Trade Alert – Here comes the next tech bubble (but for now, two new hedges)
Let’s get caught back up on a bunch of our positions and recent analysis because after putting in 18-20 hour days for the last couple months subsequent to having acquired Scutify.com and seeing its traffic explode, I’d pushed myself to the point of exhaustion and slept most of the last three days. There’s a huge undercurrent of innovation along with the bubble-blowing bull market in tech right now, and I think we can stay ahead of the curve by connecting some of the dots.
Feet to fire, if I had to buy four stocks right now, I’d do a tranche buy in:
Triquint, Cree, XOne and Lindsay (Four disparate companies in secular high-growth industries)
Four stocks I’d look to buy a tranche of puts and/or short in a tranche right now:
HLF, UBNT, Zillow and Pandora
I’ve already got all four of the longs on the sheets for me and lower price levels and am not adding to them just now. I’ve only got the Pandora puts of the four short ideas mentioned and I’m going to short a few shares of HLF and UBNT today as they look like two highflying momentum stocks who might be ready to break down, therefore making them good hedges for our own highflying momentum stocks.
Some of my VIX call hedges, those with the November expiration dates obviously, expired last week worthless. That’s ok, being that they were hedges and that we were, as I’d noted every time we talked about why I was starting to build up cash and hedges more aggressively of late, staying with our bubble-blowing bull market net long positioning overall. I still have some more December expiration VIX calls remaining on the sheets as hedges and if the markets continue to blow higher, we’ll likely see those expire worthless too, even as our overall portfolios would likely then be at yet new all-time highs there too. A wise mentor of mine used to tell me all the time when bidding me good-bye, “May you lose money on all your hedges,” because that likely means your real portfolio is therefore rocking.
First off, speaking of the bubble-blowing bull market we’re in, as my old friend Julie Verhage who’s killing it over at Fox these days, pointed out this morning that “Before today, the last time the NASDAQ touched 4,000 was September 11, 2000. The last close above 4,000 was September 7, 2000.” Remember the crash that came after the year 2000? I personally don’t think this current stock market bubble is about to pop as I think the fiscal and monetary policies of the current regimes in place around the developed world are set to blow these asset bubbles bigger than ever before they crash yet again some day. Just not yet.
Pandora Slips: Bull, Bear Cheer Growth, But Is It Enough? – $P‘s quarter didn’t look good enough given the valuation and recent endless rally. I’d added Pandora to the Revolution Investing portfolio as part of the increased “hedge” to our bubblish long stocks like Amazon, Google, Sandisk and others and I think it remains wildly overvalued and expectations of earnings potential for this company over the next couple years are too high.
Meanwhile, if you haven’t tried Spotify (not to be confused with my own aforemtioned Scutify), you’re missing the entire wave of the future. Spotify’s got radio station technologies just like Pandora and now iTunes does, but for about the same price as a Netflix subscription, I have access to actually downloading and saving most any song on the planet in the highest quality digital format available these days. I don’t use the radio much, I explore and search and download entire albums from artists, song writers, producers or any other filter I might decide to pull from. Spotify isn’t public yet, but I expect it will come public or get bought for billions in the next three to five years.
Google is reportedly in discussions with at least one eyewear company to have Google Glass in optometry offices – Over a year ago, I wrote a newsletter called, “Get in on the wearable computing bubble” and this is exactly what I was talking about when I wrote, “You thought the App Revolution Bubble was big and profitable for us? You ain’t seen nothing yet. Here comes the Wearable Computing Bubble down the pike.” Wearables like designer glasses with Google Glass technology inside of it is going to be a multi-trillion dollar industry in ten to twenty years.
Apple has confirmed it purchased PrimeSense, the company behind XBox Kinect – Voice and motion command of these wearable devices that are coming is going to be one of the standards that Google, Apple, Microsoft, Amazon and Facebook are going to be competing on.
What We’ve Learned – Lots of interesting random thoughts from my favorite music analyst, Bob Lefsetz, in this one. But this passing quote from Bob about iPhone vs Android is an absolutely fantastic insight based on our old “Flip It” concept: “Huawei Android phones are so cheap maybe Apple was right not to compete at the bottom of the market.” Hmm.
