Cody’s Latest Positions

Here is a list of my latest positions with updated commentary and ratings for each position.

I’ve broken the list into Longs and Shorts. And from there, I’ve broken down each list into refined categories in order from the largest positions within each category to the smallest. I also give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.”

So here’s the list:

Longs –

• Forever assets and other permanent holdings –
  • Media and other private investment/business holdings (9+ because betting on yourself and running a business is always a best bet)
  • Real estate, including land and the ranch I live on in NM (8)
  • Physical gold bullion & coins (8)

• Primary stock exposure portfolio
  • Apple (7) – Apple for a start, stop me if you’ve heard this before, is hitting their all time high. The value on the company is now $835 billion. The stock has gone from $1 per share to $161 per share since I first purchased it back in March 2003. The iPhone cycle surprised analysts and pundits and its strength last quarter; period. And as I had mentioned before the earnings report, I thought the set up was favorable for the bulls. And indeed, the stock has popped since that earnings report. And is, as I mentioned, now trading at yet another new all time high. Apple also underscores the dynamic that I speak about how the Federal Reserve and Republican/Democrat regime’s policies are so beneficial for giant corporations like Apple. The company just issued a whopping $7 million bond deal in Canada, and has now sold tens of billions of dollars in bonds that are getting a 2.5% or lower interest rate. Which is below what the market would conceivably lend a company money at if interest rates weren’t being artificially held at all time lows by the Fed. Are your credit card interest rates at all time lows? Probably not, but Apple’s rates are at all time lows. And meanwhile, Apple has more than $150 billion in net cash in their checking accounts around the world. Does this sound like a company that needs to be borrowing money? There’s a theory in economics called “crowding out,” and it happens when the government enables itself or giant corporations to crowd out other investment opportunities that people might otherwise engage in. And, lending Apple money when it already has $150 billion in cash to invest and buy back its stock and send them dividends is the definition of misallocation of resources. However, it does benefit us shareholders for Apple to borrow money at below natural interest rates, as evidence of the stock being at all time highs at its apex. So, I continue to hold the stock.
  • Facebook (7) – Another incredibly strong quarter of growth for facebook when it reported recently. The stock popped afterward to $175; has since pulled back a little bit. But, as we’ve seen that happen with this stock over the years when it reports very strong earnings and all of the analysts have to take their estimates higher for the future and the stock pops to new all time highs and then subsequently fades for the next month or two. I sure wouldn’t chase Facebook right now, but I’m not exactly selling out of it either, am I? It’s still my largest if not one of my largest positions, and I’m gonna continue to hold it. The amazing thing about Facebook the company isn’t Facebook the app, it’s Instagram and what an incredible acquisition it was along with whatsapp. Instagram, whatsapp, and Facebook collectively do 3 billion in monthly users now. That’s insane. It’s equivalent to almost half the world’s population.
  • Google (7) – The stock has pulled back since hitting $1000 a share a couple of months ago and we trimmed some at those levels; near those levels. As I’ve said for several years now, so much of Google is about Android and its being one of the two de facto standards in the mobile operating systems that are out there. Along with Apple’s ios of course. And Google’s ventures are also coming along. The self-driving car from Google, it’s waymo adventure is worth tens of billions of dollars in its own right. As are many of the ventures that they have. I like Google long term. I wouldn’t be surprised if we have the chance to buy it closer to $800 at sometime soon.”
  • Amazon (8) – Well, since the stock hit $1000 a share a couple of months ago and the hype went through the roof, as I’d noted in the Latest Positions write-up that I did at the time, the stock has indeed cooled off. Trump actually tweeted about Amazon this morning saying that it is hurting a lot of tax paying retail businesses and hurting jobs at small businesses and retail places — it’s almost as if he were listening to what I said ten years ago on Fox and on every article I’ve ever written about that concept, yes? I’ve long said that we’re not going to be able level the playing field for small businesses unless the giant corporations pay the same amount of tax burden on a percentage basis, if not a higher percentage of tax burden on a percentage basis, as the small businesses. Small businesses can’t compete with Wal-mart and Amazon and other giant global corporations that pay a tiny fraction of the tax burden on a percentage basis that small businesses are forced to pay. Anyway, I also wrote an article a couple of weeks ago about how I expected there to be some rhetoric in coming weeks and months, and even the next year or two, from the Republican/Democrat Regime and Amazon’s impact on jobs and small businesses. And Trump’s tweet about Amazon today is just sort of part of that playbook. Nothing unexpected by him saying that, but don’t expect any any bite to his bark or any real bite from anyone else in the Republican/Democrat Regime when it comes to cracking down on corporations paying any more taxes.
  • Nvidia (7) – Next is Nvidia. The stock has been stuck in the range of about the $160’s since it has rallied 400% since we bought it just over a year ago. There’s a lot of hype in Nvidia around Bitcoin and Nvidia’s platform being the best way to mine bitcoins and there’s a lot of hype in Nvidia right now. I think there’s a lot of long-term potential for this company as you guys know but I think there’s probably going to be some pain at some point before we see $200 per share. Right now there are all kinds of traders and pundits and momentum chasers all over Nvidia. I’d much rather own the stock when nobody is talking about it like it was when we bought it and that is not the case right now, so. Sit tight on Nvidia and/or trim some if you haven’t already.
  • Sony (7) – Sony. Here’s another one that’s very well for us. We’ve owned it for over two years now and the stock has more than doubled for us and it continues to grow fundamentally. The biggest surprise with Sony has been the strength of its image processor business. Which, a few short years ago, was just sort of becoming a supplier to Samsung and Apple. And it has now certainly become the de facto standard for image sensory components. With Sony having its content business, including the movies (wwo of which were number one in the box office the last two consecutive weeks, neither of which will I ever watch: The Conjuring and Dark Tower), there’s a lot of ways to win with Sony. Again, Sony is based in Japan and it needs a weaker yen to really benefit on the export side of its business. But, I think there’s upside to Sony still, and I’m continuing to hold it. It’s another one I don’t necessarily want to chase right now, but at $35 I would probably look to establish a position if you don’t have one. You know, there’s nothing wrong with nibbling a little bit on starting a ⅓- ⅕ size position, but I wouldn’t go crazy with Sony right now either.
  • Ambarella (7) – Ambarella will report earnings on August 31st; two weeks from tomorrow, and we’ll see if it continues to diversify away from Gopro and the drone business. Both of which have hurt Ambarella. I just think there’s so many ways to win with Ambarella being in so many wearable devices and internet-of-things devices and cars, self-driving cars, robots, security robots, drones, etc. over the next five to ten years. I continue to hold it, but I would like to see a strong quarter from the company when it reports in two weeks from tomorrow; August 31st.
  • Axogen (7) – Axogen reported another strong quarter two weeks ago, and the stock has tripled since we’ve purchased it. And the growth is very strong at 40% topline growth year over year and gross margins were once again above 85%. The company continues to hire and expand and it is executing very well.
  • First Solar (7) – First solar. First Solar has actually been our the single best performing stock in our portfolio over the last 90 days. Nobody would have thought that to be the case 90 days ago or a hundred days ago when the stock was below $30. It’s now hitting $50. The solar industry is growing. The demand for solar is growing. This is the best solar company in the world. The best balance sheet of any solar company in the world and I continue to hold it. I might trim some at some point with it being as strong as it is, but I’m not yet.”
  • Twitter (6) – Twitter is next. In the prior Latest Positions update, I wrote: “Twitter is still trying to figure out how to monetize and grow but they still have so much potential as the leading big data and real time news/updates platform that I continue to hold it.” Nothing has changed since then except Twitter has reported another weak earnings report that underscored how they are struggling to monetize and grow, but that they have still so much potential. And, I continue to hold it.
  • Impinj (8) – The company reported a quarter that was strong but spoke about order “slippage” and guided down for the next two quarters. We’re still looking at 30-40% topline growth this year. But as I have said all along, this is going to be a big win or a big loss depending on if this company can establish itself as the RFID de facto standard for retail and hospitals and all kinds of other applications for the RFID. “Slippage” is not a good sign, but 90 days of performance with some slippage isn’t going to make or break my outlook for this company.
  • Lion’s Gate (7) – Lion’s Gate reported a pretty strong quarter, but as always you should take the ninety day business of a movie and TV show production company with a grain of salt because it’s a very volatile business quarter to quarter. That said, this continues to be a great play on the content is king idea and the fact that Amazon, Apple, Google, Netflix, Hulu, and so many other distribution outlets are desperate for content.
  • SolarEdge (7) – Solar Edge, terrific quarter with a lot of upsides when they reported a couple of weeks ago; the stock popped 20% the next day. We are now up double on this position in the last year since we’ve owned it. I should probably trim a little bit soon and likely will, but this remains a terrific revolutionary technology play on solar.
  • Palo Alto Networks (8) – The cyberthreat to every major corporation is growing every day and the biggest corporations are accelerating their spending to defend themselves. Palo Alto is probably the best play on this. I’m likely to nibble some more soon.
  • Intel (8) – Intel. This recent addition to the portfolio is a play on the internet of things, Alexa, a lot of other potential growth markets that could make this a new world revolutionary. To make this a Revolution Investment after all despite seemingly being a staid old PC company. I’ll be adding more to this position soon as I’ve only bought one small trenche so far.
  • The Street (6) – Another ho-hum quarterly report from the company a couple of weeks ago. The growth in some of their businesses, like business to business, is decent but it’s offset by the losses in their b to c business, or their business to consumer business, i.e. mostly subscriptions. Real money and the other premium products here are losing subscribers and have been losing subscribers for a while. This is a big ship to turn but the company is starting to kick off more cash and that’s why we own it. The new management has done a good job and I still have faith that they will get this stock back up to some higher levels and that we will make some money along with them.
• Primary short portfolio
  • Pandora (7) – Pandora has done everything it can to figure out how to survive and raise more money and that ended up meaning selling existing shareholders down the river when they raise money from SiriusXM. CEO turnover, strategy turnover, and a failure to meet their growth targets on their new subscription product combined with a declining monthly listener base and I still think this stock is in trouble. I remain short.
  • Biotech ETF IBB (7) – I almost covered this thing recently when I realized that it’s not like the Republican side of the Republican/Democrat Regime is going to do some sort of crack down on biotech pricing. You hear Trump tweet about it, or occasionally someone from either the republican or democrat side talk about how there’s price gouging and stuff but it’s not like they’re actually going to do anything about it anytime soon. That said, I just think there’s peak margins in biotech regardless. Unless it acts like it’s going to try to break out or something, I’m going to continue to hold this as a short hedge on the broader long portfolio.
  • SouthKorean ETF EWY (4) – This has not been a good hedge and it still is not. I’m likely to cover this one. Expect a trade alert this week. Samsung is the largest component of this ETF. And despite their CEO being indicted and perhaps facing prison time for corruption and bribery of elected officials, the company has been raising guidance.
  • Herbalife (7) – Herbalife. China is cracking down on Ponzi schemes and Herbalife is dependent upon 22% of its sales in the asian pacific area with China being a large growth platform for the company. And if the government is going to crack down on what Herbalife’s very business model is of getting new sales people to pay in order to become sales people and then to go out and recruit other people to become salespeople and pay to become salespeople to recruit other salespeople. Well, Herbalife could be in trouble. I have thought about covering this one a few times but there are more cockroaches it seems, as I suspected there might be, so I continue to hold it short.
  • IWM (7) – IWM continues to be a decent hedge against our broader long portfolio. The small cap index is struggling to break out even as so many of our own stocks and the broader technology and some of the larger markets are hitting all time highs.

Remember: I wouldn’t rush into a full position all at once in any of these stocks or any other position you’ll ever buy. Patience and allowing the market and time to work to your advantage by buying in tranches is key. Maybe 1/3 or 1/5 of whatever you  might consider to be a “full position” in any particular stock. And I wouldn’t ever have more than 5-15% of your portfolio in any one stock position at any given time. The younger you are and/or the higher the trajectory of your career income, the more concentrated and risk-taking you can be with weighting in your portfolio. But spread your purchases and your risk out over time and over a several positions no matter your age or risk-averse level.

Scaling into a position using an approach of buying 1/3 or 1/5 tranches over time is how I build my personal portfolio positions, but there’s no scientific way to go about investing and trading. Sometimes you have to pay up for the latest tranche but I try to be patient and wait for a temporary sell-off to add to the existing position.

** NOTE FOR NEW SUBSCRIBERS:

If you’re new to TradingWithCody or if you’ve been a subscriber for a while but haven’t acted on much of my strategies yet and/or if you haven’t been in the markets, but you’re sick of getting 0% on your CDs, Treasuries, savings, checking, etc while the markets have been continually hitting all-time highs this year, what should you do now?

Before you ever make any trade, step back and catch your breath before moving any money anywhere. Rank your positions and your whole portfolio and make sure you’re not about to make any emotional moves with your money.

If you haven’t yet read “Everything You Need to Know About Investing” then spend a couple hours doing so, please. It’s a quick read but chock-full of important ideas, concepts and strategies that amateurs and pros alike should understand.

Then, take a look at my own personal portfolio’s Latest Positions and slowly start to scale into some of the ones you like best and/or the ones I have rated highest right now. I’d look to start scaling into a few of the many stocks in the Latest Positions that are at all-time highs along with a couple that we’ve recently featured in our Trade Alerts that I’ve personally been scaling into.

You can find an archive of Trade Alerts here.