who owns the federal reserve? Not the government. It is not a tool. It is not a part of the government. The federal reserve is horrible. Was I clear enough? We would be much better off without a federal reserve.
Cody:
We’ve been here for an hour. I’m about Zoomed out. Let me see if there are anymore questions.
Subscriber:
Any interest in box?
Cody:
Not really. I like drop box better than box, but I don’t like either one all that much.
Subscriber:
Hi Cody. First time joining chat. Usually work as I am today, but work from home I figure I’d jump on for 10 minutes in between meetings. I think I know the answer, but would you be adding to the hedges at this point? Thanks.
Cody:
Yeah. A little bit. I think it’s better a time to add to hedges than be aggressively betting on more off side. I think it’s the best time right now to just be defensive, most of us, most of you.
Cody:
Sure. Interestingly more questions about bitcoin and crypto this week than we’ve had in months. And bitcoin, normally when something like that would happen it would be because that asset has flow through the roof. We had several discussions about DVAX today because it’s more than doubled since we bought it a month ago and everybody’s thinking about it, but bitcoin’s not moved. It’s actually down seven or eight percent from its recent highs, struggling to get through this 10,000 barrier. I mentioned on Tesla the other day that Tesla getting through 1,000 reminds me of bit coin trying to get through 10,000. Just resistance and maybe there’s psychological levels, maybe it’s just something I happen to notice because I’m around numbers. Take that kind of stuff for what it’s worth — not much, except for the fact that I find it interesting that we did have a lot of discussion today about bit coin and crypto despite the fact that bit coin is not showing momentum.
Cody:
Maybe trading with Cody subscribers are on to something. I mean, you guys have heard me talk a little about it, but let’s just get it a little more verbalized and maybe this will be our last point unless anybody hops on with one last question when we’re wrapping up here.
Cody:
There’s probably a more direct correlation between bitcoin and gold going up because of the trillions of dollars of US dollars that have been printed and borrowed in the last few weeks and months and years, but accelerated in the last few years because of the corona virus crisis crash. And there’s probably more direct relation, correlation to those going up than stock market for the long term.
Cody:
The problem with the bubble in stocks, if this is one, is that eventually stocks justify their valuations by earnings and earnings might be more if dollars are worth less, but that’s a derivative and there’s a lot more variables that would come into play from a devalued dollar versus every other asset class in regards to the dollar versus stocks. Probably, especially near term it helps, but long term you’ve seen, even in the year 2000, they turned on the printer, bubble, bubble, bubble, bubble, and it took two years to unwind that bubble. And I’m not sure, again, things move faster these days than they used to. So, maybe we’ll unwind this bubble quickly and we won’t even realize we’ve unwound it by the time we’ve unwound it and we can start… we’ll be buying on the way down. I’ll probably be a little early starting to buy I would imagine. But that’s why bitcoin and gold are probably for the next six months to a year a safe kind of place. Nothing’s safe to buy, right? Everything can crash 5, 10, 20, 30%, 50%.
Cody:
But when they’re printing that much money and they’re not going to turn off the printing press, even if corporate earnings crash. In fact they would increase the printing press if corporate earnings crashed. So, the stock market really gets hit over the next year or two because corporate earnings fade badly because of corona virus crisis crash. Then gold and bitcoin are probably even more safe, even safer. Even more fun. Funner. Why is it okay to say safer but it’s not okay to say funner?
Cody:
Got to have rules for the language I guess. Makes us sound smart. Anything else? There’s a deep thought for you. Why is it that memorizing the rules of the language and being able to implement them makes you sound smart? Is it actually a real thing? Just seems strange that knowledge of rules about language is meaningfully indicative of intelligence. That’s probably more about your parents and how they spoke and had to learn the rules that they learned.
Cody:
And then there’s Emily Post. Maybe manners are a good thing to learn. Those rules are… espeically in a time of corona virus crisis, most manners, probably a good thing. Is it good manners to know the rules in the language because then you could communicate more effectively to the other person and it’s courteous? I’ve completely lost the track here. It’s 9:15. I’m tired. I’m going to go make a fresh cup of coffee and have some juice.
Subscriber:
Thanks Cody.
Subscriber:
Thanks Cody.
Subscriber:
Thank you Cody.
Subscriber:
Thanks Cody.
Cody:
Thanks guys. Bye.
Subscriber:
Thanks Cody.
Subscriber:
Chow.
Cody:
Well this is deja vu.
Subscriber:
Here we go.
