On my paid site JubakAM.com I aim for a mix of posts on macro trends and on individual stock picks. It’s a strategy I call tactical stock picking.
Over the last few days on this free site and on my paid site, I’ve posted my views on the short-term and medium-term effects of the Brexit vote.
Today’s post is about the coming dip in technology, why it will happen, and why it’s a good buy on the dip opportunity.
Brexit and the stronger dollar are likely to produce guidance for the third quarter that’s even more disappointing than the current Wall Street estimate of a 7.2% year over year drop in earnings for the second quarter for the stocks in the Standard & Poor’s 500.
If you look at what sold off during the two day Brexit crisis, you’ll find the expected list in the technology sector–stocks like NXP Semiconductor (NXPI) that are headquartered in Europe–and some unusual candidates such as Facebook (FB). In the case of Facebook the drop seems to be due to short sellers talking up the hit to revenue that Facebook and other technology companies face from a stronger dollar.
I think that leaves the market positioned to focus on the effects of a stronger dollar. Expect to hear about the dollar as headwind in the earnings reports from the big technology companies that report in mid-July: IBM, Microsoft, and Intel.
When you’re looking for bargains in this market do remember that the second quarter is almost always the worst quarter for technology stocks. You’re buying for the recovery in the third and fourth quarter–make sure you believe it’s going to materialize this year.
That’s what I’m working on at my subscription JubakAM.com site. (I’m still, yes still, at work on what’s turned out to be a very complicated post on the robotics sector and on one about water stocks that should go up on JubakAM.com in the next day or two.
I think there’s some value to you in passing on the direction of my thinking about the market on that site. Hope so anyway.
Of course, there’s an ulterior motive to sharing this with you: If you decide that you’d like more of my thoughts on the market in my JubakAM.com posts, I’m hoping that you’ll subscribe to my site at JubakAM.com for $199 a year. (By the way, you can get a full refund during the first seven days if you change your mind for any reason.)
