I found myself on Monday in a rare pot of bubbling water. It was the first time I truly felt that my kill-or-be-killed media mentality overtook the thoughtful stock analyst side, despite efforts to keep them far apart.
Although I was quite ill, I chose to maintain a pre-scheduled call with Best Buy BBY . If you are obsessed as I am with this stuff, do not miss an opportunity to extract a wealth of information from publicly-traded company executives, sick or not sick. As soon as I began talking with the Best Buy contact, I sensed her passion for the turnaround. That excited feeling that the company would win is something I had detected rarely from Best Buy, including via the presentations by the new CEO. It was just natural enthusiasm and focus. Because of that, I quickly began to envision a company experiencing an improved internal culture that eventually, could feed into the bottom line. We had a great conversation; I learned a ton and was appreciative of the allotted minutes.
After the call, I sent a tweet with something that I thought was going to my co-portfolio manager. Right. The key word there is thought. I neglected to copy her, and instead left wide open information on Best Buy during their quiet period! About 30 minutes later I realized what I had done, deleted the tweet, and believed things were fine. Little was I aware that the newsfeeds picked up the tweet and Best Buy was receiving inquiries on the nature of the comment (which in turn meant I landed calls from Best Buy). I eventually was able to have the story removed, apologized to Best Buy, and went on my merry way. I did leave this occurrence, however, with three insights worth sharing:
- There will be a massive unfortunate incident by a company/companies due to their being allowed to release material information on social media platforms. I believe companies lack the infrastructure and human capital to properly manage the delivery of sensitive information.
- News is being created rapidly, almost too quickly. As an investor, check every single source on buzzy market-moving information -- stories are being created without verifying vital quotes.
- Read analyst reports on a company you own? Pull at least five reports from different sell-side firms, look for the stats and information that trigger an internal "hmm" moment as those are the research teams taking care to understand the company on a deeper level by drilling into supply chains and executive contacts. These are the analysts that you want to follow and potentially, to base your investment thesis.
And on the Markets
I was taken aback by the April employment report tally, not necessarily the market's response as expectations were extremely low and the Fed added a touch of extra juice to its policy statement. In my opinion, the market is no longer a market in the traditional sense. Its buy-and-sell tendencies are being manipulated from various corners, whether an algorithm or a bearded person at the Fed wearing a Jos. A Bank suit. A large down day in stocks essentially means nothing; I remember when an ugly session in the red on worrying macro or company data signaled a sentiment shift could be forthcoming. Iit seems as if those days are long gone pending the Fed raising rates by the year 2020 (hints at such in 2018).
That is disturbing behavior as we are now bearing witness to the next round of horribly-wretched China and European data relative to rampant enthusiasm in the U.S. thesis because the Dow transports and capital intensive tech are scoring rotation related flows. We might as well ride the pony until he dies (translation: if you have been in the market, stay long) or climb atop a bronco for the first time since 2009 (translation:if not in the market or lightened up in April).
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