Trade Alert – Here comes wearable computing (and VIX trim)
Budget ceiling! Panic, hurry, Greece is imploding. Oh man, the Fed’s gonna stop QE tomorrow, sell everything! Oh no, rates are finally rising and…wait, you mean, there’s no headlines panicking over the sharp rise in Treasury rates? The only thing you’ll find in the headlines about suddenly spiking rates is a debate of whether or not they’re even bad news at all? See: To Cheer or Fear Rising Bond Yields?
With Treasury rates now up 25% from their recent lows and with the big move upward in dividend stocks all year, that trade I was pointing out a year ago of “Buy high quality dividend stocks that yield more than Treasuries” is over. I don’t think the average trader is thinking through just how much of this last 50% of the rally in stocks has been a forced-on risk trade as savers were desperate for yield and buying stocks instead of CDs and Treasuries. It won’t take much money leaving stocks to make stocks go down sharply. While on the other hand, if the Fed’s own Treasury buying isn’t stopping Treasury rates from rising, then there’s probably not much the average Joe/investor isn’t going to do to make Treasuries go up.
So with the short-term outlook for stocks and Treasuries and bonds looking bad, what’s a good investor and trader to focus on? As always, finding the most Revolutionary Companies and getting ahead of the future trends in tech.
I have written several times about the huge future of wearable computing (see: The most disruptive technology we will ever see — Mini Me computing is the next big thing and it’s huge) that both Apple and Google are positioned to dominate in the same way they dominate smart phones and tablets.
This week at the AllThingsD conference, Tim Cook, the Apple CEO, finally has formally talked extensively about his belief in wearable computing. There will likely be yet another, probably even more open-than-Android operating system and other big underlying trends in the wearable computing industry that we will definitely be getting in front of over the next few years, in the same way we got in front of Apple and Google’s smartphone/tablet dominance years ahead of time. I’m very excited about wearable computing and the huge markets and new economies that it will create as it enables people to more easily engage in business and communication and consumption than ever.
There is definitely a downside to enabling so much invasion of privacy in public places (and private places too) that will come with wearable computing, as many people are presently thinking through with Google Glasses. But there’s no stopping the future. And personally, I’d rather have a billion little brothers watching Big Brother watching us, as Big Brother already has been for years. I trademarked the term “Little Brother Is Watching You” a few years ago, but let it expire while I was on Fox.
Google’s YouTube along with Facebook and Twitter will play prominently in the wearable computing future, as the primary platforms for sharing and consumption.
As for trading today, I’m selling some of my VIX calls that I bought a few weeks ago when the VIX was at its lows. I just want to keep raising some cash and staying flexible. Ebb and flow, bob and weave, cross-over and dunk, button-hook flea-flicker, bunt and hit, throw and pitch, and so on. Stay active, but don’t force anything, in other words.