Latest Positions

After spending all of last week at the hospital, Amaris is back home and laughing, playing and kicking around as we love to see her do. I’m back in the saddle full-time this week and into the year-end, so expect a lot more updates, analysis, reports and a must-read outlook for how we should be set up for next year that I’m writing up.

Stock markets at all-time highs and I just want to remind you once again that if you were scared when the futures were down 800 points at 17,000 on the night Trump was elected that you probably should be raising some cash right now while you can. Steady as she goes though!

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 (8) – In the previous Latest Positions I wrote this about Facebook and it sure turned out right so far. And I do expect Facebook is headed higher into the year end: Here’s a pattern I’ve noticed as a long-time Facebook shareholder: the company will report an amazingly strong quarter of profitability and growth and the stock will pop big…and then spend the next two months treading water or fading lower until the company reports another blowout quarter. Rinse and repeat. I do think it’s wise to trim some Facebook if you’ve owned since the teens and $20s like I have.”
  • Apple (8) – Not sure it’s probable, but it’s still possible that Apple gets up to $130 into year end. The fact is that if Apple can rally 10% or just to $120 or so, the broader stock market indices will likely be hitting more all-time highs. Is Apple a laggard or a tell? Probably a laggard headed higher into year end, I’d expect.
  • Google (8) –In the previous Latest Positoins, I explained that I thought that “Google, like most stocks and the broader tech stock market, been toppy-acting lately.” Google’s still down $40 from when I wrote that, but is up nicely from its recent lows. I’d finished by noting that: “Google is a cash machine and Android makes it a great mobile play” and that remains the case.
  • Nvidia (7) – Nvidia reported another blowout quarter, raising guidance, and basically blowing every analyst’s mind with the breadth, depth and growth of each of their major pushes. Which brings to mind what I wrote a month ago in the previous Latest Positions, if I may quote it again: “VR, AI, deep learning, data crunching, self-driving cars, etc. If this company dominates the chip platform in any or all of those sectors, the growth over the next five to ten years will blow our minds.”
  • Amazon (8) – Amazon’s dominance in retail will be shining in full glory this Christmas season as the company will likely show 20-30% or more topline growth this month over last year’s December. Meanwhile, the stock is down $80 from its recent highs and I expect it’s got more upside as it climbs towards it recent highs into year end.
  • Sony (8) – Sony’s a play on Yen weakness but it’s also a play on streaming TV, Virtual Reality, and video imaging components. All of those factors seem to be working for Sony and I’d likely be a buyer back of some of my trimmed shares if it gets closer to $25 any time soon.
  • Qualcomm (6) – Qualcomm’s acquisitions over the years have helped the company become what it is today and they are hopefully still at it. The 3% dividend here is nice as the company continues to grow top and bottom lines too.
  • Ambarella (6) – What a couple years Ambarella has had as its fortunes have fluctuated from suffering with GoPro to successfully diversifying away from GoPro and AMBA the stock has been even more volatile. I’m still holding onto this one for a long-term play but have no interest in trying to trade it near-term.
  • Axogen (7) – Axogen’s consolidated since it raised more money with a smart secondary offering. The company is a long-term Revolutionary way for surgeons to repair nerves and the execution and growth over the last year and a half while we’ve owned it has been impressive too.
  • Zillow (8) – Zillow’s stuck in the mid-$30s and has been for months now. It’s likely to break out in 2017, if and only if they show strong growth. The markets are currently expecting 30% topline growth this year and another 25% next year and those kind of numbers should get the stock higher. Failure to reach those estimates and the stock will likely head into the mid $20s.
  • First Solar (7) – I’m still a long-term believer that solar energy is the best way to invest in energy for the long-term. That said, solar’s still getting trashed and is quite hated. Trump’s win means that the direct subsidies for some “green” energies might get slashed in the next few years, but we’ve seen over the years that few industries ever lose their subsidies. And anyway, again, I think solar will be the best and cheapest way to power our world over the next twenty years with or without subsidies.
  • Twitter (7) – Still of this mindset with Twitter: “I’d probably buy some more near $15. I’d probably sell some more near $25. Other than that, I’m just sitting on the shares I have left for now.”
  • Impinj (8) – Lots of cross currents in this stock and it’s been wildly volatile as big buyers and big sellers throw their weight around and the algorithms pick up on the movements and then execerbate them. The stock has been swinging from the mid $20s to the mid $30s for the last couple months and just today it swung from $26 to $24 to $27. Remember that we’re not investing in this stock for a short-term trade. We’re building this position because this company and its passive RFID platform has the potential to be a 5- or 10-bagger if they deliver and win the marketplace over the next five or ten years. If they fail, well, that’s the risk.
  • Lion’s Gate (7) – Nice pop in this stock of late and I’m just holding this small position steady as demand for the movies and TV shows Lion’s Gate produces and owns is booming.
  • Solar Edge (8) – I’m likely to nibble on more tranche on this name but am going to keep it a small position as I get to know the company and its technology better as they grow and improve it.
  • The Street (9) – The Street reported a weak quarterly report with year over year declines in subscribers and revenue a couple weeks ago. That said, as I’d noted when I sent out the initial Trade Alert, I am investing in the new CEO and management at this company with its long-term turnaround prospects and extremely cheap valuation — not because business has been booming. I’ll be very concerned if subscriber and revenue growth aren’t up year over year NEXT year after their new management and vision have had four full quarters of working.

• Primary short portfolio
  • Pandora (7) – Rumors have it that Pandora’s got a big buyout or something coming since there’s been “call buying activity.” As one of our Trading With Cody members put it in the chat room today: “Fast Money final trade yesterday said there was “huge” call buying in Pandora amazingly “at the end of the day”, so go long, buy them. I’m tempted to short it. For me, Fast Money (might as well include Options Action and Mad Money) have been far more on the wrong side of the trade than the right side. I don’t listen to them anymore, though once in a while I get curious.”
  • IBB Biotech ETF (7) – Health care and biotech got a bit Trump bump even though Hillary Clinton and Obamacare have proven time and again to be extremely beneficial to the health care and biotech industries. I still like the IBB as a hedge to our broader long portfolio but it might take a while for it crack lower.
  • EWY (8) – This remains a way to short Samsung, which is suffering from selling phones and washers that blow up. I think Samsung’s brand might never recover.
  • Hubspot (7) – I still think this stock heads lower but it’s up about 10% since we shorted it. If it rallies into the mid $60s, I might take my losses. But like I said, I don’t have faith in the management here or their business model.
  • Herbalife (9) –The markets don’t like Herbalife’s business trajectory since the company was forced by the regulators to change its business model. I might add to this short soon.
  • DIA (8) – I’m down quite a bit on these puts but as I’ve said all along, these are just hedges that I put on when stock were at all-time highs heading into the election.
  • QQQ (7) – These puts are almost worthless now, but I’m okay with that, as they are almost pure hedges on our own long-held huge winners $AAPL, $AMZN, $FB and $GOOGL as they (along with $MSFT which I don’t own) are the largest components in the $QQQ and combined make up more than 30% of the QQQ’s weighting. By the way, when I first bought Apple, Google, FB and Google, they either weren’t in the QQQ at all or they made up less than 1% of it. As they’ve gone up 5-100x in the years since I bought each of them to become the move valuable companies in the world, their weighting in the QQQ increased proportionally.
  • 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.