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Tech heavy NASDAQ takes another hit but rallies in Tuesday trading action

Written By | Feb 23, 2021
Quadruple witching, Bullard, tech heavy NASDAQ, Coyote, Roadrunner, Acme, post-Memorial Day Blues, recession fears

Screen capture of Wile E. Coyote, our favorite market metaphor, poised to take a long trip down to the canyon floor. (From YouTube video of Warner Bros. cartoon. Fair use.)

WASHINGTON – For those overweight in tech heavy NASDAQ shares, Tuesday began, like Monday, as another adventure in investing Hell. Once again, traders mercilessly hammered tech giants like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) for substantial losses.

In fact, Amazon – which trades like a tech though S&P classifies it as “Retail” – did a Wile E. Coyote-style header, It dropped nearly 100 points after the opening bell.

The trials and tribulations of NASDAQ tech stocks

That tech heavy NASDAQ is not yet out of the woods as we begin the final trading hour Tuesday. But we find the stock moving back into the green zone, up $12 more or less at 3:15 ET. That’s a good thing, too, as yours truly just picked up another costly share $30 cheaper just a couple of hours ago. What, Amazon’s going to lose money?

I still regard Jeff Bezos as a mega-wealthy hard leftist and a West Coast robber baron. But, as I’ve often said, if you don’t learn to become pretty amoral when it comes to investment matters, you’ll never make money with your virtue, whether real or imagined.

Nonetheless, unless you happen to be a malefactor of great wealth (which I am not), it’s best to buy these costly shares (at the moment valued at around $3,186 per share) one at a time, particularly if you catch them in a big downdraft such as we’ve currently seen. AMZN shares may hit another downdraft tomorrow. But as long as you try to average down while not behaving like a cockeyed optimist, you have at least even odds at making some money on these way-volatile shares.

Investors still hanker for an Apple a day

I also topped up one of our portfolios with another couple of shares of Apple. That tech heavy NASDAQ standout also took a hit today. But not as bad as Amazon. Here’s another company whose internals run on rotten West Coast PC and cancel culture infusions. But they’re not nearly as bad as those bastions of social networking evil Twitter (NASDAQ: TWTR) and Facebook (NASDAQ: FB), the latter of which appears to be run by a relative of Skeletor.

At any rate, I’ve owned Apple stuff since my first Apple IIe back in the early 1980s. Now, I’m so embedded in its current ecosystem (and related software) that there’s no way back at this point without incurring great cost.

All of which means that, ever since the Second Coming of Steve Jobs, Apple’s “next best thing,” aside from iPhone updates and its new, internally-designed microprocessors, has actually been bigger and bigger profits, not necessarily stunning new product lines. But that’s okay as long as the stock makes money.

Like Amazon, Apple has hit a nasty downdraft this week, down a good 20 points from its recent high of $140 and change. But at least today, it seemed to have bottomed out at around $123 (where I bought a bit more). It now sits at roughly $126.50, although nobody really knows where the shares might close on a day like this one.

Microsoft and oil and gas shares get some love Tuesday

Another big mover in the tech heavy NASDAQ, Microsoft shares may have found a bottom today as well at around $228 or so. Shares have bounced back nicely since then and currently sit at around $234 and change. In short, declaring today’s bounce back action as a bounce back in the direction of optimism is likely a premature call. But we’ll give it a try.

After taking my lumps for months on oil and gas stocks and related companies, the energy sector has been super good to our portfolios for the past two months, albeit with occasional heartbreaking downdrafts.

EOG Resources: A big energy winner thus far

After a big gamble back in October 2020 with a smallish position in Houston-based oil and gas giant EOG Resources (NYSE: EOG), our large portfolio suffered many afternoons of terror before mounting a massive recovery that continued today. Our portfolio’s shares are currently up nearly 100% from October’s darkest night, and I’d ought to go in there and take the profits, something that I often don’t do at a point like this. (And often live to regret.)

But, despite the Biden Politburo’s energy-hostile proclivities, Texas (of all places) just showed us that pulling fossil fuels – including coal – from America’s energy mix, is clearly ill-advised for the indefinite future and beyond. Mr Market seems to understand this as well. So, at least at this point, energy stocks are levitating at a speed I’ve rarely seen. Wish I had more.

Exxon Mobil and Valero: Two more US energy winners

Exxon MobilBut we do have some shares of Walking Dead oil and gas giant Exxon Mobil (NYSE: XOM), currently up by 34% in our portfolios. Plus, another big winner, refinery titan Valero (NYSE: VLO). Like EOG, it’s also up nearly 100% since we started buying – and drinking Maalox by the gallon – back in October. Of course, it also doesn’t hurt that both companies pay whopping dividends While-U-Wait.

Total, Royal Dutch Petroleum and Eni: European oils weigh in

I’d love to start collecting shares of two handsome European oil giants, namely French oil mega-company Total (probably pronounced “toe-TALL,” [NYSE: TOT ] ) and Royal Dutch Shell (NYSE: RDS/A). Like the US giants, both companies pay fat dividends. TOT pays better than RDS/A, particularly since the latter had to slice and dice its dividend to get its books back in better shape. But they’ve steamed away and I’d like to seem them back off a bit before I get back in these shares. (Been there before, generally with success.)

We do hold a small position in a neglected Italian oil biggie, Eni Spa Roma (NYSE: E), which is already up 11% after only 3 weeks. And which pays a colossal 11% dividend, at least for now. But we’ll have to wait to see how this one works out. I’ve been burned in these shares before.

What’s up next?

There’s more fun, excitement, and yes, potential losses to be had in this market. But at least a Tuesday that started out just as badly as Monday looks to be ending in a happy place in about 15 minutes.

We’ll just have to wait and see if that tech-heavy NASDAQ recovery continues or turns out to have been just a head-fake. And if the surprise boom in the oil and gas patch can continue apace after many, many false starts.

So we’ll look at a few other interesting things tomorrow. Both good and bad. So stay tuned. And maybe Mr Market will give even Wile E. Coyote another chance to win.

– Headline image: Screen capture of Wile E. Coyote, our favorite market metaphor, poised to take a long trip
down to the canyon floor.
(From YouTube video of © Warner Bros. cartoon. Fair use to illustrate a point.)

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17