Cody Kiss & Tell: What’s up with AAPL, why I won’t buy TWTR and emotional rescue

Here’s the transcript for this week’s Live Q&A Chat. Join us next week at 2pm ESTat

And here’s a podcast of my answering some of these questions in more detail. All you have to do to listen to the podcast is click here and then press play on the player on the page it takes you to on Scutify.

Onto my best attempt at A’s to your Q’s.

Q. Cody, AAPL, why is it so strong?

A.  Remember how I kept telling you guys for the last few weeks that if the momentum traders ever came back around to even just sniff on AAPL that it would run $100 in a month’s time. Well, isn’t it happening now after their earnings and stock split announcement?

Q. Any thoughts on RHT?

A. I’ve been impressed how long and well RHT has survived and thrived. I’ve got no edge for you there lately though, as I’ve not been following it lately. Here’s the latest news from Redhat: Red Hat Buys Ceph Provider Inktank For $175M In Cash To Beef Up Its Cloud Storage Offerings

Q. Software companies can be revolutionary–is there one worth buying?

A.  Is Scutify a software company? A website? An app company? All of the above. Microsoft is hardly a software company any more with all its Xbox and accessories and other crap. I think Oracle is by far the best run software company in the world and it’s got a decent dividend and I’ve considered buying some for a long time now, but just never have, mainly because I hate how much they pay their billionaire owner and other execs in salary each and every year.

Q. Cody, are you thinking about trimming the AAPL calls?

A.  I’ll probably look to trim some of my AAPL calls that have now worked out nicely if the stock rallies above $610 or so. Will let you know if and when I do.

Q. I saw your TV piece. Good job. I believe you are only holding common on JDSU and are thinking out many years. Prediction for earnings tonight for those of us with a tiny bit of call options? Stock has not been behaving well at all and no jump whatsoever into earnings and when the little “recovery” blips have been happening, like today…

A.  I’d rather be long than short JDSU into tonight’s earnings report. Like you said the stock and the sentiment around the stock have been horrible lately, and that means it’s likely to pop if they report anything decent and/or even good. I do expect they’ve seen good demand and backlog from the ongoing Internet infrastructure fiber optic network build outs going on around the world by service providers everywhere.

Q. Cody, are you thinking about trimming the AAPL calls?

A. I’ll probably look to trim some of my AAPL calls that have now worked out nicely if the stock rallies above $610 or so. Will let you know if and when I do.

Q. Cody, do you think we get opportunity to buy AAPL any time soon under 570 or so? How about FB? Is it better to buy 2016 FB calls . I am thinking that the FB will be more in the coming year by 2016. Just frustrated with short term options in all.

A. If you’re frustrated with the short-term options, if you’re frustrated with ANYTHING EVER in your trading/investing, it often means that you’re letting your emotions dictate your actions. And that’s not a good thing. I’d suggest just using common stock for a while til you start to feel more in a groove with the options and then start tiny with the options again. Remember it’s about the next 3,000 or 5,000 days of your life, not the next few months.

Q. Hi Cody – CIEN, It seems that there is demand for internet infrastructure build up, also more companies are offering streaming video, music, etc. so that also lends to infrastructure build up, what are CIEN’s prospects? Would you be a buyer at this level? Does the upside outweigh the downside here?

A. I would sell my Ciena immediately if I didn’t think the upside outweighed the downside here. As for buying it now, as always, I’d suggest getting started with a 1/3 or 1/4 or 1/5 tranche in whatever you consider a full-sized position and then scale into more over time. I recently added to my Ciena near these levels. “One trade to tell you about this morning. I’m buying about a 1/5 tranche in Ciena, which is currently my smallest position in the long side of the portfolio. Still will be one of my smallest positions and I’ll be looking to add another tranche to it in coming days or weeks.”

Q.  Hi Cody do you think Twitter could ostensibly become a bitcoin or other money transmission mechanism given the secure tech they have and the hypothetical connect the dots between some of the VC’s who back bitcoin and Twitter?  Also, related, at what price does TWTR become a buy?

A.  I’ve pretty much lost all faith in Twitter’s management’s ability to innovate and their lack of vision for the future. That might get priced into $TWTR stock at some point, but I think I wouldn’t be tempted to change my bearish stance on TWTR unless it were to fall even another 30-40% from these levels. At a $15 billion valuation (down from about $21 billion as I type), I’d be interested in getting long Twitter at least for a trade. But I don’t think I’ll ever want to invest in Twitter’s current trajectory and management.  Remember this: ‘Twitter IPO a “debacle”; $1.6 billion left on the table November 7, 2013, 12:26 PM ET SHARE:MORE EmailPrint COMMENTARY By CODY WILLARD I’m so disappointed with how Twitter Inc.’s TWTR -8.00% management and bankers have brought this company public today that I now don’t expect that I’ll ever invest in Twitter. $TWTR See, by my calculations, Twitter just left $1.6 billion of shareholder money on the table by pricing its 80 million shares some $20 below where the market is today.’

Q. Cody, FUEL has been buried–time to go long Rocket Fuel?

A.  Big Data is all crushed huge and I’d rather own probably SPLK than FUEL, but that’s just because I know it a little bit better. I will do some homework on FUEL. FYI, I don’t think it’s dividend yield is what is being printed at Yahoo Finance and other sites. Both SPLK and FUEL are down 50% in straight line of late. Just sayin’

Q. Let’s short TWTR?

A. Shoulda woulda coulda shorted TWTR back when it hit $60 or whatever. Too little room on the downside target I just gave you for me to want to try to game it for a trade.

Q. General comment on ZNGA? Think it might creep back up for a while, making it a good short-term market play right now? I know your feelings about it being a permanent call (if you still have those feels, since it’s climbed since then), but having tranched in and out of it and bottom-line made a few bucks, how about just playing the market action on it/its latest ER and its gaming category? Make sense?

A. ZNGA’s a decent lottery ticket but that’s all it is — a lottery ticket. I call it a never-expiring call option on ZNGA’s management’s ability to somehow create another hit game or app or create value for shareholders with their new Poker with Money business without first running through all the money they raised on their IPO. It’s really just the balance sheet and the lack of cash burn that has kept me in this tiny position for me. I’m sick of LNKD’s action and their fundamentals aren’t accelerating like I’d like to see either. So my Social Basket is low-rated right now and both are very tiny positions for me right now, that’s for sure.

Q. When would you look to add into GOOGL?

A.  In this morning’s article I sent out to you guys, I wrote: “No trades for me today. I have buy orders ready to start scaling into Facebook if it gets closer to $50 and Google if it gets below $500. Cree is looking like a good tranche buy candidate too, maybe a 1/4 tranche. But not yet.”