Thoughts from Friday, July 31, 2020

Earnings from Big Tech Don’t Matter

  • Stimulus put more $ into the economy.
  • Travel and entertainment spending simply moved to tech.
  • Services spending plummeted while people still bought stuff online.
  • Everyone was online significantly more than ever.

3rd and 4th quarter are what really matter. How will these companies do when there is no stimulus? When unemployment affects finally take root? While re-opening has been shaky at best, people are beginning to spend elsewhere.

Don’t get me wrong. These companies should still grow. But not at the rate Wall Street expects and not at a rate that justifies their current valuations.

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