This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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Michael Kramer and the clients of Mott Capital own Tesla, Netflix, and Alphabet
A real orginal title, I know. Sorry, My creative juices my not be working today.
Stocks went pretty much nowhere on March 5, with the S&P 500 finishing the day down about 10 bps No big deal. I was modestly surprised that stocks didn’t get a boost from the strong services PMI data which came in at 59.7 versus estimates of 57.2. It was one of the highest reading in some time.
Let us not forget that the services industry in the US far outweighs the manufacturing sector BY A LOT!
While it is nice to obsess about weak manufacturing PMI’s because it sounds so dire and creates headlines of doom, let’s just stop and call it a day.
Biotech stocks plunged on the news that FDA Commish Dr. Scott Gottlieb is resigning. The only reason for the decline is that the market fears the unknown, and not knowing the next commissioner is the unknown. Sell first, ask questions later.
You can see from the chart below that the day was going rather well for Biotech –that is, before the news.
I drew in a new trend line for Netflix, and this time it is a downtrend. The stock did rise today, but notice where the stock stopped rising –right at resistance at $355.
Alphabet popped above $1,170 briefly, and that could step up a rise to $1225.
Roku was up today, I’m assuming on the news that you can now use Alexa and Roku together. I download the skill to my Alexa, it’s ok, certainly not worth a 3% rise in the stock. Just don’t say: “Alexa, Go to Netflix on Roku.” You still need to use your remote for that one! 😛 hmm. I wonder if that is by design or a bug? Whaddya think?
IQiyi went up today; it doesn’t seem to care what I think. Not many stocks do. Someone asked me if it is possible for IQiyi to consolidate sideways back to the trend line. I would agree with that, it is entirely possible. I will also admit at this point a move lower to $24 is likely not on the table anymore. I still think it is overbought based on that RSI.
I’m beginning to regret changing my view on Nvidia a few weeks back to increasing to $178. Because now, I have to admit that it was the wrong call, and now I have to flip back to say I think it is going to fall. It just makes me feel dumb. But I’m going to flip, sorry, folks. It doesn’t happen that often, but Nvidia just doesn’t look right. So a drop below $150 sends it back towards $139, and I do see this one falling.
I have a rhetorical question, why is that everybody screams and cries about Tesla’s valuation, but yet the start-up Nio is praised as the Tesla killer? The company has a market cap that is a third of Ford and Fiat. That is right Nio has a $10 billion market cap.
The company is even more expensive than Tesla. I don’t see as much as of controversy around Nio and its valuation. Hardly even the same amount of short interest in the stock either.
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.