Cody Kiss & Tell: Gold, Currency wars, Apple, Alibaba, Ambarella and more
Q: Can you give some suggested entries for gold? I have some $GDX options per Cody’s recommendation, but don’t hold any common in any gold funds. Elad, I know Cody was down on investing in gold as opposed to trading it, so are you referencing a short-term entry or a trade or something else?
A: Let’s step back and talk physical gold vs. gold miners vs. gold ETFs. I don’t ever want to invest in a gold or silver ETF like $GLD or $SLV because those are just paper promises from corrupt giant banks who will be insolvent again the next time the next crisis hits them, just like they were in 2008. Most gold ETFs have very little physical gold to back up their claims and I expect most precious metal ETFs won’t actually be around in ten years from now. I do think investing in physical gold and a little bit of physical silver is a good idea for a tiny portion of your overall portfolio, and that physical gold and silver should be somewhere stored that you can get to easily at any time. The gold miner ETF isn’t as bad as a physical gold ETF because the gold miner ETF like $GDX is actually holding the gold miner stocks that comprise it. All that makes sense and clarify what you were looking for?
Q: Your thoughts on $SLV and $GDX calls that we have? How does the china deflating its currency affect these?
A: The first thing I thought of when I saw the headline a couple days ago that China was going to devalue its currency was — hey, that should be good for gold/silver. I was surprised to see gold and silver down in the futures markets after that, but the last two days has indeed seen gold and silver rally and I think that the trend for silver and gold is higher while currency devaluation wars are being fought and while those battles heat up near-term.
Q: Do you see opportunity in Natural Gas – focused companies specifically? Your All Star Kirk Spano has been all over Natural Gas companies as the “easiest trade of his career”…Stock prices have plummeted and big boys like Icahn are adding to companies like $CHK…You mentioned energy companies as “untouchable”…makes my eye twitch as I have bought in quite a bit on a nearer term recovery in Natural Gas stock prices (Next 18 months or sooner).
A: I’m still agnostic on trying to buy any energy-related stocks or assets. Natural Gas and oil need to rally 30-50% before the major energy stocks would actually benefit much.
Q: I have $100K to invest today / this week. Any suggestions? $50K into $FB & $50K into $AAPL? Or, thoughts on $BABA? It would be a small fraction of liquid assets / net worth. I am wondering if $FB, $AAPL, $BABA…or other companies, would be ideal. And, I wonder if you could share your physical gold resource, as I need to add to that as well…
A: How big is your overall portfolio? Is 100K a big chunk of change for you or just a tranche? How I answer your question will depend largely on understanding whether $100k would be a huge starting point for you or just a small fraction of your net worth to nibble more stocks with.
Q: It would be a small fraction of liquid assets / net worth. I am wondering if FB, AAPL, BABA…or other companies, would be ideal. And, I wonder if you could share your physical gold resource as I need to add to that as well…
A: I have never and still don’t like $BABA and it’s China-based, US-traded, Cayman Island-headquartered company. $FB and $AAPL are great stocks, but I’m not in a rush to add to either just yet. I might consider putting maybe 1/2 of the $100k you’re looking to invest today into: $TWTR, $FB, $AAPL, $GOOG (and you might want to consider nibbling a little bit of $SPLK, $PANW, $FFIV too). And then wait a few days or so and use the last 1/2 on the same stocks to build them up a bit more. Read this for a complete idea of how to start building up some physical gold assets:http://tradingwithcody.com/wp-…
Q: Hope all well with the family, see you added to $WFM with all the competition, margins getting squeezed why not the suppliers instead?
A: Great question, and I will step back a second time here and re-evaluate whether I’m making a mistake in thinking that Whole Foods is more of a monopoly than its suppliers.
Q: Any interest in another tranche of $P at this level?
A: Yes, I’m getting interested in adding to another tranche of $P short and/or nibbling some $P puts here while the stock is above $19. I’ve been looking at this level also, but $P is having an awfully strong day (vol & price) for such overbought state. I don’t factor volume into my analysis very often, especially if I’m using fundamental top-down and fundamental bottom-up analysis on a stock like I have on Pandora. I think Pandora’s business is in big trouble, I don’t see how they can possibly turn their business profitable to the point of being worth the $4BB its market cap currently is. I won’t necessarily rush into to add to the $P short today, but I do think it’s headed much lower over the next couple years.
Q: Since $MCD’s next earnings report is over two months away I was wondering your thoughts on how to manage this position?
A: $MCD has been teflon despite the collapsing fundamentals at the restaurants. I’m likely to just end up letting the $MCD puts I have right now expire worthless unless something drastic happens in the next five weeks. I’ll look to revisit our Pink Slime Short thesis over the next few weeks or months as I do think the fast food burger trend is headed down into the next few years as people try to stay away from that crappy stuff.
Q: Any interest in $BKS / $BNED now that the transition is done and Family first, especially the little ones Thanks for the continued guidance
A: The $BKS/$BNED split-off happened during the last few weeks while I’ve been dealing with my newborn daughter’s concerns and I haven’t done much work on it since I covered the short before the split off happened. Will take a fresh look at them and let you guys know.
Q: Your thoughts on AMBA?
A: $AMBA sort of in no-man’s land til next earnings report. The stock is up 300% from where we first bought it but down 15% from its recent highs. Valuation isn’t outrageous, but it’s far from cheap. I’d rather be long than short $AMBA though! 😉
Q: How about $FIT? Thanks.
A: Yes I like $FIT here at $40, though it’s still too close to my original cost-basis of about $43 overall to get me excited about rushing into another tranche of it just yet.
Q: Thoughts on $SNE? Thanks / Ditto on $SNE question. Would this be a recommended entry point?
A: I bought my $SNE when the stock was in the teens and I’ve trimmed it a couple times since then. If I didn’t own any $SNE I probably would look to start nibbling on some tranches to start building it up. I might add to my $SNE personally, buying back some of the shares I’d sold at higher levels, if it gets back to $25 or so. I do think $SNE‘s video library is probably worth as much as the entire market cap of the company is right now. Their image sensor business supplies Apple and others and that’s a growth business for the next couple years at least too.
Q: How about adding $DIS at the current level?
A: I should have shorted $DIS a couple weeks ago when I heard everyone on CNBC touting how it was a can’t-miss stock right before $DIS reported earnings and subsequently crashed 15%. I used to own $DIS and used to call it one of the purest Content-Is-King plays on the planet ten or twelve years ago when the stock was 1/6th its current quote. I think $DIS is a great company and is likely to head higher over the next ten years, but not at that kind of a rate. Maybe it can get to $200 in ten years but I am not interested in investing in DIS right now personally.
Nice to hear from you, Cody. Best wishes to both of your daughters, and that you and your wife say strong and catch some rest when you can.
Thank you all for the kind words about my family. We are doing fine. Thanks all, see you tomorrow.
