It was a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz is centered around Nvidia (NVDA) and how this big $465 billion company signaled a sea change when it announced a strong quarter, cut spending — and stocks rallied. This was directly contrary to the pattern that had preceded it. I’m not sure of the direction here when it comes to tech stocks. I believe that if your company goes to the company, the Marvell Technology Holding Club (MRVL), the process is simple. We know it’s good. But if the company cut expenses and was in business, it didn’t matter. Just look at Cisco (CSCO), which took a beating after revising its sales revenue lower for the current quarter. It didn’t matter, that is, until Nvidia. It is therefore natural to assume that things may have really changed with Nvidia’s rally, in particular that Nvidia has a lot of consumers with its huge video game business which has been affected by the Covid lockdown in China. Which brings us to the bigger question: what does Nvidia portend for Apple (AAPL), which is all consumer and China-heavy. Is Nvidia translating to the fact that Apple can be down enough to be able to rally around a consumer cut? My view remains no and that Apple remains precarious even from these levels. We have yet to see a consumer business with China privileges have a real rally besides Dollar Tree (DLTR) and Dollar General (DG). These are not the right analogues for Apple as they depend on Chinese manufacturing, but not on the Chinese consumer. My take: Apple is a staple outfit we’ll hold throughout its struggles, though I understand the fear of owning the stock. As always, we believe it should be owned, not sold, and that’s just a typical swoon. Sell now and what do you do when China declares Covid beaten? I say you would have your head separated from your body by a bandsaw. Now for the next elephant: the massive declines of Google (GOOGL), Amazon (AMZN) and Facebook (FB) – forgive me for using the previous monikers – and whether they can make any comebacks. These are also all problems. Let’s take them one at a time. Google was shot down by YouTube sales in Russia and Eastern Europe. If he had reported now, instead of last month, I think he would have been excused and driven higher. Amazon, some say, has gotten to the point where you get retail for free. I’m not that flippant. There are now functional issues at Amazon that were not planned. These need to be reduced to more than they have before this stock hits a real low, hence why we sold some of a once-hallowed position. I think it can go up over time, but only if the market recovers. Not good enough yet. Next, let’s talk about what we bought in the SNAP debacle: Facebook. We are well up on recently bought stocks, but the headline acts as a pre-announcement is a probability. I think CFO David Wehner found out about this possibility on the call. People freak out about being made redundant, but the company assures me that new hires rank higher and don’t need the training that newbies need. More importantly, Metaverse is closer to Reels triumphing over TikTok without having to play the China card, which would actually resonate with the street but not customers. They just want what dresses the biggest audience. Here’s what matters: Facebook is now considered a less than stellar detailer or even a second-rate materials company or an amalgamation like 3M. To me, that makes Facebook the purchase it has become. One last concern: since we have called the rally, we have won the right to predict next week. I think that we will be confronted with the clowns of the sale in May against the stooges of the summer rally. What we need to know is China, Ukraine, the Fed – the same walls of worry we’ve climbed before. My view is that we are pressing our bets right now. Our ranking is almost complete. A few more repositionings and you’re done. Have a fabulous Memorial Day weekend. We will start again on Tuesday. (Jim Cramer’s Charitable Trust is long AMZN, AAPL, FB, GOOGL, NVDA. See here for a full stock list.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim does a shop. Jim attends 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
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Adam Jeffrey | CNBC
It was a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz is centered around Nvidia (NVDA) and how this big $465 billion company signaled a sea change when it announced a strong quarter, cut spending — and stocks rallied. This was directly contrary to the pattern that had preceded it.