Trade Alert: More puts, Silver vs Gold, FB’s crypto vs Bitcoin and Bernice the Great Pyrenees
Here’s the transcript from this week’s Live Q&A Chat including discussion on my Tesla presentation, the market’s rally today and the new FB crypto.
Q. Does it look like the Fed cuts 25 points in July and the market moves higher?
A. The fact that your question implies that its fait accompli for the market to move higher when the Fed does eventually cut 25 basis points is the most important part of my answer. I keep reminding you guys that the markets sometimes/usually crash after the Fed cuts rates. I’m not as confident as the polls/markets seem to me in predicting that the Fed will cut rates twice before the end of the year and I’m even less confident that the markets would continue on their Bubble-Blowing Bull Market path if there is a Fed rate cut. So the answer I guess is that, at this time, I doubt there’s a rate cut in July.
Q. Add some puts on today’s rally?
A. I can think of worse ideas. Consider this a Trade Alert. I’m buying some puts. I’m buying some SMH, QQQ, IWM puts. Just a tiny bit. Dated out a month or two, about 5% out of the money.
Q. Morning Cody. Silver is on a multi years low. What is your view of SLV?
A. I like GLD better than SLV. Silver is too dependent on industrial uses so it’s not as good of a pure hedge as gold is.
Q. Black Swan time? What about gold? Can Stanley Druckenmiller, Sam Zell, Ray Dalio, and Jeffrey Gundlach all be wrong? As this is written gold is trying once more to punch through the $1350-$1360 price range. If it gets above the range then $1350-$1360 should be one heck of a support level.
A. Yes, they can all be wrong, but I agree with them that gold should be in the portfolio. I’ve outlined repeatedly why I believe that gold will go to $5k-10k an ounce in my lifetime. And I sent out a few Trade Alerts and discussions recently about why I’ve been buying GLD this year.
Q. I would like to know how you made out with the Tesla recharge and performance.
A. There are two Tesla Supercharging stations on the 10 hour route and charging stations in the parking garages in Vail. It was a piece of cake. No worse than having to stop at a gas station.
Q. Cody – welcome back. Just read your piece on your Tesla presentation. Looks like you changed a couple of minds afterwards. I bet that was a tough crowd. What do you think about the stock price recovery the past few days? Has sentiment changed that much? What do you think is the driver behind the price surge (even though it still has a ways to go.)
A. I’m still not sure I’d want to try to completely explain what was behind the recent continued crashing of TSLA or why it’s rallied again of late. How about this: Animal spirits!
Q. Hi Cody & Team, Is it possible to share the TSLA presentation you gave? I know you’ve made many points in your articles but I would love to see your full presentation and argument for TSLA. I live in Ground Zero for TSLA (Cupertino) so I see more Tesla 3s than the rest of the nation. Thanks in advance.
A. The only things I had in my presentation are a couple pics of me driving the original Tesla Roadster in Central Park in 2009, a screenshot of the car that I sent out and a screenshot of a video of a man being attacked by lions when I got to the Q&A. I didn’t have a prepared speech or anything. I just spoke what I knew. You must live in the safest place to drive in the world since there’s so many Tesla’s helping people drive there.
By the way, here’s what a Great Pyrenees puppy looks like in a Tesla:
Q. Hey Cody, Thanks for the timely update on TSLA from your conference. I appreciate your insight on TSLA. I can report that our Tesla Model 3 is more popular than ever. Our car is routinely crowded around by my kids friends as well as our family friends and neighbors. While people have heard the negative publicity, they don’t care. They just want to ride in the coolest car in the market and they expect great things. What do you think about cyber security tools like: Splunk, CYBR, QLYS, PANW, and TENB. I am on the sidelines right now as these stocks have fallen off, but looking to start building at the right time for me. Is it still too early to buy or when should I start building a position?
A. I own SPLK and PANW and so I obviously like the sector. I do wonder if I should be looking at some of the others in the sector, so I will take another look at the other three stocks you mention.
Q. Cody, Honda is cutting car and truck production by 17.6% in the fourth quarter this year. I’m sure other manufacturers are in the same camp. Recession warning?
A. Perhaps. It could also be an indication that the car-as-a-service and the EV Revolutions are creating a secular decline in the ICE industry.
Q. Your view of SEDG? Still more room to soar?
A. I’m holding a small position in the name steady. I like solar and it’s a leader along with FSLR.
Q. Cody, love to hear updated thoughts on DELL, JD, and TWTR. Thanks.
A. I’m holding all 3 steady. It’s time for me to write up another Latest Positions with new analysis and ratings for each stock. I’ll do that this week.
Q. Cody: Can you post latest positions update please? Last one was a month back and definitely environment changed a lot since then.
A. Yes, on it this week.
Q. Still holding the TMUS July calls? Just sitting tight on them since they’re still out of the money?
A. Yup. I’ll probably just hold most of the TMUS call options til expiry unless they spike.
Q. Will the FB crypto help or hurt Bitcoin and why?
A. It will likely help Bitcoin for two reasons. 1) It validates the concept of a cryptocurrency. 2) FB’s “cryptocurrency” is based on the same fiat currencies that real cryptocurrencies like Bitcoin are fundamentally built to hedge against. That said, at least Libra, the Facebook “currency” is based the fiat currencies of the developed world. That said, the problem with basing a crypto on even developed world fiat currencies is underscored by the back and forth between Draghi trying to keep crashing the Euro and Trump wanting the dollar to be devalued faster. There is a slow race to devalue all developed economy fiat currencies which is why I’d prefer to own bitcoin over Libra as an investment.
Q. FB getting into the crypto a big deal? Thanks.
A. Yes, it’s a big deal.
Q. If gold is 5-10k, where is Bitcoin? I am a bit of a conspiracy theorist and think it is in the government’s best interest to not have a high gold price.
A. Bitcoin could be a $0 or at $1 million in my lifetime.
Q. Hi Cody, FB’s move into Blockchain creating its own currency in its “walled garden”, a captive spending audience of billions, is an impressive development. What, if any, correlation will this development have with Bitcoin growth?
A. Facebook’s trying to make sure their version of crypto is open and not just a Facebook/Instagram crypto. See my comments above for why a Facebook crypto is good for bitcoin.
Q. Any blockchain software plays or are BTC, Etherium, and Ripple crypto currencies still the best ways to play the blockchain revolution?
A. Do any of you know some blockchain software plays for me to check out?
Q. Cody – do you like UBER better buy and hold than VZ for next 5 years? Thanks.
A. Depends on your risk tolerance. Higher risk and higher potential upside in UBER but VZ is less likely to crash than UBER.
Q. What about our VZ summer calls? Cover them or wait for the miracle?
A. I’m holding my remaining VZ call options steady.
Q. Cody – any of these IPOs that have come out recently revolutionary in your opinion other than UBER??
A. PINS is good. Not sure about the others.
Q. Also thoughts on MO, BA, and CPB given the interest rate environment
A. Current interest rate environment isn’t really a factor in my analysis on those three. I like the dividends from them regardless.
Q. Cody – what do you make of BYND madness ? Is it TLRY all over again or you see substance in those tasteless veggie burgers?
A. BYND is a better company than TLRY. I think BYND will likely trade lower but longer-term, they’ve got some first-mover penetration that’s meaningful.
Q. Cody – will QCOM join the market frenzy or gotta wait for china deal or court decisions?
A. I own QCOM for The 5G Revolution which will take place over the next five to ten years. China and court decisions are mostly just noise for Qualcomm.
And here’s what Bernice the Great Pyrenees and Amaris look like when they snuggle together:
That’s a wrap. Thanks all!
