All things STOCKS

[Thunder Good-Oil]

Data centers and cloud are also competing with machines for CapEx. LAN was the buzzword of the early 2000s. With data speeds today there’s not the same need for LANs, Novell, and disk drives. We now have fiber, wireless, and connectivity to multiple devices.

 

[Thunder Good-Oil]

GOOGL of course is first and foremost an advertising platform. AI isn’t ideal for them as search was the engine driving their ad revenue. They’ve tried a lot of things that didn’t pan out. But they also have a sizable cloud footprint which could be monetized much like Amazon Web Services. Google might be a big winner in autonomous vehicles with their mapping and satellite data capabilities.

Cisco took a big hit with local area networking getting upgraded to wireless and cloud.

 

[05_never_again]

GOOGL of course is first and foremost an advertising platform. AI isn’t ideal for them as search was the engine driving their ad revenue. They’ve tried a lot of things that didn’t pan out. But they also have a sizable cloud footprint which could be monetized much like Amazon Web Services. Google might be a big winner in autonomous vehicles with their mapping and satellite data capabilities.

Cisco took a big hit with local area networking getting upgraded to wireless and cloud.

CSCO could have been a winner, but stayed in their lane. Hardly the first, hardly the last.

What CSCO did is analogous to if NFLX stayed a mail-based rental business.

 

[Thunder Good-Oil]

CSCO could have been a winner, but stayed in their lane. Hardly the first, hardly the last.

What CSCO did is analogous to if NFLX stayed a mail-based rental business.

Yep.

Intel became too much of a PC company. Microsoft on the other hand invented the PC revolution, but had the smarts to grow other revenue streams. First DOS. Then Windows. Then the government tried to split them up l, but they had the vision to not just be the company that licensed PC operating systems. Now they do everything.

IBM has emerged after transforming as well. Maybe their screw up of giving away the DOS IP to MSFT was a good lesson for them. Even though it took them about 4 decades to get on a good course. They probably got too arrogant after dominating mainframes in the 1960s and 1970s.

Who could have predicted that AMD would go from a distant also ran in PC CPUs to what they are today?

 

[Thunder Good-Oil]

Amazon didn’t stay put as an online book retailer.

 

[Thunder Good-Oil]

UPS is maybe finally bouncing off its lows after a brutal pull back. round $225 in early 2022. $82 52-week low. Now $96. They still make money (15x). And yield almost 7% (which earnings are getting close to covering).

 

[05_never_again]

Yep.

Intel became too much of a PC company. Microsoft on the other hand invented the PC revolution, but had the smarts to grow other revenue streams. First DOS. Then Windows. Then the government tried to split them up l, but they had the vision to not just be the company that licensed PC operating systems. Now they do everything.

IBM has emerged after transforming as well. Maybe their screw up of giving away the DOS IP to MSFT was a good lesson for them. Even though it took them about 4 decades to get on a good course. They probably got too arrogant after dominating mainframes in the 1960s and 1970s.

Who could have predicted that AMD would go from a distant also ran in PC CPUs to what they are today?

NVDA too, for that matter. It wasn't all that long ago that NVDA was a company that made video cards for gaming computers, and they weren't even the best at it (ATI was thought to be the market leader by most people). AMD actually bought ATI about 20 years ago.

 

[Thunder Good-Oil]

NVDA too, for that matter. It wasn't all that long ago that NVDA was a company that made video cards for gaming computers, and they weren't even the best at it (ATI was thought to be the market leader by most people).

NVDA had the stars line up for them and didn’t ruin their opportunity. Gfx meshes well with AI and cloud and data. Had fiber not been strung so quickly over the last several years they’d be average at best or even struggling.

 

[Jax_Vol]

Is it looking like big tech is moving downward today?

 

[DinkinFlicka]

NVDA too, for that matter. It wasn't all that long ago that NVDA was a company that made video cards for gaming computers, and they weren't even the best at it (ATI was thought to be the market leader by most people). AMD actually bought ATI about 20 years ago.

Feels like yesterday I was installing a Radeon GPU and getting super stoked about have 2 gigs of RAM.

 

[kiddiedoc]

Is it looking like big tech is moving downward today?

What in the world happened after lunch today? Did WW3 break out and I haven't heard yet?

 

[05_never_again]

What in the world happened after lunch today? Did WW3 break out and I haven't heard yet?

We seem to be led lower today by a lot of cyclical stuff, not necessarily Mag 7, which is a mixed bag (GOOGL and TSLA are actually up as I'm typing this).

If you look at the worst S&P 500 performers today, a lot of that stuff is "old economy" cyclical names (GNRC, LEN, UAL, CF, TPL, DOW. Crypto and anything related to it is also super weak. I've thought for the last several weeks now that the underperformance of BTC relative to equities could be broadcasting weakness in risk assets generally, and maybe it's finally spread to equities.

JPM is off 7.5% over the last 3 trading sessions. Alts managers (BX, APO, KKR, ARES, and in particular OWL) also super weak and have been for multiple weeks now.

 

[Jax_Vol]

We seem to be led lower today by a lot of cyclical stuff, not necessarily Mag 7, which is a mixed bag (GOOGL and TSLA are actually up as I'm typing this).

If you look at the worst S&P 500 performers today, a lot of that stuff is "old economy" cyclical names (GNRC, LEN, UAL, CF, TPL, DOW. Crypto and anything related to it is also super weak. I've thought for the last several weeks now that the underperformance of BTC relative to equities could be broadcasting weakness in risk assets generally, and maybe it's finally spread to equities.

JPM is off 7.5% over the last 3 trading sessions. Alts managers (BX, APO, KKR, ARES, and in particular OWL) also super weak and have been for multiple weeks now.

Do you guys think we are we finally getting our overdue correction?

NVDA is usually interesting, so we get to see what advice Mr. Huang offers up on Wednesday.

 

[Thunder Good-Oil]

NVDA earnings will be published Wednesday.

 

[05_never_again]

Do you guys think we are we finally getting our overdue correction?

NVDA is usually interesting, so we get to see what advice Mr. Huang offers up on Wednesday.

I hope so, just get it over with. I'd love to have your standard 10% correction and see a lot of gloom and doom thinkpieces.

 

[05_never_again]

 

[Jax_Vol]

I hope so, just get it over with. I'd love to have your standard 10% correction and see a lot of gloom and doom thinkpieces.

It looking more & more that way. Tech getting their azz kicked again in futures.


Thunder, I'm looking at Pure Storage (PSTG). If you don't mind sharing, what does your notes say about that one?

 

[Thunder Good-Oil]

It looking more & more that way. Tech getting their azz kicked again in futures.


Thunder, I'm looking at Pure Storage (PSTG). If you don't mind sharing, what does your notes say about that one?

Just looking through some Schwab research, it’s priced for perfection. 200x p/e with a forward estimate of 40x. But at least they are profitable. Zero debt mitigates a lot of potential risk. 80% plus institutional ownership. But also below many of the S&P performance comparisons. Been public for 10 years. Stock isn’t too far below the highs. $25B market cap is tiny relative to the trillion dollar big tech players.

I can’t comment much on the technical aspect of how they fit into the cloud / AI / data center universe, but the demand for storage wouldn’t seem to be going away anytime soon. Especially if China isn’t allowed to dump government subsidized products into the market. I don’t even know if they sell to the infrastructure builders or the device manufacturers.

I don’t know who they’re competing with. Their SEC filings would have that disclosure. Also, who are their biggest customers and at what percent of revenue?

 

[Thunder Good-Oil]

Here we go again. At least the pull backs are fast and furious. But also violent. You’d think that buyers will be back soon.

It almost seems like a coordinated effort to suddenly start trashing AI. Pumping up the possibility of no December rate cut as well.

 

[Tri-CitiesVol]

Stagflation. AI has been the only thing keeping us afloat.

 

[Thunder Good-Oil]

Stagflation. AI has been the only thing keeping us afloat.

Except inflation is off by 2/3rds.

And anybody that wants and needs a job can have one. It’s been more lucrative for the able bodied to take the government handouts and not lead a responsible existence.

New cars are far more expensive, but they can now last 30 or 40 years instead of 10.

Housing isn’t cheap, but it used to be that those starting out would gave a roommate or two. That’s a hard adjustment for the selfie generation to make.

Nobody is starving. Gas isn’t expensive.

Insurance and health care costs are out of control.

 

[05_never_again]

Except inflation is off by 2/3rds.

And anybody that wants and needs a job can have one. It’s been more lucrative for the able bodied to take the government handouts and not lead a responsible existence.

New cars are far more expensive, but they can now last 30 or 40 years instead of 10.

Housing isn’t cheap, but it used to be that those starting out would gave a roommate or two. That’s a hard adjustment for the selfie generation to make.

Nobody is starving. Gas isn’t expensive.

Insurance and health care costs are out of control.

There is a lot of confusion of inflation with "things are more expensive than they used to be." I don't know how many times I've heard people say things like "I don't know why they say inflation has come down. Everything is still really expensive." The unfortunate reality is that it is going to take multiple years of wage growth outpacing inflation for people to feel like things aren't expensive. Inflation was 7% in 2021 and 6.5% in 2022, or almost 15% compounded over 2 years. Wage growth was nowhere near remotely close to that.

The job market is very strange. Hiring is very slow. Despite headlines about job cuts that occur every year at large companies that get people's attention, people aren't getting laid off either. There is still a COVID overhang where companies are working off the post pandemic over-hiring that they did. Those 35k AMZN layoffs got a lot of attention. What people seem to have forgotten is that those layoffs represented 2% of their workforce (it's like a 100-employee company letting go of 2 people) and that their workforce size has tripled since 2017.

 

[DinkinFlicka]

New cars are far more expensive, but they can now last 30 or 40 years instead of 10.

Housing isn’t cheap, but it used to be that those starting out would gave a roommate or two. That’s a hard adjustment for the selfie generation to make.

To your points:

1. What? I feel like the opposite is true from say, 20 years ago. The tech/creature comforts aside, newer cars feel more cheaply made than older ones. I would kill to have a brand new version of my first truck rather than buying that same 2026 model, regardless of price. We're encouraged as consumers to get the newest models of things as soon as they're out. That's all gut intuition so if you have data to support it, I'd love to read it.

2. It used to be that the freaking milkman could afford to be a homeowner. As someone in their 30's, most people I know have roommates, but also have degrees, good jobs, and 401ks. Yet they can't stand the thought of paying 400k+ for a damn cottage with a cheap face-lift, regardless of acquiring equity, they'd rather just rent.

 

[Vol423]

Stagflation. AI has been the only thing keeping us afloat.

Stagflation at 3% inflation? I think not.

 

[Vol423]

Except inflation is off by 2/3rds.

And anybody that wants and needs a job can have one. It’s been more lucrative for the able bodied to take the government handouts and not lead a responsible existence.

New cars are far more expensive, but they can now last 30 or 40 years instead of 10.

Housing isn’t cheap, but it used to be that those starting out would gave a roommate or two. That’s a hard adjustment for the selfie generation to make.

Nobody is starving. Gas isn’t expensive.

Insurance and health care costs are out of control.

New cars can last 30 or 40 years? Who is your source for that?