Cody Kiss & Tell: Fed, trach strategy, Apple, $AKAM, $UA, $KORS & 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 at https://twc.scutify.com/members/. If you have any questions about our service, just email us at support@tradingwithcody.com.

Q.  It looks like the Feds are raising rates. How does this affect tech?

A. The Fed saying that a potential rate hike is still on the table for June isn’t the same as them raising rates. Whether they raise rates in the next month or note, I do expect that in the next six to twelve months that we’ll see rates back down towards 0% and/or more QE from the Fed. Like I said earlier, It’s probably best we just ignore her speeches (or the Fed’s minutes or press conferences or testimonies in front of Congress, etc) or at the very least recognize that whatever they say/print is almost always just propaganda.

Q.  When you say you are adding 1/10th of a position (which makes sense), I guess it begs the question of what is a full position. Do you base size on, say, 1/10th of total portfolio – not looking for an algorithm, just insight into your rules of thumb.

A. For a 22 year old trust fund kid who’s got no risk-aversion and is about to start a new job with huge earnings power in front of him, a “full” position might be 10-15% of his entire net worth. A 75 year old retiree might not want to have any more than 3-5% in their “full” positions.

Q.$LGF was part of your recent ‘teenager bucket’ suggestion yesterday. i was just wondering if their earnings announcement next week should affect our timing to get into the stock/the entry price. — do you think the earnings will cause a big effect in the stock price for them?

A. No idea how to game the next $LGF earnings report, but if it does get hit, I’ll likely nibble some more of the common. If it pops after their report, well, at least I’ll have a little bit already on the sheets. No easy answer, but we try to have some cake and eat it too this way.

Q. What’s on my mind? $NLFX inking a licensing deal with Univision is an interesting move. Who’s next? Is it a good fishing net strategy for $NFLX?

A. $NFLX needs non-English-language content to succeed outside the US and Spanish is their largest potential market for now. No brainer, brilliant move for Netflix to ink a deal with Univision for Spanish-language content rights.

Q. Cody – great job navigating this market. I appreciate all you’ve done! Akamai CEO reported to buy a lot of shares. What do you think of them now?

A. Thanks Cary! $AKAM is a great cloud/cybersecurity play. Trading at 16x next year’s earnings with a 10% topline growth rate, I’m still thinking about buying some $AKAM. Just haven’t yet.

Q. Your comment on $APPL possibly losing its way and then my own feeling with the dependency they seem to need in China concerns me. Honestly, I am staying away from most China stocks for the reason you never know what the government can or will do. Take for example $BIDUand the government reaction them with the death of the student. Is Apple in danger of weighing too heavily on China or does the long-term outlook still look favorable to you as a core holding. Maybe services will be the growth area in the future. I have owned Apple since 2008 but there are signs that concern me holding for more years.

A. I’m increasingly frustrated by Tim Cook’s almost Steve Ballmer-like approach to running his company. Steve Ballmer ran Microsoft and the company never recovered from the loss of Bill Gates’ direct leadership. The China dependency on Apple is probably another concern, but not the main one, as much as Cook’s lack of vision seems to be.

Q. With all of Apple’s increasing R&D expenditures, when can we see new products?

A. That’s the $64k question! I am expecting new products next year, but I would have said that same thing to you two years ago and all we got is the Apple Watch.

Q. How’s about that recent article that $AAPL should acquire $TSLA and make Musk CEO of $AAPL ? Do you agree that $AAPL needs a visionary like Musk to continue walking Jobs’ path?

A. I don’t consider Musk to be a visionary in anything but envisioning how to get taxpayers to fund his businesses to the tune or $5 billion in direct welfare subsidies/funding so far and counting. I would LOVE for Apple to buy Tesla, make Musk CEO, see $AAPL go up 20%…and I’d sell every share into that rally and never touch the stock again.

Q. So, should $AAPL hit 110 again which might be likely with the 7 rollout would you sell all your shares and never touch the stock or were you just expressing frustration with the stock like most of the rest of us are feeling. I wish I had sold more at 130 than I did but am I crazy thinking it may get there again?

A. No, I’m saying I’d sell all my shares in $AAPL is they bought $TSLA and made Welfare King Musk the CEO. I don’t dislike Tim Cook’s entire approach to business the way I do Elon Musk’s approach. I’m not happy about Tim Cook, but I don’t think his entire approach is to get taxpayers to fund his business ventures.

Subscriber follow-up comment: Lol… Welfare King Musk! Be careful, he may never let you buy a Tesla.

Cody adds: I’d rather invest $80,000 by buying a Tesla Car that I’d store in a garage and never drive to be sold at auction in 30 years than I would invest in 400 shares of $TSLA stock at$200/share. There’s 100% chance the actual car in pristine condition would be UP in value. Can’t say the same for $TSLA stock though, huh?

Subscriber follow-up comment: I concur — that’s a prudent to way to invest in Tesla.

Subscriber follow-up comment: Re your Tesla investment. Think you should have put away your Lisa rather than buying AAPL back in the day? http://www.usatoday.com/story/…

Cody adds:  Haha, nice find, I’d forgotten about this story: “Woman tosses Apple 1 computer worth $200,000″

Q. What do you think about apparel stocks $UA and $KORS? They got hit a lot lately. Are they attractive at these levels?

A. Two weeks ago, when $UA was down but still at $39 I wrote: “$UA down big in the last couple weeks, but still at the same levels it was just a couple months ago. The stock is still trading at 50x next year’s earnings estimates and that’s just too expensive for me to chase here. It might be a good short-term trade again at some point, but I don’t like that pitch set up right now either.” It’s down another 10% since then which means it’s still trading at 45x next year’s earnings estimates and still too expensive for me to like the risk/reward right here. $KORS has a nice balance sheet and is trading at 10x next year’s earnings but it’s a slow grower at 5% topline per year and there’s not much edge I feel I have there in a fashion stock.

Q. Chipotle seems to have settled into a $400-500 range the last 6 months. Do you see a bounce back?

A. I personally wouldn’t eat at a Chipotle any time soon. I’m worried enough that they’re ruined their brand and will suffer collapse that I wouldn’t risk investing in the shares.

Q. Do you feel $TWTR is a good risk reward here to hold on to for a few years? I don’t see a lot of downside from here, been wrong before though. The hope being one of two things: First, they figure out how to monetize what they have or; second, they get bought out and someone else like $GOOGL figures out who to monetize it. Same question I guess about $FIT . I don’t see a lot of downside here either, realizing there could be. Maybe just a stock to tuck away for a while? Again, I think they could come back to 20 dollars or so or possible they get bought out.

A. I wrote about why I’m buying TWTR yesterday: https://twc.scutify.com/trade-. And I’d noted recently I’m holding onto my $FIT for reasons similar to yours.

Subscriber follow-up comment: Thanks, I will read your article today. I was traveling yesterday and missed it.

Okay, that’s a wrap folks. Thanks!