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Latest Positions: Splunk, Spotify, Sony, Cryptos and Shorts

Cody Willard

Cody Willard

— 5 min read

Here is a Part 5 of 5 of the list my latest personal portfolio positions and most of the hedge fund positions with updated commentary and ratings for each position. Let’s do this week’s Live Q&A Chat today at 1pm ET today (Friday). Come directly to the TWC Chat Room or just email us your question to support@tradingwithcody.com (video chat will return next  week).

Longs –

    • SPLK Splunk (7) – Splunk, it’s an interesting one because in some sense, it can help make money for companies. But like everything else, guys, spending budgets are going to be down. Anything that you were thinking about investing in that’s not directly related to fixing these current issues, of if it somehow generates new money or something for you, you’re not going to spend on it unless it does it immediately. And Splunk‘s valuation’s not terribly cheap. It sure is a lot cheaper now at $100 than it was at $150 if you’re looking out three to five years, but looking out over the next year, it might be more expensive right now than it was at $150 because the E from the PE is maybe not going to be near what people thought, just because the whole economy’s spending is in a vacuum. I like Splunk for the long-term and am holding a core position here steady.
    • SPOT Spotify (7) – People, even (especially?) in a Coronavirus Crisis lockdown, need their music. Spotify remains the purest play on this industry and the company continually tries to come up with new ways of locking its hundreds of millions of customers into the system. Podcasts, customized play lists, full access to just about every song on the planet. I found a collection of records that my wife’s grandfather used to listen to and it included some eccentric rare stuff such as The Smother Brothers “Think Ethnic.” I checked to see if Spotify had all of his records and indeed they do, even “Think Ethnic.” I’d like to buy more SPOT closer to $100 if it will get there.
    • Sony (7) – Sony hasn’t taken much of a hit, but I like Sony here. Sony is a great content play. People staying at home and not going to concerts and sporting events is going to drive people to play more video games. The video game platform industry is a global duopoly — Sony Playstation and Microsoft Xbox. It’s good to own a duopoly in a growing industry.

Shorts –

  • Primary short portfolio
    • QQQ Nasdaq 100 ETF (7) – Just like with my longs, I’ve reduced my short hedges over the last few weeks but I’ll continue to hold some short hedges and puts.
    • SMH Semiconductor ETF (7) – Just like with my longs, I’ve reduced my short hedges over the last few weeks but I’ll continue to hold some short hedges and puts.
    • IWM Small Cap ETF (7) – Just like with my longs, I’ve reduced my short hedges over the last few weeks but I’ll continue to hold some short hedges and puts.
    • SPY Small Cap ETF (7) – Just like with my longs, I’ve reduced my short hedges over the last few weeks but I’ll continue to hold some short hedges and puts.
    • EWU and EWUS British ETFs (7) – I put a little more of each of these short hedges back on, but they are still small short hedges.
    • Tiny short hedges, rated about a (7) – in VHC, GLUU, CVNA, GM and others. We’ve had some huge homeruns in our small shorts this year. I might cover these at any time and I’m not expecting to make much money on these shorts. They’re just hedges for the hedge fund and I’m not sure any of these are no-brainer shorts. Please don’t just go around blindly shorting these for your personal portfolio.

Cryptocurrencies/tokens –

    • Bitcoin (7) – It’s Bitcoin and everything else secondary. This coronavirus crisis and the impact it is going to have on crypto startups around the world, every crypto startup that’s not coin based and/or someone else that’s already well established and well capitalized, is in retrenchment mode. Now instead of spending venture capitalist money to figure out how to grow and take market share and become the next Ethereum related company, every Ethereum related company that raised money is like, “Crap, how do we survive and now lay off half our employees next week?” That is, again, why I stick with Bitcoin over Ethereum or anything else.The amount of money from established banks and giant companies that has been invested in Bitcoin is an order of magnitude, five orders of magnitude larger than what they’ve done on Ethereum. The Bitcoin startups are also going to be in trouble, but you’re not betting on Bitcoin as a platform as much as you’re betting on it as a currency. I don’t think that’s necessarily the case with Stellar and Ethereum and stuff. You’re still betting that the platforms work out, not just them as a currency.I’d be a buyer of bitcoin near $6000 and a trimmer above $10,000.
    • Stellar Lumens (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.
    • Ethereum (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.
    • Ripple (6) – I think it’s best not to group all cryptos together and that over time, each will trade on its merits and perceived/accepted values. That’s probably what’s happening right now with Bitcoin.

Disclosure: At the time of publication, the firm in which Mr. Willard is a partner and/or Mr. Willard had positions in some of the positions mentioned above although positions can change at any time and without notice.

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.

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