[Fast Money Review Archive — August-September 2020]
Weiss is Momentum Trading again
Steve Weiss said at the top of Wednesday's (9/30) Halftime Report that he "perhaps got too negative last week," hence, he's rebuying some stocks that he recently unloaded.
Weiss said he thought the presidential debate was "Biden's to lose." Fair enough, but we remember Romney trouncing Obama and Mondale trouncing Reagan in Debate 1 ... and it didn't exactly change what everyone expected in November.
Joe Terranova bluntly called the debate a "fiasco."
Judge uncorked the ambiguous tweet from Lloyd Blankfein that seemed to throw shade at both candidates. "Now that's one person's view," Judge qualified.
Jenny Harrington called Blankfein's description a "statement of fact" and a "very middle of the road" comment.
Judge and Jenny then clashed over capital gains taxes, with Judge insisting that what Joe Biden said at the debate is what will happen, while Jenny cautioned against drawing a "foregone conclusion."
"He said he'd take the corporate rate to 28%. So we do know," said Judge, as if the reality of any presidential administration even comes close to the campaign pledges.
"Taxes are likely to go up. That's our bottom line," Judge added.
Judge called it "a train wreck of a debate."
Jon Najarian said SBUX is range-bound: "Buy it at 80, sell it at 90."
Admittedly, it should be more entertaining than when Mitt Romney took on Barack Obama
In a fairly noncommittal episode of the Halftime Report on Monday (9/28), Bryn Talkington was making the most noise.
Talkington asserted, "I think the highs that we saw the first week of September are probably in for the year."
Perhaps overstating the political calendar, Talkington contended, "I think the debate tomorrow night is incredibly important."
Not only that, but, "I think tomorrow night will be probably one of the most, um, heavily watched shows, or debates, in history," Talkington said.
Bryn said Trump voters are a "quieter group."
We tried to piece this together, but couldn't quite figure it out ... if Tuesday is going to go a long way toward clinching the presidency for someone, then there should be a way to play it ... but Talkington didn't exactly articulate what that may be.
"Maybe most of the price damage has been done," suggested Joe Terranova, "And now it's about a little bit of, we've gotta mark some time into the earnings season to really see if we're gonna be able to have a V-snapback and go back and challenge that 3,588 again. I don't think we do. I think we churn right here between 3,257 and 34 and a quarter."
Guest host Brian Sullivan claimed "the VIX is the Minnesota Vikings."
Pete Najarian thundered, "So many people think that the VIX is the 'fear index.' It is NOT the fear index. It is a measurement of expectations going forward (sic last 2 words redundant)."
Weiss sounds like he’s doing some Momentum Trading®
Friday's (9/25) Halftime Report would've gone down in history as a rather low-key gathering ... except that Judge let slip a longtime presupposition that needs to be stopped.
This page will do so.
We'll get to that in a moment.
Steve Weiss opened the show suggesting the outcome of the presidential election could take as long as the Bush-Gore case of 2000 as a reason to be cautious about stocks. Then Weiss conceded things could change if "there is some movement on a stimulus bill."
Kourtney Gibson, in stunning ensemble, began her remarks with a boost for Judge, telling him, "First of all, hey Scott, it's been so long, I've missed you."
Judge repaid the nice note by regularly referring to Gibson — based on what she said Friday — as "The woman who called the bottom."
Gibson, who contended that "Tech is a consumer staple at this point," offered an upbeat take on the markets that wasn't enough to sway Grandpa Weiss, who said he sold PTON because of vulnerability in a downturn, and "No. 2, it's a hot stock."
Weiss also said he sold LULU and then tripped over himself to say he was long at 400. (This writer is long LULU.)
Weiss wondered why Jon Najarian and Kourtney were doing "dumpster diving" regarding UBER and the cruise lines.
Judge asked Doc whether this is a "garden-variety correction" or a "larger meltdown" of stocks. Doc explained, "I'm a shopper. I'm not a seller at these levels."
Nevertheless, Shannon Saccocia said, "I think the next 6 weeks are gonna be fairly volatile." (Note: She's not the first person to make that assessment.)
Jenny Harrington volunteered, "I think we're in for a lot of bumpiness."
Gibson struck an optimistic tone for cruise ships; Weiss called them "petri dishes."
Viewers got a "manna from heaven" (snicker) from Jon Najarian during a discussion of UBER. (This writer is long UBER.)
OK. Let's talk briefly about sports. Judge made a reference to Gibson about the 2-0 (snicker) (yeah right) Chicago Bears.
Gibson quickly explained to Wapner, "This is a Dolphin household."
Exxxxxactly.
Wapner, like many people, appears to subscribe to the Shortest-Radius Theory®: That being, people are or should be fans of the sports teams closest to their homes.
As if geography should determine which professional team of athletes — who are hired from all over the nation — we choose to support.
Judge once worked in Dallas. Shouldn't he be a Cowboy fan?
So here's some advice for those who seem to think the monstrosity of the weekly NFL TV map represents truth about favorite teams:
It's your call.
‘Nothing spontaneous’
happens during Zoom calls
On a Halftime Report episode Monday (9/21) in which panelists sounded like they were champing at the bit to buy stocks, an interesting little discussion on BA broke out.
Jim Lebenthal said he likes the stock, because "you've got a zero-premium call option on the commercial business."
Prone to hyperbole on this subject, Steve Weiss jumped in to say sarcastically that he's got a "great buy idea" for Jim, a company "where all of their customers are insolvent and may go bankrupt if they don't get bailouts" (as if they're not going to get bailouts). (This writer is long AAL and SAVE.)
"Steve you're getting the commercial business for zero," Jim sighed.
Weiss and Jim kept talking over each other; Weiss continued on and said China and business travel are both serious headwinds for BA. "I don't know where the buy thesis is for Boeing," Weiss said.
"You totally ignored the argument," Jim countered. "The value of the commercial business in the stock right now is zero."
The word "love" came up during this exchange enough times to make viewers feel goofy. "It's our love for each other, I'm trying to save you additional pain," Weiss explained.
Bryn Talkington expressed the most optimism for air travel, saying, "I've been on a plane every week for the past 6 weeks. There are a lot of people in the airports. And people are flying. And I don't buy that everyone's gonna go back to this Zoom world and do Zoom video calls. It's just like so much is left out of conversation, there's nothing, you know, there's nothing spontaneous that happens."
Not really sure how a court vacancy is a market-moving event
Joe Terranova claimed at the top of Monday's (9/21) Halftime Report that this is an "absolute perfect technical correction."
Jim Lebenthal said he doesn't think you have to wait until Nov. 3 for a market rebound. He said September's setbacks have only "vanished" the August rally. (He didn't say that August was "euphoria," but it was.)
Jim said that with Fed support, he wouldn't wait much longer to buy in, pointing to another 4% lower in the S&P 500 that would take it to its 200-day. "I would expect that that is the support that comes in," Jim said.
Grandpa Judge noted that people say they'll buy the dip and then they get "afraid" to buy it when it actually happens.
Bryn Talkington said it's "rare" when the Nasdaq touches its 200-day; if it does, it's "historically a tremendous, tremendous buying opportunity."
But Grandpa Steve Weiss said the market's reaction since the recent Fed meeting shows that investors actually believe "the Fed's out of tools."
And Sarat Sethi said "we needed this pullback" but there's "absolutely" more to come.
Joe Terranova allowed that maybe we need a "normal" correction and not a "quick, fast" correction.
The difference-maker, in case the show needed to pick a side, was Tom Lee, who asserted, "I think it's very likely stocks will make their lows before Election Day."
Lee even succumbed to hyperbole, stating, "When we look at how oversold it is, we're pretty close to where we were in late March. ... I would look at this as a massive amount of emerging opportunities being created."
Lee said a second wave of the COVID-19 is possible, but he asserted that the virus is "under control" in the U.S. Rather grimly, Judge responded, "In fact it's double digits in many places ... The numbers tell the story." Then he thanked Lee for appearing anyway.
On the 5 p.m. Fast Money, Guy Adami said Twitter people are "very abusive" (this site isn't on Twitter) and tell him he's "doomsday" or "always negative."
Scott Wapner’s important interview with Brad Gerstner and Mike Speiser
Just a week ago (9/9), an entire episode of CNBC's Halftime Report was devoted to Brad Gerstner's push for corporate board diversity, an effort called The Board Challenge that, according to its press release of 9/9, is launching "a pledge for U.S. corporate boards of directors to add a Black director within the next year."
A week later (9/16), Gerstner was back, not for The Board Challenge but to discuss the Snowflake IPO, in which Gerstner is a major investor.
About halfway through the program, Scott Wapner asked Gerstner, "It's my understanding that Snowflake doesn't have any African Americans on the- the corporate board. Is that right?"
In a lengthy response, Gerstner at first said he's had "almost 50 companies" contact him. "And of course I talked to Frank and Mike, um, uh, about the board at, uh, at Snowflake. I think they've done an incredible job of, of balancing it over the course of the last year. And, and, with all of that change, right, it's understandable that- that they don't wanna make more change right at this point in time. Um, but the company is absolutely committed to diversity. Um, and that includes all types of diversity, uh, not just Black directors on the board but diversity throughout the executive team and on the board."
Then Wapner asked Mike Speiser, lead independent director, if it's a "mistake" not to have a Black board member.
"I think that Brad answered the question well," Speiser said. "You know, it's something we're take (sic) very seriously, we're working on, and, um, the board's made quite a bit of change in the past 6 months already. And, uh, you know, we're- we're looking at it at all times and um, I think- I think it's a good question and a question we're looking at currently and we take very seriously."
Then Wapner asked an even better question of Speiser: "Did you guys take the, the board-challenge pledge that, that Brad has?"
"Um, you know, I'm not that- I got the note from Brad, I don't know that we've taken it or not. Um, I'll have to talk to the team about it," Speiser said.
"They're super-passionate about it," Gerstner asserted, adding "they've made massive changes to the board, including uh gender diversity on the board over the course of the last year, and I had a great conversation and I understand not all boards, uh, you know, can move at the same cadence."
"I don't think it's a missed opportunity; I think it's a matter of timing. But I'm glad you're calling me out about it," Gerstner added. "And I hope we ask every CEO and every board member who comes on if they've taken the pledge, if not, why not."
It's not about pointing the finger at Altimeter or Snowflake. It's about, if you're going to come on television and call for every company to add an African American board member ... and then just one week later, you're back on TV cheerleading for a great new company that you're investing in that has no African American board members ... and that company apparently knows nothing about the board-challenge pledge ... and if they're just going to say that things like this are a "matter of timing" and there's too much "change" happening to do it now ... doesn't that kind of cast doubt on this initiative or its efficacy?
Relevant, fair, important questions at the right tone — one of Wapner's finest hours.
GOOGL story goes off the rails
On Friday's (9/18) Halftime Report, Steve Weiss first tried to quibble with the definition of a "value" stock, suggesting FB, which Judge didn't want to debate. Weiss eventually said that in the next 6 months to a year, you're "better suited in growth than the industrial names."
Weiss said he was "a hair away from selling GOOGL" this week, but apparently he didn't sell, at least he never finished the story, though he mentioned texting Joe Terranova early in the week.
Scott Nations noted Nasdaq 100 futures are having a "tough time," but Nations contended, "This is a break to be bought."
‘Definitely going to be a contentious election season’
On Monday's (9/14) Halftime Report, Jon Najarian, speaking from only a scratchy phone connection, said he bought AAPL shares.
But first he claimed he bought it because he needed a "more tradeable lot size" (snicker), and so he "rounded up."
Finally, Judge asked if Doc thinks the selling is over. "Yessir," Doc said.
Nobody else was quite as effusive. "I would caution investors about making too big of a bet," said Rob Sechan, who asserted that "we've come awful far, awful fast."
Sechan said it's "definitely going to be a contentious election season." Has there ever been a presidential election that was NOT contentious? Conceded perhaps?
Pressed by Judge, Sechan said the value now is in the "cyclical laggards," an argument heard about 17 times a day on CNBC. ("They may not catch fire right away, but over the next 1-3 years ...") (That's a sample quote, not what Sechan actually said.)
Joe Terranova also said it's "a little bit too soon" to call the coast clear.
Jim Lebenthal contended that names such as TSLA and ZM are "vulnerable."
Jim revealed that he liquidated his XOM stake and explained, "Exxon bought XTO, I don't know, about 8 years ago, paid $19 billion for it. And it's still carrying that asset mostly at that value."
That's a curious valuation (which of course went unchallenged by Judge), because it's long been our understanding that XOM actually paid $40 billion for XTO.
Jon Najarian claimed that Jane Fraser "is really a game-changer" at Citi. Doc suggested that if you can pick up C at "distressed prices," you could have a good trade, except it's basically the same price as 7 years ago, pre-1-for-10, when Joe used to talk about how much "institutional buying" would go after the name once it gets above $5.
Pete’s ‘completely’
returned to his gym
The highlight of Friday's (9/11) Halftime Report was a candid discussion about PTON. (This writer has no position in PTON.)
Steve Weiss, who touts the product and the "numbers" it's putting up and says he wants to rebuild a position, nevertheless gushed about selling 110 PTON calls for "5 and change."
Weiss said you can't look at Peloton as a "bike" (which is what Joe Terranova called it) but as a "subscription model." In an example of Summer 2020 Euphoria, Judge said Jason Calacanis is even suggesting Peloton as having "Netflix potential."
One guy not buying that is Pete Najarian, who bellowed, "I've completely gone back to my gym."
Pete said PTON has done everything right but "pulled everything forward" and predicted a "big slowdown" for the system in which people pay $2,500-$5,000 plus a subscription, "Are you kidding me?"
Weiss shrugged that "it's cheaper than the gym," and Weiss and Degas Wright asserted that "people are not gonna go back to the gym."
In classic overstatement, Judge claimed that Pete "must want everybody to sell Zoom ... Teledoc ... all these names that, that thrive during the peak of the pandemic, because when things go back to normal, then no one's gonna Zoom anymore, and everybody's gonna go see the doctor ..."
Pete insisted, "Absolutely not Scott," predicting a "hybrid society."
Meanwhile, Joe Terranova opined that "much of the price damage has been done" in the Nasdaq.
Joe said that "certainly" in names such as TSLA, there's an "extreme overvaluation." And he said AAPL's move upward this summer had "zero" to do with fundamentals but rather "speculative fervor" and "positioning."
Judge kept hectoring Joe over putting MSFT circa 1999 "in the same conversation" as current megacap tech valuations, even though Joe specifically said "I don't think we can make the analogy to uh 1999 and 2000" in which MSFT goes from a 60 multiple to 20 and doesn't reach 40 for 13 years.
Joe stressed that AAPL and TSLA shouldn't be lumped in together, which Judge claimed he wasn't doing.
Weiss said he sold LULU 355 calls expiring Friday for $19. (This writer is long LULU.)
Tom Lee: Buy the dip
It never had a chance.
Thursday's (9/10) Halftime Report opened with Josh Brown doing a self-examination of his own trading/investing biases/tendencies and informing television viewers about every finding in real-time.
"You gotta know who you are," Brown explained.
Eventually, Judge reported that Tom Lee is saying "buy the dip," which is basically true, though we're in a euphoria pullback, we figure the euphoria will return before you can snap your fingers.
Jim Lebenthal claimed there's been "tremendous inflows" into bonds (snicker).
The star guest was Al Michaels, about to open another season of broadcasting prime-time NFL, this year from KC.
"Nobody watches more CNBC than I do," Michaels claimed. Judge didn't bother to ask Michaels about Michaels' favorite long-term holding, FAS.
Jon Najarian pronounced "Capri" as "COPP-ree (snicker)."
On Thursday's 5 p.m. Fast Money, Karen Finerman speculated that the defeat of the "skinny" relief package might've turned the financial markets south. Guy Adami called the November election a "coin flip" (snicker).
At least it wasn’t ‘growth vs. value’ (although it did creep into the conversation a few times)
On Tuesday's (9/8) Halftime Report, we were glad — who wouldn't be — to see Judge back at the helm.
But it was another fairly lackluster program in which "The Investment Committee" (or, as some would say, Pack of Momentum Traders) basically sat on its hands waiting for the latest correction to pass.
At one point, Josh Brown claimed that he has been "screaming" about the perils of "stock-split mania," adding that "people that bought after the split announcement and leading up to it are absolutely destroyed. Destroyed."
That might be news to Steve Weiss, who on Aug. 19 (see below) said he bought AAPL after the split declaration, because even though the split is meaningless economically, "I just thought that the market's going to react positively," and then on Aug. 28 reported a "pretty good gain" of 15% in less than a month.
Brown on Tuesday actually suggested that there are books young Robinhood traders could read, but these hotshots who made big money over the summer think they're above that. "I did those stupid trades when I was 22," Brown explained.
Jon Najarian mentioned an options trade of selling AMD puts and warned it's the "deep end" of the trading pool and that you have to be prepared to buy the stock.
Weiss’ pop quiz doesn’t produce the results he anticipated
Well, whaddaya know.
All it took was for this page to use the "e" word (see below), and within hours, stocks were in massive retreat.
Guest host Tyler Mathisen on Thursday's (9/3) Halftime Report said it was a "really surprising pullback." (Sure, because stocks are NOT ALLOWED to go down anymore.)
Mike Santoli opined that "the fever broke today."
The funny thing is, in April, basically everyone (think Jim Lebenthal, but he wasn't alone) was predicting a pullback of some kind because Judge was suggesting, practically literally every day, that the market might be "ahead of itself," but then you get into late August and September on an absurd run, and it's all "justified" because it's just a new wave of companies that are going to make gobs of revenue and are simply "pulling forward" that revenue now because of the pandemic.
Jenny Harrington said Thursday that the party isn't over, but those who "party the hardest" might need a "nap."
Jenny cited what's become a 43%, "totally unsustainable" divide between growth return and value return.
She contended people have gotten "emotionally exhausted" in watching names such as TSLA and AAPL do nothing but go up. (Those poor people, wearing themselves out watching the ticker.)
Steve Weiss said he'd wait "at least a year or two" to take the COVID vaccine after it comes to market. Then he asked the whole panel how soon they'd take it. Rob Sechan and Jenny Harrington said they'd take it "immediately."
Time for Judge, other hosts to salute Ricky Sandler’s spectacular March call (NOT Brad ‘800 pushups a day’ Gilbert’s 77% cash on March 20 and prediction of Dow 10,000)
Basically, the S&P 500 goes up anywhere from 20-60 points a day.
Nevertheless, Steve Weiss insisted on Wednesday's (9/2) Halftime Report, "There's not one experienced investor that I speak to that I would say is complacent. ... Professional investors are not complacent."
Well, this page — while very happy that stocks are high — would prefer not a "c" word but the "e" word:
Euphoria.
Note: We're not advising anyone to sell (if you take stock advice from this page, you're bound to end up with zero-laden accounts), because euphoria can probably last a year or more.
In fact, from now until, oh, year-end, or Election Day, or next spring might be the most parabolic returns of everyone's life.
But everyone knows this just isn't normalcy, that money can't flood the stock market forever.
And when supposed "value" (snicker) investors keep revealing on the Halftime Report that they're long AMZN, TSLA, NFLX, FB, NVDA, ROKU, SHAK, LULU, etc., you know we're in unusual territory.
Weiss conceded at the top of the show that it's a "momentum market." But he said he wants to forget the "trite" slogans and "focus on what's underneath the headline indices."
What's "underneath" is everyone buying stocks. #MultipleHeaven
Joe Terranova, who has recently assured that any pullback this fall will be short-lived, said Wednesday he sees LULU going "well north of 400 bucks in the coming months."
He also said he sees SBUX "targeting" the 94 high of January.
Joe said XBI is the "No. 1. candidate" in his portfolio to be sold. He said in its place, he'd buy OLLI and one of his old favorites (no, not Palo Alto), J.M. Smucker. (Remember when the coffee trade (snicker) was going through the roof? SBUX, DNKN, SJM, Keurig, Herb Greenberg questioning brewer sales, etc.)
Dr. New World said he'll hang on to ABT but indicated that ABBV is a good name to own also.
In what has to be good news for Jim Lebenthal, Pete Najarian reported that INTC September 53 calls were getting bought; he said he owns the stock as well as the calls. Perhaps Jim will be able to cash in on the "strength" he predicted would come after the shares slumped below 50. (Though it makes one wonder why Jim wasn't calling INTC a buy at 49.)
Pete called M "too dangerous."
Tiffany McGhee explained why TSLA has become a tech giant. "Tesla's really not a car company," she said.
Scott Nations offered a short trade for crude oil's October contract via options with a 43 stop.
Guest host Tyler Mathisen said "my neighbor just bought a car" through Facebook.
Josh takes ‘original cost’
out of his ZM stake
We sat through Tuesday's (9/1) Halftime Report, guest-hosted by the venerable Tyler Mathisen, and happened to hear a couple things that were worth (snicker) putting on this page. (No, neither had anything to do with Joe selling AMZN.)
There was a discussion of ZM, during which Josh Brown affirmed he's long the name.
That got us wondering if he was going to say that he's trimmed a bit, not because he expects it to fall ... but because of the size of his position.
Well, by the end of Brown's remarks, we heard: "I'm in the stock, I took my original cost out of it, it's all house's money."
Bingo.
He didn't sell it because of any view on where it is going.
He sold it relative to his own basis.
Make of that what you will.
What this page might make of that is that, if people are just trading against their cost basis and not on whether a stock might go higher or lower, then it amounts to guessing/closet indexing/momentum trading that seems less reliable than an index fund.
But make of that what you will.
Also, Tyler Mathisen claimed that by going 32 minutes until the first commercial, he accomplished "the longest A block in Halftime history." Does he seriously believe that? Hasn't he seen the (well-chronicled here) occasional commercial-free productions of Judge? #leavethescorecardstothepros
Tom Lee was more right than wrong about ‘monstrous’ rally Aug. 14
A few weeks ago (hit PgDn a few times), or Aug. 7 to be exact, Judge brought in Tom Lee, who predicted a "monstrous" rally starting Aug. 14.
Lee said he arrived at Aug. 14 because it would mark 20 days since the recent peak in national COVID cases; the previous 20-days-after-peak in April had apparently helped kick the spring/summer rally into overdrive.
This page viewed Lee's call with skepticism about the specifics. However, that call has come closer to panning out than busting out.
Since the Sept. 13 close, the S&P 500 is up 3.8% — which doesn't seem like a ‘monstrous rally’ in a summer full of them but is still a very healthy gain for 2 weeks.
On Monday (8/31), Lee wasn't on the Halftime Report (see, CNBC Internecine Scheduling Wars Alert) but spoke with Tyler Mathisen on Power Lunch, where Lee predicted the "epicenter" stocks are the ones to own into year-end.
On a sleepy Halftime Report, Judge read a note from Ed Yardeni that said the Fed is fueling a "melt-up" in stocks, for those who haven't been watching for 5 months. (Translation: Ed is eager, as are many of us, for a pullback to buy all the stocks he likes, but there's never a pulllback.)
Joe Terranova actually mentioned "the price of silver (snicker)" in his opening remarks and even brought it up again minutes later. Joe predicted a "modest correction at some point" in the fall, but he claimed it'll be "very modest."
Shannon Saccocia predicted "discomfort" with upcoming data.
Jon Najarian actually mentioned "HeatSeeker" (snicker).
Did Weiss mean ‘avoid,’ or ‘beat’? (a/k/a Doc tries to claim that an option has ‘less risk’ than a share of stock)
Jim Lebenthal, who has often mentioned INTC and ROKU on the Halftime Report, delivered a bit of an update on both names on Friday (8/28).
Jim said viewers know he's "looking for an exit" with INTC.
Indeed. Jim's recent thoughts on that stock have been chronicled on this page (see below). We thought it was interesting a month ago that Jim vowed to sell into "strength" in the mid-50s when the stock was dipping below $50. On Friday, INTC closed barely above $50 for the first time in a month.
Apparently, as of lunchtime Friday, Jim was still hoping for more.
As for ROKU, the name came up in one of Jon Najarian's options segments. Guest host Dom Chu asked Jim if he likes ROKU now. "I just bought some about 10 minutes ago," Jim claimed, something Steve Weiss questioned later in the program.
Speaking of options, Najarian actually claimed — with a straight face — that when buying an option, "that derivative has less risk than owning the actual stock."
Really? According to an Investopedia article of 2009, about 75% of options go to zero. We're trying to square that with how it's "less risk" than a share of stock.
(Translation: What Najarian is really saying is that options have a lower nominal cost than shares of stock; for example, you can buy AAPL calls (of some sort of strike price) that probably cost $10 apiece, as opposed to buying 1 share of stock for $500. What Najarian is trying to claim is that if AAPL shares, for example, drop to $475, you're coming out ahead if you only lost $10/share on an option vs. $25 a share in stock price, not acknowledging that the option decays with time and expires, while the stock can easily regain the $25 and then some over time.)
Steve Weiss said he made a "pretty good gain" of 15% in less than a month on his AAPL trading position, for those looking for helpful advice regarding purchases of a month ago.
In an attempted takedown of show terminology, Weiss said "we've gotta stop the debate" about the "legacy of old, value names." He curiously added, "That's why you have active managers, to avoid the indexes."
Nevertheless, Jim Lebenthal was happy to discuss "growth" and "value" in traditional terms, offering that the growth outperformance vs. value has been happening for "basically 13 years." And the last 5 years, Jim said, the Russell 1000 growth is up 5-fold over the Russell 1000 value, which Jim said is "mathematically impossible to continue."
Well, we've been hearing that for a while. On Thursday's (8/27) Halftime, Weiss seemed to indicate the market might be a bit overcooked, stating at the 21-minute mark, "Let's call this for what it is. Anybody who's been in the market for any period of time, including everybody in this show, has to feel that we're gettin' a little greedy at this point."
Saying banks should be sold on any pop, Weiss mentioned the "potential for Elizabeth Warren to be Treasury secretary."
Joe questions if S&P will ever dip below 2,500 again
Joe Terranova opened Wednesday's (8/26) Halftime Report saying, "The market has been too hot for the better part of the last 8 to 12 weeks."
Even so, Joe apparently doesn't think a huge crash is possible, because moments later, he mused, "You have to question, do you ever go back below 2,500 again?"
And even in this "too hot" market, Joe said of CRM, "I would buy it now."
Guest host Sully said "the production staff" told him that Joe sold SHOP earlier this year. (That could rank up there with Judge's favorite, Joe's sale of AMZN.) Joe said that on a SHOP pullback, "certainly I would be in."
AAPL shares do not care how much of a percentage they are of someone’s portfolio or what that person’s basis is
Guest host Sully opened Tuesday's (8/25) Halftime Report announcing that Josh Brown sold 20% of his AAPL and NVDA positions.
"I'm basically saying, Nvidia and Apple have become too big a part of my portfolio," Brown said.
Well, that's the kind of comment that always gets our Spider Sense tingling.
"These stocks have ballooned, so this is like risk management, is the best way to phrase that," Brown added.
"Risk management" is an interesting term. See, this page — since its founding — is a little suspicious that the term "risk management" is bogus.
And the way we like to summarize it is the headline above.
Brown quoted Warren Buffett about being at the "end of the party," and how it's hard to walk out of the room. Brown called that a "really apt" metaphor before adding this very important point: "We have no idea if Apple- if, if Apple puts on another 20% before this, this run is over."
So if he has "no idea" what AAPL shares are going to do, why is it in his portfolio?
Presumably, the reason for picking single stocks — or hiring someone to do it — for your portfolio is because you can beat the index, or wish to try.
If you're selling or buying stocks based on the size of other stocks in your portfolio, then it's like picking the 49ers in Super Bowl LIV because you already got both of the Chiefs' AFC games correct. ("Hey Edna, let's buy TOL." "Are you sure? John Doe's basis is SEVENTEEN DOLLARS!!!!!! His position's now OUTSIZED!!!!!!")
Stephanie Link offered an even more dubious head-scratcher, stating she dumped FB entirely because it got "very big."
"I, I think what Josh is doing makes 100% sense," Link said. "And I did that with Facebook. I sold out of Facebook completely and I have been trimming Amazon, because they really did become very big positions, overweights, um, in my portfolio."
Pete Najarian at first claimed "Josh is displaying great discipline" with AAPL, even though Pete himself is "still holding on and I have no intention of selling," a pair of claims that are utterly contradictory.
Basically, when we hear "risk management" on these programs, we're pretty sure it's nothing more than momentum trading/closet indexing/guessing.
If someone is spending hours on "risk managing" their portfolio, why aren't they "risk managing" their careers ... as in ... "I'm working for Bear Stearns in 2007; I better cut back my hours and use them on 3 other jobs in case something bad happens."
Didn't think so.
By the way, since Brown is into quoting Warren Buffett, how about this one: "Risk comes from not knowing what you're doing."
And there's this, from Peter Lynch via Buffett: "Selling your winners and holding your losers is like cutting the flowers and watering the weeds."
After Stephanie spoke, Sully joked about high valuations and asked Josh to "jump in." But Stephanie jumped back in and people were talking over each other as Stephanie finally got the floor to stress NVDA has good things going for it though the valuation is high.
No word on whether Joe got a loan from Judge to add CRM and Palo Alto to his portfolio
Honestly, in early March, it never crossed the minds at CNBCfix HQ that people would be talking about 1998 or 1999 before the summer is even over.
Jenny Harrington did just that on Monday's (8/24) Halftime Report, stating she's cautious on this market and hasn't seen "huge echoes" of 98 and 99, "until this."
Guest host Missy Lee though tried the Karen Finerman argument on Jenny, stating that if Jenny's continuing to hold stocks, that's basically the same thing as buying them every day. (It's not a great description actually because of tax ramifications.)
Kourtney Gibson and Jon Najarian both indicated the market will continue to be bought. Joe Terranova opined that the rest of this year won't be a "chase for performance" but "recovery in performance (snicker)."
Joe at one point added, "You certainly have to have some form of exposure to the Big 4."
Finally, Joe said he'd "reiterate" what he said last week: "If you don't own Apple, and you have that average retail account of about $10,000, OK, there's a difference between buying Apple at $550 and buying Apple, uh, at around $125. There's a big difference in terms of what your portfolio is going to look like in a diversification mannerism (snicker)."
Well, honestly, 1) we don't see a big portfolio difference between owning 1 share of a company at $500 and 4 shares of the same company at $125, and 2) we kind of doubt that $10,000 retail accounts are moving the stock market.
Kevin O’Leary says movie theaters are ‘going to go to zero’
Kevin O'Leary made so many headline-worthy comments on Friday's (8/21) Halftime Report, we're not quite sure where to start.
"Theaters are dead. They're going to go to zero," O'Leary asserted, claiming "they're going to be just like the places you went to rent videotapes from decades ago."
Well, we're going to disagree with that. That industry is under extreme pressure, yes, but it's proved extremely resilient for 100-plus years. And for the last 5 months, they've been given nothing to show. Some won't make it. Most will. These aren't video stores.
Meanwhile, Judge got chippy after asking O'Leary about being long V. (This writer is long V.)
O'Leary initially said he sees weekly data from his companies and is not seeing consumer decline. "The consumer remains strong," O'Leary said, by itself, a provocative comment.
Judge countered that the PPP and other support has "dried up now." O'Leary agreed but offered something that got under Judge's skin: "Maybe they'll abandon PPP so they're not supporting small business, and I agree with that, because the market can do its own thing and there's a mountain of private capital that wants to go to work through the bankruptcy process of the companies that aren't gonna make it."
Judge scoffed, "Maybe if you get your wish and they let every small business just go to hell, then, then the consumer would roll over. I- I don't know."
"I didn't say every small business Scott," O'Leary said.
"No yes you did," Judge argued.
"In my own portfolio, I'm gonna lose 20% of my companies. I'm going to go to zero with 20% of my private portfolio," O'Leary continued. "There's nothing I can do or you can do or the government can do to save them because the consumer's preference on how they purchase, and what they purchase, has changed. They're just not going to be the same, and those businesses are gonna die. They're in travel, they're in entertainment, they're in food services. I can't help them; they're dead. And I don't want the government taking my tax dollars and helping them."
"The last thing I want to do is have a conversation with you about this," Judge sighed.
OK, let's pause there.
Why in the world is this the "last thing" Judge wants to discuss? Isn't this a show about business and capitalism?
If O'Leary's wrong, then say so.
This page does not agree with everything O'Leary said Friday. But it certainly believes that programs should as this should foster healthy debates about the future of capitalism.
Judge responded, "For the record, you just wanna let every restaurant in this country die, Kevin. Is that what you want? And that's gonna be better for the consumer? Everybody's gonna be great?"
"Scott. Scott. Do you wanna sing 'Kum Ba Yah' with me. The- the economy is changing. Let it change. I don't wanna support a restaurant that's never going to be profitable," O'Leary said.
"We don't need restaurants anymore," Judge continued, sarcastically.
"Scott, not everybody's gonna fail," O'Leary protested. "20% are gonna fail. And they're going to die not because of just the pandemic. ... That's how capitalism works, get over it."
Judge scoffed, "To hell with every retailer except for Walmart and Target and Costco and a couple of others. To hell with everybody else. That's what you're saying."
Jon Najarian jumped in, protesting, "Scott that's not really what he's saying."
"That is Jon what he's saying," Judge snapped.
"No. He's saying 20%!," Najarian said.
"What are we supposed to do, have a parade because he says 'just 20%'?" Judge demanded.
"They are. They are. That's what's gonna happen," O'Leary added.
Najarian didn't mention the PPP but apparently sought to defend O'Leary on the percent of business failures. We won't put words in his mouth, but it sounded like he was telling Judge that the absence of PPP would not wipe out all but WMT, TGT and COST.
Nevertheless, Najarian perhaps inadvertently made the opposite point of O'Leary on PPP. Doc stressed nobody wants businesses to fail, but it's a "recognition of ... the way things are changing," then he added this: "The lockdowns are the major contributor to that Scott."
See, O'Leary argued that it's 20% "not because of just the pandemic," while Najarian says lockdowns are "the major contributor."
Basically, it seems here that if a business is only at risk of failure because of the pandemic, then that's what PPP is for. After the pandemic, it goes back to being profitable. If it was otherwise struggling from a declining business model, and might not be profitable after the pandemic, then yes, public appetite for more PPP isn't so great.
Now, how does one determine whether a business will be profitable post-pandemic? That's the problem. There's honest debate. Maybe the airlines can regain profitability quickly; maybe not. Maybe movie theaters can do it; maybe not. So a program such as PPP has to paint the business spectrum with a broad brush and err on the side of help.
Honestly, theoretical doctrines aside, we just can't see, after the year we've all been having, much public appetite for cutthroat capitalism and a survival-of-the-fittest approach into year-end. Maybe next year, but not now.
Regarding V, O'Leary stated "maybe I'm ahead," but he sees the stock as one he wants when the pandemic's over, and even now, "I don't see the consumer rolling over yet."
There was more from O'Leary on Friday. He referred to the "mandate" where he's forced to trim winning stocks such as TSLA to 5%. (Tip: Stocks don't go up or down because of your basis or gain or loss.) O'Leary advised investors to "set a limit ... and trim back these names, even though you won't outperform the index, you will have safety there."
OK. If you won't outperform the index using this strategy, why not just buy the index???
Doc admitted Friday, "My portfolio is overloaded with technology."
Doc said Goldman Sachs put AAPL to a "sell" over "120 points ago." Judge acknowledged criticism of Goldman as "chasers" and "followers."
Despite Najarian being "overloaded" with tech stocks, on Thursday's (8/20) show, Steve Weiss was taking the opposite approach, stating he's "lightened up" on a "couple" of tech positions because he sees "pull forward."
But the clash was between Judge and Pete Najarian, after Judge scolded Pete for touting the depth of the rally. "The market breadth is not great," Judge said, citing a "small group of stocks" and saying "c'mon" twice.
Pete thundered, "You're a hundred percent wrong!" and said to look at the XLB (sounded a bit like "XLV") and IBB and XBI and "the homebuilders."
"I think the truth lies somewhere in between," Weiss said, offering Dollar General as a stock near all-time highs.
Judge brought in Steve Liesman and noted "the teleprompter wasn't moving so I didn't know if we, uh, if we quite knew where we were at that moment." Liesman said "part of what's driving stocks" over the summer is that they might be taking market share from smaller companies and that small companies are closing doors "at twice the rate" of larger companies.
Joe says he’d accept a loan from Judge to add CRM and PANW to his portfolio
Wednesday's (8/19) Halftime Report took a curious detour into pro football.
Steve Weiss got things going, saying he bought AAPL after the split declaration, because even though the split is meaningless economically, "I just thought that the market's going to react positively."
Joe Terranova said he's not getting out of AAPL, even though, "The next $50 for Apple, Scott? It's probably down."
Jim Lebenthal expressed caution about AAPL, pointing out, "It's doubled in 5 months," though conceding that's from the "artificial low" of late March.
Jim said that, like Joe, he can see a pullback, and, "I think it could be more than a 10% correction when it comes."
But most of the discussion centered around Judge's fatigue over hearing Weiss talk about Tim Cook as not a great innovator, a discussion we've heard on this program, honestly, maybe a dozen times already.
On Wednesday, Weiss said not to confuse Tim Cook with a "great CEO from an operations standpoint" because Tim "has misjudged demand" many times around Christmas.
Judge asked Weiss, "Is Bill Belichick a great football coach?"
"Yeah," Weiss said.
"He's phenomenal, right? You think he's phenomenal," Judge added.
"Yeah. I think he's phenomenal," Weiss said, not terribly convincingly.
"But they lost 3 Super Bowls! He lost 3 Super Bowls!" Judge exclaimed, as if that has any parallel to Tim Cook's innovation skills.
Attempting to tie a parallel, Weiss said he admires Belichick because "he makes acquisitions."
Meanwhile, Weiss revealed, "I dabble in real estate," adding that prices have "gone through the roof," partly because of "disastrous income inequality."
Further opining on politics, Weiss said it's "pretty clear to me," and he's "hopeful," that Joe Biden "gets elected," but Weiss called the Green New Deal a "disaster" that "should never happen."
Marc Lasry claimed "Biden definitely is ahead."
Weiss enjoyed Jim Lebenthal referring to him as a "visionary."
"Oh God," Jenny Harrington was heard to say.
Jim said a GM split-up is "a no-brainer as far as what the company should do."
Things began to get hilarious when Joe gushed about CRM and said the only reason he doesn't own it or one of his favorite names, PANW, is because "I don't have room in the portfolio right now."
But the hilarity was still to come. Judge badgered Joe over the latter point; "You keep saying, 'I would,' 'I would,' 'I would ...'"
Joe repeated he doesn't have room, "Unless you want to, uh, send me a nice big loan where I can expand the amount of, uh, holdings in my portfolio."
Gorgeous Rahel Solomon offered, "Scott, if Joe doesn't have room, he doesn't have room!"
Judge responded that Joe "finds room for when he really likes something" and will report a new buy "next week."
CNBCfix.com has inquiries in to NBC Universal and Wapner's representatives to hopefully clarify Wapner's intentions (or lack thereof), or what interest rate he may charge, regarding a "big loan" to Joe Terranova. Further updates as developments warrant.
James Altucher called AAPL $2T on Fast Money on May 10, 2011
On Wednesday's (8/19) 5 p.m. Fast Money, Guy Adami said "a few years ago," or "probably more than a few," James Altucher was on Fast Money, "and he actually said Apple will be a trillion-dollar company."
Well, Guy should've consulted this page's archives.
Altucher didn't just say "trillion," but 2 trillion.
To save you the trouble of looking it up, here's a summary:
On May 10, 2011, this page reported, "James Altucher said on Tuesday's Fast Money 'it's really very simple math' as to why AAPL will be worth $2 trillion."
"'We're only in the first inning' of people using Apple devices, he asserted."
"Guy Adami was skeptical and said he was just asking straightforwardly, "You're not trying to make headlines to sell some books here?"
CNBC graphics crew thinks Bryn works for ‘Requiste’ Capital Management
As Tuesday's (8/18) Halftime Report reaffirmed, panelists' favorite trades are always the ones that happened a long time ago.
When the subject of NVDA came up, Josh Brown stated, "I'm up 700-something percent in 5 years, uh, with- with this name."
But he wasn't so certain about what to do with it in the face of multiple expansion, except hope.
Still waiting for Tom Lee’s ‘monstrous rally’ to get underway after the 20th day since a virus peak (sample size of 1)
On Monday's (8/17) Halftime Report, Cramer's Spokesman (pictured above) waited a whole 15 minutes to start replaying clips from Squawk on the Street in which Jim used the term "grand slam."
At the 23-minute mark, Cramer's Spokesman revealed, "Look, you hardly have anybody come on this program and say anything negative about Bank- uh, about, the, JPMorgan, right. Cramer did it recently ..."
Duly noted. They should give this Cramer a show.
Jim Lebenthal claimed GM is "50% higher" if it splits up. Does that mean the legacy, traditional part of the business will be worth 25% less?
Bryn Talkington opined, "Investing's hard. And you have a reason why you buy, and a reason why you sell." Can't really argue with that.
On the 5 p.m. Fast Money, guest host Sully asked Karen Finerman to explain "in layman's terms" what David Kostin meant by contrasting falling bond yields with equity risk premium.
Karen dutifully explained Kostin's point, then added, somehow with a straight face, "I'm concerned about inflation (snicker)." When Sully asked her what her "inflation bets" are, Karen stared at the camera without saying anything (those glitches happen a lot on the 5 p.m. Fast Money), then Sully asked again moments later, and Karen first responded, "Bitcoin (snicker)." Then she admitted, "Stocks in general actually do better in inflation."
So a stock investor says she's concerned about inflation but that stocks in general do better in inflation.
OK.
Haven’t heard anyone complain recently, ‘Omigod, AAPL split 7-for-1, this $440 is no good!!!!’
Judge waited a whole 9 minutes into Thursday's (8/13) Halftime Report to attempt his 2nd-favorite activity, revisiting the latest headline from CNBC's Jim Cramer, which is that, for the stock market to keep climbing, 10 companies "and many more" need to "start taking their cue from Tim Cook and Elon Musk."
That would be, declaring a split.
In a downright pathetic example of phony outrage, Josh Brown told Judge, "I hate this so much, I can't- I almost can't put it into words."
Nevertheless, Brown conceded, "He's right. That- that IS a catalyst that moves stocks. But if that's the thing that, that puts us into new highs, um, it's- it's gonna end ugly, it always does," Brown said.
OK. If Brown thinks the Mindspring stock split caused the dot-com crash, he needs to give Henry Blodget or Mary Meeker a call.
Furthermore, Judge never bothered to ask, What does Brown think the nominal price of AAPL or TSLA should be?
A couple days after the split, nobody really cares. Nobody on this show with the possible exception of Jon Najarian figured out what a split basically means — more shares, which people like, and apparent management confidence.
People undoubtedly are far more likely to believe that a $10 stock will go to $11 than they would believe a $100 stock will go to $110.
Honestly, we kept asking another question that Judge didn't — what is the downside here? We couldn't fathom why there's a problem with AAPL being 110 instead of 440. Brown knocked TSLA rising 20% on the report without noting it has moved probably at least that much on other occasions on a lot of other superfluous news.
At one point, though, Judge referred to his favorite activity as host. "I may have to do one of these, let's get Cramer out here, and we can debate this further," Judge said.
Sure. Why wait for "Mad Money"?
Brown kept talking as if everyone can buy fractional shares without conceding that fractional shares are silly and have no cachet ("Hey Edna, let's buy 0.053 of an Amazon share!"). Jon Najarian insisted not everyone offers fractional shares, including E-Trade and "several other of the big houses." Najarian said he thinks "Jim is right" in the sense that when people see the new prices on the ticker, they'll get excited. "Human emotion drives a lot of investing. It probably shouldn't, but it does," Najarian said.
Good thing CNBC has Jim Cramer, or it'd have nothing to talk about on its shows!
So the market sells off because of Harris, and the market surges because of Harris ...
Before we get into Wednesday's (8/12) Halftime Report, such as it was (snicker), we happened to overhear Josh Brown on Wednesday's Closing Bell.
Brown said that once there's a vaccine, no one knows what kind of market we'll have, though he conceded that one of the outcomes is that "We could see an absolute rampage."
OK. That aside, the Halftime Report had our heads spinning like Regan's in "The Exorcist" as Steve Weiss opined a little bit on politics.
Weiss suggested Wednesday's upward stock-market move was "partially" because Joe Biden chose Kamala (Weiss pronounced it "Ka-MOLL-uh") Harris "instead of somebody that's left."
Judge said, "Oh I think you're right about that."
Judge said if Biden had chosen Elizabeth Warren, "I think the market may be trading differently today."
That's interesting ... because just a day earlier, Karen Finerman stated that the announcement of Harris on Tuesday afternoon is "why the market sold off, actually."
The star guest of the Halftime Report was Ed Yardeni, who has a modest 3,500 S&P target for 2020.
"Everybody wants to get out of bonds and wants to get into stocks," Yardeni said.
Jim Lebenthal offered that "the virus seems to be abating."
Judge, whose job has basically been reduced to Jim Cramer's Spokesman, only took until the 11th minute to note that Okta, "which Jim Cramer suggests is one of the keys to the market, is down 10."
OMG. A stock that Jim Cramer says is one of the keys to the market is down 10%.
Kate Kelly dialed in to talk about David Solomon and mentioned a Super Bowl gathering involving Dave Tepper. (Kate didn't explain how the 49ers surrendered 21 points in 8 minutes; Judge apparently didn't want to go there.)
Kate pointed out, "Goldman's stock has actually never recovered from the high it reached in early March of 2018, right before he was named heir apparent."
Joe Terranova said he wishes he hadn't sold AMZN, "You don't know what Goldman Sachs really is right now. Are they a bank, or are they not a bank."
Asked about the speculative tech stock he swore off way too early, Jim said it's impossible to predict where the next $10 on ROKU is going to be, so trading it is "a roll of the dice." (As though trading INTC isn't.)
As expected, Weiss couldn't get through the program without mentioning "5G" (snicker).
Funny how nobody on the Investment Committee ever sold any stocks in March
Viewers of Tuesday's (8/11) Halftime Report might've thought they were watching an episode from 2017. Or 2012. Or 2009.
Yep. Mike Mayo endorsing banks again.
As usual, the banks are being underestimated, they've never had balance sheets this strong, they can make big money in lousy economic climates, etc.
Mayo though even claimed, "At some point, price itself is a catalyst," a statement that is demonstrably false.
Panelists of Judge's "Investment Committee" used the Mayo interview and other moments during the program to tout the great purchases they've already made.
Josh Brown said he was "pounding the table" on JPM under $100 and that he bought BRK-B "probably a day or 2 away" from the exact bottom in March.
Stephanie Link endorsed UNH and stated, "I was buying it back in March a lot lower."
Judge said some of Stephanie's favorites in the cyclical or value space sound "symbiotic" with Jim Cramer's "go list" (snicker). Who ever woulda thunk that. Stephanie vigorously stated, "I wanna reiterate, I'm not all cyclicals, all value."
Jon Najarian called Meghan Shue "Shannon," then apologized to both Shannon and Meghan. Shue even threw in an "at the end of the day"; we haven't heard that one in a while.
On the 5 p.m. Fast Money, Karen Finerman opined that the announcement of Kamala Harris as Joe Biden's running mate is "why the market sold off, actually." Finerman called Harris a "safe choice, a good choice which makes Biden more likely to win."
Weiss willing to be a ‘vulture’ again (a/k/a INTC still below 50 despite Jim’s prediction of selling into ‘strength’ in ‘mid-50s’)
It's funny how stock-trading opinions can twist in the wind.
On the Aug. 5 (Wednesday) Halftime Report, Steve Weiss explained that he sold his AAL puts because "I just don't want to be a vulture and profit from somebody else's misery." (This writer is long AAL.)
And then, lo and behold, look what the screen graphics said on Monday, Aug. 10: Weiss is long AAL puts.
Someone else's misery evidently is back in play.
Weiss on Monday told Judge that value or cyclicals are positioned for a short-term upside trade, but he doesn't think it's sustainable long term.
Judge likes to chide panelists for talking over each other, even though he does it more than anyone else. On Monday, Judge clumsily prompted Weiss and Tiffany McGhee to talk over each other.
Bob Pisani said gold's had a great year, and gold ETFs are "following stuit (sic pronunciation)."
Come to think of it, it's been years since we've heard Dennis Gartman say he prefers gold as a commodity over the miners because "you could wake up one morning and read that a mine got flooded out somewhere."
‘Monstrous rally’ starts next week
The star guest of Friday's (8/7) Halftime Report was Tom Lee, who's predicting a "monstrous rally in epicenter stocks" by next week, according to the screen text and Judge's intro.
Lee explained that his Aug. 14 timeline is based on a curious 20-day lag since the last virus peak (which Lee said was in late April) and resulting "big, violent rotation" into cyclicals or "epicenter" stocks.
That's a sample size of 1, but OK. However, we did verify that the CDC website shows 74,818 reported cases on July 24 and a gradual decline since then, to 53,000 on Thursday.
Lee said he thinks there is "so much cash on the sidelines still." But he does think there could be a rotation from growth names that people are "hiding in."
Pete Najarian apparently agreed. "There is so much money on the sidelines, still," Pete said. "I don't think that Tom by any stretch is wrong."
Steve Weiss, though, argued that what Lee is suggesting is not an "undiscovered trade" and "not unknown"; look at housing stocks, PHM has outperformed AMZN from the lows, Weiss said.
"Nobody's going to abandon growth," Weiss asserted.
Lee suggested that a lot of people have "zero exposure" to epicenter stocks.
Liz Young offered, "I think we use the word 'rotation' too much as an industry."
As for the tech megacap giants, "Paying 30 times for FAANG isn't expensive," given bond yields, Lee said.
Judge credited for often being right and concluded the segment stating, "Let's revisit this next Friday."
No one wants to get ‘caught’
Closet Indexing
Every now and then, we hear something about investing on a CNBC program besides the Halftime Report/Fast Money that calls for a little publicity.
We were listening to CNBC's Closing Bell on Thursday (8/6) just before the market's 4 p.m. Eastern close and caught a little conversation between Sara Eisen and Stephanie Link.
Sara was rattling off some new highs in the stock market and asked Stephanie if she's "adding to winners."
Stephanie responded with this: "Well, no, um, I'm actually trimming, and I'm sorry that I sold Facebook, but I think it was the right thing to do, taking a 47% gain. I trimmed a little bit of Amazon; I still am involved. The problem is, is that some of these companies that are going vertical, especially the FAANGs, plus Microsoft, um, they are huge names- they are huge percentages in my benchmark, in the S&P 500. So, you have to own a lot of it if you believe that- you know, if you think that they're still gonna go up, you don't wanna get caught, right. And I certainly don't wanna short these things, not right now."
Well, the investment theory that's revealed here left us scratching our heads, so we emailed the Yale and Cornell analysis departments for a translation. While we wait for those replies, here's what we gather from this ...
1) Link apparently sold some juggernaut stocks too soon.
2) Link defends those sales by claiming it's a "problem" when a "huge name" goes vertical. We don't know why that's a problem. It's a problem for a short. It shouldn't be a problem for a long.
3) Link seems to claim that the "problem" is that "you have to own a lot of it" if you think these "huge" names are going up, otherwise you might "get caught." Get caught with what? Not owning enough of the hottest stocks?? Does that make any sense?? And if she doesn't want to "get caught," why was she selling? Isn't the job of Link and every other active manager to pick the best stocks? What difference does it make if Link allocates $1 million to AAPL and it goes from $400 to $440, or $1 million to AAL and it goes from $10 to $11?
What would make sense is if Link thinks these stocks are extended. If she said that other stocks are better choices. She didn't say that. In fact, she said you "certainly don't wanna short" them. She explained that she sold the juggernauts because of the "huge percentages" they occupy in the benchmark. Listen to the whole clip. Nowhere does she say something like, "Industrials will be the better stocks for the next few months."
Well, as we like to say around here, we often don't even know which direction is east, and which is west.
But we did come up with a bit of an exercise for what Link is talking about.
Let's say this is the 1985 NFL playoffs, and you bet on the Chicago Bears to win the Super Bowl.
You win money for correctly picking the Bears to win their first 2 playoff games. The catch is, they have to win the Super Bowl too, or you lose those proceeds and your original bet.
Do you suddenly decide, after the NFC Championship Game, "omigod, my Bears money is too big of a percentage of my portfolio now," and cash in your profit and sell the rights to the Bears' Super Bowl chances in favor of "diversifying" your portfolio with a wager on the Patriots?
Didn't think so.
So why would you get out of the stocks that you think are working in favor of stocks that you don't think are working as well?
One more thing: FB stock doesn't care how much of a percentage of Stephanie Link's portfolio it occupies or what Stephanie's cost basis in the shares is.
Judge owes Joe an apology
Someone must've picked up an order for Judge at Starbucks, because the Halftime Report host on Wednesday (8/5) obviously had a little too much caffeine.
First, Judge sounded a little dismayed that no one — no one — was interested in Warren Buffett's ongoing purchase of BAC. (Zzzzzzzzzz)
Joe Terranova asserted that Buffett "could buy it for another 12 days; he can't really fix the headwinds that are challening the money-center banks."
"I'd probably buy it all for him in 1 day," said Steve Weiss. But Weiss agrees with Joe that there are too many headwinds for the consumer banks.
"No one seems to be excited about it!" Judge complained.
Joe articulated a quality point, stating, "I truly believe" that if BAC starts to gain, you'll see even more from WFC.
"Wells has had fleas though!" Judge blurted.
Joe said there's already a premium for Brian Moynihan and there should be for Charlie Scharf, but it hasn't been priced in yet. (Honestly, we're not as convinced, as CNBCers seem to be, that Charlie Scharf is The Natural or The Chosen One, but whatever.)
Judge scoffed, "You're trying to out-Oracle the Oracle. OK. Good luck to you on that." (OK. What's BRK-A's return in the 2000s?)
Steve Weiss shrugged that he thinks Buffett bought BAC as a "cash proxy."
Karen Finerman on the 5 p.m. Fast Money questioned if Buffett's BAC purchase was with "some of the Wells Fargo money," which if true would be another sell-at-the-bottom plan that Buffett recently invoked with the airlines.
Meanwhile, Sarat Sethi said he bought DIS "when it was much lower," which is a big help to anyone looking to buy now. Sarat said he'll hold it and noted, "The streaming numbers were really strong." (Tip: Streaming business is terrible. It basically doesn't make any money. That's why Iger never wanted to do it. But he wanted a higher multiple. Traders like it because they want to watch movies at home.)
Judge told Joe, "You used to own Palo Alto, right?" (Evidently, Judge doesn't quite remember that, a few years ago, Joe used to say "Palo Alto" at every opportunity, around the time of the "Megan Fox This" and "Megan Fox That" days.) Joe said yes and that he sees PANW and MNST as "potential acquisition targets."
Joe said he's long XBI but is "growing a little bit concerned" about the emphasis on COVID drugs.
Regarding FB, "The ad boycott's been a bust, from all reports," reported Steve Weiss.
Joe exlained what the numbers on his wall signify (his sons' uniform numbers). Judge, a little clueless here, claimed he knew the meaning of at least one of them: "29 is the number of stocks that you own, I think, right."
The low point of the program was when Joe brought up his AMZN sale — the one he barely mentioned a couple months ago, only to have Judge harp on it for weeks.
"Don't go into- don't go into self-loathing again," Judge warned. "We got- I can't deal with this, this self-loathing stuff again. I mean, one day was enough." (C'mon, Judge. Get real.)
"Whoa whoa," Joe protested. "There's no- there's no self-loathing on that. This is, this is the practical mannerism of mannering- managing a portfolio." Joe explained he owned AAPL, AMZN and MSFT, and he has to hold on to the remaining 2.
Indeed. If Judge can't stand any more "self-loathing," why did he have no response later in the program when Josh Brown ("I thought I was a genius; I guess not") lamented selling TDOC around 170 after buying it in the 70s?? Judge even congratulated Brown, "Good stuff."
If Judge would only come up with some fresh ideas and stop beating up Joe over this irrelevant move, A) we could stop hearing about it and B) Joe wouldn't have to keep apologizing for it.
If you successfully short anything, aren’t you profiting ‘from somebody else’s misery’?
Some comments on CNBC really make you scratch your head. Or snicker. Or both.
On Wednesday's (8/5) Halftime Report, Steve Weiss explained why he sold his AAL puts. (This writer is long AAL.)
Weiss said he took his daughter to the airport, and "the place was empty" with only 22 people on the flight. "And I just don't feel right making money on the airlines or the restaurants where their fate is not in their hands. I think equity holders can get wiped out in American. I'm not positive on the story, I think can get wiped out in all the airlines (sic grammar), bondholders can do OK. But I just don't want to be a vulture and profit from somebody else's misery."
So let's get this straight ... Weiss thinks AAL may go to zero ... but it bothers him to profit from this trade ... that's why he's selling puts ... it's not because he's afraid of ending up in face-ripped-off land if airlines (who have already been bailed out and will continue to be) recover.
(And honestly, if you think some stock — such as F, which Weiss said he was buying a day ago — is undervalued, then by buying it, aren't you planning to profit from the "misery" of someone who obviously sold it too low?)
Guy Adami warned on the 5 p.m. Fast Money Wednesday that lower dollar brings inflation (snicker). Karen Finerman said, "I want to have exposure to inflation (snicker) because I think it is gonna be here."
As for talks in Washington, Finerman said, "The market has priced in a deal."
Doc predicts economic ‘rage’
once a vaccine is approved
The beginning of Tuesday's (8/4) Halftime Report was all about AAPL, and not a bad discussion, but things got even more interesting when Judge and Josh Brown seemed to disagree over how quickly this economy could light up.
Brown suggested, and Judge seemed skeptical, that the economy could "flip the switch" once a vaccine is announced. "And stocks that are on the 52-week low list will all of a sudden become the hottest stocks in the market, and uh, I do think confidence will return fast," Brown opined.
"I agree," seconded Jon Najarian.
Perhaps overdoing it in the optimism department, Brown said it's possible we end up in a situation where the Fed and Treasury have done "too much, in hindsight, and then we're having an inflation (snicker) conversation."
Doc said he's been saying and still believes that when we get the vaccine, "We will rage."
He said he believes "deep down in my soul" that people are "anxious" to resume normal life.
Well, we're sure he's correct about that. Eventually, Brown and Najarian will be correct. And it could be sooner than people think. But it could also be as late as next year. And it's unclear how quickly everyone will take a vaccine. Yes, they could inoculate everyone in Major League Baseball, but they can't be having fans in the stands until certain standards are met, which might still take a long time.
In short, the defeat of the coronavirus might be somewhat like the liberation of Paris — an incredible, history-making moment, one that may be somewhat subdued as a weary public realizes that it's not quite at the end of the journey.
Meanwhile, Brown said AAPL seems to be getting ahead of itself.
"This is as extended as I've ever seen it since 2012," said Brown, who added, "I would not be a buyer at today's price."
Judge pointed out that AAPL is up 20% in a month.
Brown said AAPL's gains during the pandemic are crossing into "abject silliness," nearing a point where it's "completely out of touch."
Judge actually told Shannon Saccocia at the 11-minute mark, "Nasdaq's now gone negative," as though it wasn't going to finish the day positive.
Steve Weiss said he's buying F, which he called "very low risk" and not a value trap but "an option on a new (sic redundant) vaccine."
Doc said BP could easily "retake 25."
Setbacks for 1979
We don't have nearly the time we used to have on this page for commenting on pop culture, but there are times when something must be said.
In the past couple weeks, the movie world has lost a pair of sensational character actors: John Saxon, 83, and Wilford Brimley, 85.
If you enjoyed movies in the 1970s and '80s, you undoubtedly saw both, likely more than once. Saxon is probably most famous for "Enter the Dragon." For Brimley, it's either "Cocoon" or "The Natural."
Saxon's and Brimley's careers intersected in the 1979 hit "The Electric Horseman," which, despite being a big-budget feature with megastars and delivering at the box office, remains one of the most underrated films of the '70s.
Corporations are skewered in the film — that's not why it's great. Saxon portrays what on the surface may seem a cold-hearted character but is actually a tragic figure — a CEO who quietly sympathizes with what Sonny is saying but has apparently sold out for the position and, in competition against this more authentic individual, ends up ... well, we don't want to give away the ending.
The drama is the beautiful conflict over the Utah terrain, where Brimley's character briefly appears. No guns, but a vigorous battle for the upper hand in the media world. The movie is wrongly described as a "romantic comedy" but falls under the category of "soft western."
What Sydney Pollack, one of the greatest directors, probably didn't count on was that this late 1979 film would so perfectly illustrate the coming decade. It looks and feels like an '80s film, not a '70s film. Better days are ahead. To borrow a slogan (probably not endorsed by its stars) of a few years later, Morning in America. Ahead of its time.
If you're anywhere near the age range of typical Halftime/Fast Money panelists, you know you know what we're talking about.
Here's to you, John Saxon and Wilford Brimley.
Now it’s ‘months, not weeks’ for 737 Max
In a punchless Halftime Report on Monday (8/3), Joe Terranova opined that "in the last 10 years," except 2018, if you buy in August, you're rewarded by the end of the year.
"Any type of correction" in August, history tells you to buy, Joe said.
Nothing against Joe, but from our experience, those timeliness trades basically work until they don't. So if there is an August correction, caveat emptor.
Others kind of read a bit too much into Joe's remarks. Later, Joe had to tell Stephanie and Judge that he's not predicting a 10% correction but thinks it's "plausible" (snicker), which indeed was the first term he used. (Has there ever been a time in history when a correction was NOT "plausible.") That's OK; Judge gave him a "good stuff" anyway, one of at least a half-dozen times "good stuff" was heard during the program.
Meghan Shue predicted a "choppy ride" in the near term.
Jon Najarian said MSFT buying the U.S. arm of TikTok would merely be a "defensive deal" to keep it from another company.
Joe tried to talk up natural gas (snicker).
Joe said he thinks TER is going over 100, but unfortunately, he doesn't own it.
After spending basically the last 12 months typically forecasting that the 737 Max would be re-approved within a month or two, Stephanie Link on Monday predicted the recertification comes in "months, not weeks."
