Gersh; RE:" pin the E*TAIL on the Bull "
AMZN down -50% in two weeks; indeed, Gersh, nice call, er, put.
The Dude's Ersatz TechSpaetzle Fund is up around 10% YTD...
techstocks.com
...and though heavy into 'net infrastructure, the only real "internet stock" in this (essentially NDX.X index) group of 10 stocks is AOL; it's just been flat YTD, neither booming when the others do, nor collapsing with them. At first I attributed this inertia to NSCP dilution, (which I think was a really stupid acquisition) but clearly the stock is in stronger hands now - it's acting like an S&P rather than a NAZ "E*TAILER".
We have to distinguish between infrastructure stocks like CSCO and LU, portals like AOL, pipelines like telephone/cable companies, and the dominant hardware/software duo of SUNW+ORCL -- and all the rest, which are "E*TAILERS". DELL is an interesting exception - a manufacturer/E*TAILER with a build-to-order model that will eventually creep into all manufacturing; But I see AMZN as more a clever, modern "distributor", with a superb inventory control system (not unlike WMT, but) turned around 180 degrees such that the customer becomes the company's order-entry clerk. OnLine brokers like SCH and EGRP don't really sell anything (well, perhaps mutual fundz, for which they get a fee) and they have smaller exposure to bonds and trading debacles than do DLJ and MER - their revenue being driven by volume and float. I put them in the same sector as OnLine reservation services, rather than distributors of production.
Take away the internet frenzy and IMHO most of the E*TAIL stox are really components of the RLX.X - Retail Index sector. Advertising revenue is not a significant factor for them, indeed, dollars spent on self-promotion must burn faster than ad revenue taken in - and eventually they must fish or cut bait by selling something. YTD the retail sector has not been keeping up with SPY: WMT is flat, HD and WAG just off the mark and, curiously SWY and the food sector have decayed ~10% YTD (though they were recently upgraded, and have yet to report earnings). BBY still goes up, though I see them as nothing more than a remote warehouse for Japan, Inc., which can not build-to-order.
anyhoo, just musing here (^_^) evening cocktail time again.
I think the conspiracy theory about "no margin" for E*TAIL stocks is a little far-fetched (you gotta use margin to sell short or buy options) and most of that focus was on IPO's, I believe. E*TAIL frenzy just got ridiculous; charts look like penny stox, for chrissakes.
Interesting to note that -50% devaluation of AMZN and kind was overshadowed by the real blowout earnings of the NAZ bellwethers. So far, the lowest risk / highest reward Tech play has been the NDX.X index itself, by option or UOPIX leveraged fund, or the XLK "basket", leveraged with CALLs as Chris was doing.
Continued good luck to you, Gersh.
-Steve |
