Trade Alert: Trimming big positions while they’re at new all-time highs

The markets have been struggling and fading lower since last week when I had noted: “And I’ll tell you right now once again to stop everything you’re doing and think back to those August lows. If you were in pain or losing sleep over your positions back then, it probably means you should trim back and reduce some exposure to stocks. Sell when you can, not when you have to.” I’m not trying to game near-term market moves. And I do fully expect that I will eventually turn bearish on the overall economy and stock markets like I did back in 2007 when I closed my hedge fund and became a TV anchor which was before I turned bullish again back in 2009 and started positioning myself for the Bubble Blowing Bull Market back in 2010 when I left TV and started investing again. Cycles matter and markets crash. I still think that the path of least resistance for the broader stock market and in particular for our portfolio is higher prices. But that doesn’t mean we ignore the important of selling when we can and not when we have to.

So despite the broader stock markets selling off recently and again today, three of our four biggest positions have continued to power higher as Google, Facebook, and Amazon have continually pushed to new all-time highs. I’ve trimmed each  just a little bit in recent weeks but with them all being so strong and hitting these new all-time highs, I want to do a little more trimming while I can, not when I have to. I’m selling about 1/10th of each of my long-held Google and Facebook positions. Google and Facebook will remain my #2 and #3 largest positions but it’s time to trim them both just a little once again as each of them is up many multiples over when we added them into the portfolio.

Over the last couple weeks, I’ve once again raised a decent bit of cash vs where I was late this summer and into September when I had been scaling into more stocks into the panicky market sell-offs. We ebb when the markets flow as we use our markets, economic and stock-picking analysis to stay ahead of the curve as we try to short stocks that are headed for trouble and we try to invest in Revolutionary companies. That’s our playbook and it’s worked out very well over the last fifteen, ten, five, two years. Even over the last year, it’s been a big winning strategy for us.

Here are a few comments and links for you.

The ‘Steve Jobs’ movie may be biggest Apple flop since the Newton – Then again, Apple makes more than Avatar, the most successful movie of all time at nearly $3BB gross — in less than 48 hours! The real $APPL makes more money in 38 minutes than the flop Steve Jobs (the movie) made during its entire theatre run.

Apple plans Venmo rival linked to Apple Pay – Over in the Trading With Cody Chat Room this morning we were talking about Apple Pay and one of my subscribers wrote: “For pay, just put a chip in my arm and scan it. Tie that to my amex card and I am done. I don’t need all this other stuff. My god.” Golly, talk about the #Wearables Revolution. I can’t say I would ever put a chip in arm personally, just too paranoid about I want my privacy.

Another commenter chimed in: “Ha! Gotta say, I’m surprised that a guy who lives and breathes the tech revolution thinks that as long as he doesn’t implant himself with a chip he’s preserved his privacy! Probably someone knows where you’re headed this afternoon in your jeep (and may be able to change/prevent that remotely!), not to mention a whole lotta stuff about you if you’re wearing your Apple Watch. And so on. No?” Yes, but I can always turn my phone off and leave it at home in rural NM, drive my 1975 Scout, etc. But implanting a chip would mean it’s always on me.

The jetpack is real, and it’s here – Do we call this oncoming Revolution “The Jet Pack Revolution”?

Technology Losers: 3D Systems Corporation – $DDD -5% breaks to near 5-year lows. With this stock down 90% from its highs when it was worth a whopping $10 billion. This is a rare example of a company that could did at least take advantage of their stock being straight up done a 10% secondary offering back when the stock was hockey stick straight up and the company was worth 5x more than its now fully crashed stock status. That said, the company’s cash has dwindled dramatically since that secondary raised more than $300 million for the company as the cash balance on the sheets was down to $150 million as of their last earnings report. And now the stock is back to where it was five years ago before the 3-D Printing Bubble had swept this stock higher. You guys know I’ve been saying that we don’t want to try to catch a bottom in the 3-D printing stocks like $DDD, $SSYS, $XONE or others and that I won’t buy those stocks unless/until we see a couple quarters of strong growth with strong margins. I’m not sure that’ll ever happen though. Avoid.

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I’m hard at work with a few potential new long and a couple new short ideas, so stay tuned!