Cody Kiss & Tell: Oil, drones, mobile video and much more
Here’s today’s podcast. It’s a 1on1 interview with drone entrepreneur, Terry Holland, about the Drone Revolution and the best ways to invest in it. Plus how to play with drones and other apps that we’ll see hitting the markets in the next year or two.
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Cody: Howdy ho, cowboys and girls. Let’s ride. Time for this week’s Live Q&A Chat. Ask me anything. I just ordered this to do some “field research” on the Drone Revolution. http://www.amazon.com/gp/product/B00HTQCZUQ/ref=oh_details_o00_s00_i00?ie=UTF8&psc=1
Q. I know some of the folks talk about the oil drillers on this site. They are trading well off of their 52W highs and sport juicy yields. Do you have any feel or insight on these names? ex: $SDRL, $RIG, $DO, $ESV
A. The drillers have been smashed by people thinking fracking will replace deep sea- I guess it depends on your world view. That said, I’d rather be long solar than oil or drillers looking out over ten or twenty years. The energy industry is so heavily subsidized and manipulated by the giant players that it will all end in tears at some point, when the games end. In the meantime, $SDRL gives that 11% yield, which is better than a sharp stick in the eye. Careful on any of the energy plays though, as it’s not a sustainable, real marketplace and hasn’t been for decades.
Q. Hi Cody, Thank you for your very interesting posts about the Drone Revolution–and for the excellent trades in Rocket Fuel and Yelp–nice winners. How do you feel about Amazon these days? Is it time to scale in if we don’t have a position, or stay away?
A. Thanks for the kind words. Good question on Amazon. It’s just not got much of a catalyst any time soon here that I can see and the valuation remains ridiculous if you just look at it’s P/E. I think that Amazon will likely grow top line 20% per year for the next three years at least, which would mean it’ll be doing $200BB in sales in a couple more years. I think a 1x sales valuation is likely a baseline case for the stock. 1x next year sales would give you a $250 stock, so there’s probably the level I’d get serious about building a position at. But as always, I’d suggest starting with a small 1/4 or 1/5 size position here and then give yourself room to add over time.
Q. Cody, the CEO of AT&T said that delivering video over mobile networks will be huge next 5 yrs–whats the best way to invest in this?
A. Best way to play video over mobile networks: 1. Apple/Google 2. Juniper/Cisco/Ciena/JDSU 3. Level 3, Verizon 4. Intel/Qualcomm/ArmH.
Q. Any insight into $TWTR stock price movement? Sure the Sound Cloud acquisition rumor has had some impact, but in general $TWTR does not seem to be participating in the technology rebound.
A. Yeah, that $TWTR is hated right here right now. $TWTR right now reminds me a bit of $AAPL six months ago when it couldn’t get a bid and people thought it’d never go up again. I would expect that as long as tech/momentum stocks hang tough or go up over the next couple or three months, that $TWTR would pop back to $40. But no guarantees!
Q. Hi, Cody: any more thoughts on our most-definitely contrarian play on Russian-Internet YNDX, or are we still slaves to the media and actual eventss. (It’s recovered a bit. Also, you seem to have a subscriber, Strange-Currencies, showing a Russian Federation flag. Wonder (if he’s there) if he has any insights.
A. Nothing new with the Yandex. Russia’s stock market and Yandex have popped back up lately as planned, but not as much as we’d like to see. Yet, at least. Still a couple months to go in this trade.
Q. Hey Cody, love your Cody Underground episodes, they’ve really has helped me a lot. My question is, I’m 24 and having a tough time day trading so far but I love it and want to do it forever. Sometimes I win big then lose big but I know the key is to get it right more than wrong and I’ll be ok. Do you have any advice?
A. Thanks, Jay, I’m still trying to find the right recipe for the Cody Underground Podcasts. Getting better at it though. As for day-trading, read this first. “Even if you’re day trading, you obviously are doing so because you want to be in this game making money at the markets for the next 10,000 days, not just tomorrow or the next thirty days. And even if you’re day trading, you have to plan for both hot and cold streaks that will come and you have to know and be able to handle that some of those hot and cold streaks will last longer and shock you more than you’d ever thought possible. And that over the next 10,000 days, all investors and traders need to get more trades right than wrong and maximize their gains while minimizing their losses as they do so, no matter their time-horizons for each individual position and no matter what’s going on in the economy or the broader markets.” http://tradingwithcody.com/ebooks/everything-you-need-to-know-about-investing/.
Page 33 http://tradingwithcody.com/ebooks/everything-you-need-to-know-about-investing/: “I tell everybody that it’s a bad idea to try to trade for income. Everybody will have a big “draw down” at some point, which means that you’ll fall maybe 20, maybe 30% or more from your all-time highs in your stock account. And when that happens, that means you’re going to have to make 40 or 50% or more just to get back to where you were at the highs. Does that mean, if you were trading for income, that you went without any cash flow/income for those months that it took you to get back to your highs? Or does that mean you now keep taking money out even though you’re down and you’re playing with a fraction of the capital you were at the highs? Before you make a single trade for income, you should consider what it means to be wrong, consistently, for three months. Or more. No trader I’ve ever known, and I know some real trading legends, has a spotless record. And human nature being what it is, you’ll get desperate when you see all red and it will impact your performance. Why put yourself under that much pressure? There are traders out there who trade for income and do okay and even some who have become pretty wealthy but the average Joe has as much chance of trading for income successfully for the long-term as they do of winning the lottery. I do think we can continue to consistently blow away the broader markets and make a decent percentage on our capital base when we look at our portfolio over quarters and years. But there will always be months that will be tough when you’re cold as ice on your bets and if you’re having to force trades at those times because you need income, you’re probably going to end up losing even more. Be careful is what I’m saying. And please consider not trading for income or risking money in options if you don’t think you have enough to invest in a one share of a company’s common stock.”
Comment: Thanks Cody but I’m going to keep day trading. I love what I do. At some point everyone trades for extra income whether you’re day trading or investing over decades. Most people won’t invest for 30 years and never touch any capital in their account over that time period, that would be crazy. That money you take out every now and then is considered income. No one makes money on trades 100% of the time but 75% is enough I would say.
Cody: Good luck to you, Jay, and let us know how it goes along the way and what we can do to help. Be prepared for hard times and if you can make it through the bad times and temporary losses and not be forced into making desperate trades for income, you might be able to pull it off! Rock on.
Q. Cody, what do you guys feel when so many “big shots” are calling for a correction?
A. “Feeling” is the enemy of successful trading and investing. If I see a wildly overwhelming consensus of big shots calling for a correction, I’ll likely look at getting long and betting against them.
Q. Hi Cody. Can you give us an update on your take for the near term on gold/gold miners? Any reason to think we are at/near bottom? I thought I was playing it relatively safe with Jan 2015 calls but have seen a steady decline so far. Some call for gold to drop to $1000/OZ, others calling bottom around here. Feet to fire you sell, hold, buy January miners calls here and what’s going to move gold up within the next 8 months? Thanks.
A. Feet to fire, I’d rather be long January gold miner calls than short ’em. That is, I think the gold pop could come at any time. Read this for a good insight on what and why the gold market is doing what it’s doing for now. Will it change by January? Who knows, but I think the trend for gold is higher prices over the next five to ten to fifty years as measured against the dollar, that’s for sure. http://jessescrossroadscafe.blogspot.com/2014/05/gold-daily-and-silver-weekly-charts_20.html “The capping in the metals is obvious. There is no economic news or theory that is needed otherwise to explain it. The question is how long it can last.” Someone asked ‘why then is it happening?” I am sorry I had thought it was also obvious based on any number of recent posts. The Anglo-American Gold Pool, and their coterie of client Banks, have made a policy decision to hold the price of gold and silver below 1300 and 20. Why those particular levels? Because any lower, and the miners would start going out of business, and the flow of physical bullion to the East might become unmanageable. They are nice round numbers, with the obvious appeal to the bureaucratic mind. Anything higher, or rather, with a more aggressive rate of ascent, and some of the natives might become restless, and the positions of some Banks might become untenable. Their reasons are of course theirs, but I would imagine it is something along the lines of ZIRP, the TARP, selective justice, and the rigging of LIBOR and any other number of markets. The preservation of the status quo becomes paramount to those caught in a credibility trap, and especially among those who have risen to great wealth and power through ‘extraordinary means.’ ”
Q. Cody: Your answer to Jahmon was very long. Did you consider using speech to text software along with typing to answer fast instead of typing alone. Honestly looks like you typing really fast.
A. I type about 150 words a minute when I’m cranking. I might type faster than I talk, certainly faster than I could talk to a voice rec software. That answer to Jahmon was mostly a quote of Jesse Cafe’s though.
Comment: 150 words a minute? That is freaking fast. I could barely reach 85 or 90.
Q. Your daily postings on TWC seem to parallel your podcasts. Is this by design?
A. Like I said, I’m still figuring out the podcast recipe. Sometimes I do a recap of a recent TWC write-up as the podcast outline, other times, it’s just random. What do you like better? Any suggestions from any of you for improving the podcast are welcome!
Q. What else are you on the “verge” of investing in? You had previously mentioned shorting some retailers, was it B/N, Radio Shack, Sears, etc.? What else…you waiting for Go Pro IPO to invest there?
A. Yes, I’d mentioned shorting $BKS and $DLTR and a few other retailers over the past few weeks or months. I can’t invest in GoPro until it goes public and I won’t know what valuation or metrics or what analysis will go along with it coming public until it does. Will let you guys know everything I buy and sell when I do it of course.
Q. Cody, Any thoughts on upcoming GoPro IPO? S1 has been filed – $984M revenue last year which was 50% YoY over 2012. Should one consider buying GoPro on IPO? This company seems to be the leader in action cameras.
A. Yes, wrote about GoPro coming public today in my article and just answered a similar question. I’ll let you guys know if I like it when we get there, since we can’t analyze it fully yet.
Q. Your TWC postings seem to appear in many of your outlets. Do we, paying subs, get first exposure always?
A. TWC subs get everything I write first and of course, you get the actual trades I do, which doesn’t get published anywhere else. TWC subs also MUCH more content on a daily basis, much of it totally exclusive to you guys, not to mention access to me directly in these chats and by email and the complete run down of my positions and ratings, which are never published anywhere else.
Q. $INVN beaten and unloved…what changes that and when?
A. $INVN needs a win in the the new iPhone for it to spike big time short-term, I’d guess. Mid-term, Samsung smartphones and tablets to take back off in big numbers and that stock would pop.
Okay that’s it. G-d bless.
