Cody Kiss & Tell: Tax-shelter plans, Donald Trump and more
Here’s the transcript for this week’s Live Q&A Chat. It was a good one.
Well, I just got news that the new baby that’s on the way (yes, we’re preggers 2.0 over here) is another girl. That makes six granddaughters and no grandsons for my parents. So let’s start this week’s chat early on that news and I might end the discussion a few minutes early to make some calls and let my family know what’s up. 🙂
Q. I have been investing for a number of years but have never tried to dividend capture. I know CostCo is offering a 5.00 special dividend for share owners as of Feb 9th. Does the stock drop 5.00 on the pay date of February 29th to cover that dividend? Is this a good strategy collecting special dividends or does this fall under the category of if you like the stock own it and don’t worry about collecting dividends? I appreciate your insight.
A. This is a very good question and thanks for asking it. Like most things in trading/investing, there’s no “right” answer to your question and no “right” approach to trading a special dividend. I would think that the guys who make the markets in these stocks like Goldman, JPM, Morgan Stanley, etc are probably going to be on the profit-making side of those types of trades anyway, making it not just futile, but outright painful for most retail investors to try to compete in that game. Shorter answer is: I like how you phrased this part of your question: “does this fall under the category of if you like the stock own it and don’t worry about collecting dividends.”
Thank you. I have been very blessed in the market following your advice. Also, girls are great and there is nothing that can ever replace family.
A. I used to say on TV all the time, that “The only thing permanent in life is family,” and having my own children now makes that even more poignant to me. Thanks all for the congratulatory comments. I am so blessed with my family (and my career and where I live…). Rock on indeed.
Q. FOXA and NXPI are reporting tonight. Do you have any earnings play for these?
A. $FOXA has been stuck in the $30s for the last year and feet to fire, I’d guess it’s probably ready to head into the $40s sometime this year. Feet to fire, I’d also rather be long than short $FOXA, my old boss’s company, into the report tonight. $NXPI is the “go-to” stock for traders/investors looking to bet on ApplePay’s success in growing huge. It’s probably not a bad bet, but with so much attention on that stock taking it near all-time highs into this report tonight, I’ve got no feel, not even a feet-to-fire guess, for how it’ll trade tomorrow.
Q. Cody any interest in gold yet or miners?
A. I own $GOLD in physical coins and bullion that I bought a couple years ago and plan to hold it forever. I never got my chance to scale into more near $1000/oz as I’d mentioned I would if it got down there, and I’ve got no interest in chasing gold now. $GDX looks like it’s ready to break out, which is what I said would happen if $GOLD were to get back to $1300/oz as is happening now. I’ve been more cautious in general of late and I’m not ready to pull any triggers on $GDX or $GOLD personally just now.
Q. Do you think AMZN and NFLX both really had that great of earnings or is this just an overcharged relief rally in both that Amazon stopped spending a s much? In NFLX case it concerns me they are down 4 quarters in a row, I believe, on subscriber base in the US. I have thought to short both but also realize until they settle it is hard to pick a direction, still 120 straight up for NFLX is tempting
A. I think $AMZN‘s strong stock reaction to its report was surprising in its magnitude. I think $NFLX‘s growth was strong enough to fuel its upside so that one didn’t surprise me as much. I think both companies are extremely well-run by genius visionaries and I don’t like to bet against companies like that.
Q. First of all, congrats on the coming child. And for a while, our family shared your pain in reverse: my fiancee was SO wanting to buy little girls’ clothing for gifts to my all-boys set of grandkids (and nephews and nieces). My son finally came through with his third child — Dakota! All is now well, and let this be a lesson to you. Now onto business: I see you’re tranching out/reaping a bit of profits from Sony. I never got in — would you say it’s (still) a good time to tranche in now or should i wait for a pullback?
A. I always suggest starting with a small tranche in a stock you want to own and keep it small when it’s a stock up huge and at new highs like $SNE is. Get your toe in the water if you believe its headed higher still and then slowly look to add to that position on weakness, just like you always see me try to do.
Q. Well, DO you think it’s “headed higher still” at this point?
A. Well, if I didn’t think $SNE would still head higher, I’d sell all of my personal position, of course. And also, I wrote this just this morning for dear TWC subscribers: ‘Nothing wrong with taking some profits off the table now, tho I still think this: “I continue to hold my$SNE and think that there’s a lot of upside over the next five years with this stock. The library of TV shows and movies are in high demand by all the $AAPL iTunes,$AMZN, $NFLX, Hulu streaming wars. The collapsing Yen figures to be a huge boost to the company’s finances in the next year too. Sony’s investing heavily in #wearables and Sony could be…”‘https://twc.scutify.com/articl…
OK, I was thinking short-term for the best entry point, but I guess a rosy long term trumps (if you’ll pardon the expression) that instead. (Just don’t tell me you’re an admirer of The Donald.)
A. If Donald Trump and his son were men of their words, I’d right now be about to inherit all of Donald Trump Sr’s fortune when he passes. I made a bet with Donald Trump Jr for our respective inheritances on my TV show in 2008 when oil was at $120 that oil would see $30s before $150s. Two months later oil was at $33. DTJr never came back on my show! For the record tho, he was a gentleman and his sister was the first ever guest on my TV show and she was smart, friendly and engaging.
Q. Congratulations on your second baby! I’m 100% in charge of my 11 week old boy, Benjamin today, as my wife is back working again. I’m wondering if you put money into 529 plans?
A. Congrats on your new addition too! The kids get more responsive and fun, if not easier to take care of, as they go from 11 weeks to 11 months, so have fun and good luck staying up with the kid! On principle and out of fear that the government changes the rules at some point anyway, I don’t like to use tax-sheltered plans of any sort. I haven’t even thought of starting a 529 for my kids’ college funds, but I will at least think about it and talk to my wife about it now that you brought it up. Hope this answer helps!
Q. Congrats, Cody! Thoughts on TWTR into earnings tmrw? Those calls I mentioned last week (the same ones you have) are now a bit green. Hold them into earnings? Have common stock as well.
A. Probably should consider taking some profits on the call options if only to reduce a little risk, since you’re asking about it. 🙂
Q. Do you anticipate much price action in $AAPL over the next couple of months? I know that as we near the next earnings release the price will get stirred and as the marketing for the Apple Watch ramps up it will also have an effect , but otherwise is this a sideways play?
I think $AAPL still has plenty of upside if only because by many metrics, it remains “cheaper” than the average stock and is growing much faster. Apple Watch will be the next catalyst as we see how it starts selling in April and into the summer, but you know it’s not a clear pathway…EVER for any stock. 🙂
Q. In past situations, you’ve said you didn’t think it was helpful to list your relative weight of each stock in the portfolio for various reasons. I’d really appreciate you reconsidering that. sometimes you make a comment about a stock, and say that part of the reason you’re trimming is that it has grown to be an overweight portion of your portfolio. It would be helpful as a subscriber to understand that better. It would be a great addition to your “latest” positions” post, even if it’s a rough estimate of the percentage of the total portfolio. Great job on the site redesign. It’s so much better.
A. I’m set in my decision not to confuse people with giving them too much detail on how much risks they would then think is appropriate for them based on my weightings, which are probably not at all relevant to anybody but me personally but definition. I’ll think about it tho, since you asked me to.
Q. Cody, what are your thoughts about buying puts on large cap China as a hedge?
A. I’m not particularly bearish on China right now and wouldn’t their economy be a big-time net beneficiary of energy prices being 50% off what they were for the past few years anyway?
Q. China not topping? Debt-heavy, property values peaked/declining if not collapsing? Just a thought and some of the thing I’ve read recently as indicators.
A. Been hearing this line about China for like 10 years in a row, now. Not sure it’s gameable: “China is debt-heavy, property values peaked/declining if not collapsing.”
Q. Another question. Have you read the bullish article on gold by Stewart Thompson on Scutify? Would you agree with his thesis and are you any closer to buying into GDX…especially given the Swiss action since we last discussed it here. Thx
A. I just looked at Thompson’s latest article on Scutify (http://www.scutify.com/article…). He sounds way too hyped up and bullish on Gold for reasons that are not all that “new” or “insightful”. I’m bullish on GDX from $22 range here, but not in any rush to buy it.
Thompson is pretty hyped up…lol…glad to hear you are bullish. I have a spread of GDX calls January 2016…so lots of time for them to appreciate and hopefully take advantage of a momentum shift.
Ok folks, that’s a wrap. Thank you all for the kind words and see you on the Flipside.
