Out With Legacy

BBY disappointed. Wow, what a shocker. Have you ever witnessed the absurd amount of floor space BBY dedicates to DVD’s, CD’s and video games? Their business model, similar to BKS and GME, is not sustainable long term. The world has moved away from buying DVD’s, CD’s and will eventually buy video games via uploads. A great long term pair trade would be to be long cloud/bandwidth plays stocks, like RAX, AKAM, EQIX, RVBD, ARUN, VMW, FFIV and even SWIR, while short CSTR, BKS, BBY, TWMC and CONN. Digital media must be delivered, umm, digitally.

The same could be said about hard drive makers or bullshit PC’s, like DELL. Fuck those stocks. DLB makes money from the delivery of music via PC’s and laptops, but gets nothing from iPads. Look at the stock and see how stupid is looks.

The investment banks are also legacy. Fuck them too, as well as all large banks. Their business models are shattered and will not be able to lure serious investment capital for years.

The world is changing and the owners of it are companies like AMZN, PCLN and APPL. Other names that have been beaten down still have a shot at redemption. For example: GRPN, OPEN, Z, AWAY, LLNW, CTRP, SOHU and YNDX. Just because a stock is down doesn’t mean the super growth cycle is over. I remember when AMZN was sucking major dick, before Bezos found his stride.

I try to avoid being long names, even for a trade, that go against what I believe in. If I lose money in something I understand and like, it is acceptable. However, nothing feels worse than getting fucked in a stupid stock. I am sure the short term traders in DMND can understand my point.

NOTE: If Iran attempts to shut down the Persian Gulf (ROFL), Brent crude will explode and refinery stocks will recover all over their recent losses, AND MORE.