This week has been great for the portfolio. Before the long holiday weekend, I know the discussion centers on Nvidia (NVDA) and how this great $465 billion company reported a solid quarter, cut guidance — and reported shares rally. This was in direct contrast to the earlier pattern. I’m not sure of the direction here when it comes to technology stocks. I believe if your company caters to a LA Club Enterprise holding Marvell Technology (MRVL), the process is simple. We know it’s good to go. But if the company cut its forecast and it’s in the venture, it didn’t matter. Just look at Cisco (CSCO), which closed after revising its sales forecast for the current quarter. It didn’t make any difference, ie up to Nvidia. So it’s only natural to assume that maybe things have really changed with Nvidia’s rally, especially since Nvidia with its huge video game business has a lot of consumers that were hurt by China’s COVID lockdown. Which brings us to the biggest question: what does Nvidia represent for Apple (AAPL), an all-consumer and heavy China. Is Nvidia able to translate Apple’s translation low enough to rally on forecast cuts? I believe no and Apple remains uncertain even beyond these levels. We have yet to see a real rally in a consumer company with ties to China, apart from Dollar Tree (DLTR) and Dollar General (DG). They are hardly the right analogs for Apple as they are dependent on Chinese manufacture, but not on the Chinese consumer. My Take: Apple is a core holding we’ll acquire through our travails, even as I understand the fear that comes out of owning the stock. As always, we think it should be owned, not sold, and that’s just one typical swoop. Sell now and what do you do when China announces that COVID has been defeated? I say separate your head from your body with a bandsaw. Now let’s tackle the next elephant: the massive downfalls of Google (GOOGL), Amazon (AMZN), and Facebook (FB) — excuse me for using the past monikers — and whether they might make a comeback. These are all equally problematic. Let’s take them one by one. Google Russia and Eastern Europe had fallen from the sale of YouTube. If it reports now, instead of last month, I think it would have been forgiven and would have rolled higher. Amazon, some say, has gotten to the point that you’re getting retail for free. I’m not like glib. Amazon now has operational problems that were unforeseen. These must have been higher than this before the stock could have a real bottom, hence why we sold some of the once-holy positions. I think it can work higher over time, but only if the market picks up. Not good enough yet. So let’s talk about what we bought on the Snap debacle: Facebook. We’re well on the shares we bought recently, but the stock acts like a pre-announcement, a possibility. I think competent CFO David Weiner covered this possibility on the call. People are worried about layoffs, but the company has assured me that the new hires are highly rated and the beginners don’t need training. Most importantly, Metaverse China is close to winning the reels on TikTok without playing cards, which will really resonate with the Street but not with the customers. They just want what attracts the biggest audience. Here’s what matters: Facebook is now valued as a less-than-stellar retailer or even a second-rate content company or an amalgamation like 3M. What makes Facebook a buyer for me has become it. One last concern: given that we have called a rally, we have earned the right to forecast next week. I think we’ll be facing the sold out Joker vs Summer Rally Stooges in May. What we need to know is China, Ukraine, the Fed – the same trifecta walls of worry we have already raised. I believe we are placing our bets at this point. Our high-grading is almost done. A few more repossessions and we’re done. Have a wonderful Memorial Day weekend. We’ll do it again on Tuesday. (Jim Cramer’s charitable trust is long AMZN, AAPL, FB, GOOGL, NVDA. See here for a full list of shares.) As a client of CNBC Investing Club with Jim Cramer, you need to know before Jim makes a trade. A trade alert will be received. Business. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about the stock on CNBC TV, he waits 72 hours after a trade alert is issued before executing a trade. The Investment Club information above is subject to our Terms and Conditions and Privacy Policy, along with our disclaimer. No fiduciary obligation or duty exists, or is created, based on receipt of any information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
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Adam Jeffery | CNBC
This week has been great for the portfolio. Before the long holiday weekend, I know the discussion centers NVIDIA (NVDA) and this great $465 billion company reported a solid quarter, cut guidance — and signaled a sea change when shares rose. This was in direct contrast to the earlier pattern.