Is the FAANG Trade Over?

I recently joined a roundtable discussion hosted by The questions posed: Is The FAANG Bull Run Over and are Tech Stocks Still A Buy?

This was my answer:

The FAANGs trade is a little long in the tooth at this point, and, frankly, no trade lasts forever. Apple (AAPL), Amazon (AMZN), and Alphabet (GOOG) were all within striking distance of trillion-dollar market capitalizations, and Facebook (FB) was on pace to get there pretty quickly at the rate its share price was appreciating. There is still a lot of like about this group. All are leaders in their respective corners and all but Netflix (NFLX) and Amazon have extremely fat margins and large cash cushions.

But in the race to $1 trillion, valuations have gotten stretched, and growth looks more questionable. Social media is no longer new (a third of the world’s population is already a regular Facebook user) and Facebook’s business model is now under regulatory scrutiny. Smartphones are a saturated market, and Apple’s business model depends heavily on squeezing more revenue out of a base that is no longer growing. Netflix faces new competition from former partners, such as Walt Disney Company (DIS). Alphabet is still essentially a one-trick pony that depends far too heavily on advertising revenues from its search engine. Amazon is attracting unwanted political attention, and any or all of these companies could be the subject of antitrust action by the U.S. or European Union.

These are all strong companies and it makes sense to keep them on a watch list. But I’m not a buyer at current prices and this late in the cycle. The better trade today is in beaten-down value sectors. I particular like midstream energy and auto stocks at current prices.

You can read the other answers here.

Disclosures: Long AAPL

What’s Walmart’s Gameplan with Humana?

Rumors are circling that Walmart (WMT) might be acquiring Humana (HUM) or, at the very least, deepening its partnership with the health insurer.

I have my own thoughts on the matter. As I shared with Reuters’ Nandita Bose,

“The end goal here is to get more people in their stores, get them to buy drugs and make an additional purchase while they are in the store,” said Charles Sizemore, founder of Sizemore Capital Management LLC, who owns shares of Walmart.

If Walmart can offer “competitive rates” on primary care and other health services, he said, it “can grow traffic and push store visits.”

To view full article see Come for your drugs, leave with more shopping: Walmart’s new growth strategy?

Walmart has been the master of cutting out the middle man for its entire multi-decade history, and the company is well known for squeezing its suppliers. By acquiring or partnering with a major health insurer, Walmart can guarantee rock-bottom pricing for prescription drugs. And if their ultimate goal is to simply attract more foot traffic to their stores, they can sell the drugs at breakeven, and it still makes economic sense.

Looking at the bigger picture, the government has failed miserably to contain health costs. And this is not a partisan complaint; the failure is shared by both parties. Yes, ObamaCare has been a disaster and accelerated healthcare inflation, but there would have never been political demand for the flawed program if either party had been successful in containing costs over the past several decades.

The private sector is stepping in where the government has failed. Walmart is potentially partnering with Humana, while Amazon (AMZN), Berkshire Hathaway (BRK.B) and JP Morgan (JPM) are working on a collaboration of their own to lower costs.

All of this is fantastic for consumers. Some of these attempts will almost certainly fail (success is created by trial and error, after all), but the important thing is that we’re seeing the beginnings of innovation. That’s good, because we sorely need it.




I (Sort Of) Predicted the Amazon – Whole Foods Merger

By now,’s (AMZN) purchase of Whole Foods Market (WFM) is old news. I’d love to tell you that I expected this merger to happen… but that might be stretching the truth a little. Though back in October of last year, I did tell Newsmax TV that I expected to see Amazon make a major move in the grocery space:

To be sure, Newsmax Finance Insider Charles Sizemore recently predicted to Newsmax TV that Amazon is about to “upend the grocery industry” as it plans to expand its grocery business with shops that let people quickly pick up milk, vegetables or other perishable foods.

“Amazon is trying to get your grocery dollars for a very good reason,” Sizemore told Newsmax TV’s JD Hayworth.

“Groceries, while they are a low-margin business, it’s still something that every American pays for, usually on a weekly basis. If you’re already buying your groceries at Amazon, you might also buy something that’s higher margin,” he said.

“Amazon’s smart, they know what they’re doing here,” he explained. “I have a feeling they’re about to really upend the grocery industry. It’s about to get really interesting. It’s just not quite what everyone’s expecting.”

See Amazon’s Whole Foods Conquest Is a ‘Game Changer’ to read the full article.

Amazon founder Jeff Bezos famously said “Your margin is my opportunity.” I don’t expect groceries to be any different here. Groceries aren’t an exceptionally high margin business already, but you can bet that Amazon will squeeze them a lot harder.

It’s worth noting that Amazon isn’t the only competitor looking to shake up the grocery business. Walmart (WMT) itself was a major disruptor two decades ago, and the Behemoth of Bentonville isn’t sitting idly while Amazon takes over the world. Walmart recently opened a state-of-the-art automated grocery pickup kiosk that allows shoppers to order their groceries in advance and skip the hassle of having to actually enter a Walmart store.

If I were Kroger’s (KR) management, I’d be terrified right now.


Sizemore Insights Makes the List of Top 100 Financial Advisor Blogs

Sizemore Insights made Feedspot’s list of Top 100 Financial Advisor Blogs and Websites, coming in at #44.

The blogs were ranked based on Google reputation and Google search rankings, influence and popularity in social media, quality and consistency of posts and and editorial review by Feedspot’s editorial team.

My thanks to Feedspot’s editorial team, and congratulations to the other bloggers!






Chuck Norris Facts: The Aging of the Baby Boomers


Actor and martial arts legend Chuck Norris quoted me in a piece he published today about the aging of the Baby Boomers: Chuck Norris Bows to Healthy Seniors.

Here’s an excerpt:

The entry into “senior” membership in this country is rarely looked at as something to be celebrated. “Over the Hill” novelty items have long been a thriving industry – from gift boxes featuring prune juice and anti-aging soap, to birthday cards mocking the mobility, intellect and sex drive of the no-longer-young. It’s good for a laugh. Others see it differently, as a sign of the need for a deep-rooted change in society’s view of aging. As, in a society so captivated by youth culture, a form of dismissing a club that they, if they’re lucky enough, may one day be a member.

By 2060, people 65 and older will constitute one in every four U.S. residents, roughly 98.2 million people. Of this number, 19.7 million will be 85 or older. Accurate information and continued and accelerated research on the aging process are critical as we age as a population. We also cannot forget about the mass of reinforcements on the way. According to Baby Boomer Magazine, every eight seconds a Baby Boomer in this country turns 50.

According to the American Geriatrics Society, only about 10 percent of U.S. medical schools require work in geriatric medicine. As the oldest of an estimated 77 million baby boomers approach their 60s, the elderly and their concerns can be expected to inevitably move higher on the national agenda. According to John Rother, policy director for the AARP, a major change on the perception of aging is on the way…

“The Boomers, as a generation, were the single most important economic force of the past 70 years,” adds Charles Sizemore, chief investment officer of Sizemore Capital Management in Dallas. As more Boomers cross the line into senior citizenship, Sizemore believes that this powerful shift in demographics will reshape America’s society and economy.

It’s hard to believe Mr. Norris is a senior citizen himself. But I also heard that Chuck Norris fought Father Time… and won.

You can read the full article here.

I can now cross “Being quoted by Chuck Norris” off of my bucket list. Have a great weekend.

Photo credit: Carlos Killpack