Algo’s for algo’s, which cryptos, and lots of stock-os

Here’s the transcript to this week’s Live Q&A Chat.

Anybody else dizzy with these volatile intraday and day-to-day swings in the market? The market is like the weather in Ruidoso — if you don’t like it right now, just wait fifteen minutes, because it will be different by then.

Q. How much of the market’s moves are due to computerized trading? I am beginning to think that a good idea would be to reverse engineer the algorithms they are using and use that as the basis for our own algorithms.

A. I used to write all the time about the guy’s who were trying to fade the fader’s fade and whether we should be trying to fade the faders who are fading the fader’s fade when the markets are fading day to day. So what you’re suggesting is similar. The problem is that all the algo’s are different, so there’s not a specific one to reverse engineer.

And another thing on a related note from another octave, maybe we should apply some artificial intelligence to create new artificial intelligence that’s focused on creating new artificial intelligence to advance what’s currently considered artificial intelligence.

Q. When you end up purchasing crypto weeks/months/years(?) from now, will these be more of the obscure alt-coin varieties that we’ll need to have an account on a specific exchange (as opposed to more widely-knowns like Litecoin & Ethereum that are more-easily available on something like Coinbase)?

A. I don’t know yet all of which cryptocurrencies I’ll be buying. I’ll probably buy a little Ethereum and I’ll probably buy back some of the Bitcoin I sold at much higher levels… and there’s another two or three existing cryptocurrencies that I might buy, but most likely the best cryptocurrency opportunities are not available to the public or even fully created yet.

Q. Hi Cody, we got another tranche of FB just a week back and your latest report mentioned about putting it in penalty box. I have never seen you flipping your opinion so fast . Are you more concerned about ethical side or business side that could impact margins ?”

A. Worried about the stock more than the business at $FB right now. But yeah, I really didn’t like what Zuckerberg talked about in his PR blitz and it made me very uncomfortable.

Q. Cody You mentioned a few months back that you’d like to do a fresh dive into $PANW. Anything new on this front? Also, when can we expect the next Latest Positions update? Thanks

A. I will do a fresh PANW dive when I do do my next Latest Positions round up…and I’ll do the next Latest Positions round up by next Monday, April 9th.

Q. Any other cyber security stocks worth dabbling in besides PANW?

A. Amazon and Google and Apple and Blackberry are all somewhat great plays on cyber security.

Q. Second question: You are bullish on $panw and consider it to be the best cyber security stock to own and have very high price targets. Given that you mentioned about buying at current levels multiple times, you never pulled the trigger. Is it because you own a good starting position on it ?

A. I just blew it when I had the chance. He who hesitates is lost in this case, me not making as much money on $PANW as I should have.

Q. Do you see NVDA getting below $200 as you mentioned in your latest positions where you would potentially pick up more shares?

A. I have no idea if NVDA will get below $200, really…but it certainly could, as that’s not but 10% away from its current levels. 10% moves happen all the time in the markets, so it’s quite possible, but necessarily likely.

Q. Cody $WDC has been hit quite a bit due to Micron’s recent comments combined with the latest market decline. I added some more this morning ~88.50 but was wondering 1) Have you only purchased one tranche so far and 2) at what level might you be interested again?

A. 1) Yes, I’ve bought one tranche of WDC so far. 2) I bought it in the mid $80s before it ran up before it fell back down, and I’ll probably do another tranche purchase of WDC somewhere around these levels and might get a bit more aggressive in buying some WDC if it gets closer to $70 anytime soon.

Q. Thoughts on $ISRG and it current valuation? In the robotics book it was rated 8/10 at the time.

A. ISRG is a terrific robotics company that I’ve recommended over the years, but never pulled the trigger on personally, much to my own chagrin. I don’t like looking at this stock because it makes me disappointed in myself for not having owned it.

To valuation then, the company has $2 billion or so in cash, no debt. Growing 12-15% per year, expected to earn $10 this year and $11 or so next year and trading at $400 a share, gives it a 40 P/E. That’s not cheap. Probably a bit expensive for a company not growing closer to 25% so I can’t say I’m a big fan of the stock here.

Q. Cody – Wondering about $TCEHY and if there is a price point that would make you interested in that stock? Or is China still too big of a risk? Thanks.

A. Ten Cent is a great Chinese company, but yes, I think investing much money in China-based stocks is a bad idea.

Q. @Cody~could you give feedback on SPKE Spark Energy, ABCD Cambium Learning, and NHTC Natural Health Trends

A. SPKE – It’s a Houston-based utility company small cap stock that I don’t know at all, sorry.

ABCD, looks like an interesting learning company small cap stock, but I don’t see any financials or analyst estimates, so I can’t analyze it well, sorry.

NHTC, looks like a shady small cap health-food/e-commerce. The company’s market cap is $215 million and they paid their CEO $3 million and their CFO $1.5 million last year!! That would be like Apple, which has a $700 billion plus market cap, paying Tim Cook $7 billion for one year’s work…$7 billion, cash, baby. Like I said, NHTC looks like an investor’s nightmare, certainly shady.

Q. Any thoughts on AAXN (TASR as was) – breaking out to all time highs as camera and data storage provider for police forces?

A. I wrote about AAXN as a great wearables play as a camera and data storage provider for police forces several years ago. I don’t like to invest in companies that sell weapons/government-dependent law enforcement weapons, even if they’re not lethal. Just not for me. Good play on wearables to this day though.

Q. @Cody: Your most recent (that I could find) “latest positions” report dated February 20 has AMZN trading around $1,462 and a buy around $1,200 or so. Any change to that considering the recent volatility and pricing of AMZN? Are we at all close to the “or so”?

A. No, I’d still personally buy probably at $1200 or so.

Q. You lead with AMZN, what are you doing with that one here..For myself I sold a lot and bought a little in the pain this morning, thoughts? And where are you on NFLX?

A. I’m not doing anything with Amazon personally right now. See the note I wrote this morning for more on that.

NFLX is a great company but too highly valued at this moment for my liking and perhaps also at a peak TV consumption/production spot perhaps.

Q. Hi Cody Any views on arista? They seem to be killing it in the data center equipment space and have been hurt a little with this recent market turmoil. Is this a potential buying opportunity? Thanks again.

A. Man, it’s another stock that is up so much over the last five years and it’s valuation has gotten stretched like the aforementioned ISRG and NFLX that I am not a big fan of it just now.

Ok that’s a wrap folks, thank you!