top of page
  • Writer's pictureRyan Brown

Cautiously Rotating With Five Moves

Bill Baruch joined the CNBC Halftime Report to break down two buys and three sells within portfolios.

Published on June 4, 2024

We are back with a busy day of committee moves bill baruch I said he's gonna join us he does now. Nice to have you you have two new buys mas tech number one why?

This is a name we owned and we launched last year and it set a record high into August the day of its earnings report and it missed usually this last August. It's down big. They had problems with visibility in their billing and there was delays in Billings so the their guidance was very poor. We ended up getting out of that stock and pushing aside and been watching it for quite a while put that money elsewhere in industrials, now you're starting to see their EPS guidance, lift up. I like the diversity in the infrastructure business where they put a lot of cash and spent on different ventures like IE a was a company they purchased, that it costed a lot of money integrated, there's less integration cost down the road. I liked the infrastructure and natural gas space. I liked the name I always have. And I think now we have a little visibility to feel more comfortable with it. So we're we are back in that name. Now.

Why did you buy Chubb? Is that a Berkshire thing? What's up with that?

Well, if it's good enough for Warren Buffett, it's good enough for me. And I say that say that facetiously. But, you know, there's some truth to that it's best in breed, and underwriting the name has broken out. And overall, I think that I want some exposure in that space. I haven't had any insurance space. So as we talk about some of the cells, you can see some of this is sort of rotating within the sectors. I would like to be able to add that Neva 255 as it comes back in, and I think it's a breakout, that's going to stay in an uptrend. So your cells that you alluded to are, you know, I frankly, I find them more interesting, but I wanted to do the buys first. Why did you sell Morgan Stanley? You know, I think as they go through this transition away from Gorman, you know, there's a little bit of question now on, you know, where they were, what sector within the business is going to lead. And then on top of that, it's run up. But it's also been a little bit of underperforming behind a name like Goldman Sachs, compared to a job that's broken out within the financial space, Morgan Stanley's running into some of some a lot of overhead supply from his 2022 high. So I want to get out of the way in watching a little bit as they kind of rotate in something where I feel there's a bit more momentum and a bit more certainty. Why

so he's out of Morgan Stanley, you're in I think, only Goldman, or is Goldman and BAC,

BAC, Goldman Spotfire. And much bigger position. So real core position. When

you think about the financials, though, it's interesting, you know, rising rates said to be no good. And now, you know, if rates are falling, because you're worried about the macro, that's no good, either. Well,

I think actually, the mark got over his skis and in believing that the IPO market was going to open, you've only had four tech IPOs. This year, that are really significant in terms of their size, every banker I talked to and we've met with a lot of senior bankers recently are looking at mid 25, before the equity market opens. And that may not be the case. I mean, you know, if the Fed starts easing sooner, which not just one or two, but really easing, then you can see the equity market open up sooner. Well, I

mean, the the capital markets for for IPOs and stuff. I mean, I think even even the leading VC, VCs think 25. Yeah. And so maybe maybe got a little,

but what's gonna be most interesting then is you've got such a such a flood of new supply coming on. Can the market handle it? Yeah. Because you huge

pipeline. So Bill Weiss sold cat yesterday, you sold it now to last week? Oh, you sold it last week? Sorry. Why sold it last week, you're selling it as well, why?

We sold on the open yesterday. I mean, I look at the trajectory of PMIs right now. And I that is worrisome. Yesterday's manufacturing PMI, which we sold just ahead of it was poor. You know, some of the backlog that was sort of appraised coming into the year is starting to erode. And it shows a little bit of a very cyclical business here. If the economy starts to take a downturn, look at Atlanta Fed GDP now that Josh was just referencing the previous segment, you know, if some of that happens caterpillars name that's going to get hit. Now, we also own United rentals. And so I feel like a little too much exposure with that direct reliance on some of the infrastructure spending the inflation Reduction Act that's coming out this summer. So take it away a more global name and reducing caterpillar and focusing again, some of that money went to Mass Tech, we also own United rentals, right? Yeah, here is we're netting out cash as well. And we're taking a little bit of a cautious approach.

You sold target.

Yeah, disappointed earnings report. You know, I was hoping to see a little more lead into the ad revenues. But overall, this is a bounce back. I think Friday's move was a gift back to where the earnings breakdown was. So again, Overall, just stepping out of that, I mean, if I get back into more staples, some of the some of the discretionary staples, I think there's better places to be than target. So I am worried about that. And again, overall, these moves, selling three and adding to it even going back to some moves I made last week, I've netted about 3% cash. We also own the spy put spreads, which I highlighted two weeks ago. So taking a cautious approach here as we work through the data this week, as well as the Fed next week. And you know, I'm really worried whether bad news is going to be bad news. So that's where I am right now.

Good stuff. All right. I appreciate you joining us. Thank you, Bill Baruch. We'll talk to you again soon.

0 views0 comments


bottom of page