Apple’s new services, a Gaming Revolution and British Stocks
Here’s the transcript from this week’s Live Q&A Chat, including continuing talks on the 5G Revolution, how many positions are too many, and of course a little March Madness.
Q. Cody, do you have a max # of positions you feel comfortable holding in your portfolio? Or a general # you like to stay around?
A. In the hedge fund, I’m comfortable having a few more positions (and being more active shorting) than I am in my personal portfolio. I’d prefer to have about 20 longs, 5 or more shorts, and maybe some cryptos and crowdfunding investments in the hedge fund. I try to consider some of the cloud or 5G Revolution baskets as a single stock when I do build a basket, so the “20 longs” is liable to grow at times when I see opportunities.
Q. In your personal portfolio… still comfortable with 20 positions? Or fewer?
A. Comfy.
Q. Not an individual stock question but you talk about the next 10,000 days. Your best guess, how does this all end? Meaning what happens when we are are 50, 75, 100 trillion in debt? Do we go to a new monetary system? World War? Hyperinflation? Sorry, just thinking about my kids because I think they are screwed….and probably us too.
A. Don’t be too worried — one thing I always like to remember is that it’s ALWAYS worked out for the US so far, and it probably will in the future too. Also, we are usually the cleanest dirty shirt in the laundry. That said, I do expect there to be some crashes and revaluations of the government-based debt using various methods of redistributing wealth and gaming other country’s fiat currencies like we always have. I don’t think of the world, the US, the economy or the markets as heading towards “an end.” Societies, countries, economies are living things and they won’t ever “end.”
Q. Hi Cody. Looking forward, how do you think the arrival of 5G will affect AMZN, AAPL, FB, SNAP, GOOG, JD, PANW, TWTR? Which stocks or sectors do you think will benefit the most from the insane speed and the reasons behind it?
A. Big question. Each will be affected differently, depending on what new features and concepts are developed and how quickly they adapt. PANW, is a bit different than the others, in that it actually mentioned that their security platform has a 5G component to it and that it’s already seeing demand for from 5G carriers for it.
Q. Cody, I put on my British shorts along with you, and it was and is an AWESOME move. Thanks! Even used my last QQQ puts to fund it, as you suggested. BUT. . . I guess I’m in the “scared enough” world regarding the US markets (not just Britain’s) to start rebuilding short protection via some ETF puts again — can you suggest reasonable QQQ or SMH strike price and dates to do so? Thanks.
A. First off, I should mention that I’m trimming some of the EWU puts to lock in some profits on them. As for the US-based ETF puts idea, I’m short the IBB right now. I’d probably consider some May puts about 5% out of the money for insurance, I suppose. I might look at the IWM instead of the QQQ and SMH though.
Q. Good Morning Cody. What is your view of the new AAPL services?
A. Good steps in the right direction with the Apple TV and Apple TV+ stuff, but I found the focus on games with the Apple Arcade perhaps more interesting. Google just announced a new gaming platform last week too. Stay tuned (stay connected?) — I’ve got a play on The Gaming Revolution coming for you.
Q. Any opinion on investing in a holding company like NPSNY (Naspers)?
A. Alphabet Google is basically a holding company these days, so I have no issues holding holding companies. I’d never heard of Naspers, but it’s a $100 million market cap stock based in South Africa(?!). I don’t need to dig any further from there — it’s not for me.
Q. When recommending MO on a scale of 1 to 10 what number would you put to it?
A. With the yield nearly 6% at these levels, I’d rate it an 8/10 with a time horizon of 10 years.
Q. Cody when investing in stocks like MO that pay a hefty dividend do you reinvest the dividend?
A. Not usually, but sometimes I’ll add to the stock if it gets hit, so you could sort of say I do.
Q. Cody if you have a stock that you want to trim or sell do you ever sell monthly calls at in the money or slightly out to generate more profit?
A. No. My research partner in the hedge fund does that a lot for his personal account, but I don’t.
Q. Apple & Facebook are creating their own payment systems which indicates that mobile payments (i.e. Apple Pay, crypto, etc.) are not able to penetrate the mass market because most people still seem to prefer things like credit cards over mobile solutions. How far away are we from seeing a crypto breaking through to finally get some mass market adoption or do you not see that happening?
A. 5-10 years is the short answer. I expect there’s a dam about to burst in the crypto adoption world.
Q. Hi Cody, are you still considering Z as a possible investment? Have you had a chance recently to give it a look?
A. I don’t like the pivot they’re making to home flipping. Owning Z over the next few years isn’t owning an app company as much as it is going to be owning a real estate company.
Q. Hi Cody, still like COMM?
A. Yes. It’s a bit too diversified for 5G to move the needle near-term, but if COMM ends up supplying some of the 5G antennas on small cell deployments by the carriers, 5G would really move the needle over the next ten years.
Q. In your latest 2007 vs. 2019 piece, you said that you’re about to start buying some Bitcoin and cryptos again. If you believe Bitcoin potentially still has 50% downside to go, isn’t it a bit early? Or, do you not feel it will break 2k on the downside anymore?
A. Of course I don’t KNOW if bitcoin will drop below $2000 before it bottoms. It could bottom now. Or I could be wrong that it bottoms at all. But since, I do expect that there’s big upside in bitcoin over the next ten to twenty years, whether we’re talking about buying it at $4000 or $2000 — and going back to the lessons learned from that 2007 to 2019 piece itself — I’d want to start buying some here and then I’ll likely buy more if it does drop from here in coming months. Always being flexible with my analysis and positioning along the way.
Q. Cody, I know you don’t like China stocks but what about Brazil? More specifically STNE? Buffett invested in IPO. Guess they are the SQ of Brazil.
A. As an investor, I’d rather own Chinese stocks than Brazilian stocks. As a trader, I’d rather short STNE here for the next six weeks than buy it.
Q. Hi Cody are you referring to STNE in particular or to Brazilian stocks in general when referring to “shorting as a trader?” Can you clarify your take on Brazil? thanks,
A. I’ve no idea about Brazilian stocks for the next six weeks — or very much of an idea about STNE for the next six weeks either, frankly. But I’ve seen a few momentum traders I know talking about all the money they’re making by trading STNE lately — and the chart is over extended — and I’d expect that you’ll see STNE closer to $30 than it is to $40 six weeks from now.
Q. Who have you got in the finals out of the remaining Sweet 16?
A. I watched the Duke UCF game the other day and a bit of a handful of other games. After UCF lost, I lost my desire to watch the games. I never had the time to fill out a bracket and actually haven’t looked at the brackets at all, so I’ll just say it’s Duke and some team they’ll beat in the finals. Zion’s amazing.
