Thoughts Going Into The Weekend?

by Geoff Garbacz | 04/30/2021 12:36 PM
Thoughts Going Into The Weekend?

I have a bunch of thoughts going into the weekend. Too many to write one article so I am just going to throw out some ideas.

1.Why would people short Amazon (AMZN) today of all days. The company is killing it on all fronts. Prime members went over 200 million. That is $48 billion of cash flow each year just on membership fees. Amazing. Ad revenues topped $7 billion for the quarter. Shorting Amazon is like shorting Patrick Mahones. We have been long Amazon in our Morning Matters Portfolio since $3095.20 back on February 26th and today it is at $3493.

2.The month of April was another strong month for stocks. January was lower for the S&P 500 and February was slightly higher. March and April have been strong. Credit Suisse just put a target of 4600 on the S&P 500 this morning. Seems reasonable as the Q1 GDP came in at 1.6% which annualizes to 6.4%. Europe saw growth of -0.6% so we have not seen any benefit yet of their growth that will happen as they get bakc to normal. We are going to get over 2% growth easily in this quarter. Do you have Home Depot (HD) in your portfolio as a recovery play?

3.Short sellers have added 1.4 billion shares short to NASDAQ stocks since mid February. More fuel for the fire. What are they thinking? The only shorts I like now are flawed business models like Emergent BioSolutions (EBS). Even those have downside limits. Watch for a cover of this name in our World Opportunity Investor newsletter sooner than later.

4.IPOs have gone from being a winning game to a losers game. In the last three months, the average IPO is down -8% while the S&P 500 is up 11.65%. Do not buy IPOs in the after market. Witness the nasty drop in Coinbase (COIN) since it began to trade two months ago.

5.Robinhood Traders are sucking some serious wind. 85 of the 100 names on the Robinhood 100 list are seriously damaged. As such, they have scaled back their trading. That means markets are trading thin. Be careful as rips and dips can be fast and furious.

Have a great weekend and check back later tonight for our Derby picks.

Cheers & Hitt'em Straight,

Geoff

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