Remember
the furious hand-wringing over Facebook’s data scandal? Of course. And you recall the fevered worry over the fate of FB’s share price? And all FB shareholders beheld all this and more, meanwhile wondering if it was past time to go. It wasn’t–still isn’t.
What would it take for you to sell? The market talk of even seasoned investors often contains precisely nothing about learning when to sell. No plan–no chance.
Then came the call to Capitol Hill, and congressional questioning that revealed more about congressional detachment than Zuckerberg or the future. Before that came repositioning concerns relating to a rising rate environment. Now trade tensions roil on every compass point.
As investors we consume both financial information and media. Media is an array of ad-driven formats, with a vast amount of space to fill and the more dramatic the better. Within this torrent of media exists some first-rate insight and help. We thought Facebook’s share price would suffer. No. We thought more coverage would spotlight high-profile departures. Not really.
We all love raw drama and stock stories. Such stories will always stretch from glory to doomsday. How seriously should we listen? What did the Cambridge Analytica scandal actually do to Facebook? Took it from $161 to $200, 25% in eight weeks.
Aerospace and defense both turned down in June. The drag lower gripped Boeing as well. The vast majority(+70%) of BA’s revenue comes from its’ commercial business. Boeing does not need China to thrive. Nonetheless BA turned decidedly down just following Sj’s entry. Here’s the chart.
Boeing(BA)7-1-18.
- Boeing’s stratospheric flight over the past eighteen months has resulted in hordes of adoring shareholders. Yet can an industrial, even one blessed with near-secular status, prove capable of pleasing its’ newest most fickle fans?(SJChart.)
Boeing(BA)6-18-18.
- This reality check for stalwart BA fans clearly demonstrates the amount of time many companies spend in the wilderness. Is Boeing entering another “consoladation?” If they’re lucky. BA’s not positioned to rise. Shares may simple continue lower. Either way, do you really want your investment dollars packed off with them?
In the best case scenario Boeing is moving into a consolidation. The weak technical condition for BA weights heavily against any move higher. The market is in fact revaluing BA now. The 200 day simple moving average($313.58) is near support. If support is breached, the price action risk is on the downside. We believe BAs current leading issues are valuation and trade war tension.
Despite robust fundamental health, Lockheed Martin was punished severely following earnings call comment. Guidance called for a continuing, not raising, of the company’s free cash target at $500m.
Lockheed Martin(LMT)7-1-18.
- Lockheed Martin’s current decline is market driven. LMT’s fundamentals are very strong. Yet investor sentiment shifted. The water in the bay began dropping and taking LMT down.
Lockheed Martin is the default company the government is forced to hire for some military solutions. Their F-35 Lightening program is the Joint Strike Fighter for all branches of the U.S. military. LMT has a ROE(return of equity) of 1240. They also pay a 2.4% dividend.
Alibaba(BABA)7-18-18.
- Alibaba’s growth is phenomenal. A 50% growth rate forms a baseline for most of BABA’s numerous arms–e-commerce, retail, cloud, payments, and much much more. Again, trade war tensions are roiling the Chinese stock market even more than the U.S. Shares are suffering.
The market makes the rules. Our job is to learn and know them, in a timely manner. Change came to Boeing, Lockheed, and Alibaba. We lost 3% on boeing, exiting at $353. STOCKjAW locked in gains in both Alibaba and Lockheed Martin. We sold BABA at $189.75., and LMT at $319.
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Thanks for reading.
