Big Cap Tech Faves, Mucho Musktigue, The Cody-Bat-Computer and More
I leave you all with a shot of the moon that I took the other night through my new 10″ Celestron telescope using my iPhone 11. I’ve ordered a camera that’s made to take space pictures through the telescope and I’ll be sharing more of those soon, I hope.
To the moon!
Here’s the transcript from this week’s Trading With Cody Live Q&A chat.
Q. Cody, how much of the current downturn can be attributed to the drying up of stimulus liquidity?
A. Such things become reflexive or additive at least. The drying up of stimulus liquidity can’t be looked at in a vacuum. The whole cycle, of which that dried up liquidity is a part of turned as I’ve noted, since we hit the top in the last year or so.
Q. Do you recommend reinvesting dividends from stocks or collecting the cash to use for other investments?
A. Either is fine, I think. I tend to just collect the cash into the account over time.
Q. Have we put a bottom in tech? Does the rally have legs or do you fade it?
A. I’d guess that half of the best tech stocks have bottomed. Half of the best tech stocks still will test or set new lows in coming weeks and months. I’d guess that the QQQ will retest its recent bottoms at some point in the next few months, maybe set a new low. I think the DJIA and the S&P 500 and the Russell 2000 Small Caps will underperform tech for the next few weeks and months.
Q. What’s your favorite big cap tech play right now?
A. I’d have been much more comfortable answering this question yesterday before every big cap tech stock bounced 7-15% this morning! I like GOOG quite a bit at these levels, but INTC would be my favorite big cap stock…if it counts as a big cap still with a market cap of about $100 billion! LOL but not LOL.
Q. Cody, what are your thoughts on RKLB earnings this week and the company’s prospects going forward?
A. It seems pretty clear to me that Rocket Lab continues to execute. It’s still a long way to sustainable profitability for the company but they are doing all the right stuff (pun intended) to get there. ‘Rocket Lab founder and CEO, Peter Beck, said: “This quarter recorded historic achievements for Rocket Lab. We continued our small launch industry-leading cadence of a successful mission every month in Q3, and following another successful launch early in Q4 we have now conducted nine orbital missions in 2022, beating our previous annual launch record. The development of our large Neutron rocket was accelerated this quarter with the selection of the NASA Stennis Space Center as the site for Archimedes engine testing and development, eliminating the need to build a site from scratch and speeding up our development time to first launch. Neutron hardware was also produced for the first time this quarter, including full-scale prototypes of the rocket’s Archimedes engine and seven-metre diameter tank section. “Our space systems business growth is continuing, highlighted by our single largest satellite separation systems order in company history totalling $14 million. Since July 1, our space solar power business has also executed more than 50 contracts or modifications to existing contracts, and early in the fourth quarter we’ve booked more than $13 million in new business, with the majority of those bookings generated by space systems.”’ https://www.businesswire.com/news/home/20221109005991/en/Rocket-Lab-Announces-Third-Quarter-2022-Results-and-Guidance-for-Fourth-Quarter-2022
Q. Cody, RKLB is still a long way from the level where you first bought in, but up nicely from the lows. Would you buy more here? If not, then at what level would you consider adding?
A. Recall that we did send out a couple Trade Alerts about trimming some RKLB after it nearly doubled or so soon after we bought it initially. But yes, it’s still down from where we first bought it and I’m still a believer and did add more on occasion when it was lower as noted in Trade Alerts. I wouldn’t chase it today and I’d probably look to add more if it gets back near $4 again in a broader market sell-off or something.
Q. Good Morning Cody, hope you and yours are well sir. What about TSLA? Seems like the long knives are out for them. The media the admin etc. Can they right the ship and where do you see the stock in 2025, feet-to-fire?
A. I can imagine TSLA rallying 10-20% here near-term, but I’m not sure it’s got $250 or $300 in it anytime soon. Three years from now, if TSLA’s got the Semi and the Cybertruck selling, the stock could be at $400. If their Humanoid Robot works well, it could be $500. If they solve Full Autonomy, it’s probably higher than that. Why oh why did Elon have to buy Twitter? Ugh.
Q. Cody, any thoughts on all the noise surrounding Elon & TSLA? Do you like TSLA here under $200? Thanks.
A. See my previous answer. So sick of Elon. But the facts are that I depend on him for my car (my Tesla), my internet (Starlink), my social media (twitter is the only social I use), and I even use his old company Paypal as my payments provider on TradingWithCody.com. Sigh. Musktigue (Elon Musk fatigue). Sigh.
Q. Cody, Tesla seems to be selling off at least in part due to Musk selling shares to finance his TWTR purchase. You recently said that you might buy more at around $200, and it is now under $180. At what level do you view this as a long term buying opportunity? Is the future profit stream not sufficient to justify the market price?
A. See my previous answer for most of the answer. I’d get serious about buying more TSLA near $130 or so I suppose.
Q. I have only been a member here for a short time, but what I have noticed is that you will often take some element of a company (such as META and metaverse) as a reason to be bullish and almost ignore all the negatives (decreased ad spending etc). META stock has paid dearly for this decrease in ad revenue that has sent the stock plummeting. Don’t you think we need to take a look at the company as a whole rather than one aspect of it?
A. Yes, most certainly. But I also think that the fundamentals of Insta/FB/Whatsapp are good enough to justify the current market cap and that the bet on the Metaverse is the kicker/big potential upside. I’m certainly not ignoring the rest of the company or its valuation metrics.
Q. Cody, what are your thoughts on MP?
A. They continue to execute, delivered a pretty good quarter. The underlying thesis that they are in a unique position to help the US gain independence on rare earths is certainly in tact.
Q. Cody, what did you think of unity’s earnings?
A. Certainly better than feared after all their competitors like Roblox had blown up. Still a risky stock though.
Q. Your trade alert yesterday is what keeps me a subscriber. Thank you! Should profits be taken on U?
A. I’m selling half of my U calls. Have limit orders in to sell another 1/2 of the remainder.
Q. Cody, do you see Bitcoin going to 15K?
A. Probably, but just in case, I started putting a little bit back into the hedge fund yesterday. No rush but I do want to build up my bitcoin position for the long-term again.
Q. You got in and out of COIN at much higher prices. Does it ever become interesting to you again as a lot of air has come out of the crypto balloon?
A. Not really. I think Coinbase is destined to become the JDSU of the crypto world. JDSU was a huge highflyer worth like $100 billion at the top of the dot-com/telecom bubble in 2000 and then it dropped 99% and then traded around that level for years until someone finally came along and bought the company for about 98.5% less than the all time high. Didn’t go to $0 though!
Q. What does the Cody-Bat-Computer spit out when you key in TENB?
A. I just ran it through and it’s not great. This cyber security company, like so many other tech stocks, is growing nicely at 20% per year and has nice 80%ish gross margins. But the current year operating expenses is going to wipe out all profits and will continue to do so for the next few years unless they lay off a bunch of people. If they do cut expenses big time, they could become quite profitable in two or three years and the stock would likely be quite a bit higher than its current near-its-lows quote.
Q. Cody, how about a latest positions update/review sometime soon? It’s been about four months since the most recent installment.
A. Yes, I’ll do one asap. I thought about it earlier this week and had a panic attack of guilt that I haven’t written it up in a while.
Q. Cody, who can I contact to discuss the protection/disposition of my Sktls tokens?
A. Email missioncontrol@sktls.com and somebody will reach out to you and hop on a phone with you to help.
