Cody Kiss & Tell: Howdie doodie time
Transcript for this week’s Live Q&A. Join me next Wednesday at 2pm EST at http://tradingwithcody.com/chat. It’s howdy doodie time! Hit me with anything.Q: Cody, I’ve been having most of my spare time taken up with family health, major house problems, etc. and have had trouble getting on the computer to monitor the market and, most of all, your picks. (It’s not as simple as ‘read your email, dummy’) Any advice on when you get stuck like this? Go neutral if things look dicey? P.S. You’ve made me more money than all the other newsletters I’ve ever read combined! thanks.
A: Thanks for the kind words and I’m glad you’ve had success with our TradingWithCody approach. My main advice is to make sure you’re in stocks you believe in for the long-run and simply not worry too much about your stock portfolio. If you’re stressing about your stocks in the midst of other REAL issues from life, then I would suggest trimming down just a bit so you can sleep at night.
Q: On the YNDX calls. How would it play out if they moved to a Russian exchange in the middle of your trade or is that not a concern? Im buying some August calls while its down at low 28’s but just nervous about that possibility in the news.
A: I don’t think it’s any near-term concern that Yandex would move off of a US-ADR status and be forced onto only the Russian stock exchange, but if it were to happen, I would imagine our options would become worthless.
Q: IBM after earnings? sell off? By the way Cody, have been following you for years.
A: It’s amazing how many of my subscribers have been reading and/or subscribing to my services for more than a decade. It speaks to taking a long view approach in your own career and portfolio. As for IBM, I would much rather be short than long heading into tonight’s earnings, but I’m in it because I expect it is a great hedge against our highflying longs, as it has been since I first put the IBM short position on.
Q: Whats your time/price expectation for FB and Ciena?
A: I expect to own $FB for the next three to five or seven to ten years or longer if they execute and grow like they have been since I made the stock my largest position back in the low $20s. I expect to own $CIEN for the next two to three to five years as carrier spending on optical switches and core infrastructure to deliver the future bandwidth demands from consumers is going to be huge for that part of this current cycle that we’re in.
Q: Cody about $FB, you added some at 56-57 range, what makes you think thats the near term bottom? With NDAQ being at 4000+, lot of selling expected, earnings round the corner, so on…If incase the earnings go south, the stock may even see 40s, no? What made you go in at 56s…
A: I never said that I thought it’s a near-term bottom. I don’t ever usually try to nail “the bottom” or “the top” in my trades and especially in my long-term investments like $FB. I had trimmed some FB when it was above $70 and I added that tranche back when it hit $56. I’ll buy more if it goes to $50 in the near-term. I’ll probably trim more if it goes back above $70 in the near-term. I’ll be flexible and take whatever pitches the markets throw my way. And they threw me the FB at $56 pitch last week so I took a small swing at it.
Q: I have no gold exposure and do not have real capacity to hold physical gold. What is a good way to get exposure and is this a long-term core holding type trade?
A: Feet to fire, if I couldn’t get any physical gold to hold forever, I’d probably look at the CEF. But again, if the banking and/or whatever major crisis comes along in the next five or twenty years, or the system collapses along the way… I don’t think you’ll be able to convert your “CEF holdings” into actual physical gold. But CEG is as good an option as there is until then, at least. Central Fund of Canada Limited is “The Sound Monetary Fund”. Central Fund’s purpose is to hold gold and silver bullion on a secure basis for the convenience of investors in the shares of Central Fund. (Over 95% of Central Fund’s assets are Gold and Silver bullion.)
Q: What are you expecting from invn report??
A: InvenSense Schedules Fourth Quarter and Fiscal Year 2014 Results Conference Call for May 1, 2014 at 1:30PM PST So you’ve got a couple weeks before the report still. I expect that INVN is seeing strong demand for their components from a wide array of products and upcoming products like wearables and drones. I’m a little worried that there’s some momentum money in the name right now and that anything less than a stellar blow out report could bring the stock back to $20 or so, but I’d likely be a buyer if it did drop below $20 after the report.
Q: Cody, why do you like Yandex now?
A: I detailed my analysis on YNDX here: http://tradingwithcody.com/2014/04/03/trade-alert-a-high-riskhigh-reward-trade-on-a-russian-stock/
Q: Seems like you have cooled a bit on Google. The markets have also cooled on it a bit as well. Its still valued quite high. What are your thoughts on their earnings this week ? Better to get in before earnings or wait ?
A: I always suggest starting with a small first tranche of maybe 1/5 or 1/3 as much as many shares as you want to own in GOOG or any other stock regardless of trying to game the next earnings report. I have no idea not even a feet-to-fire guess for you on the GOOG report and how the stock will react to it for this next report. It’s still one of my largest positions as it has been since it came public. I just trimmed a little bit recently to lock in some profits to be disciplined according to my playbook.
Q: What about SNDK into ER (Today)? No position yet on SNDK and looking to enter at some point in time…
A: I always suggest starting with a small first tranche of maybe 1/5 or 1/3 as much as many shares as you want to own in SNDK or any other stock regardless of trying to game the next earnings report. I have no idea not even a feet-to-fire guess for you on the SNDK report and how the stock will react to it for this next report. It’s still one of my largest positions as it has been for a while now. I just trimmed a little bit recently to lock in some profits to be disciplined according to my playbook.
Q: With pullback in tech and some stocks down 20-30-percent ytd–im surprised no buyouts??
A: Valuations are still rather mindblowing out there. I mean, NFLX is worth $20 billion right now vs the $30 billion it was worth a couple months ago. Not really that big of a difference despite it being down 30%, in that regards. Either way, any potential acquirer is gonna have to offer more than either of those numbers to get shareholders to sell out.
Q: Cody, I have been looking at Yandex, but also at RSX, an ETF of Russian stks- any thoughts on this?
A: RSX selling at 22.90, 52 week high, 30.25. It’s two largest holdings Gazprom and Lukoil. (Remind me sometime to write about when a telecom company I worked for was trying to land a big Gazprom contract back in 2000.) I don’t like the idea of betting on completely state-controlled oligarch companies like Gazprom and Lukoil and if I’m going to take a risk on a Russian stock, I’m going to stick with a high-growth revolutionary type of stock like Yandex.
Q: Cody are you looking at any semiconductor stocks besides intc and sndk??
A: Can we consider JDSU and INVN in that group conceptually too. I’ve got plenty of tech exposure and while I’m always happy to buy an incredible revolutionary stock and if there’s an opportunity to do so in coming days or months, I’ll do it. But I’d rather add some non-tech exposure to the portfolio next, I think.
Q: Cody, What are your thoughts on the ER for $AAPL coming up? I’ve been taking a beating on the July 550 calls, hoping to see some up side soon. Thanks!
A: I like CSCO here and the 3% yield is very attractive. It’s got more downside possibilities than Intel, IMHO, and I’m using the INTC as a better way of playing old tech. I own JNRP but it’s even more risker (but has more potential upside) than Cisco here.
Q: Would be real interested in what non-tech areas or stks you are looking at. energy has been catching a real bid lately, anything there?
A: I want something completely off the radar. But in this 0% rates and QE environment, I’m not sure there is such a thing as “off the radar.”
Q: Cody, check out ctrx–catamaran—great value here–gotten crushed..
A: “Catamaran Corporation provides pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefits management industry in North America.” I used to know the management and the shop I worked at within Oppenheimer was the largest shareholder in the biggest PBM company back in the late 1990s. I can’t remember the symbol right now, but it disappeared as the political rules of what PBM and HCIT was funded for and who was paying for what in the healthcare system morphed over the last fifteen years. It’s not an industry I want to try to figure out the long-term playbook for. Not sure anybody could anyway.
