They have been on a freaking tear. This brings up an obvious question: With many of these names at or around all-time highs, should you bank profits?
I'm of two minds on this.
First, when you consider the massive gains over the last year -- nearly 66% in Madison Square Garden
The great Jeff Macke did an excellent piece for Yahoo! Finance on Wednesday about not getting fleeced like so many Apple
Use trailing stops. Take profits. Don't call tops or bottoms! (That might be the best one). And I would add start writing in-the-money covered calls on winners as profits surge. Classic, but solid advice too many investors fail to take. Emotion enters the equation; they get crushed. It seemingly takes a fraction of the time for profits to evaporate that it took for them to build.
NWSA data by YCharts
So, no doubt, a battleground name such as AAPL or a relative outperformer like the names on the chart, requires, at the very least, a look at strategies designed to take some money -- and risk -- off the table.
However, at the same time, there might not be a healthier sector to invest in than big media. As Netflix
Every name on that chart owns and/or controls premium content, ranging from sports to movies to the best primetime television shows. Time Warner, News Corp, Disney
In Canada, BCE and Rogers Communications
The name I left out -- MSG -- is a special case. Despite the lofty valuations, you have to think MSG, as well as AMC Networks
It's the most overlooked bull story in the stock market: Massive gains in big, old guard media names. It's not a fluke. It's not merely the product of a bull market. It's real and, while it's always wise to exercise caution via profit taking, the long-term narrative across the sector remains firmly intact, warranting confident price-to-earnings ratios.
--Written by Rocco Pendola in Santa Monica, Calif.
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