Cody Kiss & Tell: Election, hedging, rock & roll over, more
Here is the transcript to this week’s Live Q&A Chat. Visit the Trading With Cody Chat room on the Trading With Cody iPhone App, the Trading With Cody Android App or in the Chat Room. If you have any questions about our service, just email us at support@tradingwithcody.com.
Q. Hello Cody, When Trump wins the election and all the “establishment” types stop their whining and finally realize that this country may still be a beacon of light, are there any particular sectors or company names that you would recommend to long and/or short? As a soldier, defense industry stocks come to mind When Trump becomes the Commander in Chief ~ But which ones? Thank you.
A. I’m still completely confused by people who think that a white kid who went to private school and Ivy League Wharton, inherited hundreds of millions of dollars and has built his wealth on getting favorable deals/welfare for real estate, casinos and bankrupting his shareholders is somehow not part of the “establishment.” Anyway, regardless of who wins the election — and again, I don’t vote for anyone in the actual establishment or on the Republican Democrat Establishment’s ticket — there are billions of wearables, iOT devices, drones, robots going to be sold in the next five to ten years and plenty of other Revolutions to get in front of.
Subscriber follow-up: I’ll vote for the enthusiastic capitalist ~ Bk’s included, hands down every time over the corrupt socialist, Marxist that only fights for someone’s right to use the wrong bathroom. Thank you anyway for your reply.
I don’t consider Trump a capitalist. He’s also a corrupt socialist as is Hillary.
Subscriber follow-up: 95% of the entire military disagrees with you Cody.
A. Well that is fair enough. However I don’t want to base my positions or opinions in order to fit in. I am happy to be a lone voice if need be. Thank you for serving and please be safe.
Q. Cody, I saw income investments roll over a bit a month ago generally ending a nice rise since beginning of year. Anything we should read into this movement? Examples $MO, $Z, $VZ, $TIP …… thanks.
A. It’s tough to gauge whether the “rollover” in the high-yield stocks you cite is simply part of a rotation from one sector to another (perhaps big cap tech being a beneficiary?) or symptomatic of a market topping process. Good question and since I don’t feel a particular edge one way or another right now and that’s okay sometimes.
Q. What’s a good hedge play on a potential correction? How about buying some puts to hedge?
A. Always a great question and there’s never a set answer to “How’s the best way to hedge?” I wrote this in today’s post: “Take some profits on some of your largest positions. Trim a little of some of your stocks that have run 50% or 100% in the last few months. Doesn’t have to be all in our all out or drastic. Just trim 5% or 10% of some of your biggest winners. Sell some of your losers or those names you don’t have high conviction levels about.” If that doesn’t answer your question, let me know. Yes, also from this morning’s post: ” Likewise we can add a few index puts here and there as you’ve seen me do slowly but surely recently.”
Q. Currently, if you had to buy one stock, what would it be? (One that you don’t already own.)
A. Some names I’m looking at as buys right now include: $SEDG, $AKAM, $PI and $PANW but I can’t say I would buy one right now or I would be buying one of them right now. 😉
Q. What are your thoughts on the crypto-currency Ethereum ($ETH)? Do you think there should be a place for it in one’s investing strategy?
A. I think $BTC bitcoin has become the de facto standard for digital currencies and don’t know if I’d want to gamble on another being able to displace it and the large number of businesses and transactions already built on the Bitcoin platform.
Q. What are your thoughts on $SWKS? Thanks.
A. $SWKS is a great company, well positioned, but I like other semi conductor stocks like $QCOM and $NVDA more.
Q. Can you amplify your answer last week re: $TSLA overall (Cody, what do you think about $TSLA puts in the not too distant future?)? With all that’s going on, do puts or a short make sense at this time?
A. I just think there’s still the possibility that $TSLA heads much higher on hype alone in the next year or two. I’m always watching it, but it doesn’t look like a great short set up right now to me.
Q. What is your take on $PI?
A. I’ve been working on $PI after hearing George Gilder talk about it at the Money Show in SF a couple weeks ago. Still getting to know it, and missed that big pop last week unfortunately.
Q. What are your thoughts on Novavax?
A. Regarding $NVAX, it’s a $2BB market cap, so there must be some big potential for the company’s pipeline, but it’s also VERY risky in that the company has but $15MM in revenue for this whole year. I have no edge for you on this company and don’t want to pretend I do. “Novavax, Inc., a clinical-stage vaccine company, focuses on discovering, developing, and commercializing recombinant nanoparticle vaccines and adjuvants. The company produces its vaccines using its proprietary recombinant nanoparticle vaccine technology. Its product pipeline includes respiratory syncytial virus (RSV) vaccine candidates for elderly and maternal immunization that are in Phase III clinical trials, as well as pediatric RSV candidate, which is in Phase I clinical trial; seasonal quadrivalent influenza and pandemic H7N9 vaccines, which are in Phase II clinical trials; vaccine candidate against Ebola Virus that is Phase I clinical trial, as well as combination respiratory vaccine candidate and seasonal influenza vaccine candidate that is in pre-clinical trial; and rabies G protein vaccine candidate, which is in Phase I/II clinical trial. The company also has pre-clinical stage programs for various infectious diseases, including the Middle East respiratory syndrome coronavirus; and develops technology for the production of immune stimulating saponin-based adjuvants. Novavax, Inc. was founded in 1987.”
Q. What is the canary in the coal mine that you’re looking out for to call the top of the bubble blowing bull market?
A. Aka, the next “Black Swan”. Funny because both are bird analogies. Anyway, I don’t know what the next real catalyst for a major stock market crash/popping of the Bubble-Blowing Bull Market will be. Could be years off still, frankly. In 2006 and especially in 2007, I wrote repeatedly about how the real estate market and the games being played with the securitization of the real estate market was about to quickly become a major crisis. I just don’t see such a current crisis out there. Then again, the definition of a Black Swan is “an unpredictable or unforeseen event, typically one with extreme consequences” so there’s always the possibility that something I don’t see or some natural disaster or something is out there. As always, we must weigh risk/reward with our money, portfolios, lives, careers, etc.
Q. Would you say degradation of currencies and risk of some escalating war as a couple serious contenders in next crash. Two completely different sources unless one causes the other …. hate looking at the dark side. General business trends seem not unhealthy?
A. Certainly the currency wars around the world and the race to devalue every major government currency will have long-term consequences. But for the next few years, all signs point to the dollar and the US being beneficiaries of the near-term consequences.
Q. Cody, Are you and your fam still lovin’ Alexa? I think you said you bought Alexa for your friends too, how are they liking it?
A. Amaris listens to her echo almost every day several times a day. I also listen to my echo in my office almost every day several times a day. Most of my friends love their Amazon echo also. It is a pretty great device I have to tell you. I should mention by the way that Amaris is it a buddy holly phase. I tend to listen to Led Zeppelin, AC/DC, or classical music.
Subscriber follow-up: What… she booted the Beatles?!
Final note from Cody:
I’m interested in hearing from you dear Trading With Cody subscribers. Who’s more scared right now, the bulls or the bears? Are any of you out there scared right now? Maybe we should be.
