I was on the Keynote Economic panel that ended this week's annual Rutberg Wireless conference. At the conference, speaking directly before me were AOL (AOL) CEO Tim Armstrong, who previously helped start Google (GOOG); Jon Miller, formerly CEO of Fox Digital Media and Ross Levinsohn, former Yahoo CEO (YHOO).
My key takeaway was that wireless and its applications are today's biggest growth stories. More and more of our lives are navigating over to wireless. And it will not just be the wireless platform. Many more of us will double and triple task on two or three platforms at the same time. I am a perfect example of technological multitasking. I follow stock market prices on a terminal, CNBC or Bloomberg on TV, write scripts and shoot videos on a desktop, while handling phone calls and texts.
What I had wanted to see but didn't was a future with seamless HD quality interface between all platforms and therefore all operating systems. I would also like to be able to shoot HD video on a tablet. One very smart VC type I met opined that the seamless interface is not a priority for the existing powers that be because wireless and all traffic is growing so fast anyway, why take on something that could be potential major disruption?
For what it is worth, I did make a lot of money in wireless for TrimTabs clients starting in 1994 when I was recommending going long Ericsson and Nokia, and shorting Motorola and Qualcomm. My premise was that in the conversion from analog to digital, GSM (being fully robust at the time) would be the big winner versus CDMA, particularly since CDMA did not work initially. Three of those four trades were very profitable. And after Lucent's engineers solved the CDMA dilemma and bailed out Qualcomm (QCOM), I not only covered my QCOM short, but stopped following wireless and all stocks in 1998 when I converted to big picture liquidity analysis. To complete the circle back to today, the wireless' digital conversion begun in the mid-1990's made possible today's broadband world.
But the Rutberg attendees certainly were not interested in my wireless background. What they were interested in was my views about the stock market and the economy. What I did tell the group is nothing different from what I have been telling you in these videos.
My answer to the first question about the stock market was that the Bernanke Put died September 14 when the latest version of Quantitative Easing was announced. What's more, I said that as long as companies keep selling more shares then they buy back, stocks should keep going down even after the election. I truly have no idea who will win and in reality I don't care. Because I think it doesn't matter who wins.
Yes, an Obama win could mean higher taxes, but even if Romney wins, it is hard to imagine that all the Bush tax cuts stay in effect. In essence, the problems the U.S., Europe and Japan faces are not solvable by those government entities that got us here.
I agreed with the other panelists that housing has rebounded a bit and the pickup has helped the overall economy, but I also cautioned that our data shows the summer pickup might be over.
As to Europe, I repeated what I've often said before that there is no hope of a real solution. The best that can happen in Europe is that the can keeps getting kicked down the road. But at some point Euroland will implode. As to the other end of the world, China is ultimately an enigma controlled by a totally corrupt elite. A command economy with unlimited resources can build and create very expensive and very extensive infrastructure. But the big necessary infrastructure in China has been built, In fact, it has been overbuilt.. The key question is whether the current government-run economy can transform into a consumer driven free-market economy based on supply and demand. I personally think that is not possible and that major structural problems are likely to surface in China at some point that is not that far away.
I concluded my remarks by saying that, based on past history, I don't think corporations will become major buyers instead of major sellers of their own shares until the S&P 500 drops below 1300. That's when we likely will turn modestly bullish again.