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You know how I feel about the markets right now. That said, it is Monday and like always, Ivanhoff and I are looking for stocks, trends and themes that are working and/or might just work.
We covered the catalysts and the technical setups of a few dozen stocks and ETFs including TWLO, OKTA, LULU, SPY, QQQ, XBI, UBNT, EXAS, VCEL, AAPL, SMH, NVDA, XLNX, etc.
I did’t get into certain things in the show which should be discussed.
The wildcard in ANY investment strategy is the government.
Just ask Apple and SoyBean farmers and maybe next Facebook.
As trade wars and tariffs carry on and intensify, we have the stockpiling of soy beans, a threatened new iPhone tax that Apple likely eats (I doubt they pass it on to the consumer) and a wild move in oil. Nobody knows when they will end, but I do believe that Apple’s latest tariff tax was leaked to friends of the Fat man based on the price action.
As for the GOP tax plan, I don’t think anyone believed it would help American workers and/or the middle class. For example, GM got a $1.5 billion tax cut in 2017, and today, (neatly after the midterms) GM disposed of 10-15 percent of workforce and closed 2 plants in USA. Tax cuts and forced layoffs are a perfect way to get your stock price up, which GM did of course. The winner – shareholders and executives. This is not #MAGA or America First, just more of the same America.
At this point in the presidency, all America First and #MAGA comments should be followed by LOL.
Mueller must be days away from his Fat Nixon comments and I expect things to get worse for the stock market . I will be happy if I am wrong.
All told, as of today, 90% of the 70 asset classes tracked by Deutsche Bank are posting negative total returns in dollar terms for the year through mid-November, the highest share since 1901.
I will end today with Facebook.
The reason Facebook is in my 8 to 80 portfolio is not because they are nice people. I love Whatsapp and Instagram and I think Facebook is used by hundreds of millions as utility along with the poisonous newsfeed. Facebook is a powerful constellation of apps.
The devils we know are Zuckerberg and Sandberg who are NOT going anywhere. If the government does not get too much further involved, Facebook should find a bottom somewhere in the next 10-20 percent and offer strong upside.
But right now, Facebook has deep pockets, admitted a willingness to be regulated and are being called a tobacco company by other tech leaders. Here is today’s Economist:
“Big tobacco” is what the bosses of several large technology firms have started calling Facebook in private and in public. The company has spent the past year fending off critics who claim it is addictive, bad for democracy and overdue for a regulatory reckoning. Being compared to the tobacco giants is one of the business world’s more toxic insults, but it is not the only unflattering analogy circulating. A lower blow is the suggestion that Facebook may become like Yahoo, the once high-flying internet firm that plunged.
I’m not sure what took so long for the tobacco references. Back in 2009, I compared Facebook and Tobacco as Twitter was passing $1 billion in valuation. Specifically:
Facebook has investors to please and I don’t trust them at all. Twitter’s $1 billion valuation is now a serious pressure to perform financially no matter what insiders say.
If the main way for Social Networks to profitability and valuation is through these sleazy offers, put me in the camp for paying a monthly fee and removing all ads to me and my family.
And make that choice upfront before I use your product the first time.
Tobacco is 100 percent long-term evil, Google is ‘not evil’ (ya right) and Facebook and Twitter fit somewhere in between.
PS – My link to Josh Wolfe’s great technology presentation a few days back in my blog post was broken so here it is again. Worth a watch.
Also published on Medium.