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Home / Business / The money manager said that this is why investors should focus on old technology now

The money manager said that this is why investors should focus on old technology now



The enthusiasm for bullish employment data seems to have weakened, stock futures prices have fallen, and investors are looking for the next catalyst to push the market higher. In line with what we have seen this year, technology is bound to lead the South.

David Bahnsen, chief investment officer of the Bahnsen Group, believes that the market is going through the mid-term of a technical correction, rather than “a sudden and shocking drop of 30%, 40%, 50%, but we have done this in experience and argument. Need to re-price.”

in our Calls of the day, Bahnsen told MarketWatch that since the price-to-earnings ratio has not been revised to a “normal or reasonable”

; level, investors may turn a blind eye to the valuation risks of some well-known stocks.


“There is not enough motivation, there are not enough buyers now to support this valuation level.”


— David Bahnsen of Bahnsen Group

He summarized some history to guide what might happen.

Microsoft MSFT,
+2.77%
It took 16 years to create a new high, Cisco CSCO
+ 1.55%
It’s not even close to the highest level in 1999.
+ 3.08%
It is basically at the level of 1999, but in the past 20 years, these three companies have overwhelmed it. In the 20 years, the annual revenue has increased by double digits. “If the stock price doesn’t move, there can only be one reason.” The inventory is too high. “

The stock information that investors like now-the popular FAANG (Facebook FB,
+ 3.43%,
Apple AAPL,
+2.36%,
Amazon AMZN,
+ 2.08%,
Netflix NFLX,
+ 0.23%,
Google GOOGL owned by the alphabet,
+ 4.19%
) Name and company, such as Tesla TSLA,
+ 4.43%
Bahnsen warned-they can maintain growth and success and achieve profitability, while valuations can be normalized, and the stock price “will not fail for a long time.”

One solution: look at old technology giants like IBM IBM,
+ 2.03%,
Cisco CSCO,
+ 1.55%
And Intel INTC,
+ 3.08%.

He said: “They are actually stable cash flow generators and they have call options for their future.” “They have exciting new technologies that Netflix NFLX doesn’t have.
+ 0.23%
And Facebook FB,
+ 3.43%
The camp, of course not Tesla and Xuexue,
-1.89%
Without Intel’s processors, chips, servers, mainframes and hardware, these companies would not be able to do anything. ”

He said: “The technical infrastructure we need still depends on Cisco, Intel and IBM,” he added, adding that investors who patiently wait for the slow payment of these stocks can still earn substantial dividends.

Bahnsen also attaches great importance to the subject of suppressed COVID-19 demand and believes that consumer staples are the most undervalued products in the market. He owns Procter & Gamble PG,
+ 1.62%,
Kimberly-Clark KMB
+ 1.06%
And Pepsi PEP,
+ 1.33%,
He said that the three names that have not yet reached new highs are still growing.

Postpone corporate tax?

US stock futures ES00,
-0.14%

YM00,
-0.08%

NQ00,
-0.14%
Decline after the Dow Jones Industrial Average (DJIA)
+ 1.13%
And S&P 500 SPX,
+ 1.44%
Both set a record high on Monday. European stock SXXP,
+ 0.84%
According to reports, after the central bank asked lenders to curb loan growth this year, China’s stock market was declining, and Wall Street’s gains were catching up with Wall Street’s gains.

Influential Democratic Senator Joe Manchin warned that President Joe Biden’s proposed corporate tax rate in President Joe Biden’s infrastructure plan was too high and he would raise the tax rate to 25%, but not a bill. 28% of the requirement.

Non-party members of the Senate issued a ruling on Monday, asking the Democrats to make efforts to pass more legislation through reconciliation, which means that the party can get more measures in the Senate this year.

Swiss banking giant Credit Suisse (CS)
+ 1.59%

CSGN,
+ 0.98%
The loss associated with the failure of Archegos Capital Management will amount to US$4.7 billion. It also cut its dividend and announced that its investment banking and risk director will leave.

Roblox RBLX, a Twain-centric social gaming platform,
+ 5.08%
At the best point in the industry, Wall Street is paying attention.

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