$yhoo - media and tech blurred lines

Yahoo [loves] these blurred lines! 

You know you want it. 

Content for your platform

Yahoo wants to get nasty

hey hey hey hey

Yahoo is pushing investors the narrative of MAVNS. While clever, I don't see yahoo in that context. It boils down to two categories: media and technology. 

Media

1. Producing original content. (News, magazines, videos etc)

2. Distributing that content to other platforms. (Most prominent in Snapchat discover. Yet to prove its viral worth though.)

3. Leveraging their massive user base to transition users to mobile centered applications. (Tumblr, News Digest, Weather, mobile apps, mobile friendly web design, etc)

4. Media partnerships (ABC)

5. Distribution deals (SNL, etc)

Technology

1. Gemini (naitive ads and network placements)

2. Mobile Analytics / development  (flurry, in app search)

3. Video (brightroll)

4. Continuous improvements on established core functions (mail, content consumption)

Yahoo is the most under rated media / tech stock in the market. Period.

An indication is the types of advertising their network is attracting. In particular tumblr, the weather app, Magazines and News Digest. High quality brands from Crysler, Honda, ATT, Google, Charmin, WarbyParker etc.

Last quarter, Yahoo gave us a reason to believe, but it was drowned out by the BABA spin off announcement. The coming quarters, the market will not be able to ignore the performance. 

$bac - higher lows

Since Feb 26th, bac has seen higher lows.

Within the context of a negative trend.

Breakout? Im betting on it.

Market Thought... the $spy catalyst

On 2/26, the 'red flag' post warned for a needed market pull back, as SP500 estimates came down and the market multiple was way too high. Looks like the strong employment numbers, pushing rates higher, triggered the sell off.

With the catalyst in hand, how hard will this sell off be?

From a multiple perspective, assuming estimates remain and the trailing multiple approach 'normal levels' (aka multiple highs of previous quarters), the SP500 could see 1950-2000.

Technically, the SP500 can see mini bounces from here, with a few supports on the way down. But the daily suggest stronger support near 2000, and weekly sma support near 1950.

$bac - anatomy of market inefficiency and idiocy

Composition of a market: Innovators, imitators and idiots.

1. On Feb 26th, bac issues its 10K. Analysts chose to focus on highlighted risks do to reg changes spelled out in its general risk section. Catalyst was a UBS analyst, and the imitators and idiots that followed blindly.

2. BAC sees a 2 day 5-8% decline.

3. BAC passes test.

4. Jobs number way better than expected and unemployment at 2008 lows.

5. BAC recovers.

Future: with stronger jobs and r.o.w economic stimulus, economic trends favor BAC. BAC should be trading between mid 17 to low 20s!

Quick thoughts on $twtr vs $fb

(A recent write up on The Information got my juices flowing on this one.)

Facebook has proven itself quarter after quarter, and the numbers speak for themselves. They are able to leverage their scale and graph to print money. 

Good for them, but to dismiss Twitter as per metric based on user metric ignores a trend just getting started. 

On Feb 7th, I posted the momentum in twtr fundamentals. But a nascent trend I did not highlight is how Twitter is being used as the foundation for other apps. 

Twilo is one of the best examples. Meerkat is a very recent example. Dataminr is a more professional facing application.

Twilo is a consumer friendly (brilliant) UX leveraging Twitter data for relevant places to visit.

Meerkat is used to perform livevideo streams. Subsequently Twitter is in talks to purchase a similar offering but this only adds to twitter's real time information distribution capability. (But more design thought is needed for this type of app to be consumer friendly.)

Dataminr discovers actionable signals from Twitter. (Identifying legitimate tweets vs rumor inspired ones.)

Then there are the data collaborations: IBM, Google.

There is a lot going on with Twitter, outside of the more traditional momentum in their fundamentals, and these emerging applications will keep adding to twitter's value.

These new applications are things that simply don't work on facebook or any other non-rest-time network. 

$bac front-running or institution-unload

On the day headline CPI goes to deflation, some morning negativity to the banks seemed expected. But the treasuries shook-it-off!!

While the rest if the banks were shaking-it-off!!, bac was crap. All. Fucking. Day.

BAC is in limbo, technically. Its obvious assessment is negative because its below its 62sma support.

But with firming rates, I was expecting bac to start breaching the resistence, and test 17.25. Instead we got selling on higher volume. Almost as if an institution wanted to make the sales obvious. 

Hopefully the stress test acts as a catalyst to maintain the longer-term trends. If not, todays action is very suspicious.

Market Thought... Red Flashing $spy

Reported estimates have come down quite a bit, and so have operational earnings. This is not currently discounted in the SP500.

Over the last few years the market has seen a gradual multiple expansion, as the economy got healthier. In 2014 the multiple started to plateau. But actual earnings came in pretty low in Q4 2014 and estimates are low going forward. After 12/31/2014, in the chart below, the estimated trailing multiple will be in the 20s if earnings estimates hold up. That's high, too high.

The lower earnings could just be from write-downs and a lower earnings from energy. But the fact that market multiples are at atypically high levels remain. When fear sets in, normalization be damned.

This condition sets up the market for a hefty fall when the catalyst comes. Will it be the change in Fed language? Russian escalation? China shadow banking system? 

Catalysts remain to be seen, but the wider standard deviation multiple has me cautious.