Cody Kiss & Tell: Cars, Scouts, and Stocks
Here is the transcript to this week’s Live Q&A chat. Join me next Wednesday at 2pm EST at http://tradingwithcody.com/chat or send me an email with your question at support@tradingwithcody.com.
Sorry I’m late. Blame the 1975 Scout I drive.
Ask me anything. I still have to go back and figure out what’s wrong with the fuel line/pump/filter in the Scout up on top of the hill when we finish here. Ha.
Q. Thought the electric car needed a charge?
A. I don’t think my IH Scout uses an electric engine…I get about 8-10 MPG although I’m working on cleaning it up and restoring it to get 12-15 MPG in a few weeks.
Q. Is that compressed Natural Gas, conversion?
A. At this point, I’m just learning how to work on an internal combustion engine…it’s a 40 year old engine and any cleaning, updating, restoring I do to it seems to help the MPG dramatically.
Q. I’m with ya! Carburetor, valve adjust, timing – key items.
A. I thought to myself the other day, “It sounds like the carburetor isn’t getting any fuel from the fuel pump, or maybe the fuel filter is blocked.” And then I thought, “Wait, did I, Cody Willard, Wall Street Rock Star Wannabe, just think that thought and understand what it meant? Wow.” Speaking of which I have no idea what a valve adjustment or timing would require. Not yet anyway.
Not a Wannabe! Are!
Q. There’s some pretty disruptive technology coming out, and I think much of it will support driverless car technology. Any plays there? I know Google is into it, but I also hear about Nissan andd BMW putting their toes in the water. My kids will tell their car to go get their dry cleaning, or go wash itself, or pick them up from a restaurant downtown… That is inevitable IMHO, and it would be great to be revolution-minded on it. Maybe it’s too far off? A friend of mine started Passport Parking, and I’m working on some interplays with driverless car network, cloud-based parking solutions. Have you seen any good companies in this space?
A. Great insight, great analysis and great question. I don’t think there’s any good pureplay investment publicly traded in the driverless car revolution, which will probably get heated up in another 3-5 years. Which means at that point there will be some pureplays coming public and we’ll have to nail the right ones. Again. :-). Let us know what you find as you continue your research into that sector too please.
Q. I’ve been into cars the whole life! I enjoyed how you referred to 1998-2000 comparison. Funny, I was thinking along those lines a couple months ago an mentioned it in a yahoo chat. I remember those days,( if that gives you an idea of the age-not old and not young lol). Anyway, a very trying time was the 1998 dip. My first experience with margin, very scary, held on to watch AOL double twice in like 9 months. Kinda appears were setting up for a similar August – October type pull back. What say you?
A. I sure could picture a 10-15% decline in the broader indices being possible before year end at some point.
Agree
Q. You got the right idea. Lots of Fun, and will test ya. However, the older the simpler , that’s the positive. Good Luck with the scout, had a 65 Porsche and a Datsun roadster with Dual Carbs-talk about fun, HA!
A. See, part of what I’ve learned already by working on this 1975 car restoration is just how remarkable and reliable those old engines and the cars they went in were. I don’t need 819 semiconductor sensors and timers and stupid features in my car. I need a reliable machine that I can maintain and work on myself that has an incredible stereo system and easy smartphone/tablet connectivity. I think you could mass produce a IH-Scout-like workman’s vehicle with a choose-your-flavor stereo and smartphone/tablet connections for 1/2 of what Ford and GM and the other welfare-sponsored major car companies and make billions over the next few decades as you change the paradigm of the car industry.
So True! Retro Scout, Lets go public!
Q. Hey Cody, Thanks for all your insight and guidance! What % in stocks is a good range looking forward at the moment.
A. Thanks for the kind words. It’s tough to answer that kind of a question without knowing much, much more about your age, your income and potential for income growth, your savings, your inheritance possibilities, your goals, your family status, etc… I would say that you should probably be about 1/2 as overall net long exposed to the stock market as we were back in 2010 when we were “aggressively long”.
That’s what I was looking for. Thanks!
Q. Hey Cody, what’s your opinion of the market and its overall volatility once we launch missiles into Syria on possibly Thursday or Friday? Do you foresee this action higher today as very temporary (speaking short term) before a drop like yesterday hits again?
A. I would guess that we’d likely see a 2-3% swift swing down if the US formally attacks Syria (how can we possibly do that without a congressional declaration of war is only possible because the R/DRegime has no respect for our laws) and then a spike higher back to a short-term reversion to the mean. Lots of cross currents will factor in and I don’t think we can game the short-term action profitably like that though.
Q. With increasing volatility, why sell all those VIX calls? Also, I was wondering how yours were up 3X what you paid for them. Mine were up nicely, but not over 100% yet, and I bought them at the same levels you bought yours this last go round… BTW, great trade, and thank you for the timing on that one.
A. I’m not sure how long the newfound volatility will really last or how high it will spike the VIX after a 50% move in the VIX already in the last two weeks. I paid $1.50 for some of those VIX call options and I sold some of those for over $3 yesterday. Not quite 200-300% I guess, sorry.
10-4. I didn’t know if it was a process I wasn’t doing right. Great trade.
Q. Thank you for the VIX trade Cody, are you still holding the IEF puts?
A. Rock on and congrats on the VIX calls trade. I am still holding some IEF puts but I’ve locked in some nice profits on that trade already too. I would like to reload if rates will drop on a market panic or something. Otherwise, I’ll just ride these IEF puts for a long time.
Q. How many % points over spot would you be comfortable paying for gold and silver? I got some at lower levels, but paid about 4% for gold, and about the same for silver… I got the silver through APMEX< which was a pretty easy and pleasant experience. I know you prefer local, but there aren’t any gold dealers close to me unfortunately.
A. If you’re not gonna buy the silver and gold locally, APMEX is a good alternative. I’m no longer an active buyer of silver or gold at these levels after having been so aggressively loading up at much lower levels a few weeks ago, but I do plan on holding the physical metals I now own forever. I wouldn’t pay more than 3-4% over the reported spot prices right now, which is less than the 4-6% premium over the much lower spot prices I paid for some of my metals a few weeks ago.
Q. Why is GDX not following spot gold?
A. It depends on your time frame…over the last two years, GDX has been a highly volatile correlation to spot gold prices. Over the last month or so since we bought GDX it has also been a high-beta correlation to spot prices. But in the last day or two, the GDX got hit because the stocks of gold miners got hit along with the broader stock market even as there was a safety move to gold itself. That is, some people were selling gold miner stocks and buying gold yesterday, in a panic. Over time, GDX should make much bigger moves than gold spot prices…Much much higher than gold — or much, much lower than gold.
Q. Thanks Cody for the explanation for GDX. I did about 100% on the VIX; sold half my position; you’re still holding .33 of your position, correct?
A. Less than 1/3 of my original VIX calls. Might buy some back at some point.
Q. Hi Cody, your guidance and analysis lately has been so good and so timely, thank you. How do you feel about adding to Intel or Apple at this point?
A. Thanks for the kind words and I’ll keep doing everything I can to keep it working for ya. I do like both INTC and AAPL here, about equally. If the markets don’t crash near-term they’ll likely have some nice near-term upside. And regardless I think both are headed higher over the next two years from these levels.
Q. Hello Cody – I’d be interested in your thoughts regarding Yahoo. Their CEO seems to have a great forward thinking mindset with a keen interest for the near term as well and I’m wondering if I should pull the trigger on the stock at current prices.
A. I continue to think that long YHOO paired with a short PCLN trade is a beautiful risk/reward potential. YHOO should have a $50BB market cap at some point and PCLN already does have a $50BB market cap. I think in two years YHOO will be worth more than PCLN no matter whether the stocks are overall up or down from here.
Q. I’m thinking of adding to my Juniper position after the potential drop in the near term market. Do you still see this as a wise move?
A. Yes, I think JNPR’s market is growing and I think they’re taking marketshare from Cisco and Alcatel inside of that growing industry giving you a double whammy of growth.
Q. For some reason I bought CIEN this week because I thought you recommended it. I found out you did not – I must of had a dream that nite! So, should I sell it or hold it?
A. Last night I’m finishing up work about midnight and my wife is already in bed asleep and she yells up to me “Are you going to take my pills like the doctor said to?” I was like, “Uh, what pills? What doctor?” After spending a few minutes trying to get me to remember a doctor visit that never actually happened, she finally said, “Oh, I think I dreamed it. Sorry.” I also, like you, dream more about stocks than doctor visits. Anyway, yes, I’m holding my CIEN and I think over the next couple quarters we could get more upside if the company’s industry can grow.
Thank you and thanks for the VIX trade
All rightie, the checkered flag is out and we’re crossing the finishline. I’ve got to drive my 4-wheeler back up the hill to get my Scout. In the meantime, http://www.wikihow.com/Talk-Cars. How to Talk Cars (with Pictures) – wikiHow You want to sound like an expert when talking about cars? Want to impress everyone with your knowledge? Or just fit in while everyone discusses V6, V8?
