Today’s chat: MRVL, RIMM, SNDK, and Whole Foods
Here’s the transcript of today’s chat. We broke the questions and answers down into two sections as usual — Economy/markets/trading/strategy and Stocks. See you next week at 2pm EST at http://tradingwithcody.com/chat for more Q&A where you can ask me anything.
Economy/markets/trading/strategy
Q: Cody, do you think that markets highs are already in?
A: Depends on your time horizon. I don’t think we’ll challenge the recent highs this week. And I think there’s more potential catalyst for the downside near-term than the upside. But I do think sometime in the next few months that we’ll see new highs again. And in a decade? Depends on whether we get rid of the socialist Republican/Democrat Regime and the policies that they have forced upon us for the last few decades that have resulted in the economic paradigm of bailouts and legalized bank corruption on a massive scale or not. Tough analysis, but probably rather accurate — look at the last decade for example!
Q: After the Fed meeting today, they are saying some officials want to push QE3. What do you think? Do you think they will print more money in the near term? Thanks!
A: I think the Fed and the Republican/Democrat Regime that plays/enables/loses to that Fed have clearly shown over and over that they’ll let the banks print however much money they can possible get away with. So yeah, expect more worthless dollars to show up in bank coffers to gamble on derivatives and stocks and mortgages and credit card loans in the name of “stimulating the economy.”
Q: Feet to fire, Cody, in a shot term window of two weeks or so, will the mess in Europe bring the market down?
A: No. You’ll have days like yesterday that will be down 2-3%, but the markets are starting to fully realize and therefore price in the fact that the EU as it stands now is doomed. But again, I do think #OWS is about to start being a near-term catalyst and that could hit the markets a bit harder as they start to digest and focus, and therefore try to price in what those protests mean for earnings and valuations.
Q: Hi Cody, do you think upcoming weeks will be bullish in tech stocks? Thanks.
A: No, like I said earlier about the broader markets, I think there’s likely more chance of some downside catalysts hitting us in the near-term moreso than upside. But I’m not shorting any indexes or making any trades based on that analysis, and in fact remain overall net long with some upside leverage via the calls I’d been buying when the markets were in panic-crash mode in August and September.
Stocks
Q: Do you consider any action in MRVL, CSCO before earnings? I`m asking because I have only the 3 opening hours available for trading options. Then the brokers go home (in Sweden). So I have to be on my feet.
A: I won’t know how CSCO and MRVL are set up into their earnings reports until we get closer to their respective earnings reports — next week for Cisco and a couple weeks later for MRVL. I give readers a heads up on earnings trades as I do them and I can’t really do more than that, you know?
Q: Cody, do you like RIMM here for a trade?
A: RIMM – I like it around $18 for a quick trade one time. But this thing is likely to be suffering and struggling for a long time, IMHO.
Q: At what price is a good entry point for SNDK?
A: I’ll probably be buying back some of those SNDK calls I sold when I see a nice entry point in SNDK again. Not in a rush though, we just had some triples and more that we locked in on many of these SNDK calls we were buying when it was below $40, as you guys know.
Q: Hi Cody, I am a new subscriber–I want to know your position with the entry price, and what price you shorted some shares; otherwise if I buy something now then I will be in loss. Real price will give me some fare idea…
A: Please check out the FAQs page for more on how to use TradingWithCody.com and the positions explanations. If you’d like a “track record” of most of these picks, you can sign up for my Revolution Investing newsletter over at MarketWatch.com where they/we track my picks for the newsletter portfolio (and which has totally blown away the indexes for a long, long time). You get pretty much the same content from that newsletter on Tuesdays sent out as part of your TradingWithCody subscription, but you can sign up there if you want to see a “track record.” I’m sure most of my long-time subscribers/readers can tell you that my performance speaks for itself as time goes on.
Q: Cody, do you have an opinion on QCOM going into today’s earnings?
A: I’d rather be long than short QCOM into the report, but there’s a big concern in my book (as there is in most analysts’ books right now) about the potential for a guidance lowering. Longer-term QCOM is a great investment. Could be tricky in that report, and I’m not trying to game it.
Q: Hi Cody–what is your take on MSPD?
A: MSPD is in the 100 Most Important Tech Stocks Book that you get free as part of your subscription: http://tradingwithcody.com/ebooks/the-100-most-important-tech-stocks-on-the-planet/
Q: Cody, it seems the market is holding its collective breath for a strong move one way or another. What are your thoughts on a VIX play/trade at this juncture?
A: I’d be worried that the market is going to suddenly decide to trade in a tight range of 3-5% for the next month and then my VIX calls would get killed.
Q: Cody, thoughts on LNKD earnings report tomorrow? Seems they are getting downward pressure today.
A: Feet to fire, I’d expect LNKD could get crushed tomorrow if they don’t report something stellar. Which would probably spike the stock. Too crowded by the momo traders and the shorts for me on that name right now.
Q: Cody, any ideas for VC going into the earnings tomorrow morning?
A: VC is a cyclical play on the return to normalcy in auto demand in the US from the 2008/2009 crash. Not sure how to play it as an earnings play, as it’s not a stock I’ve traded like that ever before in the past. I simply own the common and scale into more when it gets crushed sometimes.
Q: What do you think about LYV? Is it the right price to short? Thanks Cody.
A: LYV is a longer-term short and I think eventually it has to recapitalize and probably kill its equity investors. But that’s two-three years out and the company could refinance/raise new money/etc., so we have to stay on top of it. I do think it’s probably a decent time to scale into a bit more of it, but I’ve not done so. Might soon though.
Cody: Thanks for subscribing, all of you, actually — I want to say a big thank you for subscribing.
Q: Cody, on the must-reads you sent us on October 31st, Mick Weinstein stated that FIO is doomed to collapse but provided no detail on the article. Do you know if he provided further detail elsewhere? http://www.marketwatch.com/story/the-bull-case-for-these-7-tech-stocks-2011-10-31?link=MW_TD Thanks Cody! You’re the man!
Q: Cody, I too am wondering about FIO. Seems to be a great space, takes advantage the data center virtualization theme that is playing out in Corporate America. Thoughts on FIO? I am curious about your thoughts.
A: FIO’s in a great position with the cloud and Apple’s initiatives therein, and could really be a great stock for the next five years. Here’s how I’d suggest playing FIO into earnings tonight. Unfortunately, the stock has climbed some 8% as the trading day has worn on and the anticipation about tonight’s report, the first since the Barron’s big FIO recommendation, builds. I’d look at buying a tiny bit of some longer-dated out-of-the-money calls and that way if the report is somehow good enough to spike the stock on top of the 8% spike and the big run after the Barron’s report, you’ll have a toe in the water. And if the stock gets killed tomorrow, you can buy some common and/or actually start to build some reasonably-sized call positions. It’s a way of trying to get your cake and eat it too and then to have some more tomorrow. But no, of course, it won’t be easy. Nothing on Wall Street is easy.
Q: Any feedback on PCLN earnings call on November 7 will be deeply appreciated….
A: Same thing — PCLN’s earnings report isn’t til next week. And I will tell you that it’s a name I’ve never traded well, so I don’t try to very often.
Q: How about SWKS–they report tomorrow.
A: SWKS — like QCOM, big concerns about inventory build up and guiding down next quarter’s estimates. If they don’t, the stock will pop. If they do, stock might hang tough anyway. It’s a higher-beta version of a similar bet as QCOM.
Q: Cody I bought UNG 2 years ago and I have huge losses….any thoughts?
A: Not a fan of UNG, but would rather be long it than short it at this juncture at this point in time at this particular price of $8 or so.
Q: How about near term opinion on AAPL now that the dust has settled from the earnings miss and Steve Job’s passing?
A: AAPL could be a tough stock to trade until we get a couple quarters with the new CEO under our belts. AAPL is just an investment for me these days, not a trading vehicle.
Q: Do you like long dated calls in MSFT? I’m looking at the Jan 2013 $22.50. I just can’t imagine MSFT doesn’t get about $28 or so in that long of a time span. Thanks and great work.
A: I like long-dated MSFT calls when it’s near $25. I like shorting MSFT puts most anytime, though that’s just not a major part of my strategy so I haven’t been doing so.
Cody: One more question! Hit me, anybody…
Q: Cody: what is the deal with Whole Foods for tonight? I have calls going into earnings.
A: I’ve not been following Whole Foods much lately so I’ll defer to my buddy Brian Gilmartin who covers Whole Foods earnings for us at WallStreetAllStars.com. http://www.wallstreetallstars.com/2011/11/02/whole-foods-reports-tonight-after-the-bell/ And for his after hours take tonight, check out his “earnings” diary: http://www.wallstreetallstars.com/earnings-diary/
Okay all, thank you for subscribing again and thank you for reading and joining me here today. See you next week. I just bought some of those FIO calls I’d talked about earlier, by the way. Check out your inbox or the main page of TradingWithCody.com for the details.
