"'Cool Kid' Tech Stocks Are a Lightning Rod"

From Barron's Read This, Spike That:

The news that David Einhorn is shorting a basket of "bubble stocks" has triggered debate among pundits.

Professional investors and the financial media alike tend to closely read and discuss the quarterly musings of hedge-fund manager David Einhorn. 

But Einhorn's latest shareholder letter may be getting more attention than most. That's because the stockpicker who famously shorted Lehman Brothers well ahead of its September 2008 demise has written that he has shorted a basket of "bubble" stocks. 

In his letter released Tuesday, Einhorn, the manager of Greenlight Capital, didn't name the companies he's shorting. And I wouldn't venture a guess at what they might be. (He might have some interesting off-the-beaten-path mid- or small-cap names on his short list, for all I know.) And it's possible that all the names aren't purely in the tech space. However, in recent months, certain glamour tech stocks including Netflix (ticker: NFLX), Facebook (FB) and Twitter (TWTR) have aroused the suspicions of many investors because of heady climbs followed by big falls, followed by modest comebacks in recent days. 

But even though Einhorn isn't naming names, his brief reference to a category of "cool kid" companies that are trading ahead of their true worth has become rich fodder for financial-media pundits. Tech stocks, after all, still fire the imaginations of writers like few other sectors, even though the industry is a shadow of its 1990s self.

What's interesting is that not all the pundits agree that there's a bubble in tech right now, given that many of these stocks fell by 20% or more in the past four or five weeks before a recent modest rebound. 

Jim Cramer may lead the list of critics of the bubble theory. In a piece for his Website, The Street, Cramer asks rather rhetorically: "How is it that we now bank with managers who tell us there is a tech bubble brewing without taking into account that the bubble has been bursting for a month now?"...MUCH MORE

We'll be back with some thoughts on April 12th's "Barron's Cover: Equities-The Highfliers Are Still Too High" in who's intro we referenced our "Cool Kids" trade, all but IBB are in the black, a better situation than 12 days ago:

It's been a week since Friday Apr. 4's "Mind the Gaps: A Lot Of Momentum Stocks A Starting to Look Interesting (NFLX; TWTR; XBI; FB; P)", the results are not going to earn anyone a bonus.
The initial group:

NFLX  337.38 -17.31
TWTR   42.96 -1.09
XBI     132.28 -6.90
FB         57.18 -2.31
P           27.82 -2.03

And a couple of "special situations" I started talking about on the following Monday:

TSLA  207.52
FSLR    68.00

Special because, in Tesla's case the $203.00 support seemed really important and in First Solar's case because, unlike most of the rest of the momo's, the stock had actually gained +25% over the prior month.

Here's last week's performance via Yahoo Finance:

Only one, Facebook, managed to turn a profit and even FSLR cracked and went into the red.
Not too impressive Mr. analyst guy.
Tesla dipped five bucks under support on Friday before rallying to close at $203.78 and remains the most interesting of the bunch. The rate of descent in the biotechs (XBI and IBB) has slowed but they are still dangerous, tradable for the nimble only.

Also, I have to repeat, we are still in a bull market, although you would be excused for believing otherwise based on the performance of the above group of misfits.