Trade Alert: Adding To Qualcomm, Trimming SPCE, Best VR Games, More
Howdy folks. AMA.
Q. Cody – I was curious your thoughts on trimming and locking in gains during this bubble blowing bull market. We spoke on the phone once briefly while you were golfing. I am 40 years old, never married and no kids, make a base salary of 300k with bonus potential to get me up to mid to high 300k. I help run a hospital in Santa Monica, CA and get the pleasure of paying California taxes. Like most of your subscribers I have made significant money over the last year or so and I don’t want to be greedy. Trimming doesn’t seem like a great idea either because when I trim a little I pay short or long term capital gains and California state income taxes, and that ends up being another 10% on top of capital gains. So I get to reduce my gains by roughly 35%. I am debating the guaranteed reduction of my capital gains by 35% in taxes when I sell versus the decision to hold onto my investments during this bubble blowing bull market with the potential benefit of continued high returns but also the potential of a massive crash reducing my earnings by 50% or more. I am curious your thoughts on what I should do.
A. I think it’s best to trim and pay the taxes than to hold all of everything through all the bubbles and crashes along the way.
Q. Cody, your view on Amazon after earnings and new CEO? What price point would you nibble some more?
A. Nothing changed but the name on the door of the CEO’s office. I’d buy more AMZN near $3000. I’m sitting tight with what I own for now.
Q. Are you adding (to) any hedges as the market continues to bubble upward?
A. In the hedge fund this year, I usually scale into a few more index puts when the markets hit new highs. Not doing much hedging in the personal account other than trimming and sitting on cash.
Q. Cody, you have not recommended any stock recently. Do think the market is too expensive here?
A. I sent out a Trade Alert that I was buying DVAX earlier this week! I do think it’s hard to find a compelling stock that has 10-100x upside with a reasonable margin of safety in this market. Which is another way of saying, yes, I think the market is too expensive in general here.
Q. Can you update your price guidance on DVAX, please? When you issued the trade alert I believe it was at a somewhat lower price. Right here around $9, are you buying or waiting for lower prices? Thanks much.
A. I bought DVAX mostly in the $7s and I plan to nibble more at some point in coming days or weeks.
Q. DVAX, is it back in play as a long term hold?
A. I’d call it a long-term investment not a “hold” as a “hold” on Wall Street can mean the analyst saying “hold” doesn’t like the stock. To be clear, I like DVAX again as a long-term play on The Coronavirus Vaccine Revolution.
Q. Cody what is the timeline for the VR / FB / Oculus roll out? How long might it take for the VR to be adopted and apart of our lives? Are you an early adopter of the Technology?
A. We are in the second pitch of the first inning of The Virtual Reality Revolution. The Facebook Oculus Quest 2 is like the 2007 iPhone, when apps were just getting started and people didn’t realize just how Revolutionary the platform of having a computer in your pocket connected to the whole world really was. Yes, I am an early adopter of VR. One of the first, really, as I expect there will be billions of VR devices sold and millions of apps in five years or so.
Q. What apps have you purchased for Oculus?
A. I have about twenty games, a half dozen Star Wars movie/adventure games, and a handful of productivity apps on the Oculus so far. I’ve spent a few hundred bucks I bet. My favorite game by far is a rudimentary football game strangely called “2MD VR Football Unleashed”. You’re the quarterback of a football team playing against robots, you’re down by a touchdown or two with 2:00 left on the clock. I’ve spent probably 10-20 hours playing that game and have only made it through the first 6 of 7 rounds. I hope it’s as hard to complete as I think it is, because the last time I played real quarterback in a real football game was in the 7th grade Little League Football Superbowl when I ran for 5 touchdowns and threw for 2 in a game we won 44-0. I was a pretty good little QB back in the day! The Star Wars movie/adventures are amazing, but I get nauseous after about 15-20 minutes of playing those particular movie/games.
Q. Hi Cody – in discussing the VR Revolution, a few of us have discussed Unity Software (Symbol : U), which is the platform many VR developers (and game developers in general) develop their 2d and 3d content on. What are your thoughts on it as a potential Revolutionary idea for the portfolio?
A. I wish I’d added U when it first came public back in the fall. It’s an incredible platform positioned perfectly for the ongoing gaming and VR Revolutions, but right now it’s trading at 40x next year’s sales estimates. Even with 80%+ gross margins that’s a big multiple for a company analysts expect will “only” grow 28% next year on the revenues. Patience for now.
Q. @Cody, you mentioned KOPN as a play on Virtual Reality – did you take a position or are you evaluating whether to take a position in KOPN?
A. I’m looking at all the VR stocks, but only own FB for now.
Subscriber: Thank You Cody, you are the Best Quarterback for the stock market!
Q. Hey Cody. Any concerns with QCOM’s earnings report yesterday?
A. Well, it’d be better if the company could meet all the demand for its products, but other than that, it was a good quarter with good guidance. Consider this a Trade Alert, I’m buying some more QCOM for the hedge fund today (I already own plenty at lower prices in my personal account).
Q. Cody your thoughts on QCOM? I thought the quarter was good. Great company, appears they are having a supply/demand issue. Which is a good thing.
A. See earlier answer please.
Q. Hi Cody, it looks like AMD is about to go up from this point, do u wanna chip in?
A. I’ve owned AMD for a while now. I still like it, but it’s gotten expensive.
Q. I invest largely in semis and feel that we have reached the end of the expansion (5G and data center expansion were already baked in). What are other good themes in your opinion?
A. I mean, I like write about the themes I like, pretty much for a living around here. VR, Vaccine, Space, etc.
Q. What are your thoughts/expectations for PINS reporting earnings after the close today?
A. I’d look for them to grow their user base and monetize that user base ever faster. That’s about it.
Q. Morning. Thanks for the picks, you have been awesome! Pins today, are you looking for a beat and higher guidance?
A. Thanks for the kind words. I’ve no idea what to look for with PINS report at this moment vs what the market is hoping and expecting at this moment, as it heads into report how its business has been for the last 90 days of its existence.
Q. SPOT is down big after earnings. I’m buying my first tranche here.
A. That’s the idea. Be patient about adding more.
Q. SPCE hitting $57 … time to trim a bit?
A. Yes, if you haven’t trimmed some SPCE it’s probably a good idea to do so. Consider this a Trade Alert that I’ve trimmed some SPCE this week.
Q. We might be in a short squeeze for SPCE. I tried to obtain the short interest for SPCE this morning and the NASDAQ site returned the message: “Short interest is not available. Short interest is only supported for Nasdaq Listed stocks.” Is SPCE not a listed stock? Where can this info be found?
A. Yes, SPCE is a heavily-shorted stock and yes it’s probably been a beneficiary of the short-squeeze theme in the market this year. I’d just google “short interest” and check a few of the sources that come up.
Q. Cody any thoughts on space play Astra going public with the SPAC HOL? They said they will have customer payloads ready to go this summer.
A. Yes, I’ve been working on it. I like HOL better than NPA, but not as much as the space stocks we already own. Patience for now.
Q. Cody, oil & gas stocks are not revolutionary stocks but they are so undervalued that it takes just a minor economic growth. Beside SPCE and Space-X need a lot of oil & gas to fly.
A. Haha, but no. No thanks, I don’t think we can get a 10-bagger out of many oil stocks.
Q. What do you think about DOCU? Is it still significantly overvalued?
A. I’ve owned DOCU since before it was overvalued. And I have to say I’m warming back up to it and might buy back a few of the shares I’ve trimmed at higher levels, but no rush.
Q. CRSP has pulled back considerably. For those of us somewhat newer TWC subscribers, who don’t have any CRSP, should we nibble here? Or at what price? Thank you!
A. I almost always suggest that you start with a small position of about 1/5 or 1/3 as much as you want to buy when you start buying a stock, including ones that I’m long here. Give yourself room and scale into more in coming days or weeks, hopefully at lower prices.
Q. What are your thoughts about future valuation/ stock of 23 &Me as it recently announced merger with VGAC- SPAC. Thanks for your input.
A. I’ll have to wait and see where it comes public and what the fundamentals look like. No rush on that one for me.
Q. Your thoughts on BTC for those who do not have any yet?
A. Hate to do it, but the answer truly is the same: “I almost always suggest that you start with a small position of about 1/5 or 1/3 as much as you want to buy when you start buying a stock, including ones that I’m long here. Give yourself room and scale into more in coming days or weeks, hopefully at lower prices.”
Q. Cody, comments on Gold, Interest rates and US dollar? Please and thanks.
A. I like gold a lot here, as it’s just about the only asset class that’s not gone vertical in the last year and could benefit if and when the mania for the crappy cryptocurrencies pops again. Interest rates look more likely to continue to head higher (and inflation could be a problem in coming years too, which would likely exacerbate higher rates). The US Dollar is always the best of the horrible fiat currencies around the world.
Q. Hi Cody. Any thoughts on USA Rare Earth LLC? Similar play to MP and will be going public via special purpose acquisition later this year.
A. Probably not for me, but I’ll look after it comes public and after the current Blow-Off Top phase of The Bubble-Blowing Bull Market cools off a little bit.
Q. Cody could MP and JMIA end up to be 100 baggers?
A. 100 baggers are rare, but over a decade or two I suppose it’s possible those stocks go up 100x from the lower levels at which we first bought them.
Q. Cody, Any thoughts or research on Palantir Technologies PLTR?
A. I don’t very often invest in companies that mostly depend on government contracts. And I’m not sure I’m okay with a lot of the things Palantir does with data and governments.
Q. First of all I would like to let everyone know; Cody has been doing ” REVOLUTION INVESTING “ for the 10 years I have been following! To me he actually Coined “REVOLUTION INVESTING!“ To my question, and sorry in advance for asking about a former robinhood penny stock BNGO! But what the heck BNGO?
A. BNGO looks exactly like the kind of stock I try to avoid. Thanks for the kind words!
Q. Cody any thoughts on Bandwidth $BAND? Good margins and trading at 10X next year’s sales.
A. I don’t know it, but at a glance it looks interesting. 50% gross margins, growing topline 40% per year, but its supposed to get less profitable next year as EPS estimates go from 45 cents this year to 35 cents next year. Looks like an old school VoIP company? “Operates as a cloud-based software-powered communications platform-as-a-service (CPaaS) provider in the United States. The company operates in two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or text communications services across mobile application or connected device. “The company also provides SIP trunking, data resale, and hosted voice over Internet protocol services. It serves large enterprises, small and medium-sized businesses, technology companies, and other business. Bandwidth Inc. was founded in 2000 and is headquartered in Raleigh, North Carolina.” Stock chart is vertical though, so no thanks for me right now on BAND.
Q. Thanks for MP. Years ago I owned Molycorp, which I believe is same mine and didn’t end well. My question is what is different now with MP (management of course) that will make them succeed vs before? Same metals were there years ago. Reminds me of a yogurt shop going out of business and another yogurt shop opening up a year later in same location.
A. The Electric Vehicle Revolution wasn’t kicking into high gear about to sell tens of millions of EVs per year, all of which make the demand for the same metals that weren’t undergoing exponential growth back then a VERY different business proposition now.
Thanks everybody, keep rockin!
