In Search of the Perfect Investment

Why do so many people pump out gloom and doom?

Because it’s easy to write?

The once-venerated Wall Street Journal ran this piece over the weekend:

They even had a drawing of Isaac (no relation).

The piece started:

Does this sound familiar: Smart guy owns a stock in March at $200, sells it in June at around $600, but then buys it back in July and August for between $900 and $1,000. By September it’s back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month. He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling the force acting on it, didn’t know that works for stocks too.

When bull markets get going, investors come out of the woodwork to pile in. These momentum investors-I call them momos-figure if a stock is going up, it will keep going up. But usually there is some source of hot air inflating stocks: either a structural anomaly that fools investors into thinking ever-rising stock prices are real, or a source of capital that buys, buys, buys-proverbial “dumb money.” Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen to keep flames growing.

Most simply blame the Federal Reserve-especially today, with its zero-interest-rate policy-for pumping the hot air that gets the momos going. Fair enough, but that’s only part of the story. Long market runs have always allured investors who figure they’re smart to jump in, even if it’s late. Everyone forgets the adage, “Don’t mistake brains for a bull market.”

And ended:

…Last week the stock market was a roller coaster that many will keep riding. But when you see a source of hot air, the bellows, it’s best to let the last ones in become the last one’s out. I like another old Wall Street adage: Your hand should be trembling when you place a stock order at the ticket window. Same if you click “Trade.” Don’t be a momo.

Meantime, today virtually all our tech stocks are up.

Maybe not tomorrow.

But I’m not stupid. I do admit to dumping ones that are 10%+ down from where I bought them, don’t seem to have fantastic prospects and are probably getting bad press.

There’s a new list of our favored stocks in the right hand column of today’s web site. Click here.

I would have posted earlier, except the weather here is 68, windless and overcast. Perfect tennis weather. So Mark and I played our 183rd consecutive game. We played longer than normal.

Now to Snowflake which goes hot, hot, hot IPO tomorrow

I won’t get any Snowflake shares pre-IPO, like Buffett did. He has more money.

I’m not going to join tomorrow’s frenzy, bidding Snowflake’s shares up into the ionosphere.

Here’s my simple reading:

The company is growing. But is losing far too much money. It’s not easy to become a Snowflake customer. It’s only got  3,117.

Here’s a chart from their prospectus which they just filed at the SEC. It’s a little weird. They mix forecasts with actuals. Read the losses at the bottom.

I downloaded this book from Snowflake’s web site:

The book conclusively proved I was a dummy because it made little sense, although, my partner, Gerry Friesen, and I used relational databases in our publishing business as far back as the mid-1970s. I’m not a total dummy on databases.

I cheated. I went to Amazon. I figured they wrote in English. Which they did. I found this on their AWS (Amazon Web Services) site. It made sense:

Improved customer interactions

A Data Lake can combine customer data from a CRM (customer relations marketing) platform with social media analytics, a marketing platform that includes buying history, and incident tickets to empower the business to understand the most profitable customer cohort, the cause of customer churn, and the promotions or rewards that will increase loyalty.

Improve R&D innovation choices

A data lake can help your R&D teams test their hypothesis, refine assumptions, and assess results-such as choosing the right materials in your product design resulting in faster performance, doing genomic research leading to more effective medication, or understanding the willingness of customers to pay for different attributes.

Increase operational efficiencies

The Internet of Things (IoT) introduces more ways to collect data on processes like manufacturing, with real-time data coming from internet connected devices. A data lake makes it easy to store, and run analytics on machine-generated IoT data to discover ways to reduce operational costs, and increase quality.

The Data Cloud is our vision of a world without data silos, allowing organizations to access, share, and derive better insights from their data.

To stress the obvious, Snowflake’s data cloud and other databases can happily (and do happily) run on AWS. And, needless to say, Amazon is my largest holding. But Snowflake is no Netflix.

Over the weekend we all heard that Citigroup now has the first woman CEO of all the major banks. I applaud that progress.

Let’s take a simple data mining problem. For years and years and years, Susan and I have a Citicard MasterCard account. We’ve never defaulted. We always puts pots of charges on it, because we wanted to accumulate miles for our next trip to visit the relies (relatives) in Australia. In the last few months, our charges have dropped by more 95%.

If you were Citi and were mining your database of customers, that would raise a red flag. You’d call the Newtons and ask why are you spending less with us?

I’d tell them that — surprise, surprise — we aren’t going anywhere soon. And that our 641,656 miles on American were doing us gornish good.

Enter JPMorgan Chase. They offer us a card that gives us cash back, but no miles.

It’s nice to have Snowflake and all the computers in the world, but, until you pick up the phone and try and sell me something, they ain’t going to do you (or me) any good.

Gornish means no good in yiddish.

For now, I’ll watch Snowflake tomorrow. I’d love to short it. But they don’t usually allow that uncivil behaviour on IPOs.

Aw shucks, I couldn’t buy TikTok

Can you imagine a company less likely to know how to run TikTok?

Oh yes. there’s one — It’s called Oracle.

And they’re apparently not getting the opportunity to be railroaded into a very dumb and very expensive acquisition..

But the good news is that Facebook and YouTube (owned by Google) are both starting up the short video format popularized by TikTok.

So it will be all over for TikTok, soon.

Guess what I just found on TikTok:

Just the sort of nonsense to interest the Central Committee of the Communist Party of China (or whatever it’s called).

I bet Mr. Trump has never loaded TikTok on his cellphone and has never surfed TikTok nonsense, albeit it amusing, loud nonsense.

Don’t do stupid

I bought four tomatoes at The Berry Farm in Chatham NY for a ridiculous $11.37. She checked me out. I asked why the crutches?

She said she ran down her stairs on the way to a game.

She fell on the last step.

She did stupid.

The funniest wildlife photos

Here’s the first:

Here’s two more.

There are bunch more here. Watch them on a big screen. Show the kids.

Life moves on

Our stocks are up today. Tomorrow, I’ll tell you the new skills I’ve learned — how to use the dishwasher, the clothes washer and dryer, and which cleaning fluids work on what. My favorite is Palmolive. Do used tennis balls work in the dryer to restrain wrinkles? Need to Google that one.

Two bottles from Amazon for $14.99. It’s Amazon’s Choice also. Click here.

See you tomorrow. Got to finish my Honey-Dos, before she returns from Canasta.

Do not call Susan and tell her that her husband is nuts. She knows that already. – Harry Newton