Hedging Inflation, Bitcoin And Ether Buy Targets, And Lots Of Stocks

Here’s the transcript from this week’s Live Q&A.

Q. Cody, unfortunately got crushed this week as my portfolio is down 13% over the last couple of weeks. What are your thoughts right now on SRAC, JMIA, TSLA? Buy, Sell, or Hold? In your opinion, how much farther can this market fall?

A. Let’s slow down first. A 13% drawdown from your highs isn’t nearly as bad as it can be. But it does remind you that stocks can get crushed and real losses do show up in the portfolios some times. See answers below about each of the stocks you asked about. As for how far the market can fall? 50% from here wouldn’t shock me, but I’m not saying a crash like that is going to happen any time soon. I’m also NOT NOT saying the markets won’t pull back 50% in the next year or two either though.

Q. Good morning Cody in addition to your names I have a rising dividend fund that has 40% of my families portfolio is this a proper way to hedge vs inflation.

A. Maybe, maybe not. I don’t think stocks will be safe, not even value or dividend stocks, if/when inflation hits 5% or 10% or more and especially if that makes interest rates keep rising too. Also, I don’t suggest having 40% of your family’s portfolio in any one asset.

Q. Are there any cloud or security stocks which are not very vulnerable to an inflation inspired pullback. I am thinking of a 3-5 year horizon.

A. I don’t think so per se. That said, the best stocks to invest in as a hedge against inflation will probably be, as usual, Revolutionary companies creating platforms in secularly growing industries.

Q. Earlier answer: “I don’t think stocks will be safe, not even value or dividend stocks, if/when inflation hits 5% or 10% or more and especially if that makes interest rates keep rising too.” That is a scary thought. If inflation were to hit 5-10% how would interest rates not go up?

A. If and when the economy goes beserk with inflation spiking double digits, you can’t just say as a fact that interest rates will go up too. It’s very likely that interest rates go up when inflation spikes, but it’s not as if they are always directly correlated all the time.

Q. “If and when the economy goes beserk with inflation spiking double digits, you can’t just say as a fact that interest rates will go up too”…Maybe not, but it seems highly unlikely to me.

A. Well, isn’t that the same thing I said? I literally wrote right after that, “It’s very likely that interest rates go up when inflation spikes”, right?

Q. Hi Cody, I am new subscriber. Is it a good level to buy TLT puts or?

A. Welcome. I might nibble a few more TLT puts for the hedge fund today as I’d trimmed some yesterday. I don’t think TLT puts should be a major position or anything and with the TLT already down so big in the last two weeks, I wouldn’t look to rush into starting a position in it. Just a nibble maybe.

Q. Do you feel that ETFs are OK to invest in gold or silver? If so, any preference?

A. I talk about this all the time. If you’re buying gold and silver as a hedge against a complete system shut down from a solar flare or something like that or against a hedge that the banking system completely collapses, then you need to buy real physical gold and silver. If you’re buying it based on the idea that gold and silver are likely to rise in value relative the US dollar, then using GLD and SLV and/or other ETFs is fine.

Q. Hey Cody. What’s your nibble price and trim price on BTC and Ether?

A. I’d probably look to nibble some BTC near $40,000 and Ether I’d probably look to nibble some around these levels. In fact, consider this a Trade Alert, I’m going to buy some Ether futures (ETHUSDRR) for the hedge fund today. I might buy some for the personal account too, if I get around to logging into my coinbase account.

Q. Hello Cody, there is BTCC.B and BTCC.U etfs launched in Canada. Is is a good vehicle?

A. I don’t know those specifically, but I’d answer similarly to my comment earlier about silver and gold ETFs: If you’re buying bitcoin as a hedge that the banking system completely collapses, then you need to buy real bitcoins. If you’re buying it based on the idea that bitcoin are likely to rise in value relative the US dollar, then using bitcoin ETFs is okay, just don’t pay too much of a premium for the ETF over their bitcoin values.

Q. What do you think of Coinbase direct listing?

A. I like Coinbase a lot. But I am in no rush to buy it as it looks way overhyped here for the near-term.

Q. What about starting a position in TSLA and SEDG at this levels f you hadn’t any?

A. I always tell people to start with a small tranche to get going when you don’t own any of a particular stock that you want to own. And yes, I’d much rather start nibbling a position in TSLA and SEDG after this big pullback than, say, two weeks ago at their all-time highs which was 20-30% above their current levels.

Q. In the race to deliver the optimum EV battery ..any revolutions on the horizon ?

A. Quantumscape, Tesla and others are revolutionizing battery technology. But QS (and to a lesser extent TSLA) looks way overvalued right now.

Q. Hi Cody, should I buy U at 104-105 for a second tranche? Bought first tranche at 120.

A. I mentioned in the Trade Alert I sent out last night that I bought a second tranche of U yesterday (at about these levels).

Q. Your opinion on Semi’s NVDA and QCOM at these points?

A. I like QCOM a lot here and it’s better to buy NVDA for the long-term after it has pulled back 20% from its all-time highs like it just did than to buy it when it was hitting those all-time highs.

Q. Cody, SPCE, JMIA and SRAC have backed off highs quite a bit. You mentioned last night buying a little SPCE. Is it time to nibble some JMIA and SRAC? Thanks.

A. I’d probably look to nibble some SRAC here today, but not JMIA if you already own it. JMIA’s valuation is way stretched as the stock has more than tripled since we bought even after the pullback.

Q. Hi Cody. What is your opinion of HOL? Is it a good space revolution stock?

A. Working on it.

Q. Cody, Same question with the Big Boys. AAPL, GOOG, and AMZN? I see you nibbled some FB last night. Thanks.

A. I like FB a lot here. I’d put the other 3 in this order: AMZN, GOOG, AAPL.

Q. Your thoughts on Copper, lithium, lead…. battery materials.

A. I don’t feel like I have an edge on those specific commodities. There sure is a lot of demand for batteries though.

Q. Hi Cody. DVAX made some pretty bullish statements about potential vax unit volumes. Where would you add, and what objective do you have in mind, i.e. 2-3x?

A. I’ve already nibbled this name a couple times as noted in past Trade Alerts and/or Chats like this. I think a 2-3x upside over the next year or two, if Dynavax really does start benefiting from vaccine volumes, would be reasonable expectations.

Q. Is DOCU a good buy before earnings in a couple of weeks?

A. I don’t know that I’d try to game the earnings report, but I do like DOCU sign as a de facto standard way of signing contracts in the years ahead, so I continue to hold it.

Q. What do you think of Roblox direct listing?

A. I haven’t done any work on the valuation or anything. I’ll keep an eye on it and will take a look after it trades for a while.

Q. Is Boeing out of its 737 Max hole ? It is trading at about half the price of pre 737 Max debacle.

A. Boeing’s balance sheet and other problems are not going away. That said, I’d rather own BA than short it.

Q. Morning, Thanks for the pics! I have been buying a little ABNB your thoughts?

A. AirBnB is a great company, the industry de facto standard which I like. I’d like to buy ABNB at about 1/3 or 1/2 of today’s valuation though.

Have a great weekend, everybody.