Farr, Miller & Washington's Michael Farr is shaking up his exposure to mega-cap tech.
What To Know: Farr trimmed his Alphabet (NASDAQ:GOOGL) Inc (NASDAQ: GOOG) position and used the cash to buy Amazon.com Inc (NASDAQ: NASDAQ:AMZN) shares as the stock sits about 35% below where it was trading at the start of the year.
"I think this is a market ... where you follow your discipline," Farr said Wednesday on CNBC's "Fast Money Halftime Report."
He noted that he doesn't have a good feel for where the market is headed next, so he has defaulted to looking at the numbers and making decisions based on valuations guided by discipline.
His Alphabet stock position had grown substantially over the years, and he decided it was a good time to take profits after seeing Amazon trade significantly lower.
"We look at it on enterprise value to EBITDA, and at 14 times, that's as cheap as it's traded in a long time," Farr said.
See Also: Amazon Lost 2 Key Black Executives This Week: What You Need To Know
Although he believes Amazon is still buying market share in the e-commerce space, he praised the strength of the company's cloud and advertising businesses. Farr acknowledged that the stock could still go lower, but he told CNBC he took emotion out of the decision-making process and took advantage of the buying opportunity.
"I sell things when they get to be too large and too expensive, and I try to add positions when I can be opportunistic ... at these levels and prices my discipline says ignore the emotion, follow the discipline and let's take the position," Farr said.
GOOG, AMZN Price Action: At time of publication, Alphabet was up 1.13% at $2,265.62 and Amazon was up 1.14% at $109.92, according to data from Benzinga Pro.
Photo: courtesy of Amazon.
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