Cody’s Latest Positions: Equities, gold, cryptos and so on

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.”
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 the office I work out of, some land and the ranch I live on in NM (8)
  • Physical gold bullion & coins (8)
• Primary stock exposure portfolio
  • AAPL Apple (7) – Why are smartwatches and another few hundred products exempted from the latest round of Trump’s China tariff-ing? Well, I guess the companies and consumers of the other 6000+ products not exempted are going to be forced to subsidize Apple and people rich enough to buy smartwatches and other high tech goods. Which is probably going to be great for helping boost demand for the new Apple Watch that’s got new health features and all the other updates that you’ve heard about already and for the new Apple iPhone 10X92S and iPhone SXS10.2 (did I get that right? LOL) that will be hitting the markets soon. Apple’s services business has helped Apple’s margins expand and the stock multiple expand as analysts have finally caught onto its importance about seven years after Trading With Cody subscribers were aware of it. I think Apple is a relatively safe tech name for the next year as there’s not as much momentum money chasing gains in this name as there is in…say, our next stock for example.
  • AMZN Amazon (7) –  A trillion bucks, baby. That’s what Amazon was worth when we trimmed some our position a couple weeks ago. The stock has pulled back a bit since then and frankly, would it really surprise you if the stock were to pull back a bit more from here and then spent months to get back to a trillion? There’s a lot of momentum in this and other long-held Revolution Investments of ours, which is a function of how well they’ve performed in the last few months and years. Momentum money will rotate away from these names eventually, if only for a few weeks or months, even in a Bubble-Blowing Bull Market. I think AMZN might require patience for a while. As for the fundamentals, there’s no doubt that The Voice Revolution, Driverless/Drone Delivery, Robotics, Distribution, Advertising, The Voice Revolution and The Voice Revolution are kicking it.
  • GOOG/GOOGL Google (7) – The problem with Google is that their whole business model is based upon tracking and knowing everything about you. Then again, it’s that very business model that is why the company’s worth nearly a trillion dollars right now. Google’s avoided much of the political spotlight that’s been shone so harshly on Facebook and Twitter for the last few months. Which is an amazing thing to say about a company that’s been sending multi-billion dollar checks to regulators for anti-competitive settlements. If Google can keep its nose clean and out of the political spotlight for the next few months, it might become the leader of the FANGs as the other FANGS lag for a while. That aforementioned momentum money in AMZN, for example, could rotate to GOOG.
  • FB Facebook (7) – Facebook’s been in the doghouse. I shoulda, woulda, coulda trimmed more when it was a $200. Would I trim more now? Maybe, actually. I’ve owned this stock since the $20s and the company’s ramping spending for next year which could hit earnings growth. Then again, much of that is concern about earnings growth for next year is already modeled into the analyst numbers and probably got priced in on this drop from above $200. Looking out five years from now, I think FB will be quite a bit higher than its $160 quote, but looking out one from now, I’m less sure about that.
  • NVDA Nvidia (7) – The action in Nvidia and even moreso the action in its competitor AMD is reminiscent of the heady days of dot-com bubble. In 1999 and 2000, you used to see tech stocks go up 20% in a week and 200% in two months at a time all the time. These days its not just tech stocks, but its marijuana stocks and cryptos too and biotech stocks and…lots of signs of euphoria and greed all around us. As for Nvidia’s fundamentals, the 35% revenue growth of this year is being modeled down to 13% next year. There’s no way Nvidia will be above $200 a share if the company only grows its topline 13% next year. Then again if the company can grow 20% or more next year, as I expect it will, that will allow upside to the current estimates. If Nvidia could see 30% topline growth would likely put this stock above $400 next year assuming more Bubble-Blowing Bull Market action. Not sure that’s reasonable though.
  • SNE Sony (7) – I’ve bought Sony as a contrarian tech Revolution play when nobody thought the company would ever get turned around when we first bought it a few years ago in the teens: “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. As I’ve mentioned, Sony’s investing heavily in #wearables and Sony could be a big player in wearables. Speaking of which, was the Sony Walkman the first successful #wearable computer?” Well, Sony’s wearables business hasn’t done anything. But their image sensor business and content business and Playstation business have all boomed, taking the stock from $15 where we bought to $60 today. Probably going to trim some of this one again soon.
  • AXGN Axogen (7) – In the prior Latest Positions, I wrote, “I’m worried this stock has some near-term downside and/or range-bound trading ahead of it for the next few months or so.” Well, crap, the stock is down 30%+ since that post. I’d trimmed that stock many times as it rallied into those past all-time highs but now I’m sitting tight still. I’m probably about to nibble back some of the AXGN we sold near its highs, but part of my hesitance in adding small tranches in our existing names right now is a function of how far the market has run in the last seven years. Stocks aren’t up just a little bit, they’re up huge and Axogen is still up like 800%+ from where we bought it. And it’s still not “cheap” again.
  • SEDG SolarEdge (7) – My first boss on Wall Street was a legendary stock broker who used to start many a call with a prospect/client saying, “Grab a pencil. Write down these numbers.” And then he’d read off the company’s revenues for the last few quarters to show the growth. Here’s that for Solar Edge:
    

    Revenue	6/30/2018	3/31/2018	12/31/2017	9/30/2017
    Total Revenue	227,118	209,871	189,340	166,552

    Looking pretty good so far and if they can deliver that kind of growth for the next few quarters, I’d expect the stock will get back to its all-time highs where we were recently trimming some and then perhaps go even higher. I’m not in a rush to buy any SEDG back just yet, but I might if it gets into the $30s near-term.

  • VZ Verizon (8) – Q. Hi Cody, It’s rare that you rate a stock a nine and was wondering if you still consider Verizon a nine. Thanks. A. I hate to be nit picky, but I’d probably put Verizon a 9/10 whenever it dips below $50 and it’s probably an 8/10 whenever its above $50. I still very much think that Verizon’s 5G can really create some upside to the company’s growth for the next five years. And even if not, I’m happy to own a defensive name with nearly a 5% dividend yield.
  • TWTR Twitter (7) – Oh Twitter’s gone from being the second coming of Netflix to the second coming of Snapchat in the last two months, hasn’t it? Longer-term I think Twitter can put up 20%+ growth on the topline for the five to ten years, assuming single digit user growth. The company will get better at monetizing each user on the platform and I expect daily usage per user will grow 10-20% per year for the next few years too. That makes this stock a pretty attractive buying opportunity as its gotten back into the $20s.
  • Palo Alto Networks (7) –From their earnings call transcript: “Continued spending on security is being driven by a few notable technology trends. One, consumers and employees are walking around with very powerful computing devices, which are constantly connected using increasing bandwidth. This is forcing a large-scale upgrade in IT infrastructure globally. Two, the transition to the cloud is gathering steam. Every customer I’ve talked to is working on a version of a cloud strategy and migrating either some or all of their business to SaaS and PaaS. Three, there’s a broad understanding of the value of data and the need for good usable data as a basis for applying AI and machine learning in the future.” That said, we’ve had a big run in this stock and it just had a nice pop on that earnings report a couple weeks ago and I’m probably going to trim some of this one for the first time ever.
  • INTC Intel (7) – Rumor has it that Intel’s got some manufacturing issues at their plants. Intel grew topline more than 10% in 2018, which was double what most analysts expected. Analysts are only modeling 3% topline growth for Intel next year and that wouldn’t be enough to keep this stock moving higher. That said, the stock is trading at 10x next year’s earnings so I don’t think it would crash either. I like the 2.5% dividend yield in the meantime either way.
  • WDC Western Digital (8) – In the prior Latest Positions, I’d written, “Pricing might be weak this quarter for storage.”  But as I’d also noted, “I think demand for storage and supply of data storage isn’t inline for the next five years or driverless/AI/servers/app growth.” Let’s dig in a little deeper though, the fact is that the company’s legacy HDD (disk storage drive business) is still a cash cow generating $6-7 per share in earnings each year and that’s not likely to change anytime soon as the price advantage for server HDD vs flash storage is still about 10x. That is, flash storage is still about 10x more expensive per terabit than old disk drives are. If IoT, AI, Voice Revolution, Driverless and the other tech revolutions that demand exponential storage supplies grow through the next three or five years, pricing in storage will go up and margins will go up and this company could earn $15-20 per share in 2022 or so. Throw a 8x multiple on those earnings and the stock would be at $120-160, up for the $60ish level right now. We’re paid 3.5% dividend yield right now to hold the stock anyway, which is what I’m doing with my shares.
  • UA Under Armour (7) – This is a stock that’s expensive on a price-to-earnings basis but cheap on a price-to-sales basis. That’s because it’s a turnaround that’s trying to get their earnings back on track after stumbling in 2016 which gave us the opportunity to buy this stock with a $10 handle. Analysts expect mid-single digit growth for the topline this year and next, even as they expect earnings to double from 17 cents per share to 33 cents. Normalized earnings for UA are probably close to $2 per share if they can truly get their inventory cleared out and roll out a hit product or two. The stock is sort of in no-man’s land right now, neither a great buying opportunity nor one that looks like it’s about to pop higher. Steady as she goes because looking out three or five years, this stock could be back near $50.
  • GLD (8) – I’m an opportunist with my portfolio and am always willing to make a short-term trade if I see a good opportunity with favorable risk/reward. I do think, for example, that gold and GLD are probably going to be up 20% from these levels over the next year. Three primary reasons why. 1) Rotation from cryptocurrencies to gold as The Great Cryptocurrency Crash continues. 2) Geopolitical tensions are on the rise and a year from now I think the odds are that geopolitical tensions are even higher. 3) The gold/GLD chart looks awful and sometimes that’s the best chart to buy.
  • TST The Street (6) – Here’s a good article about how David Callaway the new CEO has got TheStreet turned around: How Dave Callaway has turned around TheStreet.com. Might be time to trim a little bit of this one as we’ve had a nice 150% gain in it now.
  • CALX Calix (7) – Nice pop from $6ish to $9ish in this stock in the last week or so. That said, you have to remember that this is a small cap, somewhat illiquid stock, so it doesn’t take much money buying or selling to move this stock. Longer-term, week-to-week movements are irrelevant anyway — either this company wins some big contracts from VZ and other carriers and the stock rallies big from here, or they fail to win contracts and the stock will fall big from here.

• Primary short portfolio
  • Nasdaq 100 QQQ ETF (7) – Our hedges served their purpose, I suppose, as they helped keep the portfolio hedged a bit at the highs. I’m likely to nibble a few more puts in coming days or weeks when markets rally.
  • AMD (8) – The momentum in this name is in overdrive and the stock is parabolic. That said, the company is supposed to earn up to 70 cents per share next year even if the topline only grows about 15%, down from 30% in 2018. The stock was at a 2x forward P/E to those earnings estimates just 20 months ago. I’m not sure the company will deliver on the dream scenario that the topline will do another 30% next year to justify this $30+ stock here.
  • S&P 500 SPY ETF (6) – See QQQ write up above.
  • DJIA DIA ETF (6) – See QQQ write up above.
  • P Pandora (7) – Pandora’s had a bounce as Wall Street analysts are drinking the kool-aid that the company is pouring. I’m not. I’m holding this short steady as I continue to think Pandora can’t sustain its business against the likes of Amazon, Google, Spotify, Apple, YouTube and other music streaming services.
  • IWM Small cap ETF (6) – See SPY write up above.
  • Biotech ETF IBB (7) – I’m still planning to add to my Biotech IBB short sometime soon. There’s a lot of momentum in biotech right now and there’s probably a pocket of air underneath many biotech stocks.
  • EWY SouthKorean ETF (6) – South Korea’s stock market has been volatile recently and I’m still likely to finally just cut my losses on this hedge too.
• Cryptocurrencies/tokens
  • Bitcoin (6) – I’ve owned bitcoin for years and have sold most of my bitcoins but still hold some. I think there’s more near-term crash ahead for bitcoin and most any cryptocurrency but that bitcoin could be a survivor/thriver long-term.
  • Stellar Lumens (6) –This is a big concern, probably the single biggest concern I have about owning the Stellar Lumens. I’m increasingly convinced that the Stellar platform is going to be big in The Blockchain Revolution, but I’m less sure about if the Lumens will function as a store of value currency from these current levels. That said, I just started buying Stellar Lumens recently and I’m likely to nibble a few more soon even though I think there’s more near-term crash ahead for Stellar Lumens and most any cryptocurrency but that bitcoin could be a survivor/thriver long-term.
  • Ethereum (5) – Growing less enthused about Ethereum as time goes on, but still holding the tiny bit that I own.
  • Ripple (5) – See Ethereum write up above.

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.