Earnings trends and an update on the Riverbed puts
It’s fried-day, as my old pal Herb Greenberg from CNBC used to write back at TheStreet.com a decade ago. It was a long week with lots of headlines, earnings, and Fed developments. I’ve listened to and/or read the transcript from dozens of earnings calls not to mention having read hundreds of analyst notes in the last five days.
Here are three clear trends so far:
Tech stocks have to report much better than expected earnings, a la FFIV or AAPL, if the market’s to reward them. Anything sniffing of a miss, a la Google or Riverbed, and the market takes it out on the stock hard.
Bank stocks have had a reprieve and unless they absolutely miss, a la PNC, the stock’s just hang tough and rally higher. There’s a bigger theme than earnings happening in the financials. The government seems less likely than ever to step up prosecuting ongoing financial fraud at the TBTF banks, and that’s really what driving these stocks.
The semiconductor equipment suppliers like KLAC and NVLS have seen a turn and there’s a lot of spending going on in the semiconductor world as INTC and QCOM et al accelerate their arms race.
And here’s the question of the day: Does Greece and the Euro still matter? I’m going to throw it out there for you guys once again, as I do everytime the Greece/Eurocrisis panic subsides — NOW IS THE TIME TO PANIC ABOUT GREECE!
Seriously, if you were worried about Greece’s debt crisis and the ability of the Euro currency to survive back a couple months ago when everybody else was and the markets were at their lows, then why aren’t you worried about it now? Stocks are much higher and have much further to fall if the worst case scenario for Europe’s sovereign debt crisis comes to pass now than they did back when everybody wanted you to panic about it.
Be fearful when others are greedy. Be greedy when others are fearful. Others are decidedly not fearful right now. So you should be.
Finally, let’s hit on Riverbed. Man, the stock is getting hit badly today and the report wasn’t up to snuff. After seeing F5 continue to accelerate its growth and having seen Riverbed stumbled a couple times of late, I’ve got some concerns about Riverbed. Those puts we bought yesterday are up huge and served their purpose of hedging our position, but I’m letting them sit for now as I decide on the Riverbed’s ultimate fate in the portfolio. We initiated our Revolution Investing Model Portfolio position in Riverbed back around $12 a share. That doesn’t matter though, does it? The only thing that matters is whether we think Riverbed is going to be much higher in five years than it is today. Working on that with fresh perspective right now.
