The "R-Word" Returns: Panic, Plans, and What's Next ...
Recession fears are back, but while retirees sweat and politics fuel the panic, autonomous tech like Waymo and Oracle’s datacenter boom signal opportunity.
The “R-Word” is trending again.
If I got a dollar for every recession prediction …
I’d have Elon Musk wealth.
Still, you can’t shrug it off.
Those tapping retirement funds can’t just wait and see.
I get it.
But if you’re in your 20s, 30s, 40s, even your early 50s … this is when you get rich.
Part of the panic is political.
Under President Biden conservatives thought a recession was coming.
The minute Trump is elected, they flip.
Democrats are now down in the dumps.
Recessions will happen. People will panic …
Investors plan.
Waymo …
I was in San Francisco last week.
My sons and I tried to count the number of Waymo’s we saw.
We lost count after 50.
That was in less than an hour eating pizza by the pier.
We didn’t ride in one, but our Tesla drove itself very confidently, swerving in and out of traffic.
Autonomous driving is only being held back by slow moving government regulations.
The technology is ready and it works.
Transportation costs are about to plummet. .
Big reason why markets are volatile isn’t all political.
Forecasts are murky.
Take Delta Airlines for example.
I recall looking at earnings last year and management was very bullish.
Shares of DAL 0.00%↑ soared.
Two months later and management said this:
We are closing 2024 and looking into the New Year, we had a lot of optimism. We had a very significant growth plan. We're expecting to grow revenues 8% over the course of the first quarter and it was consistent with what we had been seeing all along as the as last year ended. Well, as it turns out, it looks we're going to be closer to 4% than 8%
Ed Bastian - Delta CEO
Hard to invest when management reduces revenue forecasts by 50% within 60 days of providing them.
Dig into the details and it really wasn’t the economy.
Poor weather at Delta’s Atlanta hub and tragic airplane events were the cause.
My Take: With earnings season coming to a close this week, markets will be bracing for what the next earnings season will have in store. Lazy executives will blame the economy or “volatility" … the real ones will take advantage of the market conditions.
Key Events
Tuesday
Nvidia CEO Jensen Huang keynote at GTC
Wednesday
Five Below FIVE 0.00%↑
Thursday
Nike NKE 0.00%↑
FedEx FDX 0.00%↑
Micron MU 0.00%↑
Oracle ORCL 0.00%↑ is turning into an extraordinary story.
Typically the company’s database and server products are fairly boring.
But management was pumping demand in a manner you rarely see on its recent conference call.
We remain very confident and committed to total cloud infrastructure revenue for fiscal year 2025 growing faster than the 50% reported last year and it will be even faster for fiscal year 2026, likely a lot faster.
Safra Catz - CEO
I can only think of 2 tech companies forecasting demand past 2025 right now. Can you name the other in the comments?
Here’s the interesting thing about Oracle … it’s a pure play datacenter company.
With Amazon you buy the ecom business, Microsoft its Windows, and Google its search.
Oracle also appears to be at the center of the forced sale of TikTok.
Unless one of the other cloud giants end up with it, Oracle could have a steady flow of business for years.
Oracle shares should be accumulated on any continued weakness.
One More Thing ….
One thing you won’t hear much over the next few weeks on financial news sites is:
I don’t know …
On Wall Street, it’s expected that you project an aura of intelligence and superiority.
Out of about 100 company’s I regularly follow - only 2 are forecasting past 2025.
In the short term, most don’t know what’s going to happen.
That’s okay.
20 years ago I took a year off of college and caddied for a professional golfer.
He won the Rolex player of the year on the Canadian tour and Q-School.
Before each shot that year I asked 3 questions …
Where he was aiming. What kind of shot he wanted to hit. And where he wanted it to land.
I didn’t know where the ball was going to go.
Just like I don’t know what will happen to the stock market.
But if you have a plan … and execute.
The results will follow.
My sons and I played in a tournament last week. We were the only group with little kids playing. I asked them the same 3 questions before each shot. We won by 2 strokes.
Plan. Process. Execute.
Find me on my other social media platforms,
See you later this week.
Colin
Colin always the best. Any news on NBIS . I understand you said something about thrusday too for NBIS
Nvda and Avgo