Cody Kiss & Tell: Rate hikes, Market Timing, Bitcoin and 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 WithCody Android app  or in the Chat Room. If you have any questions about our service, just email us at support@tradingwithcody.com.

Q. What kind of impacts do rate hikes have on the debt driven growth the global economies?

A. Slowly moving higher rates would probably not have much impact for at least a few more years. A big jump in rates over a short time frame would probably create some crises in the banking system and/or sovereign wealth bonds in the EU so that’s what I’d be more worried about that simply “higher rates.”

Q. Historically markets that start with such low volatility and good gains end the year even higher do you see that happening this year?

A. Not sure that’s accurate historically-speaking and/or that it’s applicable to this year’s market and/or if it’s game-able this year.

Q. Hi, you were going to check with your surgeon friend re: Axogen.

A. We’ve been playing text/phone tag for the last couple weeks. Just yesterday morning I wrote him back: “I’m here and available if you have time to chat.” He wrote back 9 hours later: “Finally done with all my crap! Sorry it’s 9 hours later.” Hopefully, we’ll finally connect today. My same surgeon friend wrote me this question Monday night, which is one of the things he and I will be talking about in addition to Axogen when we do finally talk.

Q. My same surgeon friend wrote me this question Monday night, which is one of the things he and I will be talking about in addition to Axogen when we do finally talk. “I have money in large cap growth fund at its 1 year high and near its 3 and 5 year highs. If everyone expects a pullback in large cap growth stocks, then I should stop contributing to it and sell some of it, correct? Wait for a correction before buying back in?”

A. I don’t know and wouldn’t necessarily care if “everyone expects a pullback in large cap growth stocks” but let’s answer the more important, actionable part of the question: “I should stop contributing to it and sell some of it, correct? Wait for a correction before buying back in?” As always, the answer depends on your own time frame, risk-tolerance, goals, income mobility, inheritance potential, how much you have in stocks and mutual funds vs how much your net worth is vs how much you make every year, etc. In a broader answer, I can tell you that I have been trimming some stocks and am not in a rush to buy right now, but that I continue to hold onto most of my longs.

Q. You mentioned getting out of $HUBS around $65. We are there! Thanks.

A. Yes, I’m feeling the pain on the $HUBS short. I don’t have much more tolerance for it. But I’m not covering it just yet.

Q. Chris Sacca killing $TWTR – ironically on Twitter. Almost feels like he has a personal axe to grind w/ Dorsey. Wondered if you had any insight.

A. Yes, Chris does seem to have either an axe to grind with Twitter co-founder and returned CEO, EO. No other insights for you, as I don’t know either guy personally. Here’s an article on it.

Q. Any new thoughts on Bitcoin?

A. Even as a Bitcoin bull for the last few years and as an owner of a few Bitcoins, I never thought they’d be worth more than gold this quickly. I wouldn’t chase Bitcoin here, but I remain a bull on the Bitcoin industry and I suppose I’m still a long-term bull on Bitcoin itself.

Q. How is Bitcoin worth more than gold? That’s like saying $FB is worth more than $AAPL because it’s price is $1 more per share. The nominal price per bitcoin may be more but I don’t see how that means anything. Does it mean a stock is worth 1/2 when it splits 2 for1? No. Please explain to me why people are saying Bitcoin is worth more than Gold.

A. The price to buy one Bitcoin got up to be as high as the price to buy one ounce of gold. That’s all they mean.

Q. Anyone like $MULE?

A. MULE an interesting software company but let’s see how it comes public this Friday and plays out before we make any decisions about the stock.

Q. Do you think Dragi will start raising rates on euro?

A. Probably not meaningfully — unless market rates spike and/or inflation spikes sometime this year.

Q. Does it make sense that $AMBA could be a player in the driverless car market, say in a year or two? A Barrons article is suggesting this as a possibility. Know anyone on the inside?

A.  The analyst quoted in the Barron’s article delineates: ‘Writes Anderson, who has a Buy rating on Ambarella, and a $75 price target, “Our understanding is that in the BMW deal, MBLY will provide the vision processing and Intel’s chips will run the driver policy.” “Thus, the deal confirms our suspicions that the vision processing/computer vision element is likely more valuable than the market has acknowledged to date,” writes Anderson. “For this reason, we believe investors would be wise to turn their attention to Ambarella in a post-MBLY takeout world.”’ Here’s the link: http://blogs.barrons.com/techt… The upshot is that he’s right on both points: 1) Ambarella is certainly working behind the scenes on more advanced visual chips/software including for the auto industry. But that 2) they are unproven and early on in the technology, so it’s still a bit of a long shot that someone would take them out as an play on self-driving cars.

Q. I don’t really see much news on $GIMO. Any updated thoughts?

A. Not much new at $GIMO. Steady as she goes. The risk is they miss their guidance again. The upside is they could see accelerated growth especially if the can get some wins/partnerships with Amazon Web Services.

Q. I know you’ve discussed this before but I will ask again. When buying gold coins, what is a reasonable premium to pay above the bullion price?

A. Short answer is this: For generic gold coins right now, I wouldn’t worry about paying 5% or so above bullion if you trust the dealer. Longer answer, read my book Everything You Need to Know About Investing in Gold and Silver.

Q. What are your thoughts on $NVDA considering the M&A? At $100~ was last week the time to dip into it again? Or is this price a good time to enter again? I still have a bit prior to our sale close to $120.

A. I don’t think the $MBLY acquisition by $INTC changes much for $NVDA tho it is certainly a bigger threat with $INTC‘s war chest than on its own.

Q. Does $MBLY purchase make $NVDA look cheap?

A. Nothing would make $NVDA look cheap but lots more growth.

Subscriber follow up:  Fair enough-haha.

Thanks everyone, that’s a wrap!