Here’s the transcript for this week’s Live Q&A Chat. I’ll start by noting that into this morning’s crash-y market, I’m covering a small part of my SPY, SMH and IGV index short hedges. I’m not doing any outright buying so far.
Q. Cody, Please give us the next TSLA!
A. I’m working on finding the next TSLA every day. Not sure when I’ll find a stock I like as much at the valuation TSLA was at when we found it last year at $50 a share. Stick around though. At some point in the next year or two, I’ll find some more names like that with that kind of risk/reward profile and I’ll pound the table for you guys when I do just like I did with TSLA.
Q. Long time listener, first time caller. Been sitting on some cash and with the AAPL and TSLA splits looking to add a relative big portion of those. Been reading a lot on both last couple months. Understand the delay of new iPhone and battery day coming up with also Q3 results to come. Infamous question: at what point would you dive in? I know most of you are long on them but wondering if jumping in before those days would be worth it but also agree a calming of both those are coming/in works
A. Thanks for being a long-time subscriber. I like both AAPL and TSLA long-term, but both seem quite overvalued to me right now, even with their recent pullbacks. That said, I always suggest starting with a partial tranche in our long-term Forever names that you don’t own or want to own more of. Maybe 1/5 as much as you eventually want to own is the place to start and then nibble a little more in a few days and over the next few weeks buy the rest that you want to own.
Q. Do you have an opinion on Solid-state lithium battery maker QuantumScape as a venture capital-like investment? They are backed by Bill Gates and Volkswagen, and expect funding from Volkswagen and Qatar’s sovereign wealth fund. Especially with Tesla’s battery day coming up, I’m thinking the market is going to be very focused on battery manufacturing?
A. In a different market, I would think it’d be difficult to extrapolate Tesla’s battery day hype out to other battery stocks, but in this market, that might work. Then again, if Tesla falls after its battery day the way it did after its driverless day last year, battery stocks might all get hit in this market. At any rate, as a long-term investment, I’ll have to dig in a bit further. I probably wouldn’t want to chase it today while it’s up 60% on the news that it’s coming public through a spac with the symbol KCAC. I like this part in particular about QuantumScape: The board of directors includes Tesla co-founder J.B. Straubel.
Q. What are your feelings with DVAX?
A. Like I said a couple weeks ago, when the company’s name wasn’t mentioned in some of the higher profile vaccine ideas, the stock was likely going to sold off. That said, I still think it’s a decent lottery ticket on the vaccines and I’m holding a small position steady, having taken some nice profits at higher levels when we had the chance.
Q. Any thoughts on spce? or just hold steady for now?
A. Nothing new there. Sitting tight.
Q. Can you please comment on CPB earnings? Are you going to hold/add/sell the position? What is playbook with the name? Appreciate your guidance! Thank you!
A. I thought the quarter was pretty impressive with nearly 20% year over year topline growth. I’m sitting tight with CPB for now.
Q. Thoughts on Polkadot? Ethereum fees are mooning all the while no one really knows when ETH 2.0 will ever arrive. I think DOT has a great chance of getting into the top 3 in crypto market cap by next year thanks to its interoperability – (plus, having a great team led by Gavin Wood doesn’t hurt).
A. Where you been, Gambler? Haven’t seen you in the chats in a while. I haven’t looked at Polkadot, but if you have some good links for me, I’ll dig in.
Q. Business is surprisingly great, post-Rona. Can’t explain it, but no complaints.
A. That’s great to hear. Marketing, internet marketing is your biz? (Subscriber replies that yes, he is in the internet marketing business).
Q. Somebody else I subscribe to recommended Chainlink at $2. I bought a little for fun. Has had a nice pullback from 20 to 13. You know anything about them? thoughts? This whole oracle, smart contracts, blockchain way over my head.
A. Sounds interesting, but I’d want to see some of their products in action before buying any. “Chainlink (LINK) is a decentralized oracle network which aims to connect smart contracts with data from the real world. Chainlink was developed by Sergey Nazarov, with Steve Ellis as the other co-founder. It held an ICO in September 2017, raising $32 million, with a total supply of 1 billion LINK tokens. LINK, the cryptocurrency native to the Chainlink decentralized oracle network, is used to pay node operators. Since the Chainlink network has a reputation system, node providers that have a large amount of LINK can be rewarded with larger contracts, while a failure to deliver accurate information results in a deduction of tokens. Developers describe LINK as “an ERC20 token, with the additional ERC223 ‘transfer and call’ functionality of transfer (address, uint256, bytes), allowing tokens to be received and processed by contracts within a single transaction.” Following the 2017 $32 million LINK ICO, 32 percent of LINK tokens were sent to node operators to incentivize the ecosystem and 30 percent stayed within Chainlink for development (35 percent were sold in the public token sale). ”
Q. I know it’s expensive (aren’t they all) but any thoughts on SE? Looks like could be AMZN of southeast Asia. I know you tend to stay away from foreign stocks but don’t think they are China when it comes to being shady
A. Trading at 10x sales, unprofitable, but very impressive growth and the stock chart is parabolic up 10x in the last couple years. Maybe at a better price, I might be interested in it. But not here, not right now.
Q. Any thoughts on StitchFix $SFIX or Farfetch $FTCH? Are they the future or will people continue to buy their clothes in stores?
A. Both companies seem interesting as plays on the future of buying clothes, but I’m not looking to buy either one.
Q. Cody, first thanks for what you do. Thrilled to have caught many huge waves with your names. We appreciate you. FTF had to buy another EV other than Tesla, who is your second fav in this space? Or is it Tesla and nobody else yet??
A. You a surfer? “Catching waves.” I’m staying away from most of the other EV players and/or would consider shorting a little bit of some of them to help hedge the TSLA winnings. I think Rivian is going to be the real deal too, but it’s not public.
Q. Thoughts on Battery Day?
A. Tesla Battery Day is the most overhyped event since Tim Cook revealed the Apple At Home Vase-looking Talking Device.
Q. Don’t think you talked about ROKU after earnings. Obviously focusing on growth now and profits later. Any thoughts on their earnings report? Nothing is guaranteed but to me 5-10 years from now, might be 10 bagger. I have had ROKU the product for a year or two. Just bought another smart TV for different room. Couldn’t stand it so had to get another Roku stick.
A. Roku’s earnings were fine, strong topline growth is key. I don’t like the ROKU interface as much as much as I like Samsung TV’s interface personally, but both work fine and ROKU’s the pureplay streaming company that literally gets paid to get its customers.
Q. Thoughts on WORK next week earnings?
A. The bar is set high for WORK unless the market is back in full on Blow-Off Top Bubble Mode next week.
Thanks everybody for being a part of the Trading With Cody community.