Cody Kiss & Tell: Bubblicious, anchor stocks and more
All right, let’s rock!
Q. Hi Cody, I hear a lot that the market is as you say, “bubblicious” and many say a pull back is coming soon but I also hear that all of the traders are coming back from their vacations and that now is a good time to be fully invested (which I never am as I learned from you) as the bull roars into the end of the year. I also notice on the Biz channels that one says this and another says that ~ Is now a good time to be “more” invested in the market (I ask this knowing that I have solid profits in your recommended picks)? Thanks for your reply.
A. I personally don’t often try to game the market of thousands of stocks trading millions of shares each daily for the next few dozen trading days, which is another way of looking at the “stock market for the next few months.” I do think that there Bubble-blowing Bull Market forces of 0% interest rates, QE, and corporate profit maximizing strategies of the Republican Democrat Regime will lead to a bigger stock market bubble than we’ve already got right now. At some point I’ll become outright bearish and much less invested than I am right now, which is much less invested than I was back in 2011 when the Bubble-blowing Bull Market we’re now experiencing was just getting started, but all of this is basically playing out as I’ve outlined and I’m steady as she goes for now.
Q. Cody, what type of nazz correction are u anticipating?
A.Not expecting “another” correction in the Nasdaq just now. The path of least resistance is probably sideways, neither upward nor downward for now.
Q. Hi Cody. Great meeting and hanging with you in SF! If you were not you but me, and wanted to anchor on 5 stocks right now, would they be $AAPL, $FB, $GOOGL, $AMBA, and ……$SNDK? $INVN? Other?
A. I’d consider my $AAPL $GOOG $FB $SNDK $INTC and $LNN to be my “anchor” stocks, I suppose. And was great to meet you and hang out in SF too. Thanks for being a part of TWC!
Q. Hi Cody, I hear a lot about “nearfield technology’ but don’t have a grasp on what it could be useful for other than “bumping” phones. Can you enlighten me please?
A. Nearfield technology is best thought of as the next generation of BlueTooth communications. On site payments using near-field communications and especially control of all the random devices and appliances and door locks and thermostats and so on will use varying nearfield technologies and it will be a very big, but very commoditized/low-margin business in the next five to ten to twenty years. http://en.wikipedia.org/wiki/Near_field_communication
Q. Can’t make the chat today, so here are 2 questions (1) Is $AMZN a decent long term investment? It seems to continuously wander up and down(300-400). Everything gets invested for its future (a good thing), but is there a solid upside to the stock over the next 5 years? (2)Are the routers ($JDSU,$CIEN) a good 5 year investment (barring a new super fast routing technology)?
A. Yes, I think Amazon’s a good 5-year investment as they will continue to take market share from every retailer in the US and will eventually dominate even grocery shopping and spur-of-the-moment 30-min deliver shopping too. 2. I wouldn’t be in $JDSU and $CIEN if I didn’t think they were good investments over the next five years too. The spend on infrastructure and broadband capacity has to continue to grow over the next few years and those are two good ways to bet on that trend.
Q. Starting to look into September to be set up for the October earnings season. Obviously, $AAPL, $GOOGL, $FB should do well per recent trends, back to school shopping, advertising, and NFL starting. Looking for some other catalysts and to start building some new positions beyond $AMBA, $INVN, $IXYS, $HIMX – do you have some other ideas about to come out? I am thinking you might have some adds to start scoping out.
A. I’ve got a couple names I’m considering adding but I also like all the names you just mentioned too. I’ve got a “What’s old is new again” tech stock from the Wearables Revolution I’m probably going to add in the next few days, so stay tuned for that. But it won’t be a short-term kind of trade and might take a while for it to play out.
Q. What do you think of Softbank $SFTBF as a play on Alibaba.
A. I don’t like that idea at all, frankly. How do you decide when the Alibaba IPO hype turns from buy-the-rumor to sell-the-news dynamic? I want to short all things Alibaba-IPO-related, not buy them, as I think all the upside from the endlessly pending IPO is more than priced in already.
Q. Ok, thank you. Do you think we should look at Baidu? 59% growth last quarter is hard to turn away from.
A. I’ve written a lot about how much I like $BIDU but that I just don’t like to invest in foreign (especially admittedly “Communist” country) stocks. Best pair trade idea I had last year was shorting $NQ and pairing that with a long $BIDU. NQ down 70% since I wrote that and BIDU is up 70% since I wrote that. http://www.marketwatch.com/story/china-tech-play-nq-mobile-baidu-pairing-2014-01-09
Comment: Yes, I recall from the book a few years ago. I can separate the company from the country, i.e. Yandex – might venture in, especially closer to the $200 level.
Q. Cody, last night we were looking at $MBLY – any opinion on it? The leaders in ”Advanced Driver Assistance Systems”.
A. Speaking of not wanting to invest in foreign companies, $MBLY, “Mobileye N.V. Har Hotzvim 13 Hartom Street Jerusalem, 97775 Israel” That, and the stock is straight up on hype from the Ferguson tragedy. I’d rather short $MBLY than buy it for the near-term right here at $44.
Comment: With more gaps in that chart than a mouth of teeth. It is a great short looking chart.
Q. Cody, have you covered your short position in $SPY? I didn’t see it in the latest positions.
A. Yes, I’m out of my $SPY short. Had some puts that expired worthless.
Q. Cody, if you had to choose a company on your current positions to work for…which would it be & why?
A. Great question! Truth be faced, I know I am not wired to work at ANY corporation, as I’m much too anti-control and am too renegade in my approach to life. If I was forced at gunpoint to work at a company from my current portfolio, it’d probably be Facebook (or Amazon or Google) as I’d want to work for the founder of those types of incredible growth companies.
Q. Do you see any of the wearable/drone companies in your positions with similar leadership/vision?
A. I think $AMBA’s got the potential to be an $INTC or $SNDK kind of play, but I don’t think anybody’s set up to become the Facebook of Wearables yet.
Q. Speaking of $LNN…has been a bit of a disappointment so far in 2014 no? I believe at one point you called for LNN to be your highest performing stocking 2014… What catalysts await near to mid term?
A. Yes, it’s been disappointing near-term for $LNN shareholders this year, though the dividend has been steady and that’s not too shabby. Catalysts? Earnings and revenue growth need to kick in over the next couple earnings reports.
Q. Now rumors of a wearables announcement along w the iPhone 6 announcement on Sept 9…how do you see $AAPL stock playing out up to and through the event?
A. Too much $AAPL love right now. I bought puts on $AAPL to hedge a possible pullback as I think it’s set up for a sell-the-news pullback into the iPhone 6 release. Still my largest position overall and am not outright bearish on $AAPL, just a bit hedged for now.
Q. $BKS reports in two weeks and its at new all time highs right now. Do you see the earnings report as a catalyst that is more likely to effect to the downside? Seems like they would have to really impress to justify these recent gains. It’s up about 16% since i initiated a small short position less than 3 months ago.
A. I think your analysis about the upcoming earnings report needing to be good from $BKS to keep the stock from pulling back is dead on. That said, I am drawing a line in the sand around this upcoming $BKS earnings report and if the stock keeps going against us after that report, I’m likely to take my lumps and losses and move on from my $BKS short.
Cody: Thank you all, that’s another wrap. Song of the day is AC/DC Money Talks! https://www.youtube.com/watch?v=2lqdErI9uss
