I am off to Europe for the next 10 days. I hope to talk to some new Stocktwits partners and meet some great entrepreneurs in Paris, Madrid and Barcelona.
Beginning in February, things have really stalled in US financial markets and for those that did not take the price action warnings in momentum stocks, the pain is real. Google is in a massive buy mode with Facebook and even if the bets are correct, the market needs time to prove them out. The old internet guard like Yahoo is still lost in the internet jungle now focused on long form video content. I guess Tumblr is just rocking? My gut is the reach they think they have will not translate strongly to this content. I Also think Medium/Wordpress/Twitter/Pinterest will kill Tumblr. I doubt Yahoo will have the resolve or get the talent to pull this content bet off in a good way for shareholders. In the meantime, you have confusion and doubt. Not a classic wall of worry anymore, just plain ‘show me’.
In that wonderful land of cheese, socialism and cigarettes we call France, life is quite grande! The French are in a bull market:
Back at home, Bank of America reminded us of why I called them ‘Skank of America’ in 2008. They pulled back on a dividend today.
Citibank is still Shittybank. All the king’s horses and free money have not budged this stock since 2008 (click the chart to enlarge):
IPO’s are still coming up Turds…here is ‘hot’ storage IPO $NMBL now breaking it’s IPO price.
I think this selloff in US momentum is just a process and will end pretty soon. I won’t yet speculate on the real leaders that will emerge. I am excited to dig into some broken IPO’s and new all-time highs with catalysts that I can grasp to put some money to work over the summer. I don’t feel any rush.
The money that is working well in US markets is in Toothpaste and Bandaids…the $XLP for those that want to follow Consumer Staples:
I prefer to buy those for clients when the stocks are down 25 percent than at all-time highs. For me, the growth is not worthy of their cycle high multiples.
The bubble is still in the bond markets. I can’t explain it, but rates are not showing any signs of rising. Today in Canada, a 50 year 3% bond was floated. No fear of inflation or just lunatics? The speculator in me wants the other side of that trade at some point. Luckily I don’t have to bet against trends to earn my living.
The one trend bet that will continue is the disappearance of the US Middle Class. The trend is irreversible, and the ramifications are gynormous and generational. I like Kathryn’s take on it:
The unwinding of financial leverage is still in it’s early days. While ‘social leverage’ seems long in the tooth based on recent price momentum, I believe it is still early days in the global sense of the trend.
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