AMD, Robots, Fed cycles and Blackberry

Here’s part 2 of the transcript to this week’s Trading With Cody Live Q&A Conference Call. Part 3 will be published shortly.

Let’s hit on a few stocks that are in the news before we jump into Q&A. I will do briefs. What jumps up as number one, AMD which has had a crazy week.

The company had a really strong quarter raising guidance and seeing strong demand. But AMD is what I think the ugly step child of the artificial intelligence revolution. Meaning that NVIDIA is the favorite son. Cramer’s dog is named NVIDIA, or that is what I heard as I was driving into work listening to CNBC on Sirius XM radio. So maybe it is the favorite dog, not favorite son. Haha! (Don’t quite your day job, Cody!)

So AMD had a great quarter. They are clearly benefitting from a strong economy and their latest chipsets are hitting the right spots apparently as AMD reported a strong quarter and raised guidance. I still just don’t like AMD and maybe as I’ve mentioned before I have some sort of bias against AMD, but I would rather just own Nvidia than AMD. I think at some point I may even want to short AMD. If they ever miss a couple quarterly earnings reports I might one day bet against them, but for now the rising tide of artificial intelligence deep learning, cloud computing and virtual reality are lifting all boats.

That was a malapropism, wasn’t it? Or almost? Maybe I just malapropism-ed, malapropism. Ha. Did you know you can’t have a deja vu of a deja vu unless it’s a deja vu of a deja vu? Back to stocks.

Also sticking out to me is iRobot up 23%. I haven’t read much on that yet. Let’s read the headlines for iRobot. “iRobot raises forecast after boost from Amazon Prime day. Stock skyrocket to record levels.” Well, there you go. It underscores the power of Amazon, which I would rather own than iRobot. But it also underscores the power of robotics and the robotic revolution that you guys will link to it. You have access to a free copy of a book I wrote. I think it was called 10 Stocks For The Robotic Revolution. We published it maybe 2 or 3 years ago and iRobot was featured in it. Long time Trading With Cody subscribers have been flagged on that one for a long time. The stock is up three-fold this year. I should have bought it.

With Akamai on the other hand, I am feeling a little like a genius today because as you guys know I was asked about that about a week ago in one of my chats and my comments were it was just too expensive still. I have been talking about it with king of value investing Robert Marcin and we were both sort of feeling like that there would be a better opportunity to buy some of it.Today it is down at a new 52 week low. Down 15% on the day to $45. I think I mentioned I would be interested in buying it somewhere around $40. I think it might be a really attractive long-term investment. It is only 10% away from and I don’t know that I am going to buy it right now but that one is looking attractive to me. The worrisome part is whether the company is being killed and will be killed by Amazon Web Services.

Also in the headlines, “Stocks hold modest gain after feds leave interest rate unchanged….” Snoozer alert! As you guys know it is not about them raising rates right now, it is about them reducing their balance sheet every bit as much as it is about raising rates. Whether every meeting raises rates or not also is not the point. The broader cycle from the Federal Reserve and their rate setting is that of higher rates, tightening, reducing the balance sheet. Those things are extremely bullish early on and mid-cycle for the stock market. If you are new Trading With Cody subscriber ask us for a recent record I published about the Fed — simply ask us at support@tradingwithcody.com to get it. Essentially, stocks go up with the federal reserve raise rates and we will send that out to you. It talks about how conventional wisdom is wrong. Actually I mentioned it in the article on Monday, didn’t I? I was quoting Martin Zweig and his book Winning On Wall Street and how it was right about some things and wrong about some specific things. Including the Fed for the last 30 years and how cycles have interlaced with the stock market.

Let’s hit it! Questions? What do you guys got? If you’re on the call, ask me! I feel like Rocky hitting slabs of beef! I wonder what happened to the slabs of beef that they used in the move, Rocky? After he finished punching them and they recorded the scene however many times. Do they just throw it out? If they were going to throw it out, I would bet one of the crew put it in his freezer to use it. I don’t know. It would be sort of gross to eat but it would be awfully wasteful to just throw a lot of beef carcasses away. Maybe they didn’t even use beef carcasses. It is a movie!

Anyway, lets do this.

Q. New subscriber here. What about Blackberry?

A. I bought $BBRY recently. Blackberry reported like 2 or 3 weeks ago. It wasn’t a great report, but I didn’t care, like I just said I wouldn’t. In fact, I bought more after it went down a little from the report. Look, my main reason for owning Blackberry is that car brains QNX platform that they have in so many relatively smart car dashboards and the contracts they have with so many of the major car manufacturers. One thing I did see the other day the Justice Department or someone approved the Blackberry Android phones for high secure, encrypted, phones. That is another reason as you guys know in the original article where I was buying Blackberry a couple months ago for the first time is because I think their focus on being the secure Android platform is probably a really smart place to be over the next 3 to 5 years. Android is surprisingly done a good job of fighting viruses and those types of things, relative to where I thought it was headed years ago. They battled it back at least. I am sure there are Android lovers out there that would battle me on this point, but Android compared to iPhone —  iPhone is probably much more secure than the typical Android phone. Blackberry has done a lot of stuff and bought a lot of companies that secure the Android platform and the infrastructure for companies that use Android or iPhone — either platform can be made more secure by Blackberry.