Cody’s Kiss & Tell: 1929 crash, risk vs reward, TheStreet 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 are your thoughts on the overall market and potentially having a 1929-1930 type run/crash?
A. There’s always a chance for another stock market crash and we should always be prepared to handle one. I don’t expect we’ll see a 1929 bubble-to-crash turn this year, but it could happen.
Q. Hi, Cody. When you talk about risk/reward being bad/appropriate/good is there a number a particular number you are referring to? In another words how do you judge if risk/reward is good or bad in any particular case? Thank you!
A. In any particular investment there’s quite a bit of art vs science about risk vs reward. If I think a stock can go up 10x in the next ten years but that it could go to $0 if they fail, sometimes that is sometimes a good bet — if you love the company’s management and business model.
Q. Also since everybody seems to be waiting for a pullback shouldn’t we “flip it”?
A. I’m not so sure that everybody is waiting for a pullback anymore. Lots of folks are more bullish than ever and/or feel like they want to get in more long exposure asap.
Q. With respect to your various put purchases do you have downside expectations or targets for where you’d sell the puts? Thinking about where to strike $IWM, $EWY put spreads.
A. The $IWM and $EWY puts/shorts are partly there to serve as downside hedges to our broader portfolio. I don’t necessarily have a downside target for either IWM or EWY, but I do expect they have more downside from these current levels between now and the end of this summer, I suppose.
Q. “RE: IWM put, open interest for Aug 137 strike is 562 but for 138 strike it is 3,572. Would this considerably higher liquidity steer you toward 138 strike (considering it is just a buck away)? Thanks.”
A. Unless you’re moving around millions of dollars when you buy and sell those put options, I don’t think the float (ie, open interest) would matter.
Q. Cody, what have you learned from your friends at $TST? You said you were going to check, just curious if that has happened?
A. Yes, I met with the CEO and the Chairman from TST when I was in NYC and we did talk some about the company, their strategies, etc. Sounds like they’ve accomplished a lot in the few months that David’s been cleaning the ship up and they are now trying to get the ship turned to kick off cash and grow again, as we all hope they will. I told them the same thing about their stock that I’ve told you guys from the beginning — if they can figure out a way to just kick off $5 million in cash, the stock would probably double or triple from these current levels. I’ll give a couple more quarters to get the ship turned in the right direction.
Q. What do you see as Pandora downside?
A. I think $P is likely headed into the single digits or even below $5 in the next couple years if they aren’t bought by someone first.
Q. $TER has been benefiting from purchasing Universal Robotics. Wonder if you had a chance to talk to them?
A. Still working on $TER.
Q. Just curious-is IBM turning around?
A. Ask Watson. The fact that IBM’s big bet on AI is a program that was originally built as a gimmick to compete on a game show while Amazon’s changing the world with Alexa and new AI initiatives says all you need to know about $IBM. I’m not a fan.
Q. Any thoughts on $MULE? Worth getting some of the IPO?
A. It’s an interesting software company but let’s see how it comes public and plays out before we make any decisions about the stock.
Subscriber follow-up: I tried to buy $MULE at the IPO price 14$. I have an order in for it.
Cody’s follow-up: Good luck!
Ok folks, that’s a wrap. Thank you!
