Playing for a Tech Wreck

Published on
July 24th, 2019
16 minutes

Playing for a Tech Wreck

Trade Ideas ·
Featuring Larry McDonald

Published on: July 24th, 2019 • Duration: 16 minutes

Larry McDonald, founder of the Bear Traps Report, takes a deep dive into tech and determines that many of the "FAANG" stocks face significant downside risk over the next few years. He highlights the growing threat of populism and the political backlash against big tech, notes the companies' valuations from a fundamental perspective, and considers a pairs trade to play the situation, in this interview with Justine Underhill. Filmed on July 23, 2019.



  • HK
    Heji K.
    24 July 2019 @ 18:41
    Telcos might be at the losing end of 5G for the first few years given telcos are heavily indebted already and have to make major infrastructure investments for a customer base that will upgrade slowly since killer 5G mobile apps do not exist yet. 4G rollout benefited from existing killer applications people wanted- mainly video streaming and faster internet. Current 5G reviews revolve around downloading a movie under a minute which is not convincing the majority to plunk down $1200+ phone and a more expensive service. 5G is relying on apps that don’t exist quite yet.
    • CM
      C M.
      29 July 2019 @ 15:21
      Or canceling your Comcast internet and going with Verizon.
  • TM
    Tim M.
    24 July 2019 @ 16:59
    QID may be ok for short term trading, but it looks like it has a lot of inherent decay otherwise, probably not the best instrument
    • DL
      David L.
      24 July 2019 @ 23:21
      Could you suggest alternatives?
    • JL
      Jonathan L.
      26 July 2019 @ 06:54
      David L - you can buy puts on QQQ (NASDAQ 100)
  • AK
    Arthur K.
    25 July 2019 @ 23:10
    Could not understand why guv-mint is going after FB until hearing LMcD`s explanation. light bulb moment 💡. Not so keen on the trade ideas as is blasting into stratosphere after hours today.
  • AA
    Aaron A.
    25 July 2019 @ 12:34
    What Larry doesn’t understand is that most of the FAANGS, especially google, FB, Twitter, are run by leftists and in bed with them. Dems will talk tough in public but will give them a pass because these tech companies demonetize and block a lot of conservative media platforms. If dems take control of Washington, FAANGS will keep going up. Google engineer just went public confirming my comments. They are distorting search results that aren’t favorable to democrats. Leftist = socialist.
  • DC
    Dan C.
    25 July 2019 @ 12:20
    yeah the no socks thing seems to span the generations the trend was popular in the 80's also , i wonder what elliot wave people say about this says about this .
  • JL
    James L.
    25 July 2019 @ 08:01
    what is it with these guys that none of them wear socks and wear elf shoes?????
  • JO
    Johnny O.
    25 July 2019 @ 06:54
    Shouldn't it be short something more FAANG focused like XLK, rather than the broad QQQ? Anyway, I think they'll all still go up and down together. The President is being slowly educated on how the political bias of Google and Twitter and Facebook is corrupting elections, and action is beginning (starting with some anti-trust anti-competitive inquiries). But if the crazy Fed-funded bull market continues, the QQQ and the likes of MSFT will still be hoovering in money.
  • BH
    Brad H.
    24 July 2019 @ 14:55
    IYZ has two positions with over 20% weight. I wouldn’t consider Verizon and Cisco cheap either.
    • SR
      Steven R.
      25 July 2019 @ 06:21
      Then analyze the other ones
  • AB
    Avik B.
    24 July 2019 @ 10:43
    Goog is at 5.6x revenues, not 10x...
    • SR
      Steven R.
      25 July 2019 @ 06:21
      doj not rev
  • WB
    Wes B.
    24 July 2019 @ 14:27
    The value over growth crowd tends to ignore that many of the "value" stocks are some of the most indebted companies in the world. AT&T being the classic example.
    • SR
      Steven R.
      25 July 2019 @ 06:20
      Will that matter as much if the fed goes near 0? Thinking possibly not.
  • JG
    Jose G.
    24 July 2019 @ 23:23
    Like Nokia for 5G. Betting against FAANGS , gutsy, but ill pass
  • PG
    P G.
    24 July 2019 @ 21:51
    I don’t understand why you are saying that the dangerous of index funds are that they have no thought behind them and “it’s just money flowing in”. While your trade idea was based on a very detailed and calculated thinking, and is based entirely on index funds 🤔
  • Nv
    Nick v.
    24 July 2019 @ 12:11
    Spot on. Great interview.
  • PB
    Pieter B.
    24 July 2019 @ 12:00
    Great conversation Larry & Justine! Thank you!