Veteran tech investor Paul Meeks breaks down the latest trends he is seeing in the tech sector. You can watch the full show with Paul every Tuesday at 11:30am on BenzingaTV on YouTube, and you can also check out the reply after.
00:00You know, I am a Fed watcher and I watch this very carefully because I've said a million times on this segment, tech and other aggressive growth stocks cannot go up consistently and strongly unless you have flat to declining interest rates.
00:18We call that the beauty of discounted cash flow valuation modeling. So it looks like the Fed will do nothing when they next to meet. And it looks like they are going to lower the benchmark interest rate in which all other interest rates are built in this country by about a quarter percent.
00:38But they're going to do that on September 17th. Looks like they're going to take the next meeting and they meet every six weeks off, almost regardless of how much blasting Chairman Jay Powell takes from the president of these United States.
00:54So we'll see. If I was Jay Powell, I would do the same thing, because even though the numbers are neutral to maybe supportive of lowering rates, we have not seen the full impact of the tariffs.
01:12And if the tariffs are inflationary, you got to see that play out, don't you?
01:19And of course, we had tariffs that were going to go into effect on July 9th, and now most of them will go into effect not until August 1.
01:29So stay tuned for that. I want to reiterate the concept that I just told you about because it's all the rage in Silicon Valley.
01:37Remember my acqui hires. Instead of doing a formal acquisition to pick up some interesting talent, to pick up interesting technology, a large technology company in the States will not formally buy the company.
01:56Because when you formally buy the company, you set yourself up for deal scrutiny, but you essentially pull out of that company all of their talent, and essentially you've had a de facto acquisition and you've gotten around the regulators.
02:12And we're seeing this, right, with Alphabet, with their $2.4 billion lift out of the talent and intellectual property of the AI software coder, Winsurf.
02:26So next, the other thing I want to tell you is, here is a term. This is the education settlement. It's called a 10B-5-1 plan.
02:37When a company's directors or management or other insiders sell stock, they like to tell you to give you some comfort that, oh, I was told by my financial advisor to diversify, and this is all part of a 10B-5-1 plan.
02:56I will tell you this, that yes, the CFO of Micron the other day initiated a $20 million program when the stock was trading at $125 a share.
03:10Even though it's now on autopilot, it really isn't on autopilot.
03:15When you create one of these plans with whomever you create it with on the Wall Street, you do put different terms.
03:25And one of the terms that you probably are entering into the plan is, I don't care what happens, but this is my sell target.
03:34And so, no matter what bullshit somebody spends about, oh, man, it wasn't my sale. It's a 10B-5-1 plan.
03:43Well, you know what? Even these plans that are supposedly an autopilot, they have very strict terms as to when they sell shares.
03:51And the CFO of Micron is telling you at $125 a share.
03:55So remember, don't get lured into the bullshit of the autopilot of the 10B-5-1 plan because it is used by most executives at all the leading companies in Silicon Valley.
