Some days just smack you in the face and say: "Look at me, this is what's working you moron, buy the best and leave the raggedy others to the rest!" Today's one of those days.
And what exactly is working?
Why don't we just look at the stocks that are roaring today. They pretty much tell it all.
Let's start with Cisco (CSCO). If you go back to the 1990s you will find one company that truly got the era, and it wasn't Intel (INTC) and it wasn't Microsoft (MSFT). It was Cisco. That's because the Internet was just coming into its own and if you ran an enterprise and you wanted to get on the Internet and have an Internet strategy you made one phone call. You called John Chambers, CEO of Cisco.
I remember John coming by my office to talk about his stock. Next thing you know I was a Cisco customer. Then, when I started TheStreet.com in 1996, who did I turn to? Cisco. There wasn't anyone else to turn to because Cisco offered a solution to your problems and it did it for shops with 10 people and for shops with 10,000 people, including every major phone company, the real superhighway at that time for web traffic.
That's how Cisco's stock became, at one point, the largest market-cap company in the world.
Since those supercharged days there's been periods of excellent performance for the company and periods that I would describe as being more episodic, as the Internet matured and competitors nipped and the company had to deal with downturns that hurt crucial customers and whole regions around the globe.
Cisco never lost its edge, but you can only ride an ebbing wave so far. And then, seemingly out of nowhere, the slow and mature Internet became the young, spry kid known as the Internet of Things.
It's not just a computer that's linked to the Net. It's your appliances. It's your car. It's your search. It's your TV shows. It's your watch. It's your shirt. It's your fitbit. It's your your cellphone. It's your camera. It's your pictures. It's your webpage. It's your wallet. It's your tweet. It's your sports scores. It's your heat. It's your air conditioning. It's your security system. It's your city. It's your library. It's your military. It's your airplane. It's your pancreas. It's your heart. It's your brain.
If you thought the original Internet was overwhelming, you are talking about managing a wealth of data that's may be five or even 10 times what it might have been just a few years ago and could double and double again in no time flat. The opportunity is too great. You either have a strategy and you live, or you stick your head in the sand and you die.
John Chambers saw the first Internet coming. He saw the much bigger and better sequel, the Internet of Things, coming too, and he put his own huge company through the gut-wrenching paces of adoption. Who better to figure out an Internet of Things strategy than the company that has executed it already?
Once again, they, except this time it's a bigger "they" -- it's cities, countries and companies -- are calling John and telling him he has to offer a one-stop end-to-end secure solution for them because they are desperate and need to master the Internet of Things.
I know you might feel like saying after a day like today where Cisco led the Dow, "I know, I missed it." Do you know how many money managers said that during the five-year run from 1995 to 2000 when Cisco advanced from $2 to $65? Do you know how many traded in and out of it the way that we see people trade in and out of Apple (AAPL) all of the time? This is quarter one of the numbers I have been looking for from this company. Quarter one! I say game on.
How about Expedia (EXPE) and Trip Adviser (TRIP) up 15% and 23%, respectively. What happened? Takeovers? Yes, except in the case of Expedia, it didn't get a bid, it gave a bid -- a bid to competitor Orbitz (OWW). If this deal gets done, it will take a vicious war among Expedia, Orbitz and Priceline (PCLN) and turn it into a slap-happy duopoly that may, at last, lead to a truce and the end of real price competition. And how about Trip Adviser? It just reported a tremendous quarter at a time when people were worried about a travel industry slowdown.
In truth, though, that's way too granular. Both Expedia and Trip Adviser are used by billions of people to go places and go cheaper and faster with applications that work best on cellphones. These two companies, along with Priceline, will dominate the $400 billion travel industry, which has been consolidating like mad.
The regulators have blessed deal after deal and I bet they will bless a Orbitz/Expedia tie-up because in this new world you can always tell the regulators, "Hey, Google could come in here tomorrow and wreck the whole industry." Between Amazon (AMZN) when it comes to retail, and Google (GOOGL) when it comes to online content, a company can claim that there's plenty of competition so mergers should be blessed. Think about it, you have a consolidating industry (think better pricing) that's based on connectivity and data aggregation (that's the Internet of Things) that works best on your handheld (that's social mobile and cloud). All the themes I preach endlessly as being among the most important pillars of this major run.
Then there's Whole Foods (WFM). Here's a company that some could say stumbled, even as it never lost its touch as the destination for natural and organic foods. In truth, Whole Foods didn't stumble, it's just that everyone else, from Wal-Mart (WMT) and Target (TGT) to Costco (COST) and Kroger (KR) caught on and came after Whole Foods with pretty much reckless abandon. Plus, a compliant IPO market let Sprouts (SFM), Fairway (FWM) and The Fresh Market (TFM) tap into funds to build out their networks.
Next thing you know Whole Foods seemed like just another food retailer. But those who counted Whole Foods out didn't understand that these seemingly gentle execs are actually fiercely competitive, and in the span of 18 months realized and executed on a plan to turn this chain into the most technologically advanced retailer, with a nascent but powerful media message and affinity program that could ultimately rival the gold standard of Starbucks (SBUX). In 18 months, for heaven's sakes. And just like Cisco, you are in quarter one of the revolution, the quarter where Whole Foods leapt from being a regular register company to being the number one Apple Pay customer.
And, again, like Cisco, which had to transform itself from the major domo of the Internet to the keeper of the Internet of all things kingdom, Whole Foods has had to transition from the best natural and organic store, to the place where you can learn how foods are sourced and where they are sourced from and if they are authentic or phony. You always trusted Cisco. You always trusted Whole Foods. Now they are telling you who to trust in this new more cynical world.
Oh and that natural and organic wave? Guess who else is riding it? How about WhiteWave (WWAV), which actually guided numbers down? Why? Because it has to spend to meet the opportunities of China and Europe, which are desperate for the plant-based drinks that WhiteWave makes. That's why it's up more than two bucks.
And who isn't riding the wave? How about Kellogg (K), down almost 5% as the world joins America in the "depantrying" of tired old cereals, cookies and largely not-so-hot-for-you snacks. Huge missed quarter. WhiteWave is spending to meet demand. Kellogg is spending to try to stimulate demand and buy back stock. Tony the Tiger just seems as endangered as the real thing.
Any given session can't necessarily tell all. We usually have Greece and Russia and Germany and China that cloud our judgment as well as Fed chatter to totally throw us off the scent. But on days like today? What can I say? It's right there in front of you, like a Powerball game that lets millions of people win by giving them the theme of the numbers ahead of time.