Cody Kiss & Tell: Yelp analysis, Drone catalysts, and a pic of my baby, Lobo and me

Q. After this violent hi growth tech correction are you more willing to be further LONG than in quite some time as valuations have been chopped by 20-50% in even some of the best earnings reports?

A. Yes, definitely. I am willing to get more aggressively long some of the former highflyers in hi growth tech. That’s why I started a new basket of that very kind of thing yesterday and am actively scaling into $YELP, $FEYE, and $FUEL right now.

Q.I know it’s a longer-term view/basket, Cody, but of the three ($YELP, $FEYE, $FUEL), would you point to one as more likely to yield shorter- or mid-term growth/bounce back than the others?

A. $YELP is probably the “safest bet” of the three, but all three are high risk, high potential return kind of investments. $FEYE and $FUEL are crazy volatile and only if they start to make some serious money per share will the stocks be guaranteed to go up. But there’s no guarantee they’ll ever become wildly profitable so there’s no guarantee that the stocks will go up.

Q. Any thoughts on where Google is going short term?

A.  I’ve long had a hard time trying to game Google short-term, though a few years ago I nailed what I called the “Best trade into year-end” when I loaded up and told TWC subs about loading up on Google calls after the stock had been trashed for no good reason in a strong market. For now, it’s sort of perceived as a “safe” stock in tech, and that can be good for the short-term but will hurt on the downside hit whenever it comes next as the people who thought it was “safe” then decide it’s not after they’ve lose money on it. The game/cycle/mentality of trading never changes, it’s just easier to look out five or ten years and see that Google and Android will likely be much bigger and more valuable and making more money then than they are today and that means the stock will likely be higher too.

Q. Hi, our 550 July calls on $AAPL which are up 1 & 1/2 times our cost do we hold them after the split?

A.  I’ll let you know if I sell my AAPL calls, but for now steady as she goes for me.

Q. OK — here’s a disparate judgment call for ya if you’re willing to make it: I’ve made some fairly good money over the last couple of years with my $APOL short (been in and out of them). Maybe I’m suffering “$APOL waiting fatigue,” but if it were a toss-up between staying and waiting there or freeing up that total investment (not huge) for a shift to $YELP — what would be your call? (I can risk the loss.) Think more mid-term.

A. Sorry, eb, that’s just too much detail and I wouldn’t have much more edge than you do in that exchange.

Q. Do you think $YELP is a take-over candidate, there are rumors going around about Yahoo possibly buying them.

A.Yes, I absolutely think $YELP is a takeover candidate and that’s one of the reasons I like the stock right here right now though I never buy a stock only for the “it might get bought” reason. But at $3.5 billion valuation for $Yelp when other app companies are going public and/or being bought for tens of billions of dollars, I think there’s a good chance somebody comes along and snaps this company up while they still can at a less than ten billion dollar valuation. I picture myself as a venture capitalist on this stock and if somebody came along today and laid out the existing revenue and growth and the earnings potential for this company with its established brand name and app downloads around the world…well, I’d definitely take some risk on this equity at this valuation, even if I didn’t have a liquid exit at any time like I do with a publicly traded stock like $Yelp which makes it an even better bet in my mind.

Q. Thanks, how is the baby?

A. Thanks for asking, the baby is so gosh darn cute I can hardly stand to be without her for any time at all. She LOVES her daddy and smiles and kicks and reaches for me whenever she hears my voice. And in the last few days, she’s discovered her brother Lobo the cattledog and Miel the Great Pyrenees and now she gives them the same reaction and if she get near enough she goes crazy pulling their hair and ears. I uploaded a pic of this activity from this morning on Scutify since you asked.

http://www.scutify.com/profiles/leader.aspx?q=codywillard&s=5373b575b229aa0e08c0494c

Q. That dog typifies patience. And you, joy.

A. Your comment about that dog Lobo being patient made me smile. He’s a great dog but frankly, my wife and I are convinced he actually LOVES any attention he gets from my daughter and he just pretends he that he is somehow having to tolerate it. And I hadn’t noticed the joy on my face in the pic frankly, until you pointed it out. I guess I just was looking at my kid and dog!

Q. Thats a GREAT picture, the baby is beautiful, i love your Zuckerberg hoodie.

A. My wife calls my tuques “hoodies” all the time. That’s actually a tuque on my head in the pic, but it looks like a hoodie in the pic at least. She has no excuse for confusing me all the time by telling me my “hoodie is in the closet” when she meant my tuque was in the closet! Haha.

Q. Looking at kid + dog = joy. And you call yourself an analyst?

A. Haha, touche.

Q. Hi Cody, what options would you recommend for $Yelp for the near/mid term play? or just common?

A.  I’d look at $YELP calls dated out into early next year with strikes maybe 10-20% out of the money. They won’t be cheap though. And as always with any options trade you could lose the whole tamale if it doesn’t play out in time.

Q. Cody: as we are talking about $YELP and other stocks hit HARD whats your take on adding more $JDSU and $INVN here as they seem to be holding 10.5-11 and 18-18.5 respectively as 2 big drone plays?

A. Nada nuevo (nothing new) on our drone plays. Wouldn’t mind them dropping another 10-20% so I could buy the next tranche lower. No near-term catalyst for either that I know of, but that’s not the idea with $JDSU or $INVN anyway. Did you see the new site I’ve been building as a resource for Drone Revolution Investing and my upcoming book about it? http://www.thedronerevolution.com/multimedia.html

Q. Drone’s are getting a lot of media attention. We need an oil company or the ag industry to get approvals for use as a near term catalyst.

A. Nobody thinks of $JDSU or $INVN as drone plays but us though, so any hype about drones probably won’t mean much to their stock price multiple unless they soon start seeing actual sales into drones that gets investors on our page.

Q. Hi Cody, can provide some insight on why you rate $CIEN a “6” (from your 1 – 10 scale)?

A.  With $JDSU and $JNPR in the portfolio too and with all three acting poorly despite the recent strong sales, I just downgraded the rating on Ciena for the near-term for now. Like I explained though, if it stays at a 6 rating on my (trying always to be) objective scale, I’ll likely have some decisions about whether to keep it for the long-term. But for now, it’s just a 6. As I think about it this moment, I’d probably rate it a 7 if I had to do it again.

Q.  Cody: then when will we add a pure play drone holding or pure play basket of drone stocks?

A. The only pure plays in drones at the moment are the big guys- $BA $NOC. I might buy one of them at one point as part of the drone basket. Still researching it like a maniac for now though.

Q. Hi Cody. There’s been a lot of banter about the VIX lately. I hear that volatility is increasing, but the VIX is down in the dumps. What are your thoughts? Is it a good time to go long on VIX? Thanks!

A.  I like your contrarian thinking on the VIX here. Yeah, maybe some out of the money vix calls dated into mid or late summer wouldn’t be a terrible risk/reward as a hedge for a long portfolio. But I wouldn’t make the trade to try to create alpha or expect to make profits from it other than a hedge.

Q. Cody: check out Aerovironment. I have owned this company. http://www.avinc.com.

A. Thanks Chris, we’re on that one too!

Q. Cody: I think your shooting too low with the podcast. I’m envisioning a daily Wall Street All Stars hour long webcast after market close… with you as ring leader and segments from all the All Stars. I see a Scutify ticker along with the other tickers crawling along the bottom of the screen. Either independently produced or perhaps you could pitch it to the Blaze network. They have a programming gap you could fill nicely and your independent-libertarian streak would make you a good fit. Like an hour long infomercial for Scutify.

A. Thanks for the high expectations! Fact is, I still have a opportunities that come my way on network and cable and entertainment news shows and executives. I don’t think I can take on that kind of a responsibility and keep my sanity. I’m pretty happy working my butt off on the things I am doing these days and adding a daily or big-time show commitment isn’t in the cards for me anytime soon.

Q. Cody: just more “waiting fatigue” on my part? Six-8 months ago, you suggested I look into TLT for an added play on the contemplated rate rise. So I got into January $105 puts. Getting restless, and they’re sitting about 65% in the red. What’s your latest read on the D&R Regime and the Evil Banks’ hold on rates? Should I hold on to the TLT puts, maybe swap them to further out in the future? (Strike price? )Move the $ over to IEF puts (a total disaster for me, about to run out in June) . . . or just stay patient? Bottom line: what’s a good Waiting for Godot rate play these days?

A.  The fact that the drop in Treasury yields is all of the headlines would make me rather think it’s about time Treasuries start to crash again.

Q. Enough to hold on to $TLT? Or put my 35% remaining investment in them to a better higher-rate use?

A. Can’t help ya further than that. I do think rates are going to run higher this year.

Cody-  Okay folks, that’s the boogie to be. Drop the hammer as it shoulda been done by MC. The Muddy Souls – Can’t Touch This (Boogie to be) http://youtu.be/A7gTyG44CoQ