Every time you want to get negative, you get gob-smacked on the upside by fabulous quarters where you expect weakness and activists when you expect nothing.
Last night, one of the biggest retailers and one of the largest software companies simply blew away the numbers: Costco (COST) with an extraordinary 10.3% comps and Adobe (ADBE) with 25% year-on-year growth and 40% margins.
At the same time, Elliott Management decides to pursue the canning of CEO John Hess of Hess Corporation (HES) and adding of a gigantic buyback, or a sale. I don't know if Elliott can succeed, as it has 6.7% and Hess has 10%, but the stock has dramatically underperformed, falling 30% versus a 21% increase in the S&P 500.
So, parse this: one of the largest software companies with $2 billion in sales this quarter says business is strong, and its company touches 65 trillion data transactions and says business is strong.
Costco says business is very strong, with particularly strong membership revenues and good numbers in food, sundries and soft lines.
An oil company that's been a total loser can become the biggest winner.
If you were short all three -- which would make sense, given that not every software company is doing well, a retailer is prey to Amazon (AMZN) and an underperforming oil company gets a driver -- you are going to get crushed today.
That's the essence of a bull market. It always surprises you, and you say: "where's the froth?" Costco has now rallied 40 points from the summer and I think it could be an easy shot to $100. Adobe goes to $200, and Hess? Who the heck knows.
So, when you hear that people say the market is high, remember these three. They are emblematic of what is going on. Oh, and one more thing: Costco and Adobe are winners in tax reform -- if we get it -- and it's not in the numbers yet.