Cody Kiss & Tell: How to hedge, Gold miners, 3-D Printing and more
Facebook at new all-time highs. Will it run to $90 or hover around $80? You know it’s long been one of my largest positions and remains so and I’m not trimming any more right now. I might trim some in another few dollars or so. Let you know. I’ve got some personal stuff I need to take care of tomorrow, so I’ll be back Monday.
Here’s this week’s Live Q&A Chat.
Q. Cody, I just listened to your Cody Underground podcast with Robert Marcin, great interview. Do you agree at all with what he said about hedging his portfolio heavily for part of the year?
A. Thanks for the kind words. I’ve learned a lot over the years from talking, meeting, eating and drinking with Robert and I always listen to his ideas about markets, strategies and so on. I typically do some hedging in my portfolio as gains get big and as risks rise tho, I don’t look at it on a calendar-basis per se. I’m sure I’ll be more hedged at some points this year and less hedged at others. Does this answer your question?
Q. So you would look at hedging individual names or markets on an opportunistic basis? Do you expect to ever be “fully hedged” or would you rather just go to cash?
A. All of the above! LOL. Seriously though, I do sometimes buy puts on my largest long positions when they get overextended in addition to trimming them down. I also buy puts in broader sectors like my XLF puts right now that help hedge our overall net long exposure to the markets. I don’t know that I’d ever go “fully hedged” without having a large chunk of cash as part of that too, so it’s not mutually exclusive.
Q. Do you think the Apple Watch 1st generation version peaks just tech users interest or do you think its a main stream item as it now stands, without knowing all the apps that can change how people think of it?
A. I expect the 1st Gen Apple Watch to go mainstream as people learn just how much the apps on there save you time, money and energy.
Q. Cars, TV and watches, oh my. Do you think Apple is taking on too much at the same time? It seems that with the iPhone and the iPad they focused on one thing at a time.
A. I don’t believe for one minute that Apple is getting into the “car building business” other than putting iOS into the dashboard. AppleTV has been here and struggling for a long time and that’s not new. The Apple Watch doesn’t seem to be too crazy for Apple to handle, so we’ll see.
Q. The way tech is going and life is changing are we all going to be shopping at home, wearing oculus rift glasses to watch NBA and NFL from court side and 50 yard line seats, getting groceries shipped to the house, spending less times at malls and thus freeing us to have more quality time / live longer lifestyle?
A. Some folks consider time at the mall to be quality time, but yes, your point is a good one that tech is indeed enabling all of us to tap information, be entertained, make our incomes and much more — the App Revolution is in full swing and changing everything in our lives.
Q. Are you closer to electing which security stock you want to start adding to?
A. I’m still leaning towards $PANW and $FFIV, but Panw is the purer play on security. I will likely go ahead and add at least a first small tranche soon.
@eladryba (Chief Trading Coach on TradingWithCody): OK Cody I will step ahead of U buying $FFIV and add it to my security name portfolio with a tranche buy here.
Q. I know you’re a long term believer in solar. what do you think of the rooftop installers like SCTY and VSLR? Seems like a lot of room for growth but also a lot of financial engineering happening with those companies.
A. I don’t know VSLR very well, and will do some work on it and let you know. SCTY is a good company but I like FSLR’s model better and I don’t need to be too heavily or too broadly invested in solar.
Q. We know $FB is a richer media and experience w/ less limitations then a Twitter platform. However Twitter is starting to gain in areas it was badly lagging. What do U see going forward for $TWTR?
A. Twitter’s continuing to figure out how to monetize their nearly 1/2 billion users and it’s very early in that process — maybe still 1st inning even. And Twitter’s 140 character limit has helped them create the Big Social Data industry as its easier to track content, topics, tone and so on in 140 character limit than in Facebook’s sprawling ecosystem. Big Data is going to be a Big Driver for TWTR going forward.
Q. The recent news from FB, getting into money transferring is banking next for them? Digital dollars and paying from a watch or phone seems to be the future. So convenient, security is needed big time though. One watch or phone to use as a key, ID, Payment vs carrying around a wallet, needing cash, keys and such, do U see this as the future one wearable device strapped down to us= less ability to forget or lose.
A. FB’s money transfer news is interesting only because the company is the 1.4 billion user behemoth of the social networking world. Apple, Google, FB are definitely trying to become de facto standards in a variety of markets and money transfers is part of that. That said, other than Apple Pay, none have caught traction and perhaps the best way to play this is to short EBAY and/or Paypal when it gets spun out of EBAY. And yes, the future devices will be much more secure and easier to keep with you — that will happen naturally.
Q. Is $FB looking to have moved out of its trading range?
A. Not sure yet. Been a long time that $FB been trying to get into the $80s but I think it’s looking like $90 is increasingly likely sooner rather than later.
Q. What’s your take on Gold miners here? Is this a good entry point?
A. I’d rather be long than short the gold miners for the next few months and years. But until gold sees a sustainable bounce to $1300 and then stays above it, the gold miners in general are probably going to be capped. From an long-term revolutionary investment stand point, I’d rather just own physical gold coins than GDX, but I might buy some longer-dated out of the money GDX call options at some point this year.
Q. Is the 3D printing movement dead? or is just the hype in the stocks over but the ideas and practicality of it just commercial and not a “home use” ?
A. 3D Printing will likely be a growth industry for the next twenty years, but the industry itself is struggling a little bit to go mainstream and the valuations of the biggest 3D Printing stocks just got too wild as they started competing against each other. Pricing models will still need to be worked out over the long-term for these 3D P stocks, and I still expect that SSYS is the best of breed, but it could be a couple years or more before they bottom and get their business figured out.
