Friday File: Shaving Momentum (but not too close)

Checking in on Fastly and The Trade Desk after a wild week, plus thoughts on Intuitive Surgical, Medical Properties Trust and more

By Travis Johnson, Stock Gumshoe, October 16, 2020

So what’s happening this week? We inch closer to the election, and to what I continue to expect will be a relief rally no matter how the results come out — the last time I was this eager for something to just be over was probably when I made the mistake of watching The English Patient (I walked into the movie theater in 1996, but I’m pretty sure it was 1998 before I was allowed to leave).

But that doesn’t mean I’m “betting it all” on a huge market rally — just that I think another surge for stocks is the most likely outcome, given the emotional turmoil we’ve all been living with this year and the huge amount of money still sloshing around in the system, looking for a home. If the Fed could just literally drop it from helicopters that would probably be a huge improvement in terms of economic impact, other than the riots which would ensue — if Jerome Powell borrowed Bernanke’s helicopter for those drops, at least, most of the money would start with the people who actually need it to pay rent and buy groceries, rather than primarily being waylaid and used to inflate stock prices and asset prices, as has been the case with the Fed’s largesse over most of the past 15 years… but that’s the world we live in, no sense in imagining otherwise. The reckoning over all this deficit spending and Fed leverage will probably come someday, sure, and it might really hurt… but I bet we’ll do a lot more spending first.

While I wait for this torture to end, though, what’s on my mind when it comes to the Real Money Portfolio? We got a little shot across the bow from Fastly in the form of a pre-announcement of a bad quarter to come in a couple weeks, so that got me to thinking about the size of my “momentum growth” exposure overall, and I ended up shaving off some of that exposure… so I’ll go into my long and drawn-out navel gazing on that front for you (you’re welcome!), but first let me check in on some medical stocks that rose to mind this week — Intuitive Surgical because of its earnings report, and Medical Properties Trust because of yet another story about “hospitals in distress.”

Intuitive Surgical (ISRG) reported earnings, giving a little more hope ...

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