Cody Kiss & Tell: Looking for a grandslam, Apple in 6 mo’s, gold’s next move & 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. Looking for a grandslam, an Amazon or Apple 20 years ago. I understand the risks. Is there a company or two out there that you have an eye that say $10,000 invested now can possibly change lives 10/15 years from now?

A.  That’s the great question, and I wish I had a single answer. The reason we spread our bets across a portfolio of potential stocks that are the next $AAPL or $AMZN, including both$AAPL and $AMZN. $NVDA, $SNE, $FB, $QCOM and most of our other stocks have 5-50x upside potential, but few will actually deliver that, and it’s best to spread the money on several names. Probably better to put $1-2k in 5-10 potential 5-50-bagger stocks rather than $10k in one.

Q. Can we break NASDAQ 5000–or does it not matter?

A. I don’t think the universe is going to reward investors/traders who are gaming an arbitrary, but round, number of an index comprised of hundreds of stocks that represent earnings power of real companies. 🙂

Q. Emailed question: Hi Cody, Where do you see Apple 6 months from now? Thanks

A. I’d guess $AAPL is around $110-115 in six months. Downside risk is to $85 and upside potential is to $120 over that time frame. Longer-term, I think we just hold onto our $AAPL and/or nibble some more if it gets down into the $80s.

Q. Have friends visiting from upstate New York who maintain the country is fine on the two coasts and other parts involved in the New Economy, otherwise not so good. Thoughts ?

A. I’m not sure I agree that it’s just the coasts that are booming right now. Dallas, Atlanta, Denver, and many other cities are doing quite well. Farmers and ranchers aren’t printing money right now, but they aren’t going out of business either. Oil’s not in a total depression and the job situation in the oil patch has stabilized. Tech, biotech, other industries are booming.

Subscriber follow-up: I guess what my guests are referring to is that the manufacturing jobs in the Midwest are lost and gone forever, and this is a problem which needs to be addressed somehow. “You need two jobs to get by and are worse off than twenty years ago”.

This was certainly true for the last thirty years. But over the last five years, I think manufacturing jobs bottomed longer-term. There were almost no factory jobs left so it wouldn’t shock me to see the trend of declining manufacturing jobs turn positive.

Q. On precious metals: kind of seems obvious you don’t go along with the “fears” that the Fed will raise rates. That being the case, would you call this a re-entry (or add-to-tranche) point to get back into silver or gold, which have (over?)reacted to those threatened moves the last few weeks? (And yes, I know you believe in owning the real thing, but for those of us playing it the other way…)

A. I wouldn’t be surprised to see another 5-10% pullback in gold and more than that in silver if the Fed does raise rates again in the next three months or so. That would probably be the time to be more aggressive about buying some near-term. Nibbling a tranche of gold coins for your safe while gold’s near $1200/oz will probably pay off well in the next ten to twenty years, no matter what gold/silver do into the next six months though.

Q. Any thoughts on Energous {WATT} ? They are coming out with a wireless charging solution that may play well for the wearables revolution.

A. $WATT is a speculative venture-capital-like investment. The company is burning millions of dollars per year but sales are supposed to go from a couple million last year to $4 million this year and over $12MM next. I’m not sure that the company wouldn’t STILL need more cash even if it grows that fast. You’d have to have a lot of faith in the management and/or the technology if you’re going to risk on your money on this one.

Q. I have several customers who rely on web marketing and they are running from HUBS and moving to Marketo (MKTO). Is there a paired trade here or is the whole web marketing landscape on shaky ground?

A. I haven’t dug into $MKTO‘s management and business model to the extent that I have done on $HUBS. I’m not sure the entire web marketing landscape is doomed, but neither$MKTO nor $HUBS is profitable. I like your thinking on the paired trade idea though, so if you have more info about $MKTO vs $HUBS, I’m all ears.

Q. Cody, where is your add point on the HUBS short?

A. Maybe somewhere around $50.

Subscriber follow-up: Would you say that $49.67 is “somewhere around $50” on HUBS? Should we give it another day?

Yes, I was being a bit facetious, but am just not in a rush to add to the $HUBStoday. Maybe tomorrow if it actually gets above $50, I’ll sell another tranche short.

Q. At what price, if any, would you buy back NFLX?

A. I’d be more interested in $NFLX again in the $70s if it were to fall there. No rush though.

Q. Are you looking to double down on FIT?

A. Not anytime soon. I’m letting the existing $FIT position I have sit tight. I wrote a few weeks ago: ” I’m holding my $FIT position steady after all and if it gets closer to $10, I’ll probably start to build my $FIT position up into a larger-size position.” And that’s probably still about where I am on this one.

Q. Re your comment on Fed policy in email, looking at interest rates on several timeframes, they are coiling for a move soon. Here is TLT, the 20 year Bond ETF – if I had to pick a direction here, I would be long, i.e. lower rates ahead.

A. I’d been thinking that the Fed was going to ease/create new QE next rather than continue to raise rates meaninglessly from 0.25 to 0.5% and on towards 1% in the next year or so. Could still happen. Thanks for the chart, can you explain to those of us who don’t do much charting more of what you see on that chart that makes you think it is predicting lower rates ahead?

Subscriber follow-up: Two premises – one is that the narrowing edges of the triangle mean it will break out soon – up or down. I personally look for this as a continuation pattern and so extending the move upwards. The guru on patterns actually says that 60% of the time, this leads to a breakdown in price,, i.e. higher rates. http://thepatternsite.com/dt.h… If you want to see chart patterns, this is an awesome overview; http://thepatternsite.com/visu…

Thanks for explaining. Always love to learn!

Thanks folks, see you in the Chat Room later today and every weekday. 🙂