We hear an awful lot about short-selling these days. Some view it as a sin. They don't want anybody betting against a stock and they try to destroy those who are shorting anything.
Others view it as a plaything, just a huge amount of fun and always brag that they profited from negativity, that they "went against" someone like me and crushed it.
I find this whole David versus Goliath theme of the buyers as well as the young swashbuckler going against the older, seasoned swordsman, tiresome. As someone who has been at this for 40 years I think it's been per se a real bummer to bet against me because you will win some - everyone does - but like any sport, you will lose some, and I can tell you a day like today is a day where you will never make the playoffs.
Why do I utter this? Because the stocks I have championed for ages, the ones that, if you read my mentions column on Twitter (TWTR) , everyone is short because they always claim they do the opposite of me, broke a lot of short sellers' hearts because they really delivered.
Case in point - and a real horrible short - Advanced Micro Devices (AMD) . Until five years ago when the stock was at $5, I despised AMD. I remember it from the era of the late Andy Grove, one of the best executives of all time, who ran Intel (INTC) so well that he could have wiped out competitor AMD in a heartbeat. I always thought they kept AMD alive so that the Justice Department wouldn't pursue them for monopolistic practices. The government ultimately did, but that's a different story.
Then five years ago I met Lisa Su. I professed that I had been an Intelaholic but given its mismanagement I was on the wagon. Nevertheless there was no way I could possibly get behind AMD no matter what she said.
For the next hour and a half she took me to school telling me not about Intel but about the roadmap she had to erase Intel's dominance by out engineering the once great semi giant.
I left the meeting with a sense that perhaps I not only had to abstain from Intel, but it was time to belly up to the bar and make mine AMD. Subsequently, the more I checked with the semi people I know - not hedge funds but actual semiconductor and semiconductor capital equipment folks - the story checked out. I checked in with a slew of prospects and they were busy sampling, and liking, AMD. Sadly they were also doing so because Intel had actually fallen behind a company that I used to have a good belly laugh about.
So, I went all in. Now $5 has gone to $95, a remarkable performance while Intel's journeyed from $36 to $53. Intel has a new CEO and he has done his best to sow seeds of doubt about my AMD obsession but this morning's quarter shows me that I am a proud AMD-aholic and it's now truly several years ahead of what Intel is offering in everything from personal computers to high performance computing and with gaming, once the attempted province of Intel, well forget about it.
This stock's been kept down because the company is trying to buy Xilinx (XLNX) to give it more internet of things and telco exposure. The deal's being held up but I think not for long and you need to get in now because as I always used to tell clients, stocks that go to $100 go to $120. Of course I was being facetious, but this stock is a monster and Lisa Sun along with competitor Jensen Huang, may be the two best designers of the most important asset this country has. When the deal with Xilinx does close, expected by yearend, it is immediately accretive and will make this stock look very cheap versus its competitors.
The how about Alphabet (GOOGL) ? Here's a company that is the best at what it does and it does pretty much everything. It has the best advertising model in search and YouTube, the latter reaching young people that's impossible for traditional TV to get. It has the best self-driving cars. It will eventually give Amazon (AMZN) and Microsoft's (MSFT) Azure a run for the money in the cloud world.
And it has among the smartest people on earth who are constantly improving this cash machine. If you listen to the call, which I suggest you do, you will hear the glee that's deserving. A crummy short.
Oh and how about Boeing (BA) ? Anyone want to short a company that was supposed to lose a ton of money and instead made good coin? I was thinking that Boeing could shake off the 737 Max woes and the 787 tribulations only after it did a gigantic equity offering and got through two years of suffering. Now I am thinking there could be an equity offering but it would come much higher and before then, no matter how much the Chinese may despise us, they do need the planes and not all can come from Airbus (EADSF) . This one feels real good after today's spectacular report.
Now look, I know that the Delta variant can slow the economy. It's a given that it will put pressure on sales for everything. The CDC's dire forecast for the vaccinated because of the unvaccinated has the more cautious of us wearing masks even as the most obstinate of them serving as COVID's best friend.
It's pretty obvious that the Chinese, at least short-term, feel the need to crush companies that exacerbate class distinctions, create billionaires that are too big to control and help Wall Street and its kleptocratic clients make a ton of money that belongs to the PRC. I often wonder if the Biden administration understands that an unrepentant, belligerent China gets funded only in part by our stock market but in almost full from buying Chinese imports. We are addicted and they know it. Yes, Apple (AAPL) and Starbucks (SBUX) had exceptional sales in China but some big plane orders would sure help a lot more people.
And if it weren't for the Delta variant I think we would have heard a tougher Fed that would have started the process of liquidating its bond hoard. Or at least stopping the buys, which at this point seem pretty needless if we are going to go all in on infrastructure which are what the steel stocks are saying.
But today was a day to celebrate not being short what I like and I am grateful for those who say that they like to short everything I like because crow is a dish best tasted cold, and are they ever eating a ton of it.