Last week in Cook’s Kitchen, I shared a dozen charts that looked at inflation from various angles. My biggest “explainer” slides were all about the massive liquidity from the Federal Reserve and Treasury, on their way to pouring $7 trillion into the economy and markets this year.

But does that mean that this monetary and fiscal stimulus are the only forces for stocks to make new highs?

Not at all. They are extremely important tailwinds, but they are not the whole story.

In the video that accompanies this article, I show a great new chart from Fidelity data of what the potential of this bull market could look like.

Because historical patterns tend to rhyme in the economy and markets, we could see S&P 4,000 before this Tech Super Cycle is done.

I also address, with the help of some great charts from my colleague and Zacks Chief Equity Strategist John Blank, the many questions about why fund managers are so eager to buy stocks at premium valuations when earnings growth is still headed down.

I answered some of these in my July presentation Software Goes Stratosphere on Planet COVID where I explained how tens of trillions of investment dollars are competing for shares and “growth at any price” in the pandemic/remote economy.

So while Goldman’s chief strategist David Kostin finally throws in his bearish towel last week — with a year-end price target rehab from S&P 3,000 to 3,600 — seasoned tech investors like Philippe Laffont of Coatue Management just keep calculating the growth and profits of companies positioned to dominate the future in their industries.

Sell Tesla to Buy Boeing?

In the video, I introduce the former “Tiger cub” Laffont and his success with Coatue. I tell the story of his “full circle” with Apple, where he was turned down for a job with 3 different divisions in the 1990s and went on to make it one of his greatest investments by 2015.

More recently, I was interviewed by Newsweek reporter Lucy Harley-McKeown from London on Tuesday in this piece Why Did a Major Fund Manager Dump Tesla’s Surging Stock and Buy Boeing?

She knew that Laffont had sold a big chunk of his Tesla TSLA shares and started a sizable new position in Boeing BA and wanted to get some more insight.

So I took a look at the SEC 13F data for Q2 and found that Coatue had sold 42% of their Tesla shares but still held on to 310,000 as of June 30.

And they plunked down over $450 million for 2.75 million Boeing shares under $175. My take on this type of swap was simple: sell the wild speculation in a stock that now exceeded the combined market caps of 4 other car makers and buy the severely beaten down #1 maker of jetliners because passenger air travel would revive eventually.

I explained that while the 737 MAX crisis should have hurt Boeing worse, the pandemic couldn’t hurt air travel much more and so the worst seemed priced-in to Boeing stock…

“Many managers plugged in the numbers and it became an incredible value stock under $150 for managers that are looking ahead three to five years. We’ll get through this pandemic. Air travel will return at some point, and Boeing is a leading player in aviation and aerospace.”

While I was looking over the trading records of Coatue, I noticed a few other standout buys and sells. Laffont and his team loaded up on PayPal PYPL during the second quarter, increasing their position by over 50% and making it the largest holding, with his big new Disney DIS buy nipping at its heels. Together, the two stocks appear to make 20% of one of Coatue’s approximately $12 billion funds.

He also grabbed a big chunk of Zoom ZM shares, spending nearly as much as he did on Boeing. And the firm took some profits on one of my favorite investments, Alibaba BABA, as well as Netflix and Microsoft.

The bottom line is that technology-focused investors like Laffont, who’ve seen big cyclical swings in the economy and market over multi-decade careers are able to keep a few principles as their guiding light during the storms.

The first is that downturns are shorter than long bull runs. The second is that technology megatrends outweigh most other economic shocks. And thirdly, when central bank monetary tailwinds are a a predictable and unrelenting force, the macro-investment seas are smooth sailing for extended periods.

Thus, when you imagine a few hundred more portfolio managers like Laffont, overseeing trillions of dollars in aggregate, you can envision the chase for stocks that’s been going on. And it may not stop for another year, or three.

Disclosure: I own BABA shares for the Zacks TAZR Trader portfolio.

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