Cody Kiss & Tell: TradingWithCody Apple, SanDisk, Twitter and much more. July 1st, 2015.
Cody Kiss & Tell: TradingWithCody Apple, SanDisk, Twitter and much more. July 1st, 2015.
Q: How do you handle selling losers vs. holding through a pullback?
A: First off, as with most things investing/trading-related, it’s can often be more art than science when it comes to trying to navigate the ups and downs of individual names. $AAPL pulling back from $700 to $430 back in 2012 is a good example. Why did $AAPL pull back so sharply? Well, noise mostly. There were so many $AAPL bulls at $700 (split-adjusted $100) back in 2012 when the stock had gone straight up from 2009 depths from under $20 per share, split-adjusted. Looking back, you could see the makings of at least a serious short-term pullback as I had outlined at the first and only “Apple Investment Summit” back in 2012 and the fact that I knew people who started trading $AAPL options at that time — and had never traded $AAPL OR OPTIONS before in their lives. The point is that we did indeed have the vision and understanding to hold on to and even build up our $AAPL common stock position back when it pulled back like that in 2012-2013 and we’ve had the vision and discipline to hold onto the vast majority of those $AAPL shares in the rise from $60 to $130 since then. I’ve owned $AAPL for 13 years now and have had to “suffer” through several 30-40% pullbacks and even a couple bigger pullbacks than that over the years. We have done a great job over time of trimming and scaling and ebbing and flowing and that’s how you build a great long-term portfolio and how you outperform everybody else over time. We won’t nail the tops and bottoms and trying to do so is how fools are made. We have a playbook and strategy and insights and vision that give us a huge edge over the years and that’s why we do what we do when we do it. 🙂 Rock on.
Q: Where and when do you see a good entry or add into $TWTR, also where would you start a position in $SYNA? Thanks.
A: I like both $TWTR and $SYNA right here right now but they are very different set-ups. I’m not sure $TWTR will find its legs until they get a new CEO but I think Periscope alone is worth $10 billion or so and if I were a VC and could invest in Periscope at such a valuation, I probably would. The entire $TWTR valuation is just $20 billion right now and I think the Twitter business/platform is worth at least $20 billion anyway. So looking out two or three years, I think $TWTR could be closer to $100 or more, but looking out two or three quarters, I am worried $TWTR could be lagging in the $30s still. I’ll probably scale into more $TWTR personally at some point, but not for now.
$SYNA‘s been in trouble since the reports that $AAPL might try to develop their own Synaptics-like chips for future iPhones hit a few weeks ago. This is what I wrote in last week’s Live Q&A Chat about $SYNA and it still holds true this week: “Synaptics is down about 10% in the last week (but still up 50%+ from where we first bought it) after this story from Digitimes about Apple developing its own integrated touch controller/display driver chips. I’m not a fan of trying to game stocks using reports from Digitimes as a reliable source. Maybe Apple is developing their own version of the chip they currently buy from Synaptics, but it will take at least a year or two for such a chip to hit market if and when it does. All that said, the entire display driver chip business is about 15% of syna revs, and the company has been diversifying its customer base very rapidly. The stock would certainly get hit on a loss of the Apple business, but again, I think that’s at least a few more quarters out if it happens at all.”http://tradingwithcody.com/201…
Q: What’s your take on $SNDK?
A: I am doubling down on my homework and making calls and analyzing all things SanDisk right now, as I agree — this laggard has been a thorn this year. The Micron call and Samsung fundamentals are weighing on SNDK right now and while I remain steadfast in my Flash-is-the-future-of-storage, I’m increasingly concerned that the bear case that SanDisk’s margins could contract in the next few quarters is a problem. We initially bought our SanDisk in the $30s or so back in 2011 and have trimmed a good bit along the way, but the question is of course all about the future. More analysis and decisions from me about $SNDK in coming days.
Q: I only have half a position in $SNE would you add here or wait until earnings results? Thanks
A: You know I can’t advise you so specifically for your own portfolio and all. I don’t know how big $SNE is relative to the rest of your portfolio or what other positions you have in your portfolio and how similar or dis-similar they might be to $SNE and whether you are a huge risk-taker or a conservative investor or whether you’ve got millions in other assets that dwarf your stock portfolio, etc. I think $SNE might see $25 before it sees $30, but I think it gets to $60 in the next year or two.
Q: Being Greek and both my parents both being from Greece I have to say it’s a shame to see what the PEOPLE of the country are going through. Having said that I am not sure the current situation will be resolved to stay or to leave. I truly believe they will leave the euro and vote NO on the ref….. Do you see any value in positioning for a NO vote by buying put protection or into any of the VIX type etf’s?
A: If Greece actually votes no and leaves the EU, it would probably be best for the Greek people and for the EU and for the US stock markets over the long-term. But if Greece actually votes no and leaves the EU, it would probably tank the European stock markets 10-15% over a week or two and the US stock market would tank 5-10% over that same time frame. Can you game it with puts? Not sure. Maybe better just to do as I have and trim back some of your positions and raise some cash so you’re ready to pounce if the markets give us a great chance to buy lower and we remain bullish about the fundamentals and set-up for the next couple years or so.
Q: Great news about your baby girl, so very happy to hear. Keep positive:) Why do u think some of the former market leaders are now sitting near or at 52 week lows, namely qcom, sndk, intc. Out of the 3 stocks mentioned which are you most confident on? This would be a long-term hold for me.
A: The three chip stocks you mention are down each for very different reasons. QCOM – The Chinese are sick of paying huge royalties to Qualcomm and they are squeezing Qualcomm’s margins and growth isn’t as good as it would be if the Chinese were just playing friendly and paying QCOM what they’re supposed to. SNDK – Samsung is SanDisk’s biggest competitor in the flash storage business and Samsung’s probably built up too much flash storage inventory, as the latest Samsung smartphones haven’t sold as well as the previous ones. See my other SanDisk analysis from earlier in today’s chat too. INTC – Computers aren’t selling like they used to and Intel is still a very PC-dependent business. PC unit growth will be negative this year and that means INTC’s server business has to provide any potential growth for the company. INTC’s mobile business still lacks traction.
Q: There are a lot of uncertainties around the Greek referendum Sunday. I have enough cash position (around 40%) in anticipation of better buying opportunities in the coming weeks, but I’m also afraid of. too much cash position will hurt my portfolio performance. What’s your take on this?
A: Don’t let fear of underperformance or fear of anything else dictate your moves. No doubt that if you were 80% long with some call options and the markets rally 20% in the next six months, you’d still think to yourself: “Self, why didn’t I put 150% of my money into only long stocks and have used mostly call options.” You’ll always wish you’re had less cash in rallies and more cash in sell-offs. Ebb and flow and control what you can, and don’t look back. You have this.
Q: If Greece is just a market uncertainty and market cap wise its small, why is SO much attention by the market on it?
A: The fact is that the Greece leaving the EU would show just how fragile that union and their fiat currency really is, and fragility in a currency/union of nations isn’t bullish for the long-term corporate profit/corporatist/welfare-state we and the Europeans are forced by our governments to live in.
Thank you all, I’ve got my 18 month old daughter Lyncoln on my lap and I just got a photo over text from my wife who IS GETTING TO HOLD AMARIS RIGHT NOW! I’m headed back to the hospital to hold Amaris this afternoon too. Thanks for the continued prayers, all.
