LA, NYC, Rock n roll and Latest Positions

I’m going to be on the road again next week, with a bunch of meetings and speech in NYC and then I’m onto LA for some meetings. No rest for the rock n roll.

You’ll notice that my Revolution Investing Ratings for most of my long positions have dropped one point and some of the Revolution Investing Ratings for my shorts were raised a point. I’m not surprised as many of our longs are up huge and I’ve been trimming some longs as well as having added a new short hedge or two in the six weeks since that last Latest Positions update.

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
  • Facebook (7) – The 800-pound gorilla of social networking and the app revolution. Instagram could have twice as many users as Twitter by the end of this year as it heads towards 600,000 million versus Twitter’s somewhat stagnant base in the 300 million range. Then there is WhatsApp with now over 1.2 billion users and also has Facebook and lots of people like to Facebook. The stock is at new all-time highs and I am just sitting steady on my large Facebook position for now.
  • Google (7) – Google has been on a terror since February. Within 2% of its all-time high and up 250% in the last 5 years, Google has been on a terror for a while. As a matter of fact, it’s up more than 1500% since I first bought it on the day it became public. Android is still probably the single biggest driver of this stock right now. Interestingly, Alexa Amazon’s voice-activated artificial intelligent platform is a big threat to Android—an even bigger threat for Google’s Android operating system than it is for Apple’s iPhone/Siri.  The reason beign that Apple makes the hardware and Android, as a software platform, gets less relevant as Alexa becomes more dominant.
  • Apple (6) – I trimmed some Apple just last week as it hit $136, also a new all-time high. We had been buying it in the $90’s thirteen months ago, when it was hated in addition to owning it for many years. Lots of buzz about the upcoming iPhone8 which is interesting in its contrast to the pessimism when the iPhone7 was about to come out. Sometimes you have to wonder if the stock prices drive the expectation of the next iPhone or vice versa.
  • Nvidia (7) – What a wild ride that stock has been for the last year as we have owned it for this quadrupling and subsequent 20% pullback. The stock is also crazy just today as it was down another 5% early this morning and finished the day higher. AI, deep learning, self-driving cars, gaming, virtual reality–these are the huge growth markets for the next ten years and Nvidia is primed to benefit from each of them.
  • Amazon (8) – Amazon should change its name to Alexa. Just kidding. But, in all seriousness, Alexa is a big deal for Amazon and the world. There is also Amazon Web Services and that retail business Amazon runs. Bet on brilliance and Bezos is brilliant (and I am alliterative to boot).
  • Sony (7) – I will be frank and admit to myself and you that I am bored with Sony. We have nearly a double on this stock since we bought it a couple of years ago, which is nice, but I have been disappointed n the lack of monetization they have done with their huge content library of movies and t.v. shows. I will give them another quarter or two to see if they can start to benefit in the way I expect them to be able to from the demand for their streaming video content.
  • Ambarella (6) – Ambarella is up 20% in the last two weeks. It is truly one of the most volatile stocks I have ever owned. Over the last few years while we have owned it we have ridden it firm the low 20’s into the 120’s, trimming here and there along the way. And for the last year it has been just as volatile. I want to see another quarter or two of good demand that isn’t from GoPro, but is from lots of other companies.
  • Axogen (7). The stock has gone from 4 to 11 since we bought it and the company has executed very well over that same time frame. I have a call set up with my best friend from college, the dual hand transplant pioneer at Johns Hopkins who is the one that introduced me to this company. And I’ll let you know if he still is raving about their nerve products.
  • Zillow (7)– Zillow is a conundrum for me. I love the product. I don’t like their competitors products and it seems to me that is on its way to becoming the de facto standard of real estate apps. I am holding steady for now.
  • First Solar (7) – Solar has come back in the last few weeks- – I think I must have been early on calling its bottom a couple, three months ago when I nibbled on First Solar and bought Solar Edge. First Solar is still my favorite solar play, which is my favorite way to invest in energy.
  • Gigamon (7) – Gigamon has a terrific cloud and network security platform that could have tremendous exponential growth ahead of it if they actually become a de facto standard for many enterprises who are using Google, Amazon and Microsoft cloud solutions. We will find if they can deliver on that promise over the next 12 months. I might nibble a little more if it drops below $30, but otherwise, I’m sitting tight for now.
  • Twitter (7) – If Trump can’t help Twitter, can anybody? Seriously though, Twitter is doing fine and I think it will be bought at some point this year.
  • Impinj (7) – $PI’s earnings and guidance certainly weren’t thrilling, but we didn’t expect they would be. They show steady strong growth and and if they indeed do become the de facto standard for RFID for retail or any other sector, there’s huge upside in coming years. Very risky and volatile stock though, as I’ve said it would be from day one.
  • Lion’s Gate (7) – I have meetings in Hollywood next week including one scheduled with a Lion’s Gate bigwig. I am excited to chat with him about the company and the industry.
  • Solar Edge (7) – Solar Edge’s technology and the demand for technology looks ready to boom this year. This is a small cap Israeli based company that we can expect to be very volatile. And if the company doesn’t execute, the stock will get hit. No surprises.
  • The Street (8)-The stock will probably be stuck in this range until at least after the next earnings report in mid-March. At the current $0.80 level the company is trading at less than the net cash on their balance sheet. Fact: I bought Apple when it was trading at less than its cash balance back in March 2003 – split adjusted price where I bought is net $1.00 and the company had a split adjusted net cash balance of $1.20.
• Primary short portfolio
  • Pandora (9) – Pandora is investing a lot of money in trying to take on Spotify, Apple, Google and Amazon in the music streaming world. I think they are getting killed. I remain short this stock and think its headed much lower.
  • Biotech (7) – Biotech seems to be a play on sentiment around the politics of healthcare. Trump doesn’t seem to be overwhelmingly pro Biotech or healthcare in general but if the Republicans do end up creating any new or reforming old healthcare laws, like Obamacare, you can bet that large corporations will benefit. So I need to stay on my toes with this short.
  • EWY (7) – Samsung is doing a good job of keeping their businesses profitable while their cell phone division struggles. I am bearish on South Korea’s economy though and the fact that Samsung’s CEO could get arrested for real for bribery stuff is clearly a risk for that stock. I remain short.
  • HubSpot (8) – I recently shorted more of this one around $61. I’ll cover it if gets close to $65 or so. I just don’t believe this company’s business model will every justify the current valuation.
  • HerbalLife (9) – Another earnings report that disappointed Wall Street and lowered guidance too. We seem to have pattern here since the company “won its war against the FTC.” I remain short.
  • IWM (8) – I just recently shorted this small cap ETF and bought some puts on it too. This is mostly just a hedge as I do think the stock markets are overextended and I just want some downside protection.
  • Valeant Pharmaceuticals (7) – *Tiny Position Same story: “I’ve been short $VRX since the $170s, as you guys know but I’ve covered most of it. I still think $VRX heads much lower. Back near its lows again, I’m holding my remaining short steady.”

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.