Latest Positions: Notes, analysis and ratings

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) – I’m pretty sure that the kids playing Pokemon Go aren’t surfing Facebook as much as they normally do. Not sure that’s enough to keep Facebook from reporting yet another strong growth quarter when they report next week as Instagram monetization is kicking in high gear. I bought another small tranche of this name into the Brexit panic. With the stock up nearly 10% since that purchase, I might trim some again at some point.
  • Google (8) – Google has underperformed during the last month or so and it’s quite possible it’s about to catch fire as the stock catches up with the market. I get the logic of buying $GOOG while it’s underperforming and have done so a few times in the past. Including here in this example I just found from 2010(!) when Google was trading at $225 (split adjusted): “my single favorite trading idea for now into year’s end is simply buying Google calls with a $500 strike price ($250) that will expire sometime in 2011. Google’s set to explode as earnings leverage increases, as its search takes yet more market share, and as mobile ads and Google TV and more come together for the company.” Those call options paid off big as the stock rallied into year end. That said, seems almost too easy to buy Google yet again when it’s underperforming for it to yet again catch up to the markets. Personally, I’m just holding my large-ish Google common stock positions steady.
  • Apple (8) – Apple’s stock has been in steady rally mode for the last week, but that still leaves it $30 below its all-time high. I expect we’ll see Apple back up closer to $130 as the new iPhone 7 roll out hits in the next few quarters. Remember the good old days when Steve Jobs would sometimes announce some cool product that would blow all our minds? Sigh.
  • Sony (7) – Sony’s large amount of sales that come from outside of its home country of Japan are hurt by currency conversions when the Yen has been in rally mode. On the flip side, Sony might sneak out and make a few smart Virtual Reality or other acquisitions overseas while the Yen is strong. Sony’s live streaming TV service, Play Station Vue is catching some traction and perhaps even hurting Netflix’s customer acquisition growth as evidenced by the big miss in subscriber growth and guidance from Netflix in its most recent quarterly report. I’m holding my Sony stock steady and expecting it could be a $50 stock in the next year or two.
  • Amazon (7) – Amazon’s feeling a bit overloved right now and if they’re next earnings report isn’t stellar, it could be in for a hit. Probably best to trim some Amazon just to lock in some profits while they stock has been on such a tear.
  • Nvidia (7) – This stock is up about 70% since we bought it a few months ago and the momentum traders love it right now. We bought some more of this name just about at the exact bottom of Brexit panic and I trimmed some near after it ran nearly 15% last week. I am just sitting tight in the name for now.
  • Qualcomm (7) –  Lots of concern from sell side analysts that Qualcomm’s next earnings report will be a miss and that guidance will disappoint too. With smart phone sales growth stagnant, Qualcomm’s business for the last 90 and the next 90 days won’t be stellar, but much of that is already priced into the stock. Looking out over the next two to three years with Qualcomm’s positioned to benefit from driverless cars, smart car dashboards, drones, IoT and wearables, I plan to hold it steady for now.
  • First Solar (8) – First Solar has been in a funk along with the broader solar sector, but it remains the best play on solar. I’m likely to nibble some more of this name in the mid $30s if it gets there.
  • Twitter (8) – Twitter appears to be positioning itself as a stealth competitor to cable companies, Netflix, Sony Play Station Vue and every other video platform. They’re moving strongly into live streaming sports (NFL, NBA, Wimbledon among others so far), politics (the Republican Democrat Regime conventions), business (Bloomberg TV), not to mention Vine and Periscope, Twitter is clearly betting big on being a video streaming platform. It’s not a bad concept and one that’s got me interested enough to hold onto this recent repurchase, on which we are up 30% already.
  • Ambarella (7) –What a run this stock has had of late as its rallied from the $30s to nearly $60 per share. Live streaming and high definition video recording are growing strongly and this company is still a great long-term way to play that growth. I’m holding mine steady for now, but might take time a little bit at some point soon.
  • FitBit (8) – FitBit has nearly a billion dollars in net cash, is continuing to break into the enterprise sector (Target and others are buying Fitbits for their employees), has most of the topselling devices in multiple categories on Amazon and could earn $1 per share this year if they have a great year. Wall Street seems to expect that these guys are going to have a serious inventory build up and have to cut prices and will miss the estimates. This could be a $25 stock if they company hits estimates and it could be a $10 stock if they completely blow it. This was one of the names I nibbled on during the Brexit panic and I’m holding my position steady for now. 
  • Zillow (8) – Zillow’s near monopoly on the real estate App Revolution makes it a compelling long-term Revolutionary Investment. Would love the chance to buy some more near $30 if the stock gets hit on earnings or something in the first week of August.
  • Axogen (7) – The company was recently included into the Russell 2000 small cap stock index. More importantly, the company contiues to grow and deliver strong results across the board. I took some profits on the name recently as it spike to $7.50 and am sitting tight for now.
  • FireEye (6) – I’m a bit nervous about our FireEye position and if they disappoint me at all in their next earnings report on August 4, I’ll likely get out of it. No doubt that network security is a quickly growing industry and FireEye is pureplay  beneficiary of that growth. But I’m aware there might be better plays in the sector.
  • Lion’s Gate (6) – Crazy volatility in this stock since we bought, as it’s twice rallied into the $20s and twice has been sold off back to teenager status. I’m holding this one steady for now as the streaming video wars continue to escalate and these guys are a pureplay supplier to those wars.

• Primary short portfolio
  • Pandora (8) – Despite the company’s reinstated CEO/founder repeatedly stating that they are not for sale, it seems that Wall Street continues to believe somebody is going to make a bid for it. I don’t think that’s the case and I don’t think the company’s struggling fundamentals and questionable path to profitability justifies this valuation. I’ve been short this stock for a long time and have locked in some profits over that time. I remain short the stock for now.
  • Hubspot (8) – This is another wildly volatile stock and there’s not much liquidity in the stock it seems. Just a little bit of buying power will move it up 5-10% and a little bit of selling power will move it right back down. I’m not a believer in this internet marketing firm’s business but the near-term growth appears strong. I’ll short more if it pops before earnings on August 3 and would probably short more if it pops after earnings too.
  • GW Pharmaceuticals (6) – Still holding this stock short, but I have to respect the fact that they are taking advantage of their outsized market cap to sell some equity and raise more money while they can. The recently announced $290 million secondary offering is going into the company’s coffers and not selling shareholders’ pockets. I’m considering covering this name entirely and moving on.
  • IBB Biotech ETF (8) – I covered some of this short position into the teeth of the Brexit panic. With the 10% pop since then, I might re-short those same shares if IBB soon. Same as last update: “Biotech/health-care pricing is getting ever more scrutiny from the government and I think a general repricing of these health-care related valuations is playing out in front of us right now.”
  • Valeant Pharmaceuticals (7) – *Tiny Position I’ve been short $VRX since the $170s, as followers here on Scutify know. I still am short $VRX and I agree with Andrew Luck that this sucker is likely a $0 before it’s all over.
  • Kandi Tech (*no rating, too hard to short, puts too expensive) –*Tiny Position The stock seems stuck in a tight range and I’m likely to finally close out this position and lock in those profits.”

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.