Posts by Philip Pearlman
- Philip Pearlman at Breakout1 mth ago
Amazon wants to make it incredibly easy for its users to pay for goods and services of other merchants without having to have a credit card on file everywhere else.
The payments space as a whole seems to be heating up at an accelerating pace recently and Amazon, with more than 200 million e-commerce accounts complete with credit card numbers and a trusted brand, could, to quote a 1990’s Jeff Bezos, get big fast and challenge eBay's (EBAY) Paypal for payments dominance.
Heading into the end of the week, the stock market seemed to take to heart its mandate to frustrate the majority of participants most of the time.
It was a tale of two markets. Monday and Tuesday were bullish with the S&P 500 (^GSPC) rising more than 1% while the badly lagging Russell 2000 (^RUT) ripped more than 2% on Monday alone after its 1% jet higher last Friday.
Under the hood, divergences abound. The S&P 500 and Dow Industrials (^DJI) managed all-time closing highs on Wednesday while the Russell 2000 could not hold its 200-day simple moving average yesterday. Internally, NYSE breadth remains mediocre even at these levels
In addition, economically sensitive sections of the market have also begun underperforming significantly. Most notably, the iShares Home Construction Index ETF (ITB), which traded up by as much as 7% during the first two months of the year, has fallen 12% since and now trades down 6% YTD.
Everyone in the world is now focusing on the extreme equity market divergences. They cause a good bit of anxiety and appear striking to observers forever looking for patterns in the big scheme with which to make sense of the universe.
First, there’s the difference in performance between the large caps and the small caps. The large cap Dow Jones Industrial Average is making new all-time highs while the small cap Russell 2000 closed below its 200 day moving average last Friday.
Second, the number of NYSE stocks making new highs minus the number of NYSE stocks making new lows continues to look mediocre at best even as the Dow and S&P make all time highs.
Something has to give one way or the other. Either small cap under-performance and the relatively poor market internals drag down large caps or the small caps battle back and play catch up.
The million dollar questions go like this -
Apple is just a consumer electronics company and has been so for quite a while now.
Its days as a magical company are long over. The magic died two and a half years ago with Steve Jobs and now Apple is finally coming out of denial, acknowledging reality and giving itself the opportunity to move on to its next phase.
This is long overdue.
The height of the denial culminated some months ago in the over-the-top fantastical and widely distributed iPad commercial complete with dreamy Robin Williams voice over that, while excruciatingly beautiful, seemed way out of touch with reality and the accelerating trend towards the commoditization of the tablet market.
So Apple, if the reports that it is close to buying Beats Electronics prove true, is finally pivoting; a long overdue move out of this denial and a coming to terms with what it is.
I love Twitter.
It’s a brilliant and revolutionary service that allows people from all over the world to connect with each other and to large audiences dynamically and in real time. In this way, it is a new communications technology that has truly changed the world for the better and I imagine it will continue to surprise and delight myself and millions of its other loyal users.
Last night, Twitter (TWTR) released its second earnings report as a public company and the stock is trading much lower than yesterday’s close to around $38/share. This comes after an already precipitous slide from the $73.31 close on December 26th four months ago. Growth continues to slow and investors are questioning whether the platform can achieve near universal adoption the way Facebook (FB) has done it.
High expectations accompany high valuations, and clearly Twitter is faltering presently.
- Philip Pearlman at The Exchange3 mths ago
The gist was that these five stocks are the bellwethers for the bull market and must be watched closely in order to guage the health of the long-term rally in effect since the crisis lows of March 2009.
On Feb. 13, I wrote:
As these fabulous five names outperform, the bull market must be given the benefit of the doubt. If they falter, well, then watch out.
And while they all rallied Tuesday, the once "fab five" stocks have indeed faltered in a big way over the past month:
Where we are now
We had carnage spread across the board to end the week in equities with technology names getting clubbed especially hard and the biotechnology sector continuing its slide. In fact the Nasdaq Biotech ETF (IBB) was down a whopping 5% at one point.
The NASDAQ composite (^IXIC) traded almost 3% lower with Amazon.com (AMZN), Facebook (FB) and Netflix (NFLX) among others all down sharply. Recall that it’s been only two days since the S&P 500 (^GSPC) closed at a new all-time high, although things can shift quickly, especially to the downside and as the old saying goes, “the market takes the stairs up and the elevator down.”
Earlier this week, Facebook bought Oculus VR, a small, early stage company working on virtual reality.
And now this from the NYT:
Mark Zuckerberg, co-founder and chief executive of Facebook, announced on Thursday that the company was creating a new lab of up to 50 aeronautics experts and space scientists to figure out how to beam Internet access down from solar-powered drones and other “connectivity aircraft.”
To start the effort, Facebook is buying Ascenta, a small British company whose founders helped to create early versions of an unmanned solar-powered drone, the Zephyr, which flew for two weeks in July 2010 and broke a world record for time aloft.
It might seem strange, these seemingly whacky and far afield moves the social behemoth is making. But there’s a method to Zuck’s madness and it is all about the future.
First, with the Oculus deal, Facebook is looking for the next big thing, perhaps the operating system of the future. As Union Square’s Fred Wilson Fred notes:
Last night, Facebook (FB) announced that it has acquired Oculus VR for $2 billion in stock and cash, which some pundits view as a lot of money for a company at such an early stage of its product development. Facebook paid the majority in stock though, a powerful currency given its high valuation, which is smart.
With Instagram, Zuckerberg proved that Facebook has the ability to acquire a company without ruining its product. This might seem elementary, but it is no small point, given that corporate America is paved with deals gone bad.
In that regard, preserving the awesomeness of Instagram ultimately allows Facebook to make advertising deals with increased diversity and scale while also securing leadership in social image sharing which is fundamental for the company.
Many early Oculus proponents, some of whom financially supported the company on KickStarter early on, feel slighted that the company sold for so much and so quickly to the social behemoth.