Silicon Flats

Mad Money's Jim Cramer has identified the ten best stock investments since the market panic of 2008 and they are not the ones you would expect ... not Google (aka, Alphabet), not Amazon, not Apple, not Facebook, not Microsoft. In fact there is only one Silicon Valley company in the group, Netflix. These stocks have moved up anywhere from 1,861% to 6,545% and their names (in descending order) are: Incyte Corp. (biopharma), United Rentals (equipment rentals), Regeneron (biotech), Alaska Air (airlines), Windham Worldwide (hotels), Netflix (media), American Airlines (airlines), Priceline (travel info), CBS (media), and Fifth Third Bancorp. (banking).

To read more about these winners, see: CNBC Article.

If I Won the Powerball

When  I was a youngster I dreamt of having a million dollars. Today this amount is but a piffle ... if you don't have at least a billion, you are a nobody. So this Wednesday's Powerball drawing has given me a chance to upgrade my dream ... and go for being a billionaire. If I'm so lucky on Wednesday, the issue then would become ... how to spend all this dough? Let me suggest some interesting ways:

- Set up the Potts Foundation to combat global warming ... fund it with 500 million dollars

- Get some new wheels ... perhaps a Rolls

- Like many of the Silicon-Valley billionaires, spend money to live forever

- Hire Jim Cramer to manage my money

- I might emulate Rupert Murdoch ... get divorced and marry a young chippie ... see: Daily Mail Article

- Buy a 200 foot yacht and park it off of St. Barts for the winter

- Buy a gun for every registered Republican voter who doesn't already own one

- Provide full-ride college funding for all my grandchildren

- I might even purchase a sports team

Timber!!

One by one the big trees in the stock market are getting axed. First it was Alibaba, then Exxon, then Apple, then Twitter, then Disney, then Tesla, then Fitbit ... many of these high fliers after reporting stellar quarters. The only biggies who seem to have escaped this clear-cutting so far have been Facebook, Amazon, Netflix and Google (the FANG group as christened by Jim Cramer.) What's going on? Yes China is slowing down and may, in fact, be in a recession. And yes, the Federal Reserve Bank is likely going to start raising interest rates next month. But earnings of these mentioned forest-floor timbers have still been improving and future guidance is still positive. So what is wrong?

To me the dramatic price-drops in these mostly high PER (price earnings ratio) stocks are presaging a general market sell-off sometime soon. Generally in stock market down-drafts, it is the high-flying stocks that suffer the most ... and since these stocks have been the investments of last resort as weakness permeated most other market segments (see: Where to Invest), it is now their turn in the barrel. In fact, I suspect that any real weakness in the FANG group will be the final indication that a major stock market correction is upon us.

So keep your powder dry ...

In Spades

The European stock markets are up substantially this morning for two reason: one, the hope for a Greek debt settlement and two, the fact that the Shanghai stock market is up over 10% in the last two days ... both reasons being baloney juice. Whatever the Greek terms, it is clear that the vast majority of its debts will never be repaid and a capitulation by Germany and the EEC will now only encourage other debtor nations (Spain, Portugal, Italy) to swing left and emulate Greece in petulant defiance of their debt obligations.

And insofar as the much bigger issue, China, it is abundantly clear that the current Shanghai stock market is now a state-run artifice. The Beijing government has stepped into this "free market" with both feet ... decreeing that big investors not sell major investments for six months, threatening short sellers with prison, stopping trading on huge numbers of listed stocks, forbidding new IPOs, forcing banks and insurance companies to buy stocks, etc. ... see: The Economist Story. Such government manipulation of prices cannot bode well for the future of this trading venue ... and clearly is no reason for any bullish sentiment in the rest of the world.

Even that perennial bull, Jim Cramer, is chary about these developments and is offering constant veiled warnings about the state of the world's stock markets. I concur ... in spades.