Cody Kiss & Tell: That time I went to Sundance and other answers

Q. This is a nasty day. I’m not sure what’s harder to do here? Stay put? Buy puts? That seems too easy.

A. I think sitting on our hands right now, with our heavy cash positions and short hedges along with our remaining longs is probably okay for now. Like I keep saying, we can wait for better pitches. There will be a time for more trading, buying calls or puts and so on, but for now, I’m steady as she goes and ready to make new moves when I think the time/prices are right.

Q. I’ve been following the platforms and comments from candidates for the upcoming presidential election, Bernie Sanders’ in particular, and I’ve been impressed by Bernie’s perspective of the US “establishment” along with his proposals. It’s still early, but I think Bernie resonates strongly with A LOT of people, especially those who have been turned off by the establishment BS that is politics, finance, and healthcare in this country. I don’t think that his proposals can be executed without a hitch, but he seems like the type of person that could create significant positive changes to the establishment and help create a better future for all over the long term. Should Bernie get elected, what do you think that could mean for Finance and Healthcare? And, what do you think the timeline would look like for those changes?

A.  First, I think the establishment will ensure that Hillary Clinton gets the nomination. And even if Sanders got through the Democrat Regime to win the nomination, I don’t think he’d be the likely winner. All that said, I think health care stocks would get hit but not as bad as finance stocks would get hit if Sanders were to become our next President.

Q. What price do you plan to scale into some AMZN?

A. I’ve owned Amazon for a very long time and though I sold quite a few shares back in November when the stock was near $700, I’m not rushing back into them just now. That said, this stock is quite oversold here and likely to bounce 5-10% near-term. Feet to fire, that is.” I personally am not in a rush to buy another tranche of $AMZN just now.

Q.  You mentioned a while back that you would be looking to scale into $AMZN again around 550. At the time it was trading around 600. I went ahead and bought a 1/3 position around 545 and was looking at it today thinking another 1/3 might be good down here at 525. That said, your article today said you were in no hurry to add to your position. Also, I am not sure I like the idea of bookstores in malls again even if they $AMZN get great rental rates to come back in the malls. Brick and mortar stores are not behaving well. How do you feel about this move by $AMZN, when would you buy more and a price target a year from now?

A. I just don’t like the market action and the ongoing potential for the energy/commodity crash to wreak havoc on the stock market. So I’m being a bit more patient now. We don’t have to be as willing to put money to work right now as we are/have been/will be again at other times.

Q. Thoughts on the bookstores concept?

A. My entire article today was about the Amazon Bookstore concept: https://twc.scutify.com/articl…

Q.  Great news on Amaris! What do you think of NFLX at these levels? I’ve read that domestic market is somewhat “saturated” but NFLX is now in 150+ countries and is an international story. Also, I’ve read that networks are not willing as much to give NFLX content as it plays against the network for their own viewership. Any perspective? When would you be a buyer?

A. $NFLX has lots of threats including all those you mention, because it is the de facto standard for App TV. It’s not a big position for me right now and I’m just going to let the market trade itself out for now as I think the stock could double or triple from here in another five or ten years. I’d buy more at some point, maybe below $80. But again, given the market and economic risks from the energy/commodity crash, I’m just not in a rush to build up even longer term positions right now.

Q. Should I buy a tranche of NFLX?

A. I think if you don’t own any $NFLX maybe a small 1/4 or 1/5-sized tranche is the best way to start into it. This bear market action we’re living through so far in 2016 makes it hard to try to game a bounce for the near-term. Heck with the way momo stocks are getting crushed this year, we might get the chance to scale into more of it around under $80 at some point in coming days or weeks.

Q. Interested in your take on the $TWTR downgrade http://blogs.barrons.com/techt…

A.  The analyst wrote in his report, “We have been long-time critics of Twitter’s product strategy and stock,” but “we took a respite from the negativity for a brief period in the past three months based on the belief that if the product strategy were going to show signs of improvement we might see the stock respond. Well the stock sure responded (negatively!) and the product still resembles its former self while the individual in charge of the product as recently as two weeks ago now resides at Instagram. We believe it was John Maynard Keynes that once stated, ‘When my information changes, I alter my conclusions. What do you, sir?'” I like that the analyst is being flexible. But as I’ve been saying for months, and used to say when I was a vocal $TWTR bear back when it first came public — the company’s got to show some innovation before the market will reward it with value.

Q. What are your thoughts on GOOG? Tough market out there…I was hoping GOOG could have held onto its gains.

A. Yes, me too, and now that the stock is down 7% from yesterday’s highs, I wish I’d trimmed some more near $800. This is bear market kind of action and while I don’t often try to game near-term moves like this, I do think $GOOG remains a must-own long-term Revolutionary stock.

Q. What do you think of long dated calls in GOOGL, deep in the money, dated out to end of this year, next year? To add a bit of leverage, GOOGL crushed earnings and are below their pre-earnings price.

Q. What the hell is the difference between GOOG and GOOGL? If starting a position, which should I own? Thanks.

A. I don’t like to game the different share classes of a stock if I don’t have to, so I own both $GOOG and $GOOGL since the split and mostly use $GOOG to trade around but they should basically move in tandem over time.

Q. NASDAQ 4000 looks like a support level the market may visit since we can not get any kind of traction or sustained rally. What price level on the S&P makes the P/E decent again in your mind?

A.  The S&P P/E is “decent” even here, if earnings growth comes through again in 2016 and 2017.

Q. Have you ever looked at Criterio NASDAQ:CRTO ? It looks like a nice play in internet marketing solution but I don’t know much where they are vs their competition.

A.  I’ve never heard of $CRTO before, but the P/E ain’t bad at less than 20 if company can grow the 30%+ that analysts expect for this year. Nice balance sheet with $5 per share net cash. I’ll dig further, thanks for the heads up.

Q. I’m seeing all the OTAs getting hammered. Any interest in PCLN or EXPE? Analysts seem to think Airbnb is eating their lunch. I think that impacts PCLN more do you agree?

A.  And I do think AirBnB will impact $PCLN and $EXPE in years ahead. Whether it is much right now or not, I’m not sure. Here’s my analysis on $PCLN from the eBook, Stocks for 2016: “What was once a start­up dot com travel site whose “innovation” was that you can bid for a hotel room or flight has become a full­fledge App Revolution company, as I’d outlined it was about to back in 2010. Growing its revenues another 15% this year will put them above the $10 billion mark. The market cap is now a whopping $60 billion, but that’s only an 18 P/E. I’d be interested in rebuilding my position in this stock from years past if the stock were to get hit hard, maybe closer to $900, where the P/E would be closer to 13 and it’d be a screaming buy on valuation metrics.” Here’s my analysis on $EXPE from the eBook: “Expedia is growing 15­25% per year and trading at 20x next year’s earnings estimates, pays nearly 1% dividend yield and the competition that should have been in the travel industry has been allowed to be rolled up into an oligarchic situation, meaning margins are high and innovation are low. Not a bad stock and one along with Priceline that I wish I’d had bought back in 2011 when I first started investing again.”

Q. Given the news on Yahoo, is it time to buy a put/initiate a short?

A. $YHOO‘s a mess and though I’ve been reluctant to pile onto the Marissa Meyer bashing bandwagon, after seeing the parties she’s thrown and the books she’s spent millions on even as the company’s revenues have suffered and seeing her comments and interviews for the last few months as she’s almost spun off the $BABA stake , sold the company, reduced staff and created a new strategy — and now she’s doing all of the above and taking a write down on Tumblr that she paid $1BB for at the same time that $FB bought Instagram for $1BB…well, I just have to admit that she’s awful. I haven’t messed with that stock in years and have no intention of trying to game how all the spinning off and selling itself goes.

Q. I assume your advice is “hands off” on Chipotle, or is there a way to game (a) what I think is pretty good management and (b) the basic idea that perhaps long-term maybe there’s nowhere else to go but up? Long-term calls? (<–probably reckless)

A. If you like $CMG and think it can be a Healthy Eating Revolutionary company, I’d suggest doing the 1/3 tranche approach in just common stock for the long-term.

• Follow up question: So Cody I should have asked, “What do YOU think of CMG as a Healthy Eating Revolution play?
• A. I’m not sure I can truly be objective about $CMG since I am a native New Mexican who eats Mexican food, like real burritos and tamales and enchilada and rellenos and things, almost every day. $CMG is a healthy-eating play, by definition, since it’s food is rather healthy, but as a long-term investment, I just don’t know that I’m sold.

Q. Cody, thoughts on QCOM. I have a 1/3 position just above the current price. When would you be a buyer again? Is the smartphone saturation and the renegotiated royalties that big of an issue as they expand into other avenues such as IOT?

A. I think $QCOM is very cheap on lot of metrics and I think they’ve got great exposure to the Smart Car market that’s about to bloom into tens of millions of units per year in another three to five years. This is about the same price at which I bought my shares in $QCOM and I probably won’t do another tranche personally unless it gets closer to or even below $40.

Q. About Qualcomm. I was reading this recently. What is your response? It gives me a headache… “Smartphone makers including Apple and companies in China and Europe are contending in antitrust cases that any increase in the selling prices of their mobile devices is the direct result of their own innovations on a particular phone software and even hardware. Thus, there is no basis for them to share with Qualcomm the additional financial gains from increased pricing. Qualcomm has since conceded and may have to give back fees of unjustified collections and even pay fines, totaling billions. This is the kind of risk that needs to be accounted for when investing in Qualcomm stock. Future advances in mobile technologies may push back the company’s old patents to less prominent positions.” Read more: The Biggest Risks of Investing in Qualcomm Stock (QCOM, BRCM) | Investopedia http://goo.gl/KBRnDn

A. I think a lot of the risk of litigation and patent issues are already priced into $QCOM here. But there are certainly worst-case scenarios for their patent royalty business that would impact the fundamentals and probably hit the stock. The dividend and cash balance provide some cushion though.

Subscriber comment: It brought tears to my eyes as I scrolled through Amaris’ facebook. The video of you and Amaris caused my mind to flutter back to the days when I discovered your column on The Street and you were still single. Who knew then what lay ahead? God did. And God wasn’t looking the other way while Amaris was nesting in her mama’s womb. I can’t help but think of Psalm 139: 13 -18. “You made all the delicate, inner parts of my body and knit me together in my mother’s womb. Thank you for making me so wonderfully complex! Your workmanship is marvelous—how well I know it. You watched me as I was being formed in utter seclusion, as I was woven together in the dark of the womb. You saw me before I was born. Every day of my life was recorded in your book. Every moment was laid out before a single day had passed. How precious are your thoughts about me, O God. They cannot be numbered! I can’t even count them; they outnumber the grains of sand! And when I wake up, you are still with me!” Sometimes it’s in the bittersweet that we discover we can endure more than we ever imagined – to God be the glory. You and your family are always in my prayers.

Thank you so much for the very kind words! Yesterday, I stumbled across an article on TheStreet that I’d written back in 2006 about my time at the Sundance Film Festival and what I learned about the future of TV and movies. I laughed when I thought about the contrast of those days of my life as a single dude going to Sundance vs nowadays. I wouldn’t trade where I am now for any other tie of my life though, as you imply. My family brings so much joy to all my life every day. God bless you too. This passage brought tears to my eyes, as it relates to Amaris. Thanks for sharing. Psalm 139: 13 -18. “You made all the delicate, inner parts of my body and knit me together in my mother’s womb. Thank you for making me so wonderfully complex! Your workmanship is marvelous—how well I know it. You watched me as I was being formed in utter seclusion, as I was woven together in the dark of the womb. You saw me before I was born. Every day of my life was recorded in your book. Every moment was laid out before a single day had passed. How precious are your thoughts about me, O God. They cannot be numbered! I can’t even count them; they outnumber the grains of sand! And when I wake up, you are still with me!”

Q. That IS a remarkably sweet video of you and Amaris. You always say, “talk about anything here,” so I’m going to ask you to tell the folks about the foundation you and Lori have set up (discussed on the site) to help families of other medically fragile kids. Is there a link to it you can provide?

A. Thank you for asking. I asked my wife about it and we will set up a GoFundMe page or something similar in the next week or two, and I’ll share that with you. We created the Amaris Willard Foundation after the passing of my wife’s 98 year old grandfather, Johnson Stearns. He was the most generous man and in his honor we wanted to have his generosity live forever. The family wanted the donations to go to other families that have medically fragile children in hopes of lessening their hardship in anyway possible. Last week, we donated to the fund’s first recipients, a family in Ruidoso, NM, my home town. The family has a 14 month old child named Oscar Cuevas who has epilepsy, Todd paralysis, benign attacks and two enlarged holes in his heart. They are headed to UNM Hospital so that the baby can receive medical treatments. You can follow Amaris on Facebook for updates on future donations and news about the foundation. https://www.facebook.com/Amari…

Thanks to you and everybody for the kind words about my family! We are so happy to be home.

All right, that’s all the answering and thinking and analyzing my brain can stretch to do right now. Thanks again for all the kind words, well-wishes, prayers and other support for my family. Rock on, as a younger Cody used to probably say too often.

Subscriber comment: The older one kinda says it a lot, too.