Naturally, the big news last week was the Presidential election on Tuesday, when Donald Trump surprised all the political experts and pollsters. Ironically, the stock market tanked overnight but rallied dramatically Wednesday in reaction to the Republican sweep. The DJIA ended the week at record highs.
We saw incredible volatility in a massive stock market rotation that rewarded financial and industrial stocks, while punishing many leading technology, dividend, and defensive stocks. As a result, investors are questioning whether they should abandon companies with strong sales and earnings and rotate into financial and industrial stocks, even if they have lackluster earnings. I would argue against that strategy.
If you are questioning the power of strong sales and earnings, I would like to share some positive news about Nvidia (NVDA), which surged 29.8% on Friday after posting stunning third-quarter results and raising its sales guidance. The fact of the matter is that…