Cody Kiss & Tell: The Fire, The EU Crisis, Facebook Options, TBTF Banks and much more…

We came up with a new, more compelling title for these weekly Q&A Chat Transcripts, Cody Kiss & Tell. Here’s the transcript of the back and forth (via email this week because I couldn’t log on for the live chat) with subscribers from TradingWithCody.com.

How can we HELP U to HELP others affected by the fire?
A. can donate funds to Alto Cafe at 575-336-1980 which is feeding everyone for free; Mountain Annie’s at 575-257-7982 which is doing the same thing, Lincoln County Mercantile at 575-354-4260 which is taking cash donations to feed the animals, they can mail a check to the Nogal Church ( and we will get the money where it needs to go, These banks are taking donations:

First Savings Bank
2713 Sudderth
5752577170
Jennette Lindsay

Valley Bank Commerce in Roswell
Jenifer 5756232265

Otero Federal Credit Union
Attn April Rue

Q. I’m sorry to hear about the fire disaster and hope this terrible ordeal is over for you soon.
A. It’s been remarkable that there’s been no deaths or even reported injuries from this fire so far. Thank you for your condolences. Things here are okay though.

Q. You take care of your neighbors ad family and property. And please cut a wide safety zone around your property now with know but able trees with 300 feet of your house. Nice big grassy lawn. Help protect yourself in the future. Take care I appreciate your dedication.
A. Thanks. And in fact, I do think that a large part of the miracle that the fire burnt within a score of yards of my house, but didn’t burn my house is that my foreman, Marcus, and I have spent the spring clearing the trees and raking every last piece of dead grass and pine needles and Juniper debris from all around my house. Not quite 300 feet yet, but we’d indeed been clearing/trimming the conifer on my new land pretty much every week since I closed on it.

Q. I was going to ask you a question about Zynga, but it’s not important. Hang in there and focus on your important stuff. Keep strong.
A. Thanks. I really am touched by all the outpouring of support. We’ve got another question about Znga, so please refer to it and if it doesn’t answer your question, let’s address it next week.

Q. I am a TradingWithCody subscriber. Since there is live chat today, could you talk about ZNGA trade that you suggested sometime back. Should I buy more a the current price around $5 to dollar cost average. My original buy price is $8.50. Thanks.
A. I am frustrated to no end by this stupid Zinga. It is my smallest position though and I would like to add to it down here and maybe build it up a little bit, but I’ve not done so yet. My big concern is that people, even on the iPads and iPhones quickly burned out of playing Zinga word games and zoo games and what not. Let’s do an informal poll among all of you — are you using Zinga games more or less now than you were six months ago?

Q. Saludos Cody, glad your taking care of home and community. You never know what will happen day by day. Time will tell and I am a patient investor and tranche into these positions and have lost more in my trading days and can “afford” these however they turn out. You maintain a Very upbeat positive attitude on your calls when you make them and are also open about your disappointments. Yet my tip toeing into options are some tough lessons in guessing…though you hit the APOL puts right on and I was with you on them. Mostly getting burned fast on these. My question is how are you feeling about your reading of the markets, your calls and the revolutionary investing? I am getting sea sickness hearing the financial news and the markets response is like witnessing a fast moving Bi-Polar patient. I am getting tired of the yo-yoo and I am feeling more and more cautious and this is one reason I bought the subscription for a year, but only in part. The other big factor is you sharing what you feel is going in the macro environment. I am going to sit tight for awhile and time will tell.
A. I agree! I’m also sick of the market yo-yo-ing and freaking out about the EU-crisis and then celebrating a EU-crisis can kicking and then panicking again and then celebrating again and I’m sick of 0% interest rates forcing retirees into a desperate search for yield and I’m sick of the corrupted corporate-subsidizing, small-business punishing tax code and I’m sick of how the Republican/Democrat Regime has decided that giant corporations around the world are above the law…
Unfortunately, though, that is the reality of our political economy and our investment opportunities in the early 21st century here in the US. Everything I cited above and much, much more is all very revolutionary in both a political and economic sense and the world has never seen anything like what we’re headed into.
I remain very confident that we will see another stock market bubble before we see the collapse, but I am also confident that I will be flexible enough to change my mind and/or sell and hedge before that collapse. I have no crystal ball though and I could be wrong — but I’d ask you this: If the Western Civilization collapses and takes out the vast majority of our stock investments, I’m not sure that my stock investments would even make the Top 5 concerns on my “What I’m worried about” list, you know?

Q. Cody, here are my questions: 1. What’s your opinion of the financial stocks JPM, C and BAC? Since the EU crisis will be never end, should I buy them during dip like right now or next week? As you said, it ‘s buying oportunity when everyone is scared. It seems most people are afraid of financial stocks, especiallly with international exposure. 2. I sold my GLD put a week ago, it looks GLD will be up for a while. What do you think GLD can still be as a hedge in our portfolio? 3. Apple kick out Google map and bought TomTom map, is that going to hurt GOOG’s Ad revenue? What do you think about the impacts on Google stocks? Best Regards.
A. JPM, C and BAC and the rest of the Too Big Too Fail banks are still bankrupt even after getting trillions of welfare and paying out hundreds of billions of dollars in fraudulent…er, fake bonuses over the last few years. Nothing can get better for these guys than the current plundering and profiteering off taxpayer backs with legalized fake accounting. I would short these guys and will as soon as it becomes clearer some day probably in a couple more years that they are finally going to wash out the shareholders of their worthless stock.

Q. Worry about your life and home now and don’t focus on us! Take good care.
A. Thanks so much. The community, the state, the country and pretty much the whole world has been responsive and helpful throughout this ordeal.

Q. Hang in there, Cody. Glad to hear you are safe.
A. Thanks so much for the kind words. Truly a blessing how all have been safe thus far.

Q. Dear Cody, I’m very sorry about the Little Bear wildfires doing so much damage to a beautiful part of our country. Please excuse the segue. What’s your options strategy for Facebook? Do you have an automatic sell-off price, or will you wait until you feel the time is right, announcing your intention to sell before doing so? In solidarity, I also purchased Facebook $28, $29 and $30 January calls in imitation of you. I’ve not been actively doing ANY trades since the recession, but have been an assiduous reader of Revolution Investing for a year now and hope you will let me know what to do. I see the 28’s have been “in the money” (i.e. at $28 a couple of times) and wonder if setting an automatic “sell” is a good idea? Many thanks.
A.Thanks for the kind words and the good news is that this is probably Mother’s Nature way of doing some major spring cleaning (clearing) of the forests. It’s a total nightmare for the people who have lost structures, but we all here did know that the forests were terribly overgrown all around the county.
I don’t use automatic sells very often, but that’s in part a reflection of how on top of the markets/trading/investing I am most every day that the markets are open, meaning that I am almost always near enough a broker and aware enough of prices that I can respond intraday. For less active market participants, a GTC (Good to cancel) order can fit the bill for what you’re looking for here. Put in an order to sell some of those calls at a price that you would like to lock in part of the profits and if the stock rallies to that price, you’ll have it executed automatically.
Thank-you Cody. I’ll take your cue but hope I don’t miss the better part of a trade if there’s a lag between when you sell and later report about having done so. Can you share a number you’re looking to between now and a few months from today? Having got burned when contracts expired worthless in the distant past, I’m merely executing your insights (tho’ I, too, feel it’s an intelligent move and liked the Yoda reference in one of your recent RI emails). Best!

Q. You have not spoken about the impending tax increases and spending cuts in the U.S. It is being called taxmageddon or the fiscal cliff, which are likely exaggerated. However, they do expose our portfolios to risk, since it very well could be what reduces our current 1.8% growth down to recessionary levels. While the news, and your writings, focus on Europe as the biggest worry among money managers, I don’t think enough is being discussed about these domestic issues. What is your take on this?
A.The entire tax code and collection thereof is a joke in this country. The gaming of the tax system and all the 108,000 pages of tax code that the rich and corporate take advantage of is not going away and the entire concept of a taxmaggedon is simply rooted in the propaganda that these Republican/Democrat Corporatists thrive on. That said, yes, the markets will at some point likely sell off again and that sell off will be blamed on the “coming taxmaggdon” and the entire Shock Doctrine of getting a bunch of special interests more welfare money and subsidies and tax breaks will work out to kick the can down the road once again. I could be wrong though.

Q. Dear Cody, any view on two “falling angels” – TWX and RSH. Thx and good luck!!
A. It is ‘cheap’ but I’m worried that it’s cheap the way yahoo & blackberry are ‘cheap’. The yield is totally unsustainable & every part of their business is under threat from amazon. They are trying to be the place you go to compare every mobile phone service but even wal-mart sells the iphone now, they should have done this 5 years ago. Bottom line it trades for about half of book, management is closing a lot of money losing overseas operations, should be good for a dead-cat bounce and a three month trade into the new iphone (plus I’m sure private equity is looking at the retail footprint & brand right now). Plus that dividend really worries me.

Q. Prayer of protection for you and your neighbors Cody. God bless.
A. Thank you very much. Here’s a fitting verse from the Bible:

“But now, this is what the LORD says — he who created you, O Jacob, he who formed you, O Israel: “Fear not, for I have redeemed you; I have summoned you by name; you are mine. When you pass through the waters, I will be with you; and when you pass through the rivers, they will not sweep over you. When you walk through the fire, you will not be burned; the flames will not set you ablaze.”

Q. Good luck and God Bless.
A. Thanks. Here’s another verse that’s very fitting:

“Because thou hast made the LORD, which is my refuge, even the most High, thy habitation; There shall no evil befall thee, neither shall any plague come nigh thy dwelling. “(Psalms 91:9-10 KJV)

Q. GOOG continues to tailspin and its daily chart looks scary. Any possible stabilization in the coming days? Why is the stock being hammered?
A. I think the recent weakness in Google is likely because a bunch of perma-bear hedge fund managers have decided that GOOG is a great short. The Apple long paired (pear-ed? Get it?) with a Google short is the trade du jour for those guys and chartists are climbing on board with the concept. That’s a technical reason for a stock to be down, and I like to take the other side of that when I am confident in the fundamentals, which I am for Google here. In other words, when and/if Google continues to deliver earnings growth or some other fundamental catalyst to propel the stock higher, these shorts will have to scramble to cover higher.
Thank you very much for the insight. I will hang in there for the long haul.

Q. Hi Cody. In a live chat a few weeks ago someone asked you about Violin Memory as a potential competitor to FIO. You responded that you were not familiar with Violin Memory and would do the research and get back to us with a response. My concern is a potential vcr versus betamax situation here, and I obviously don’t want to bet on the betamax. Do you think FIO and Violin can coexist together or do you think eventually one of them will become extinct? The last info I read about Violin is they are planning on going public this summer. Have you heard anything and would you recommend trying to get shares in the ipo?
A. Great question and I love the way you’re going about using old technological revolution lessons and applying them to today. That said, I don’t think the Violin and Fusion-IO platforms are mutually exclusive, as they are still just a fraction of 1% of the total market of server sales. If and when they would actually get so dominant in servers that there would be a Violin vs. Fusion-IO battle for dominance going on, both stocks would be up multiples from their current quotes. That said, both could falter and be displaced by bigger competitors if they don’t continue to innovate and drive the entire server market to places it’s never been before.

Q. Hello Cody, first I would like to wish that you and your family well despite the fire. I’m a new subscriber and was drawn to your service by your blog posts on APPL. On that note, I’d like to get your take on APPL’s current quarter. I heard a lot of talking about this being a weak quarter for APPL. Thanks!
A.Thanks for the kind words and thanks for joining the TradingWithCody.com community. I think AAPL is selling as many iPads as the they can keep up with but the big risk is that there are other Cody Willard’s out there who are waiting for the new iPhone before doing their latest upgrade. That said, I’m switching from the increasingly frustrating and disorganized Android platform for the increasingly easy-to-use and easily tied in to all my other devices iPhone system. I have an AT&T iPhone but my main number has been on Verizon and I’d been on Android on Verizon for a long time before the iPhone ever was available on Verizon. Anyway, I can’t wait to ditch my Android once and for all and get the new iPhone but that’s not going to happen before Apple reports its next quarter. I’m a buyer of any AAPL weakness from here regardless and if the stock were to get hit after it’s quarterly report, I’ll load up on it.