Cody’s Latest Positions with updated ratings, commentary and analysis

Stocks are up a little bit this morning. I’ve got at least a couple new names that I’ve been working hard on and are getting closer to adding to the portfolio. So stay tuned for that. But in the meantime, here is a list of latest positions with updated analysis, commentary and ratings for each position. I note that I’ve upped three of my long positions to a 9 out of 10 rating, which underscores the fact that I’ve gotten a bit more bullish in the last week as stock markets got hit hard and I’ve been doing some nibbling on some of our names.

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 (7)

• Primary stock exposure portfolio
  • Facebook (7) – Facebook is a killer app and great asset. The fact that you also get full ownership of Instagram and Whatsapp as part of the package is even better. And you also get the world’s leading Virtual Reality company, Occulus Rift too.
  • Google (7) –I’ve been playing with Google Cardboard. After just a couple hours of playing with a cheap $40 plastic headset and downloading a few free “Google Cardboard” virtual reality apps, and watching a few VR movies on YouTube, I’m more psyched that ever about the future of VR and Google’s place in it.
  • Apple (9) – Apple TV, Apple Watch, Apple iPad Pro haven’t been the hit Apple shareholders would want. Is the iPhone slowing or will it continue taking share from Samsung? Long-term, I think Apple can double in the next few years.
  • Amazon (7) – There’s Amazon in retail and then there’s everybody else. We own the greatest retailer of the last twenty years and should probably own this sucker for the next twenty years. Amazon is having a blowout holiday season.
  • F5 (9) – With a billion dollars cash (or $13 per share) and a 12x forward P/E, F5 is very cheap compared to any other “network security” play and I know the CEO there and I like him and his vision and past performance. I think network security industry is ripe for consolidation and wouldn’t be surprised if there are buyers out there considering picking up F5.
  • Sony (9) – Sony’s image sensor business is booming, Sony’s actually making some inroads in wearables, robotics is another growth area ahead for Sony and you’ve got the content video library business kicker.
  • Synaptics (8) – I’ll quote Robert Marcin: “Haptic touch screen mania for the Korean and Chinese phone makers next year. WSJ confirms that Synaptics was chosen to provide haptic touch screen for Samsung. Who knows how big this company can get with touch controller, fingerprint sensors and video controller all packaged by one vendor.”
  • First Solar (6) – One of the few energy stocks that has had a good last year is First Solar, and that’s the one we own and are still sticking with.
  • FitBit (8) – The stock will be all about the holiday sales figures. Looking at best-selling items on Amazon and seeing Fitbit dominating several sections is a positive sign.
  • Silicon Motion (7) – Silicon Motion carries some near-term risk as its customers, including Hynix, Kingston, Lexar Media, Numonyx, Samsung, Sony and Transcend are not all in boom mode.
  • Netflix (7) – Netflix is a killer app too. The stock is stuck between $110 and $125 and could be for a few months, I suppose. I’d buy more near $100/share and I’d trim some more above $135.
  • Ambarella (6) – The good news is that nobody asks or seems to care about Ambarella anymore. The bad news is that GoPro’s still their biggest customer.
  • Axogen (8) – The stock bounces between $5 and $6 a share lately but longer-term is growing steadily and positioned for dominating the nerve reconstruction business.

• Primary short portfolio
  • Pandora (7) – If Pandora can figure out how to successfully become a streaming on-demand music platform and compete with Spotify and Apple Music head-on, this stock could really take off. I’m doubtful the company can pull it off, but I will be all over the company as it tries.
  • GW Pharmaceuticals (7) – Most of the GW Pharma tests have failed. The valuation of the stock even at these levels 25% lower than we shorted it at, is still $1.5 billion and is trading at 25x next year’s revenues. The company is very unprofitable and will continue to be so unless they finally get a big hit on one of their tests, and even then, they’ll have to successfully bring that product to market and fight competition/patents and hope the product takes off in the market.
  • Valeant Pharmaceuticals (6) – *Tiny Position I’m likely just go ahead and cover this short and move on for now as it’s such a small position.
  • IBB Biotech ETF (6) – *Tiny Position These puts will expire in January and it looks like I’ll be taking a loss on this hedge and will re-evaluate this position at that point.
  • Kandi Tech (*no rating, too hard to short, puts too expensive) –*Tiny Position I tried to short this stock and it’s too hard to locate any shares to borrow. I did get filled on a few puts but have decided this one’s too much of a battlefield stock right now to mess with adding any more.

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 answer for your question. 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.