Russia & Ukraine, Why INTC, FB Haters, You For Unity And More

Here’s the transcript from this week’s Trading With Cody Live Q&A chat.

Q. Cody, what level of concern do you have with Russia/Ukraine?

A. Not much. But I do think China is watching how the world handles this scenario and if Russia ends up getting everything it wants and/or just invading Ukraine that it will embolden China against Taiwan. If Russia really does invade, it’s going to be a major problem for the stock markets and oil will spike (probably temporarily) to like $130 or something.

Q. Perfect, I couldn’t agree more about the importance of China watching and it makes me concerned with TSM. Do you have any updates on TSM given the geopolitical backdrop?

A. Not much of an update really. The China threat to Taiwan is definitely a risk that should be baked into the stock price at all times, although it’s probably not.

Q. How are the ratings in your system impacted by price changes in the underlying equities, i.e., is it relevant to know the price of the equity when the rating was calculated? This information was not provided.

A. If you mean the literal price of the stock, as in XYZ is trading at $5 or ABC trading at $4000, no that doesn’t factor in at all. The valuation does certainly matter though, but the sheer stock price is irrelevant.

Q. I am new to the whole WiNR/WilPowr thing. Is there any negative number? what is the maximum number it could go to?

A. The range goes from 0 to maybe 90 or 100. There are about a dozen or so inputs, all weighted differently and some of which are dependent upon other inputs. Most of the numerical inputs (some of which are subjective, such as “Conviction Level”) go from 0 to 1000 on a logarithmic scale with 100 being average. Okay, I just went to the algo’s and ran through the most outrageously best numbers I could put in the system, including like a Conviction Level of 999 out 1000 which would mean that I know for a fact that something would work out (which is impossible) and a Revolution Factor of 999 out 1000 which would mean that the company would solve world hunger and all disease and end the need for working (which is impossible) and the highest number that it can kick out is actually about 365. But again, I’ve never seen a number higher than 71 when I ran.

Q. What’s best way to play metaverse?

A. FB with the Oculus platform followed by Unity with its gaming engine platform.

Q. What are your top 2 buys now?

A. INTC and INTC and maybe some UBER.

Q. Cody, according to the latest email, UBER is your highest rated stock. Can you please provide some color on why this company is so highly rated?

A. INTC’s rating got bumped up a few points as I’ve done more work on it all week so it’s my highest rated stock right now actually. But UBER is trading a reasonable valuation, is growing near 50% per year and is dominant in its fields including having a lower daily cost basis for food delivery vs its competition.

Q. Similarly, new names INTC and W are highly rated and down from our original first tranche. Should we be adding here at the current levels?

A. I’ve been working hard on INTC all week and am liking what I’m finding. Yes, I bought more today, consider this a Trade Alert. I’m planning to make INTC a large position in my personal account and to make probably the single largest position in the hedge fund.

Q. Is INTC planning to build in Europe?

A. I haven’t seen that headline, but I’m still only waist deep in my Intel research, heading to neck deep and I’ll know that answer when I’m there.

Q. Thank you for taking the time to provide these live Q&A sessions! I would love to hear your take on CHPT or AQMS; both of which have been severely beaten down the past 30 days. I am hoping to find a good line of attack to benefit from the growing EV industry, without getting in bed with the obvious TSLA, etc.

A. EV stocks were in a bubble as I mentioned in the article earlier this week. I’d avoid almost all of them still as the valuations are still quite stretched. I haven’t looked at CHPT in a while, but I have always been a big skeptic of that one. The other one is a penny stock microcap that looks too risky. Maybe check out QS. Or, sorry to say, stick with the best, TSLA.

Q. I have being on FSD beta for a few months now, and frankly, I think it is falling behind some of EV from China and even Cruise and Waymo. What is your conviction level for Tesla on it’s autonomous race?

A. My conviction level for anybody solving FSD anytime soon is low. My conviction level for Tesla being the one to solve it if anybody can solve it is medium (Intel’s MobileEye is making progress and/or maybe even ahead).

Q. Lastly, at what price should we begin to buy a tranche of FB? Seems like it’s been beaten down a great deal over the last week.

A. I sold some FB puts that I had in the hedge fund yesterday to open back up a little more FB exposure but I didn’t buy any personally and probably won’t as I already have a good-sized position courtesy of having made FB my largest position at like $25 a share a few years ago after its post IPO collapse. I’d look to nibble a tranche of FB when its below $220 and to really start to buy it near or below $200 if it gets there.

Q. Cody, hope you and yours are well. So, FB on your algo is still a decent pic. So you’re saying there’s a chance? I have heard that there could be some massive defaults in commercial real estate in the next 20 days or so. Any take on that sir?

A. Haha, yes, there’s a chance. In 5 years, if Meta works out, it could be a trillion dollar business by itself. But the question then might be what is the social side of the business worth in five years? Maybe about what FB is trading at right now, I suppose? Or lower because of competition and future competition? So I like the FB here but it’s not got the best risk/reward profile right now.

Q. Hi Cody, given the low WiNR/WilPOWR score on FB, why is it still worth holding in your opinion?

A. The metaverse kicker keeps me in it.

Q. On the new WiNR/WilPOWR chart, it seems like your gut feeling might like the lower FB more than the higher W, or are you buying straight up by the W/W number? I’m having trouble thinking the old 10-1 scale with these new numbers. You haven’t been pro INTC or W in the more recent past.

A. I’m not straight up basing my portfolio’s weightings based on the W/W list but it does influence the weightings for sure. INTC’s a newer pick and the more work I’ve been doing on it, the more I like it here. W’s a bit more risky but as it’s come down in price, it’s getting more interesting as a long-term investment.

Q. Cody, when will you provide a write up on W and why you like the company? What makes it revolutionary?

A. It ain’t easy to build an infrastructure for shipping giant furniture around the country to consumers. In fact, it’s almost revolutionary. Also, the company’s gone a great job of making sure their brand resonates with quality.

Q. Cody, why are no financial gurus saying buy a little FB down here near $200? Of course, with all due respect, you just did. LOL.

A. I had CNBC on for a bit yesterday and they were debating FB and I turned up the volume and I heard about three gurus hate on it and puking it out and two gurus saying it was still a long-term buy. Nobody wants to buy FB for a trade and if that was my game, I’d probably be looking to buy it when its below $220 and sell it on pops. But I’d be careful trying to game short-term moves. FB is still widely widely owned out there.

Q. What strike and expiration puts did you sell for Fb?

A. I had some FB put hedges that I’d used to hedge FB earlier and I sold about half of them to close them out yesterday. I wasn’t shorting FB puts.

Q. You had mentioned in the 02/07/22 trade alert that you’re selling your BTC/ETH from hedge funds but keeping them in your personal portfolio. At what price range you had purchased them in hedge funds? This will give us an idea of whether we should hold onto it or not. I have a good sum invested in these two cryptos based on your earlier suggestions. Also, do you foresee any trouble down the line for these two?

A. Hmm, this seems like a strange thing to ask about but I can sorta get where you’re coming from with this question. I’d made some money on bitcoin and eth futures over the last three years in the hedge fund as I’d mentioned and sent out Trade Alerts about buying bitcoin near $10,000 for example or below $30,000 a year or two later and both times it hit those levels. But I also had been using futures and not outright crypto because of the custodial issues and so I have also been able to be very flexible about just letting those expire recently and resetting my hedge fund to a little more cash vs crypto. I still think there’s a major washout coming with crypto and the SEC will crack down on 90% of the cryptos (probably AFTER the cryptos already crash and go to almost/completely $0). Bitcoin will probably get hurt if/when that cycle plays out and ETH would probably get hurt worse because it’s more of a security than bitcoin is so it will be more impacted by SEC rules/crackdowns. I still think both are good long-term holds as I’ve been saying for years and almost a decade now on bitcoin!

Q. Hey Cody, can you give us an update as to where you are on $HNT? Thanks.

A. JSpitz in the house! I pull up the quote for HNT on coinmarketcap.com about once a week. I still have two active miners, minting a few HNT here and there. Did you see the article about HNT in the NYTimes the other day? The analysis and bullishness for HNT in the article sure sounded almost like something my subscribers might have read about a long time ago when I introduced them to Helium HNT .

Q. Can you please share your thoughts on the Unity earnings from last week? Seems very optimistic for the near term and long term future.

A. It’s amazing how many games are being built on Unity’s gaming engine platform. Great business, but highly valued already. I’d make a very big position if it got down closer to $80 or so.

Q. What are the best small cap buys here?

A. Whew, I’d tread a bit lightly right now in small cap specs, but my favorites are probably RKLB, BKSY, IONQ and ORGN.

Q. Could you kindly provide update your full SHORT list (including options) and weighting?

A. Yes, for my personal account — I have no hedges right now — no shorts, no puts. In my hedge fund, I have a lot of hedges and I wouldn’t suggest trying to copy that in a personal account. I suggest most people just stay away from shorts and puts in their personal account except rarely.

Q. Cody, can you explain the reasons you might only short in your hedge fund vs. not shorting in your personal account. Why the difference in approach? At the end of the day, shouldn’t the objective in both be to limit risk and maximize profit?

A. No, doing so depends on how big the portfolio is, how much time/energy you want to spend hedging it as safely but inexpensively as possible and, probably most importantly, the goals. I can handle and have handled many major drawdowns in my personal account and will do so again. My hedge fund partners expect me to avoid major drawdowns.

Q. Thoughts on ABNB?

A. Too expensive for me.

Q. Hi Cody, what do you think of PYPL and the poor earnings report that has sent the stock down over 30% thus far? Thank you.

A. Ran it through the WiNR/WilPOWR system the other day and it only came out in the mid-teens. I was surprised that it wasn’t more highly rated.

Q. Cody, could you take a look at BKKT and comment in the next weekly call?

A. Hmm, “Bakkt Holdings, Inc. operates a digital asset platform. Its platform enables consumers to buy, sell, store, and spend digital assets. The company was founded in 2018 and is headquartered in Atlanta, Georgia. Bakkt Holdings, Inc. is a subsidiary of Intercontinental Exchange Holdings, Inc.” I just went to the website and it doesn’t look like good bet to me. That said, I just googled the CEO and I DID like what I found. I expected a history of being an executive at shady small cap penny stock companies but the guy seems legit: I’ll actually take a serious look at this stock after seeing this CEO’s credentials and the fact that the stock is down 80%.

Q. Cody, thoughts on DELL?

A. Too complicated financial structure. Would rather own INTC.

Q. Have you looked at NARI?

A. No, but I will!

Q. Your thoughts on WDC please. Thank you!

A. I’ll take a fresh look at it, but it’s just not my kind of stock.

That’s a wrap. Thank you all!