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A Wonder to Behold: Last Innings of the Bull Market

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Have you been watching software, cloud and Internet-related stocks lately?

The different industry groups under these umbrellas have helped vault the technology sector -- and consequently, only the Nasdaq among indexes -- to new highs since the February correction.

If you've seen my Technology Super Cycle report, you know where I stand on semiconductors leading the exponential revolutions of innovation in the cloud, mobile, high-performance computing, smart-network systems, and autonomous machines.

But I've found software winners harder to pick and so I would just settle on dominant giants like MSFT, GOOGL, AAPL, and Amazon (AMZN - Free Report) .

Last year, I even bought Salesforce (CRM - Free Report) and Adobe (ADBE - Free Report) because I saw that while their valuations were rich, they were growing their franchises as key technology platforms and "embedded services" for their big, data-dependent enterprise customers.

Then I sold CRM and ADBE way too soon before I realized the fruits of their labor. Both, coincidentally, are 48% higher than where I sold them. Ouch!

And it made me remember that a mature bull market was doing exactly what you should expect in its later innings: realizing the best of all possible worlds for smart, patient investors.

Here's how I explained it to my TAZR Trader group on March 9...

A Wonder to Behold: The 9th Year, and 2 or 3 Extra Innings Ahead
Posted on 3/9/18

TAZR Traders

As we enter year 10 of this bull market next week, I was reflecting on its power, so well-exemplified today.
 
With stocks like Lam Research (LRCX) surging to new highs, my thesis that Stocks Won't Test the Correction Lows was secured.
 
While many of our leaders like Alibaba (BABA), Facebook (FB), NVIDIA (NVDA), and Apple (AAPL) have a little more work to do in making their new highs, the Nasdaq 100 itself did on the backs of other names.
 
And over in Healthcare Innovators we enjoyed these 6 new all-time highs this week: BLUE, EDIT, EW, VRTX, SRPT, and NTLA.
 
The rewards of a bull market like this are only for the faithful.
 
And by that I don't mean blind faith, but seeing what others fail to see... A vision of what a bull market can achieve (based on history) when it has the best of all tailwinds, plus exponential technology revolutions unfolding in giant waves.
 
Those investors that do their homework tirelessly and THEN HANG ON, are rewarded immensely.
 
Imagine running a fund of $50 million or more to be able to hold 100 names or more.
 
Do you think you'd have a hard time filling it up with good, strong ideas?
 
I wouldn't. Every day I look at a dozen or more stocks making new highs that we once held but I sold for one reason or another.
 
To wit, let's look at 21 stocks I let get away in this past year...
 
From ADBE to ZEN, 21 Stocks We Let Go Too Soon (Or Failed to Grab When They Were in Our Sights)

(end of TAZR commentary from 3/9)

I'll share a baker's dozen of those "picks I let go too soon" (or blinked and missed) below in alphabetical order...

1. Adobe (ADBE - Free Report) : Let go at $148
2. Autodesk (ADSK): I've watched and written about it for years in hopes their innovations with CAD/CAM would revolutionize 3-D manufacturing
3. Amazon (AMZN - Free Report) : Thought I should buy 10 shares on the pullback under $1K in Oct before earnings, instead reco'd June 1200 calls for $70 and those are trading for over $400
4. Cognizant Technology Solutions (CTSH): Let go at $53
5. CyberArk (CYBR): Let go at $44
6. FireEye (FEYE): We owned for almost a year from under $12 and let go of the last bit at $15.50 on earnings during the correction
7. Intuit (INTU): Took my eye off this one after it came through my screens after November earnings
8. RealPage (RP): Let go at $34
9. Salesforce (CRM - Free Report) : Let go at $86
10. Shopify (SHOP - Free Report) : Said I was going to buy this ecommerce platform on a pullback under $90 last year and I blinked
11. Twilio (TWLO): Always too expensive, but their communication software platform was unique and in demand
12. YY Inc. (YY - Free Report) : Actually, I just bought this today after missing it under $70 last year :)
13. Zendesk (ZEN): Wanted to buy under $30 but it was always expensive like TWLO and too many better ideas

The Moral of the Bull's Story

Got a minute?

I can think of no better way to sum up the moral of this story than with a 1-minute video I recorded last year over at the CBOE. TV host Angela Miles asked me for my favorite "trader's tip" and I knew instantly that if I only had a minute to share with thousands of investors, I would choose this one core idea...

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Disclosure: I own shares of BABA, YY, NVDA, LRCX, AAPL and FB for the Zacks TAZR Trader portfolio.

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the TAZR Trader and Healthcare Innovators services. Click Follow Author above to receive his latest stock research and macro analysis.



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