Despite selloff, stick with tech titans: Strategists


With U.S. stocks following the Dow's largest three-day losing streak with the largest reversal in trading since the peak of the financial crisis, "shaky" might be an understatement.

Surprisingly, the tech-heavy Nasdaq reversed course the least, only losing .44 percent on Tuesday with shares of Apple, Amazon, and Netflix all ending higher by the end of the trading.

Yet, despite the fact those names trade at high multiples, Gerber Kawasaki CEO Ross Gerber dubbed the companies "the current blue chips of the future" in an interview with CNBC's "Closing Bell."

"Amazon, Apple and Netflix really should be in everybody's portfolio," he said, adding the caveat that Amazon might be a bit expensive at current levels. "Amazon web services is doing so well so it's a good stock to own, but it's the same risk you take with Netflix they're very high-valued stocks."

It's also that reasoning that makes Apple the best bet of all three in Gerber's eyes, considering the upside potential, a better valuation, and the margin of safety since Apple CEO Tim Cook reaffirmed growth after investors voiced concern over a China slowdown.

"When I can buy something at 12 times earnings, with a 2 percent dividend, and earnings growth of 35 percent—find me a better stock," he said.

However, the fact that Apple's upside is so widely agreed upon by investors could represent a lack of incremental buyers, according to JK Investment Group's Chris Johnson.

"When you look at Apple, 2,400 different institutions own that," he said. "When you look at Netflix it's about 600, when you look at Amazon it's about 1,200—that equals buying potential in terms of growth."

Despite innovation that has Apple bulls most excited, like Apple's watch, Music and Pay, Johnson likened the tech giant to a slow-growing dividend stock. Performance of the three stocks seems to support that thesis.

Apple's 6 percent loss on the year pales in comparison to Amazon's 50 percent gain and is even further dwarfed by Netflix's 108 percent year-to-date performance.

By Zack Guzman
http://www.cnbc.com/2015/08/25/despite-selloff-stick-with-tech-titans-strategists.html

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.

Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.
Schedule a call with an advisor, free of charge.
Read more from this issue
  • For Elon Musk, Tesla’s Impresario, the Latest Act Falls Flat
  • Live Sports Remain Ace In The Hole For Cable Companies Against Cord Cutters
  • Should advisers barter their services?
  • How a Smart Comp Plan Can Boost Firm Growth
  • Like Dividend Stocks? Don’t Chase Performance, RIAs Warn
  • How To Get in On The Big Money In Sports
  • What It Really Costs to Attend Coachella
  • Rise Of Social Media Takes Toll On Traditional Advertising
  • Remind clients that inherited stocks aren’t keepsakes
  • Middle class deserves unbiased advice
  • 10 Financial Things Newlyweds Must Do
  • 12 Habits Of High Earners That Anyone Could Emulate
  • Financial Planning for the New Realities of Marriage
  • Healthy Investing Could Make You Wealthy
  • Jack Dorsey’s Twitter stock buy: PR or true confidence?
  • Pulling Clients Away from the Panic Button
  • Harsh Reality Of Tech Stocks: Not Everyone Can Be A Unicorn
  • Advisors Who Warned Clients about the Stock Slump
  • New Apple iPad Pro geared toward meeting advisers' business needs
  • Gaming The Investing Angles Of Virtual Reality
  • 7 Times You Need to Talk to a Financial Advisor
  • Winklevoss Twins call on advisers to get on Bitcoin bandwagon but they're not budging
  • Wells Fargo Pushes for Cross-Sales with VIP Program
  • Star Wars: The Investor Force Awakens
  • Fed Proves Irrelevant in $2.6 Trillion Slice of U.S. Debt Market
  • Prepare Your Portfolio For Iraq War Three: The Death Of ISIS
  • Stock Options & Restricted Stock
  • Four Big Tech Trends for 2016
  • Twitter users dislike Twitter exec exodus
  • Oil-Based Economies Collapsing And That's Great For America
  • Why IPO Investors Are Set Up For Failure
  • A New Wave of Advisor Recordkeeping Tools
  • Pride Month: 3 Financial Tips for LGBT Couples
  • Musk’s SolarCity Bid a Rare Time Investors Don’t Buy Vision
  • Yahoo reports lackluster results as sale looms