What a difference a month makes. Maybe we needed a string of holidays to regroup after a difficult September, when as you might remember, as I emphasized, a weak IPO market knocked the stuffing out of growth stocks. Perhaps, the final destruction of WeWork; which was a Ponzi scheme that failed to launch an IPO; reset the legitimate growth market.
Take Roku (ROKU) for example. That was a typical growth stock that got taken to the woodshed. I was forced to sell ROKU, wait the requisite 31 days, to avoid any wash sales, and then I went back into the stock. You need an iron constitution to weather these storms.
I always tell clients that the markets care about three facts (or economic data points) – earnings, interest rates and jobs. Jobs are strong. The FOMC is lowering rates. As earnings season is playing out; the message is loud and clear, in the aggregate, earnings are doing well.
I was interviewed by Michelle Makori of i24News late Friday afternoon (my time here in Nevada). Unfortunately, the lead time was too short to send out a message to my readers. If you have never watched Michelle or I24News, I suggest that you do. It is available on some cable systems or on the internet.
Prior to the segment, I submitted some talking points. I will share them now with all of you
1 – So far earnings have done quite well, considering expectations are being lowered into the future
2 – Tariffs and impeachment talk have not been a factor in earnings or guidance, but are used as a convenient excuse when companies miss expectations
3 – Amazon (AMZN) – we own the stock personally and for clients; despite missing expectations and gaping lower in the immediate after market, performed quite well in today’s [ last Friday’s ] regular session. Jeff Bezos is excellent at investing for the future at the cost of short-term results. Traders want instant gratification. Investors want long term results. This means that hedge funds / traders are sellers while institutions / pensions / mutual funds are buyers. The latter are strong money.
4 – Intel’s earnings were excellent, and the message was clear – the semiconductor sector is strong. I always look at semiconductors as the “main ingredient” in technology. This tells me that tech will have good earnings reports. We have exposure in personal and client accounts to Nvidia and Semiconductor ETFs
When it comes to growth, technology comes first. When it comes to technology, semiconductors lead the way. Following behind are stocks generating revenues in the cloud, software, streaming and data sectors.
I would also mention that despite all the body blows that Boeing (BA) has taken, the stock has held in well. Most other companies would have gone down the drink. The stock’s resilience wil pahy handsomely to investors over the long-run.
For clients that may have skipped reading my quarterly letter, let me repeat where the note began.
… Effective October 3, TD Ameritrade, has eliminated commissions for stock and exchange traded funds trading. TD Ameritrade followed Charles Schwab’s zero commission policy announcement just a few days earlier. This is great news and the positive impact to client accounts will be felt immediately. Clearly, the industry is moving in that direction. One might ask, how can brokers charge zero commissions? The answer is simple yet complex. Brokers get paid for order flow from large institutions, such as mutual funds. Furthermore, brokers earn money on margin, stock lending and prime brokerage services to hedge funds. Large full-service brokers will have to follow their discount broker brethren, in my opinion, or else they risk becoming financial dinosaurs.
Our second exciting announcement is that LakeView Asset Management has hired Bridge Financial Technology (Bridge) to automate client reporting. I interviewed and demonstrated many service providers over the past few months and concluded that Bridge was the right fit for LakeView Asset Management and our clients. Since forming LakeView Asset Management in 2002, quarterly client performance reports were produced in-house. We are currently in the process of on-boarding information to Bridge and expect to roll out the service to clients by November 1. I have worked very hard the past few weeks to customize and aggregate client accounts to optimize reports on a household and strategy basis. Parenthetically, this is one reason I have not published My Gut Felling as often the past few weeks. Bridge will not only provide quarterly but also monthly reports. Access will be available online. Once we go live, I will provide clients with more information. I am confident that you will like our new client reporting product.
Please note – I would be happy to supply the entire quarterly letter to anyone desiring to open an account with LakeView Asset Management
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AMZN, BA, NVDA, ROKU – although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right-hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage, and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com
– You can email Scott at email@example.com
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