The more things change, the more they stay the same? History doesn't repeat itself but it often rhymes?
When you compare this market to the last impeachment go-round, the impeachment of President Clinton, you find an astounding similarity to what was working then and what's working now.
Do you know that the late great Mark Haines used to call me "Reverend Jim Bob from the Church of What's Happening Now?" I loved that name, so did my late dad, who revelled in it.
But you know what? It turned out to work for a lot longer than anyone thought, although the dot com crash erased a lot of the gains that the market racked up during and after the House voted to impeach, as they are doing now.
Let's peruse the leaders. If you marry today's Dow with the stocks back then, you will see that the Steve Jobs-led Apple (AAPL) rallied 151% -- all part of the monster run this stock, among the greatest wealth creators in history, enjoyed.
You know what worked then, something that worked now -- own it, don't trade it. The stock traded at $8. It's now at $279. The more things change, the more they stay the same.
Second, though, is a little more controversial: Cisco (CSCO) . Right at that moment, the John Chambers-led Cisco was at the center of the internet, known as the backbone of the entire build out. Cisco flew way too close to the sun back then -- rallying 130% in 1999 -- and it soon fell to earth, languishing as its telco clients one after another went belly up. You caught a terrific quadrupled from $20 to $80 if you owned it into the top of the Nazz in 2000, but it went back to $7 not long after and it still hasn't recovered.
The amazing thing is that Cisco survived at all -- and now I think you are getting one of the best buying opportunities you are going to get in ages because successor CEO Chuck Robbins is reinventing the company, making it more of a subscription software internet of things with a fantastic 5G portfolio for the enterprise coming right up. Back then, rates were high -- call them 5%. Not now, which is why Cisco's 3% yield is a really nice cushion. I think the mid-$40s is a great staging ground for higher levels and am glad we have a nice-sized position for the trust.
So many retailers have disappeared from the scene from back then, but not Walmart (WMT) . Its stock had been on fire for ages and it really hasn't quit. The fact that it was only up 69% gave you a terrific buying opportunity. I remember many saying Walmart was horrendously overvalued versus the fancy pants companies the analysts shopped at. I'll take $20 to $119 any day of the week, give or take twenty years.
You know how Facebook (FB) and Alphabet (GOOGL) are facing all sorts of government investigations, even as we remain steadfast with them for Action Alerts Plus? Back then, the software colossus was in the midst of the big daddy of investigations: United States versus Microsoft (MSFT) , an antitrust horror that many thought would crush the company. Nope, buying opportunity. But not quickly, as the stock fell from $50 to $13. Let's say the latter part of that runaway freight train was a buying opportunity, as many got run over by Justice. It did gain 68% that fabled 1999 before the Antitrust division prevailed. I still like it in the $150s and I particularly like it when it comes to the lack of government intrusion of any sort.
Home Depot (HD) rallied 68% that year on the way to national domination. While business never really faltered, the stock soared from the $30s to the $60s before a decline that took more than a decade to recover from. I still think it's cheap at $218, twenty points from its high with a 2.49% yield. It just stumbled because of lowered guidance. I predict that will be a blip in a long-term run like it has had since 1999, which is why we just bought some more on the dip.
Sometimes you get those moments where tech shines so brightly that it dominates the leadership both in the Nasdaq 100 and the S&P, and the period after the impeachment hearing was one of those moments.
The leader? Qualcomm (QCOM) , which rallied an astonishing 2,619%. That's what a $3-to-$80 run looks like. Talk about Icarus; this darned semiconductor's stock fell to $7 not long after and it took about 15 years to get back to that lofty and definitive top.
Qualcomm is and always will be a creature of improving cellphone technology -- and now it's 5G that beckons. Thirteen times price-to-earnings ratio, almost 3% yield, this one makes no sense to me. It should be higher, especially give the Micron Technology (MU) move after its excellent quarter just released.
Verisign (VRSN) placed, so to speak, in both the Nasdaq and S&P and second place honors gave it a 1191% return, which made perfect sense because it's a domain registry company and there was a domain gold rush back then. Guess what? There still is and Verisign's got all sorts of ancillary businesses that generate terrific returns. It peaked at $212 then crashed to the single digits with the internet stock collapse, but, liked Cisco, it stayed in business -- although it took 20 years for the company to get back to that lofty level.
You know what's one of the best performers in 2019? The stock that was the third-best performer in the Nasdaq and fourth in the S&P: Lam Research (LRCX) . I am proud of this one because I liked it back when I was a hedge fund manager for its historic 500% run in 1999 and I like it now even as it is up more than 100% and we have a huge win from it for Action Alerts Plus. What's the secret sauce? Along with Applied Materials (AMAT) , Lam dominates the semiconductor equipment business. Lam bought Novellus not that long ago, another stock we recommended hard here because it was captained by the legendary Rick Hill and that refreshed the line. This stock went from the one and change to its current all time high of $292 and it never really got crushed during the bad Nasdaq days of 2000 to 2002.
The rest of the winners back then that are still kicking? They remain intriguing, but not as buyable. In the Nazz number four is Checkpoint Systems, a version of cyber security that I am just okay with. And number five, Biogen (BIIB) : You are taking a flier on an alzheimer's treatment with that one. I prefer others because of the binary nature of that company's prospects.
Oh, and let's end with a curious oddity: On Thursday morning David Faber talked extensively about how DISH Network's (DISH) Charlie Ergen is trying to buy some assets that need to be divested in order for Sprint and T-Mobile to get regulatory approval to merge. DISH wants to build out a national 5G network, which could cost billions and billions of dollars. Ergen testified yesterday that it has $10 billion in financing to do so.
DISH back then was a great growth company and its stock vaulted 706%. It rallied to the mid-$50s during that period, but like so many others in telco and transmission, it crashed badly and took about 14 years to get back there. It's back to $35. Me? I'd rather own AT&T (T) , with a 5% yield, or T-Mobile, which will have good growth even if the deal gets blocked by various states' attorneys general, on competition concerns.
You know what my takeaway is? We keep thinking about how hard it is to own tech. You listen to these winners and you know what you think? Yep, it is hard. Many of these collapsed soon after the post impeachment run.
But, and I know you hate this term, the crash? It proved to be a buying opportunity for most of them. You just needed to be patient. Same as now.