When I left Corporate America nearly 6 years ago to trade full-time, a friend asked me, “Do you think you will be bored sitting around a computer all day without anyone to talk to?” I worked with a good group of guys – we would often go out to lunch together and there was always water cooler talk. I hadn’t really thought about the social aspects of trading, but relative to getting wiped out and having to find another J.O.B. – “yucking it up” over lunch wasn’t near the top of my concerns. I definitely had some boring days, but now with Twitter and especially StockTwits I have thousands of people to talk to 24/7.
On Friday, I sent out the following tweet:
With the old school boyz moving $INTC $IBM $MSFT $CSCO maybe old head money managers are putting money to work…
One of the tweets I received back said:
“I have never heard an old head use the term ‘old head’…lol”
All I could do is laugh. I never thought of myself as an old head. Next time I will be more specific in my tweets and refer to the “older heads.” LOL.
Anyone that traded in the late 90s had to get nostalgic on Friday with Microsoft, IBM and Intel being up 5.6%, 4.4% and 2.9% respectively. Those days by far were my best trading days. I could careless what happened in Greece. I could careless about a European Summit. My biggest concern was how do I get more money to plow into the market.
Back then the market was much easier to understand. The internet was growing like wildfire. The build-out required tons of networking and computing hardware from companies like Cisco. The hardware required semiconductor content from the likes of Intel. In order for Intel to produce semiconductors, it needed testing and fabrication equipment from Teradyne. The smartest investors studied the capital expenditures of the semiconductor companies to get an edge. If Intel planned to increase spending certain suppliers would benefit. Making money was as easy as picking stocks at various stages of the supply chain.
Intel peaked my interest in November-December when it started hitting highs dating back to 2004. Most growth investors have long written off Intel. I have no allusions of Intel repeating its 90s run, but I believe it is still a very valid market signal. Intel won’t increase its spending unless it senses an opportunity. On Thursday, Intel said that it would spend between $12.1-$12.9 billion in 2012 – higher than expected. Earlier in the week, Samsung reported that it would be increasing its capital spending by 11% in 2012. Many companies will benefit from these expenditures.
Personally, I believe that Intel has set the stage for a 3-6 month market run. If Apple delivers the goods on Tuesday – it won’t be like 1999, but we will be partying the same.
Disclosure: Long Apple and Intel. Positions may change at any time.