Berna nails it again; The market is no longer being driven by big tech stocks; COVID-19 cases are rising; The $397 bagel; 'Disgusting old man hands'
1) I've said it before and I'll say it again: If you're not reading my colleague Berna Barshay's free Empire Financial Daily e-letter, you're missing out (you can sign up for it here).
She's consistently provocative and insightful – and regularly shares profitable stock tips, both long and short.
In her Empire Financial Daily two weeks ago, The New Entrant to the Streaming Wars Has Become a 'YOLO Stock', she took a close look at ViacomCBS (VIAC) and its soaring stock price and concluded:
With significant challenges to the legacy business, an uncertain roadmap for streaming, and possible retail trader crowding... It's probably time to sell.
After what we saw with GameStop (GME), it wouldn't shock me if VIAC shares saw another leg up. But on the fundamental merits, I wouldn't be surprised if the stock lost a third – or even half – of its current value over the next year.
The stock closed that day at $96.33, peaked a week later at $100.34 – and then imploded, losing more than half its value in the past week, closing Friday at $48.23.
I've now only half-jokingly modified Warren Buffett's famous maxim:
Rule No. 1: Never lose money
Rule No. 2: Never forget Rule No. 1
To be:
Rule No. 1: Always listen to Berna
Rule No. 2: Never forget Rule No. 1!
2) This interesting tweet shows the breadth of the market's strength – it's no longer being driven by a handful of big tech stocks:
3) Regarding the pandemic, we're in a critically important horse race right now between the vaccinations, which are going well, and rising COVID-19 cases, driven by some combination of virus variants, policies (many states are loosening restrictions), and behavior (the most extreme idiocy being spring break crowds in Miami Beach).
I remain optimistic that we're going to win this race, but I wish people would be patient just for another couple of months!
Here's the latest chart on vaccinations, showing that an average of 2.7 million doses per day have been administered over the past week – an all-time high (source):
But this chart shows that the positivity rate has risen from 3.9% to 4.6% over the past two weeks (source):
As a result, cases (a leading indicator) are now rising slightly, though hospitalizations are flat and deaths continue to decline (trailing indicators) (source):
4) I finished climbing in Joshua Tree on Friday and on Saturday flew from Palm Springs to meet my wife in Jackson Hole for a week of spring skiing.
In this Facebook post, I wrote about and shared pictures of my last two days of climbing and missing my connecting flight in Los Angeles (aka, the story of the $397 bagel). It was truly one of the dumbest things I've ever done – but, as I said to my wife, "If I was to do one really careless thing over the past week, I'm glad it was this – because climbing mistakes can be fatal!"
And in this Facebook post, I showed what a week of crack climbing on rough rock did to my hands – even though I was wearing gloves most of the time... My wife says my hands look like "disgusting old man hands" – and I think she has a point!
Best regards,
Whitney