"Just one more thing."
- Lt Columbo

Small beat at Intel (INTC) but very poor next quarter and full-year guidance (both sales and profits).
I shorted Intel (on the report) and added further to my Micron (MU) and (QQQ) shorts.
This stock was widely touted in the business media all day -- it's a consensus long.
I argued against the optimism early this morning (see Rosie's tweet) and yesterday:

Apr 24, 2019 ' 09:18 AM EDT DOUG KASS

Chart of the Day

* The Semis have diverged from their historical relationship to bond yields* I added to my Micron (MU) short yesterday
Semis (orange line) v. the 10 year U.S. note yield (white line):

Source: Peter Boockvar

With an hour to go, here are my key observations on the day:

* Another smart rally off of the day's low (such a resilient market!) but not accompanied by a revival of breadth (which is now 1,175 advancers against 1,760 decliners).
* Bonds rose by 1-2 basis points and the 10-year yields 2.535%.
* Crude oil dropped a beaner -- with most of the decline late in the day.
* Gold was unchanged.
* Ns over Ss.
* Banks continue to trade well with a good bid in the space. Bank of America (BAC) especially ++.
* FANG and technology was the upside feature (but most stocks were well below their daily highs). Amazon (AMZN) will be interesting tonite. Is Google (GOOGL) the next Amazon (after last night's powerful Facebook FB results?)
* Look at Micron (MU) . The stock traded as high as $44.65 and is now at the day's low of $43.08. I have added to my short today.
* Asset managers, such as Franklin Resources (BEN) and T. Rowe Price (TROW) , reversed recent gains. I have been adding to my shorts of this disrupted industry.
* Industrials and basic materials were adversely impacted by the 3M (MMM) miss. (Caterpillar (CAT) , DoDuPont (DWDP) and Dow, Inc. (DOW) weak)
* Autos were conspicuously weak. (Several technicians seem to be warming up to the sector. I would continue to avoid.)
* Comcast (CMCSA) , a member of my Best Ideas List (though I am no longer in the name), flourished today (+$1.45).

Disclosure: Long AMZN (large), GOOGL (large), SPY (large), QQQ (large), FB (small) DOW, DWDP (large), BAC (large), C (large), WFC (large); Short BEN, TROW, MU, CAT.

I will be leaving at about 3:30 pm today for a business meeting so I won't be around when Amazon (AMZN) releases its quarterly report.

Though the market has come back hard from the day's lows, I don't see it in the market's breadth (which is now 1180 advancers and 1732 decliners on the NYSE).
Just pointing it out.

* As I have written, a near generational low in interest rates causes "mischief" and the misallocation of resources
* Argentina's 100 year bonds have already flamed out
Back a while ago I cautioned about the Argentina 100 year bonds:

Another on the issue of Price and Truth:

Perhaps it's a semantics question.

Or perhaps it is a question that can not be answered.

To me, price is both the Truth and a Lie.

At any moment in time it is Truth, as we can buy or sell here as the collective wisdom of the investment world judges this price as the TRUE value.

But it is also a Lie, in that tomorrow this price is just a memory, and on nothing more than market sentiment or an Exchange Traded Fund or actual company news (see 3M (MMM) ) there is a whole new 'Truth'.

Talk amongst yourselves.

ANOTHER wicked good market rally off of the lows - though there is still almost a 2-1 advantage of decliners over advancers.

I just added to my (SPY) short at $292.67 and my (QQQ) short at $190.96.

* On the basis of fundamentals and my assessment of reward v. risk I sold out of most of my Twitter on yesterday's gap higher
* I feel "comfortable" in that decision

A large seller appeared about 30 minutes ago in Twitter (TWTR) , taking the stock lower.

Despite protestations from some, I feel comfortable in the view why, when and what price I sold most of my stock yesterday ("Whither Twitter From Here"): 

Twitter (TWTR) (our Real Money stock of the day) provides an interesting contrast of investing based on the calculus of "intrinsic value" and the notion of "margin of safety" (both Graham and Dodd principles) as compared to the analysis of the technical picture. (The later - price action - is obviously quite robust given the volume and price movement.)

Today, Tim "Not Judy or Phil" Collins (on Twitter), Bobby Lang and Rev Shark have all published very upbeat columns on Twitter. (Sarge seems to be holding a middle ground in his view of the name.)

Finally, in a TST video, Jim "El Capitan" Cramer says he would buy the stock up to $45/share.

Today, on the big gap higher, I have scaled out of most of my very large holding (my average cost was under $30/share) - I sold much of my stock over $40/share today.

The stock has been a trading sardine and this is at least the seventh time I have successfully traded and invested in this name.

Here is my update on Twitter's quarter - released earlier in the day.

Stay tuned to see if the funnymental or technical assessments are accurate!

That said, I am a sub $35 buyer.
I would be interested in others' thoughts on entry levels, etc.

"Short people got no reason
Short people got no reason
Short people got no reason
To live

They got little hands
And little eyes
And they walk around
Tellin' great big lies
They got little noses
And tiny little teeth
They wear platform shoes
On their nasty little feet

- Randy Newman, Short People
Besides the Indices, I added to the following individual shorts today: (CAT) , (AAPL) , (MU) , (TROW) , and (BEN) .

*Buffett gets involved
This is a move in the right direction for Kraft Heinz (KHC) .
But no rush as I slowly accumulate a position.

My pal and ex classmate at Putnam Management in the 1970s, Larry Haverty, early this morning (5:30 am!) on CNBC - discussing Facebook.

From Lisa Abramowicz:

Adding to (GLD) on the better action.

Re-shorted (CAT) - I believe I made a mistake in covering (though I made a nice profit).

This may be the sort of frothy action that ends badly.

I replaced the short (SPY) and (QQQ) that I covered the other day - and put out a Spy short at $292.70 and a QQQ short at $191.41 in pre-market trading.

This moves me back to large short in the Indices.

* My "deranged" 2019 surprise that Facebook would successfully address its privacy issues, resulting in gains in engagement and users - has been realized
* And so has my $200 price target been achieved!!
* Facebook's shares are likely going to move higher over the next several yearsSurprise #4. Despite the Appearance of the Bear, FANG Stocks Surprisingly Prosper (Both Absolutely and Relatively) as Investors Seek Growth (at any cost) In a Slowing Economy - Facebook's Shares Rebound Dramatically:

While there is a growing consensus that FANG will lead a Bear Market lower - that is not the case as growth, in a general sense, is dear and cherished by market participants next year. Among FANG, Facebook's shares have a reversal of fortune (and is the best performing FANG stock) as the company announces aggressive management changes and moves to remedy the misinformation trap.

FB investors begin to believe that the company is quickly moving to fix its multiple data and privacy issues.

Fewer (than feared) Facebook members opt out and growth in usage resumes in the back half of 2019.

FB's stock popularity (and market capitalization) increases as it becomes a more dominant holding in "value investors" portfolios - the shares trade above $200/share late in the year.

- Kass Diary, 15 Surprises for 2019

I entered 2019 with a variant and very bullish view of Facebook FB (the stock was featured prominently in my 15 Surprises for 2019 above):

* El Capitan and I Are Mutually High on Facebook
* Booyah, Facebook!
* My Two Favorite Contrarian Picks for 2019

A Spectacular Quarter

Facebook recorded good user engagement and metrics (much like Twitter (TWTR) did the day before). The first quarter demonstrated solid top line growth (+30% year over year), rising monetization (advertising ARPU +16%) and strong free cash flow generation ($5.5 billion).

Estimates will likely be raised by the Street and valuation assumptions will be reset higher. Street price targets should move to towards the $225-$250 area.

Here is a good synopsis from JP Morgan:

1) FB Building Out Privacy-Focused Social Platform, But Public & Private Will Co-Exist, Both Are Important, & Business Should Not Be Impacted N-T. We believe FB's privacy-focused vision has been somewhat unclear to the Street, but Mark addressed this major strategic priority head-on & did a good job clarifying how public & private experiences will co-exist going forward. We believe a privacy-focused approach is critical for FB to regain & maintain user trust & confidence. End-to-end encryption & interoperability across the FB Family are key tenets of the privacy vision, as are ephemerality (Stories) & secure data storage. Importantly, while many have asked if privacy-focused creates risk to the Feed, mgmt. stressed that any impact would be L-T & having both components would ultimately be good for the business. Feed continues to represent the bulk of the ad biz & mgmt. expects that to continue, even w/the fast growth of Stories.
Here is a good synopsis from JP Morgan:

2) FB Again Makes the Case for Regulation, Which We Believe Would Have Modest Impact on the Business & Remove a Key Overhang. Mark continued to push for Internet regulation, just as he did publicly a few weeks ago. He reiterated that more countries should adopt a GDPR-like framework, which we believe is critical in the US this year (at the national level) ahead of the California Consumer Privacy Act (CCPA) on Jan 1, 2020. Increased regulation does come w/risk to the business, particularly around data privacy, which FB suggested could reduce ad targeting capabilities in 2H19. But nearly 1 year in, FB seems to have navigated GDPR extremely well. FB recorded a $3B accrual loss related to the ongoing FTC inquiry, but we believe investors would look beyond the fine, as well as likely data privacy regulation, as resolution of both would remove key overhangs.

3) Strong Execution w/Stable Engagement, Minimal Decel, & Higher Profit Outlook. FB's 1Q results & outlook were strong virtually across the board. DAUs & MAUs both grew 8% Y/Y, a bit ahead of consensus, & DAU/MAU has held steady at ~66% for the past 3+ years. Importantly, we believe FB is effectively managing Blue App revenue decel & seeing strong growth from IG. FXN Ad Revs slowed only modestly to 31% Y/Y. And comping last year's lightest spending qtr, FB increased total costs & expenses only 34% Y/Y (ex-FTC accrual), prompting mgmt to lower its 2019 expense growth outlook to 37%-45% ex-accrual.

We believe 1Q represents another qtr in which FB showed its ability to maintain strong engagement & also effectively manage revenue deceleration, which should give the Street increased confidence going forward. We continue to believe that FB can deliver 20's% revenue growth in 2020 w/moderating expense growth, driving strong re-acceleration in earnings growth next year-we model ~17% growth ex-accrual. We reiterate our Overweight rating & are raising our PT to $245 based on 25x 2020E GAAP EPS of $9.73.

Bottom Line

I believe that Facebook's shares are heading higher.

Even my aggressive target (see Surprise) may prove to be conservative.

* If 3M's EPS miss and this column doesn't give you pause for reflection on how investors blindly follow price, nothing will!
* Despite protestations from those that worship at the altar of price, share prices are not necessarily truth
* Case in point, 3M - who's shares are trading -$21/share this morning!
* Another lesson learned

Back in January, after conducting research on the company for nearly a month, I cautioned about (MMM) 's fundamentals:

Jan 07, 2019 ' 09:52 AM EST DOUG KASS

3M: A Lot of Work Leads to a Dead End

There is nothing worse than spending several weeks researching a company -- talking to competitors, suppliers etc. -- and then determining at the very end that the fundamentals do not appear to be holding up.

That is the real crappy part of fundamental analysis and research -- it is labor-intensive and often leads to a dead end.

And so it did with 3M (MMM) .

As stated, I spent quite a lot of time doing research on the company - and indeed 4Q2018 EPS results (reported on January 29th) were weak and the company guided down after my post (above).
Nevertheless, the shares of MMM moved solidly higher over the last 3 1/2 months - rising from about $190 (on January 1, 2019) to over $220 this week!
I felt like a horse's ass - and there was not a day that went by that I questioned my analysis and sanity.
As 3M's share price rose the company picked up a number of sell-side Street endorsements (including Jim "El Capitan" Cramer who highlighted the company in January and again with FedEx  (FDX) and Walgreens (WBA) in early April. Several technicians favored the stock because of its chart which was moving from "the lower left to the upper right."
Twice, in February and in March, I went back to my spreadsheets (and research contacts) on MMM trying to find out what I was missing - and I concluded that the fundamental outlook was actually deteriorating.
I stayed away from the stock, though I was reminded daily how wrong I was for not having purchased the shares.
This morning the company reported a (across-the-board) miss and large guide down - its shares are -$21 lower in pre-market trading, a decline of nearly 10%. For a company as sizable as 3M that is a huge draw down and I can't remember a comparable daily drop in the last decade for the company. Bottom Line

There is a tendency for many investors and traders to believe that price is truth.
I have been quite consistent in explaining my view that fundamental assessment and "intrinsic value" are the standard bearers of my stock picking process and that often there are large gaps in which current share prices are well above that value (and vice versa). This is particularly true in a market dominated by products and strategies that are agnostic to fundamentals and are governed by price momentum.
3M is an excellent example.
Many will dismiss 3M's profit shortfall as company specific. It was not - as the weakness and the reasons for the guide down was broad-based.
In a mature bull market and economic cycle there are many other 3Ms in my estimation - stocks that are progressing well in the face of a weak fundamental foundation.
And that is today's lesson - price is not truth.

My friend Peter Boockvar says the BOJ is still expecting a different result:

The Bears disappeared again in the weekly AAII index of individual investor sentiment. They fell 1.7 pts to 20.2, just off the lowest since January 2018. Interestingly though, many of the Bulls went to the Neutral side which saw its 3rd week in a row of gains, rising by 5.7 pts to 46.3, the most since June 2016. Call this the 'I don't know' camp. Bulls fell 4 pts to 33.5. I guess the bottom line is with markets at the highs no one wants to be bearish but because it's the 3rd trip around current levels over the past 15 months, individuals are reluctant to get all bullied up.

With very little to do or say after everything already done, the BoJ kept rates unchanged overnight as fully expected but Kuroda said "Given uncertainty over the outlook, we have no intention of raising interest rates at least until the spring of 2020. I don't believe we must review our interest rate targets at all cost straight after the spring of 2020." This is what central bankers refer to as 'forward guidance.' As Japan has had rates at about zero for 20+ years, that has seemed perpetual. The BoJ thinks this is further easing but when QE and zero rates are forever, it no longer is accommodation. lt just is and stopped a while ago to alter the timing of economic behavior. Kuroda even left the door open for more easing, actually believing that it would matter. The BoJ now believes that they won't hit their arbitrary 2% inflation target until at least past their fiscal year 2022. That is 9 years after they originally set it. Isn't it time to reassess it? Isn't it time for central bankers in Europe and the US to learn the lesson of Japan that just printing money and keeping rates low forever is not the path to higher consumer price inflation but leads to so many other negative consequences, one of which is destroying their capital markets?

One last thing, the Japanese government is debating whether to increase the value added tax by another 2 percentage points this October from 8% to 10%. There is a lot of hemming and hawing over this as to what it will do to economic growth. What is missing is the acknowledgement that the BoJ's goal of wanting 2% inflation from near zero is the same thing as raising the VAT. If people are worried about a VAT hike, why are they ok with a rise in inflation? They are the same thing.

In response to the BoJ, the 10 yr JGB yield was unchanged but the 40 yr yield ticked up by 2 bps. The yen is higher while the Nikkei closed up by .5%. The rest of Asia though was weak, particularly China where the Shanghai comp fell 2.4%, the Shenzhen was lower by 3.4% and the H share index closed lower by 1.4%. There was no particular news but after a great run and the sense from officials that more monetary loosening is unlikely to come their way, it was time to take a breather.

The South Korean Kospi fell .5% after they reported that economic activity contracted unexpectedly in Q1 by .3% q/o/q instead of rising by .3% as expected. Since the great recession there has been only one other quarter that saw a q/o/q decline, in Q4 2017 and that was by .2%. Exports make up almost 50% of the South Korean economy so if you want a tell on global trade, this is it. Exports dropped 2.6% q/o/q.

Another central bank that is trapped below zero, the Swedish Riksbank, said today that instead of finally getting its benchmark rate back to zero from -.25% and -.50% before that, they "will remain at this level for a somewhat longer period of time than was forecast in February." I'll say again, accommodation forever stops being accommodation. The Krona is down 1.2% vs the euro in response.

The UK CBI said its April sales index improved sharply to +13 from -18. The estimate was zero. They were "encouraged to see retailers with more of a spring in their step than in recent months" with the help of higher real wages but said "however, this month's sales growth will have been distorted by the later timing of Easter, and falling sales in clothing and department stores underline how challenging underlying conditions remain." They acknowledged that Brexit has been delayed but "uncertainty continues to drag on consumer confidence, and many retailers report an impact on their sales." The pound is weaker but so is just about every currency against the US dollar. Gilt yields are slightly higher and the FTSE 100 is lower, not responding again to the lower pound.

As for the euro heavy dollar index, it's up for a 3rd day to the best level since May 2017 but at 98.23 is still below the late 2016 high of 103.3.

Stating the obvious, as I have for the last 12-to-15 months, untenable levels of debt (and deficits) do matter.

Rising debt ultimately leads to higher interest payments, which is a governor to economic growth: