$FB flat. Before the report, I’d really thought it’d be up or down at least 5% and after seeing the flat action after the strong report, I’m wondering if and when it ever will get out of the $70s.
No trades for me today.
Here’s the transcript for this week’s Live Q&A Chat.
Q. Any thoughts on INTC here? I’m looking to add a second tranche… Got my first tranche in at about 30.
A. I wrote extensively about $INTC yesterday, so read this:https://twc.scutify.com/articl… But yea, I think $INTC looks like a good pick for a second tranche, while it’s down on $MSFT‘s ugly report yesterday.
Q. Any thoughts about yelp? Worth while hanging on to?
A. $YELP is a good company and likely to get bought at some point (Yahoo, maybe?), but seemingly dead money for now.
Q. HIMX just popped. Is this a long term buy or just a quick pop?
A. $HIMX is on fire. They’ve been managing their growth well, but as I’d said when I’d sold it, I don’t need to take the risks on another small/start-up-like chip supplier.
Q. Are you surprised at the relative small price jump in AAPL after that report? I’m definitely adding…kind of scary that the greatest quarterly report of all time can only move a stock 6-7%…
A. Say what? Relatively “small” price jump? Let’s do some relative perspective on it:$AAPL‘s 7% move today is worth $50BB of valuation — that “small” price move is worth the entire market cap of $F Ford Motors! 🙂
Q. Oil and Gas stocks getting whacked again today…some day these are going to soar…but when?
A. I don’t know why we have to try to catch a bottom in energy stocks. Let’s find the next $AAPL (or just buy more $AAPL) instead of fighting the energy collapse. An old friend of mine who recently died started as a oil field hand and eventually bought and sold some of the same handful of oil co’s several times. He’d get out in the boom times and inevitably buy ’em back out of bankruptcy years later. I still think it will take years for oil to get back to its old highs and then some time after that before the jobs/boom come back to oil towns.
Q. I’ve heard you say “a long time” on energy stocks again. For point of reference how long is that to you?
A. I could see this energy cycle playing out as follows: 1. Supplies from all the tens of billions of dollars invested in energy infrastructure keep coming online this year and into next. 2. Then, maybe 3-5 years of continued underinvestment in new wells and new supply will mean there supply side is finally stabilized. 3. Meanwhile, consumers will buy bigger vehicles and otherwise learn to ignore energy prices since they’re low, which will cause demand to rise over the next 3-7 years. 4. Somewhere in the next 5-7 years then, we’d expect to see the bottom of the energy cycle turn and prices will rise. 5. Could take twice as long as all my above estimates to play out. UPSHOT: A “long time” when it comes to seeing the energy cycle bottom and turn higher for investors could be 5-15 years out.
Q. Wow! That is the absolute longest I could see it playing out. But, I think I agree with Jeff Gundlach that it’ll play out faster if for no other reason to avoid a big war. … Gundlach: Oil is incredibly important right now. If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying. I would be shocked and very scared if by year-end there isn’t some progress towards moving oil prices back towards the $70s per barrel. For me, as an investor though, I think the biggest money is in nat gas and solar. Would love to get $FSLR‘s fortress balance sheet, growth and move into polysilicon at a bargain basement price. Do you see that happening?
A. So, are you saying you think governments/bankers/traders will manipulate the price of oil back into the $70s by year-end for geopolitical reasons? I think the market forces are in control of long-term energy prices and therefore the energy cycle for now.
Q. Based on your outlook on energy prices, I would expect Russia’s economy to collapse. Should we look at shorting $YNDX and other Russian companies that trade on US exchanges?
A. I don’t like the outlook for Russia’s economy if energy prices are going to be down here for the next few years or a decade either. But I do think $YNDX is a Revolutionary company in Russia’s Internet, so I wouldn’t short it. If I weren’t so averse to investing in companies based overseas, I’d want to buy $YNDX at some point no matter what the price of oil does.
Q. Okay but what about shorting other Russian stocks?
A. Too hard to game as so much of the Russian stock market has already crashed. I’ll stick with finding the next $AAPL, $GOOG, and $FB instead. 🙂
Q. Thoughts on Fb er tonight?
A. My thoughts on $FB‘s earnings tonight? “Gulp.” No, just kidding. FB has more than 75% of the developed world’s adults on their site, so I don’t think we should worry too much about “user growth” for FB per se. The markets will want to see continued increasing monetization of those users in the developed world and will want to hear about monetizing WhatsApp too. I think $FB will break out of its $70s range one way or another tomorrow, and as a long-term long, I’d rather see its upside start sooner rather than later. But we’ll just have to wait and see. I’m holding my own long-held $FB investment steady either way for now.
More on $FB‘s earnings tonight: Many Facebook Inc FB 1.19% investors will be watching for an increase in DAUs (daily active users) and MAUs (monthly active users) this quarter. Former hedge fund manager Cody Willard thinks investors should focus on something else instead. “Facebook’s penetration in the developed world is so high at this point,” Willard, who now serves as the chairman of Scutify (a financial social network), told Benzinga. “Three quarters of the adult population in the developed world is on Facebook. The growth has to come from monetization of those users — not from new users.” That, he said, is what people really want to see from Facebook. “They want to make sure that we are very early on in the monetization potential of the billion-plus people that use Facebook,” Willard added. Read more: http://www.benzinga.com/analys…
