NEW YORK (Real Money) -- Vanquishing the negatives. A lot that happens in this market is about vanquishing the story that bedevils a specific company.
It often seems to me that much of this magnificent run has less to do with the oft-cited Federal Reserve and much more to do with the negatives going up in smoke for a variety of reasons.
Let's tick down a few.
Right now Kyle Bass, a very wealthy hedge fund manager, is targeting a key patent owned by Celgene (CELG), among others. It's been a tough road of late, because last week Celgene upped its gigantic buyback and then a Celgene-affiliated company, Epizyme (EPZM), had some excellent success with a drug for non-Hodgkin lymphoma. It's only Phase one, but the market went crazy for it and Epizyme's big gains spilled into Celgene's stock. The short case is, at least, temporarily rebuffed and Celgene at last is acting like the Celgene of old.
So is Gilead (GILD), which had been stalled over questions about whether health maintenance organizations would pay for its expensive Hep C cure. The answer is yes, and now the shorts are being overrun.
Or how about GameStop (GME)? This company was supposed to be a sitting duck for the shorts, who are short 30% of the float. But it has reinvented itself as a seller of swag and apple, and it turns out that hardware's still a very valid business. CEO Paul Raines didn't just sit there. He changed the business model.
How many times have people told me that Domino's Pizza (DPZ) was the short of a lifetime? How could the stock of a pizza delivery company go up tenfold? How could it not be overvalued? Hasn't it taken allof the share it has ever going to take? Nope, because it re-invented itself as a technology company with an app that makes it so delivery's easy and mistakes are, well, pretty much a thing of the past.
Then there are the usual suspects. Netflix (NFLX) was supposed to run out of gas, but it turns out that its special programming plus fast Internet have made it the bell of the international ball. The short story just has too many holes in it. Yes, Amazon.com (AMZN) was totally overvalued, but then it started showing you how it's Web Services Business has a lot of profitability potential, and next thing you know the company went from a hopeless spender to a company that's spending far more prudently than we realize and could show a profit it if wanted to.