1/29/25 - $amzn - ST buying into $meta print

29 Jan

1/29/25 :: VROCKSTAR :: AMZN
ST buying into META print

- i'm going to leave aside valuation at the moment, but to say: AMZN is not cheap, it's not expensive and in a 1-day context, that doesn't matter

- went on a walk after resetting my feet taking some profits on NXT today (the ST stuff - don't worry fam i still have a warchest of ITM leaps)... and some things occurred to me related to tonight's MSFT, META, TSLA prints

1/ none of these companies are going to communicate taking down capex guidance for a few reasons. A) given what just happened this weekend, companies this BIG and LT-thinking need to communicate and act consistently and thoughtfully. perhaps in time, this will be the case, but they won't like say this (they don't even know), and in fact they're incentive is NOT to - which is point B) if say META says they are taking down capex, but MSFT isn't... then we're still at the phase where someone is likely seeing something the other isn't - and both will be "wrong" - prisoner's dilemma. furthermore, if you DO plan on taking capex guide down bc you see reason to do this - you would try to convince your "competition" to keep spend high and "waste" this amt such that they haven't figured out what you have AND they're less likely to try and figure out what you have such that you don't say take down capex guide.

as u guys know i write my stream of thought... no edits... it's for me, but if it benefits you, great! so hopefully the above makes sense, and if not we can hash out rest in comments.

SO! the conclusion here is, that if chip stocks/ e.g. NVDA (and let's even throw AAPL in there now, GOOGL too) are looking for some confirmation even if it's incomplete about capex spend... the result will be net +ve nvda... and hence, the marginal flows back into biggest stock, into ETFs/passive flows... into Q's... resumes.

...and drum roll... AMZN is big and benefits flows. The 1/31 $140 calls are cheap b/c earnings IV isn't embedded this week :)

BUT WHAT ELSE IS GOING ON, why AMZN for a second, unrelated reason?

- we've seen the consumer IS spending. while they might be virtually bankrupt (not everyone, but lots), credit IS flowing... airlines are crushing, black friday was huge this year, stonks had a good year (wealth effect +ve), the new admin in the US is jobs friendly, people are still riding high as a kite.

- so such that META says "our ad biz is crushing" partially to their own AI efforts (respect!) but also bc incrementally there's more volume bc of consumer... that will translate into AMZN beat, and the algos will arb this immediately tn.

- so while i have a smally flyer on META into the print (i think they beat, but it's not a big position, just playing the game), i think an equally interesting bet here are ST near the money but still OTM c's on amzn.

let's see. the setup looks interesting and it might be a 60/40, so keeping size small, but i try to take all bets where i think i could have a small edge and size/ risk manage accordingly.

V

29 Jan

Catatan

* third para: "their incentive"... was typing fast and u all know i don't proofread on purpose (i left that world behind and i'm more about 80/20), but bad grammar kills me, so this rare occasion i'm correcting :)