Industrial Earnings Power Ready to Rally

When I see airlines like United tacking on 5 points a day while prime growth stocks like Microsoft slip a dozen points overnight, I shudder then add to my Boeing position. At one point 10 percent of my assets rested in Boeing. Microsoft can bunch together plenty of sinking spills, too. Same for Eli Lilly and IBM. 

The conceit of playing a Nifty Fifty list rests shattered along with buying half a dozen prime growthies. They no longer exist. Eli Lilly does shed a dozen points in the blink of an eye and then bounce back. Previous cycles I used to buy great operators like Polaroid and Xerox, but that didn’t last forever, either, just a decade or so.  

Of late, I’m seeing some of my ragamuffins acting much better. Namely, I own Macy’s which can swing 5 percent daily. Cleveland Cliffs has deconstructed and even Hawaiian Electric is bouncy. Let somebody else own pricey bank stocks like J.P. Morgan. If you’re wrong on carrying a mid-teens multiplier you will lose just as much as on a growth stock. 

I just added to positions in reasonably valued growthies like American Express and Boeing.  The space for owning Apple and Microsoft is crowded with wanna be shareholders. There goes Eli LIlly, down a snappy 30 points while Exxon Mobil is buoyant, up 3 points or 3%. Enterprise Products Partners just popped 5%. This is a normally stodgy energy trader. 

It's time for money managers to deal with their lingering disdain for GDP stocks. Look how buoyant General Motors turned on a great operating quarter. I banged out Apple and Microsoft.  Macy’s daily can go plus or minus 5%. Nobody’s talking about Macy’s filing a Chapter 11 bankruptcy. 

As I write this Eli LIlly has sunk 34 points, over 3 percent. I closed my eyes and bought more.  The stock can fade badly and then recover overnight. 

All such carnage takes place while energy plays hang in and bank stocks remain buoyant. Recurrent slippage in Eli LIlly seems just the ebb and flow of trading. GM can be an up stock with the S&P 500 losing over 1%. Boeing and American Express now buoyant plays still show sinking spells of 3% or more.  

The market looks to me like it wanted to make a bet on the resurgence of industrial earnings power. Caterpillar and Deere are very resurgent day traders. The bet on new machinery orders is paying off. 

In short, prime capital goods stocks, take Deere and Caterpillar Tractor, have acted well past 12 months showing huge percentage gains capable of popping 4% daily. This is not crowded investment space like Microsoft, Apple and Tesla occupy.