Latest Positions, family update, Boston/NYC trip

The family is doing great. Amaris is a bundle of hilarity and smiles most any time I talk to her. And her outright cracking up with chuckles when I pretend I’m a cat and purr/meow on her belly and neck is about the pinnacle of parenting. She’s gotten big enough and healthy enough that’s she spends most of her days off of the oxygen/humidity and has gotten much more active without all that tubing in her way. She doesn’t crawl or talk but she sure communicates with her smiles, her hands, her frowns, her frets and her body language. Meanwhile, Lyncoln has developed quite a vocabulary, just this morning telling me about her fake plastic cup cakes “Try this, Darth Vader, it’s delicious!” Did I mention she likes me to pretend I’m her friend Darth Vader when she’s not got me pretending to be Elsa to her Anna from Frozen when she’s not calling me “Uncle Cody” (what she hears her cousins calling me) and laughing about that.

I’m going to be on the road next week, with a bunch of meetings in Boston and NYC with media companies, pro sports teams, a few celebrities, a few investors and money managers and…I’ve got a LOT lined up. I’ll leave for Boston from Roswell early Monday morning and will leave for NYC from Boston early Wednesday morning and will get back to home to Ruidoso late Friday. I’ll do some writing on the road and have some updated analysis on all of our positions for you today.

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) – If I may do a flashback within a flashback like they do a movies sometimes…In the previous Latest Positions I wrote this about Facebook and it sure has turned out to be right so far: “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) – Apple’s caught a bid of late, if only because there’s been less selling pressure. They need a new hit to make this stock go above $130 in the next year. iPhone 8 could be enough of a hit if it’s great, but really, Apple needs something, anything post-Jobs that’s actually innovative.
  • Google (8) – Google and Amazon have both come back strongly from their recent lows and back above $800 near their all-time highs. Google’s a must-own in any Revolutionary Investing portfolio, but we do need to keep an eye on the burgeoning Android-vs-Alexa war to become the de facto standard operating system of IoT and the connected home. (Where’s Apple in that war? Good question!)
  • Nvidia (7) – Nvidia’s stock has finally caught some resistance and a pullback. The amount of chips that Nvidia could sell in the next five years to power Deep Learning and Artificial Intelligence systems, not to mention how many chips they could sell if their self-driving car platform becomes the de facto standard for the industry — it’s mind boggling. But let’s not get ahead of ourselves. I do think we could see this stock back near $90 at some point this year. I’d probably buy some of the shares I’d trimmed higher back at that point if Nvidia got to $90 again.
  • Amazon (8) – Amazon’s valued as the dominant retail giant it is plus a bunch for the Amazon Web Services cloud juggernaut. I’m not sure the market’s gotten its arms around just how big and important Amazon’s Alexa operating system could be. I’ll be writing much more about that in coming weeks and months and years. Amazon’s Alexa operating system could be worth more than all of Amazon currently is.
  • Sony (8) – Sony’s tried to bounce lately and if it can break above its mid $30 highs from last year, it could run to $50 in a hurry. Sony is still a great play on: Virtual Reality, Streaming Live TV, Demand for movies/TV shows, HD recording and more. Still a Japanese-based company with that risk, but I’m fine holding my own after having trimmed some on occasion as noted since I’ve owned it since it was in the teens.
  • Qualcomm (6) – Qualcomm‘s got a lot of moving parts but the new mobile chips are great to see as they continue down their technology road map. I’m just holding my Qualcomm steady for now, but am still quite bullish on them long-term, obviously.
  • Ambarella (6) – If Ambarella can continue to grow topline even as GoPro fades, AMBA will have upside from here. The reason the stock is down lately is because of the report about how GoPro might be moving away from Amba as a supplier and replacing Ambarella with Qualcomm. That’s fine, as we want Ambarella working with other companies, not GoPro anyway, right? I’m just holding this stock steady for now.
  • Axogen (7) – Another strong quarter of growth caps a another strong year of growth (nearly 50% topline growth after having forecasted 30-40% topline growth) for this nerve supply company. More importantly, here’s the outlook from the company: “Management reiterates 2017 annual revenue will grow at least 40% over 2016 revenue and gross margins will remain above 80%.”
  • Zillow (8) – Z stands for zzzz, as in boring stock, these days, huh? Let’s see if there’s some strong growth for Zillow in the next couple quarter’s earnings reports and make a decision or two about nibbling more or moving on.
  • First Solar (7) – Nice bounce in First Solar over the last few weeks and I’m just holding this stock steady for now.
  • Gigamon (8) – Here is an article about $GIMO’s lack of business with Amazon. Basically, the analyst surmises that the stock took at hit because: “The more recent pressure on the share price came after the company’s investor conference in which management indicated that its budding partnership with Amazon.com, Inc. (NASDAQ: AMZN) was unlikely to generate revenue until at least 2018.” That makes sense, but we should “Flip It” because that means $GIMO is expecting 25% revenue growth for 2017 WITHOUT any help from its budding partnership with $AMZN‘s crazy fast growing Web Services. ‘For 2017, Gigamon planned to make a foray into the AWS market with free licenses for small implementations of its visibility software. “We do not have any revenue expectations for AWS built into our fiscal 2017 model, so any contribution would be upside to our projections,” the analyst noted.’
  • Twitter (7) – Twitter’s not going to collapse like a MySpace anytime soon. But it’s still questionable as to whether this company can leverage its critical mass as an information, news, celebrity and data platform into something truly meaningful. And yes, as I’ve said for the last two Latest Positions, I’m “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) –Hospitals, retail stores, warehouses, distribution and logistics companies…yes, the market for RFID is huge and if $PI can become a/the big winner in that industry, there’s a lot of upside from here. If it fails to become a winner, obviously, it’s headed lower.
  • Lion’s Gate (7) – The old stock has split into two different classes. I’m holding onto both long-term as demand for good content is evident in Apple’s, Amazon’s, Google’s and Netflix’s endless quest for such content.
  • Solar Edge (8) – Looks like there was some tax-selling forces into the end of last year that reversed in the new year. Nothing new here, I’m holding my position here steady.
  • The Street (9) – TST could get delisted. But I don’t mind that, since we’re looking for the company to generate cash and fundamental returns, not trading returns. Remember that from the beginning, I have said that we should consider our investment in $TST to be a late stage venture-capital-like investment. That is, we are investing in it because we think it can kick off quite a bit of cash flow in the next couple three years. The company has nearly $30 million in net cash and is valued at slightly more than $30 million bucks. The company will do $60 million dollars or more in revenue next year. I am betting that the company can grow enough and be profitable enough that it will kick off several million dollars a year in 2-3 years. If that happens, the stock will be up quite a bit from its current levels. If they fail and have to burn a lot more cash in the next 2-3 years, the stock will be lower. It is a small risk that it gets de-listed from the NASDAQ but the valuations would still reflect the cash flow in 2-3 years, whever the stock is traded.

• Primary short portfolio
  • Pandora (7) – Pandora, which is competing directly against the best-funded, most-well-run tech companies on the planet — Apple, Google, Microsoft, Amazon — and is getting killed by fellow smaller-player, Spotify, announced today that they’re going to lay off a bunch of their employees. The stock went up a bit because the last 90 days of business wasn’t as full of market share loss as was feared. I’ve no plans to cover this short anytime soon.
  • IBB Biotech ETF (7) – I thought to myself the other day, “Self, it might be time to add another tranche/reshort some more $IBB shares. They are up big since Trump got elected and I still expect at least some big rhetoric about drug/health care pricing.” Stay tuned, as this is a trade I’m likely to make soon.
  • EWY (8) – Color me skeptical about Samsung’s ability to continue to grow real profits 50% in the midst of their Phones/Washer blowing up debacle. Much of the profit was from currency fluctuations (the South Korean currency was down 10% last quarter vs the US dollar which is how Samsung prices their products). That said, I’m always worried about overstaying my welcome on a short, so I’ll keep as tight leash on this one.
  • Hubspot (7) – This stock has been trading volatile between the high $40s and high $50s. The next quarterly report could pop it back to the high $60s if it’s strong. Otherwise, it could be a long way down for this stock if the model starts showing cracks as the stock has already shown cracks.
  • Herbalife (9) –We’ll know in the next 3-4 quarters if HLF‘s new business model, forced upon them by the Justice Department when the JD came down on HLF‘s old business model, has any chance of working like the old business model which for some reason they used even though it was found to be unfair by the Justice Department. I’m just holding those $HLF puts steady, win or lose. I’ll probably let them turn into a short common position if they’re in the money. I’ll let them expire worthless and just hold onto my $HLF short common position if they are out of the money on expiration. My short $HLF position is bigger in magnitude for me than my puts and the short position will play out over the next 2-3 quarters, I suppose, one way or another.
  • DIA (8) – Same as last time: 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) – Same as last time: 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.