Answers on how to trade tech right now

Q. I’m curious about FIO. I bought an opening position on yesterday’s decline. I feel the company has excellent prospects for the future nevertheless I worry about other competitors in an ever changing innovation. FIO seems to have the current edge and have been received strong press from the DEMO conference. Any thoughts? Are you a buyer here or at all?A. As I’d noted in the Trade Alert post I’d sent out previously this week, I nibbled some more FIO common recently. I’ve been dead right about this stock being a wildly volatile stock, yet the mid $20s bottom I thought it’d stick nearly has been fallen by already. I’ve explained previously that we need to consider ourselves as venture capitalist investors in this one because it’s such a new company that’s not but trying to focus on profits but to put it more exactly trying to establish itself as the leader in a multi-billion dollar industry that hardly exists as late as this. As the price per bit for Flash continues to fall past that of the price per bit for hard drives over the straightway couple years, the business possibility for FIO to displace the HPs and Dells in the server world is huge. Nevertheless the company has to execute a highly competitive and cut-throat industry and we are very, very early investors in it, so it will continue to be wildly volatile as it as well can’t be valued at on any kind of P/E or normal public-company valuation metric.

Q. Hi Cody, can you give any thoughts on ALU please? Nearly 52 week lows nevertheless is it as great a buying possibility as I hope it is?A. Oh, the Lucent. Do you remember when Lucent was first spun out of AT&T and it was so powerful that there were conspiracy theorists who thought that Lucent was something derived from “Lucifer”? Or when Lucent was vendor-financing tens of billions of dollars of theirs and other equipment for their clients back in 2000 at the top of the telecom bubble? Or when Lucent invested hundreds of millions of dollars in real-hard cash in a free space optics company and at that time eighteen months later with their stock down 90% Lucent had to issue a death-spiral convertible that is nevertheless haunting their shareholders today? Lucent survived because it had a government-forced monopoly for decades that gave it legacy products to service and a giant customer base to sell to, yet they are a classic stock that became a great short possibility as the government-enforced advantages they’d enjoyed for so long went away as the Internet displaced traditional telecom and competition with wireless and VoIP (Voice over Internet Protocol) hit hard. They are to telecom what Apollo will likely be to education in five years from now. And no, I have no idea in buying a lottery ticket-priced share of stock in ALU at in accordance with $2 a share today in the hopes that they somehow fix their finances and their company. I’d to put it more exactly own ZNGA with my lottery ticket-priced money.

Q. What’s your advise on PCLN as you know they report afterwards market today?A. I’ve told readers earlier that PCLN is blacklisted on my own trading screens. I’ve never gotten that stock right when I’ve traded it and I deep down hate myself when I see a stock quote for that thing and I know that I haven’t been a part of its success. Ugh. Good luck, nevertheless I can’t help you on Priceline. Side note — the only person I’ve ever been to intimidated/didn’t-want-to-pop-the-bubble to meet in my life was William Shatner when he came by the Fox Business studios in the green room during I was getting make up. I hid. I to the letter couldn’t bring myself to meet Captain Kirk in real life because in my mind, that guy in the Priceline commercials and who does hilarious rock n roll covers and stars on a CBS sit com isn’t actually Captain Kirk. I love me some Star Trek to this day and I make no apologies for that. Live long and prosper.

Q. Your opinion on LVLT please.A Nothing’s changed with our LVLT investment either. It’s a long-term play on the idea that the company’s taking everything into account going to grow sales and margins as they’ve consolidated the Internet backbone industry.

Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com. At time of publication, Cody was net long Apple, Fusion-IO, Level 3, Zinga, and Nuance.