Let's see. Let's take a look at that new high list after this tumultuous February, one the bulls are happy to see come to an end even as the final day turned out to be ugly, like so many before it:
What do we see on that list: hmm, there's Salesforce.com (CRM) which reported just this evening the biggest blowout I can recall. When you see spectacular numbers, some 40% growth figures for a company that has sales north of $10 billion -- I should say well north of that number, you have to ponder what would have happened had you been shaken out by the volatility. We will be speaking to CEO Marc Benioff momentarily about that simply dazzling quarter -- and I have followed this company for ages -- but I think you should feel a little seller's remorse if a minute move in the 10-year treasury caused you to bolt one of the fastest growing software companies of all time and I think sales are headed to $20 billion pretty rapidly, saying something because when we started talking to Marc the company was just breaking through the $1 billion barrier.
There's ServiceNow (NOW) , another cloud based company information technology company that we've championed for ages. The cloud is not deterred by bloated VIX trades and a couple of prospective Fed hikes because CEO John Donahoe is busy running the business.
How about TJX (TJX) , the comeback kid you may know as TJ Maxx or Home Goods, or I may know as a company I lost faith in after many years and now want to wear the Post-It -- what Karen Cramer used to make me do when I screwed up at the old hedge fund. What's wear the Post-It? It means taking the symbol of the stock you screwed up on, putting it on a Post-it, affixing it to your forehead and going outside at 100 Wall Street and getting her a soft pretzel and a diet Coke. Boy does that ever center your mind and give you a realty check about rigor.
How about XPO Logistics (XPO) ? CEO Brad Jacobs has been on the show a number of times as he has built out a brand new national last mile transport company to take bulkier goods from distribution centers among other places, to your home.
And then there are three others that are worth talking about because, well, I want you to wear the collective post-it for, if you listened to the siren songs of selling because I need to remind you that if you have conviction, if you believe in owning companies, not trading stocks, you might have used this month's wild ride to profit not walk outside with a symbol taped to your head for all to see.
The first? The first is Boeing (BA) . Let's think about this company for a moment. What does it stand for? I would say the best of American engineering with an unbeatable product with tailwinds all over the place -- couldn't resist -- including orders that make it impossible to get a plane any time soon, an outlook that gives you twenty years' worth of visibility and billions of potential users who have never had a plane ride.
Of course it's not just a scarcity of planes. It's a scarcity of stock! The company has been a voracious buyer of its own common as well as a serial dividend raiser with deep commitments to returning capital to you, the shareholder.
Let's see, was any of that interrupted by a long overdue lift in wages for the American worker? Did the endless margin calls that marked the bottom put an end to the demand? Is defense spending going down because the government's cutting taxes and raising military spending? I don't think so.
Then there's a stock you might be familiar with, it's called Amazon (AMZN) . You may know it as Alexa. If you are opposing it you probably think of it is as the Death Star. If you are on Wall Street you think of it as the $737 billion company that runs Amazon Web Services, the most popular cloud on earth, Amazon, the retailer and Amazon advertising which is growing leaps and bounds by the minute.
Oh and if you are like me and tens of millions of other people it's Amazon Prime, the way we shop, pretty much the way we live, and if this doorbell works that they just shucked out a billon for, the autonomous way we get our groceries. Hard to spot? Yeah, about as hard as the purloined letter was to find, and I don't just mention that because that take of ratiocination was penned by Edgar Alan Poe, who like Kevin Plank of Under Armour (UA) game also hails from Baltimore.
Did you get washed out of Amazon because you heard that Jay Powell might be worried that the economy's too hot? Maybe you got spooked by the dollar's strength, or was it it's weakness. Nah, it was oil's rally or its decline. Had to be one of those, no?
And then there's another little stock that you might have felt compelled to trade out of during this tempestuous month, the stock of a company called Apple (AAPL) .
Twenty-eight days ago Apple reported its quarter and if you didn't know any better, the world's largest company laid an egg, and egg so sulfurous that we can only conclude it had to be rotten. You can go through the simultaneous research, how about Keybank's "Cash Return should support the Stock but we see little to Drive Upside, downgrading the stock to sector weight." How about Deutsche Bank's very clever "F1Q-18 results, A mixed bag of Apples." What's Deutsche's advice? How about this bit of wisdom, "Our view if Apple as a trading stock is unchanged and we believe shares are likely to trade within their historical range. " Hmm rangebound. I guess you are supposed to let the stock go at $167 where it was when this prosaic report came out and then get right back in at $155 seven days later to you could traverse to the other of the range and end up at $180 where it traded today.
Post-It worthy? If you are Karen Cramer, she's always been a tad more harsh than I've been, not that anyone truly ever confused me with Ghandi.
Nah, for that honor I am writing the proverbial Post-it for the acknowledged dean of the group and frequent TV guest, Toni Sacconaghi at Bernstein, who, may I just say, is a serious practitioner of the business, person of rigor, but a person nonetheless of Wall Street. You may know Toni from back in 2015 when he said that "Apple's best days are behind it." Maybe you remember that time back in January of 2017 when he did the same. Or perhaps you read Toni's interview in the New York Times back on April 28 of 2016 when he said the "there's no question Apple's best days are behind it." I remember it because the stock was at $94 and CEO Tim Cook came on Mad Money to argue a different case. I used to write obituaries in my youth when I got out of college. I don't think I would have been calling the funeral home for the full name and picture, which the job entailed.
But Toni was more precise when he downgraded the stock at $167 "the verdict is in, relative to expectations the cycle is weak," and "Q1 results were worse than many investors realized."
Maybe ignorance was bliss given that he got you to own the stock 13 points ago?
Now here's what's so difficult about this exercise. Do you know that in many ways Toni's dead right? The cellphone business is more zero sum with little growth than its ever been. There's a piece in today's Journal about how "your love of your old smartphone" is a problem for both Apple and Samsung because the older ones are too good, way too good to need to upgrade.
Here's the issue though. Apple's a consumer product company with an incredible following that has created an eco system second to none and has the highest loyalty of any device in history. The service stream is growing and has huge margins. Procter (PG) , Clorox (CLX) , Colgate (CL) , Coca-Cola (KO) , they ain't got nothing on Apple even as their stocks all sell at dramatic, substantial premiums to the incredibly cheap Apple which has the misfortune to be covered by brilliant tech analysts like Toni -- and I have known him long enough to know he is brilliant. My point? Still I have to give him the Post-it because he's kept you trading this stock like a whamma jamma when the call was to own it not trade it, and that remains the mantra as we go into the Ides of March. I just hope this next swoon isn't the one where we find out that, voila, Apple's best days are indeed behind it, or at least we hear it mouthed one more time.
