Mid-Day Update
by - January 28th, 2012 12:08 pm
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by - January 12th, 2012 11:01 pm
Reminder: David is available to chat with Members, comments are found below each post.
To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene
Mid-Day Update
by - January 12th, 2012 10:57 pm
Reminder: David is available to chat with Members, comments are found below each post.
To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene
Mid-Day Update
by - January 12th, 2012 10:49 pm
Reminder: David is available to chat with Members, comments are found below each post.
To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene
Bridgewater’s Views Still Gloomy on 2012
by - January 3rd, 2012 8:20 am
Courtesy of MarketMontage. View original post here.
Ray Dalio has created a machine at hedge fund Bridgewater – not only have assets surpassed $120B, the fund continues to churn out some fantastic results for investors. Through end of August last year, the fund was up 25% YTD (and that was after an awful August for markets, and before the stampede upward of October); this after a 44% gain in 2010. Longer term, this quirky group, has returned a fantastic 15% annualized since 1991.
The WSJ highlights some updated thoughts for the near term (gloomy) and decade out (not much better). Essentially it paints the developed world as “Japan-ized”. Some excerpts:
- As the new year rings in, the hedge fund firm has no plans to change that gloomy view. Robert Prince, co-chief investment officer at Bridgewater, and his managers at the world’s biggest hedge fund firm are preparing for at least a decade of slow growth and high unemployment for the big developed economies. Mr. Prince describes those economies—the U.S. and Europe, in particular—as “zombies” and says they will remain that way until they work through their mountains of debt.
- “What you have is a picture of broken economic systems that are operating on life support,” Mr. Prince says. “We’re in a secular deleveraging that will probably take 15 to 20 years to work through and we’re just four years in.”
- In Europe, “the debt crisis is [a] long ways from over,” he says. The economic and financial morass will mean interest rates in the U.S. and Europe will essentially be locked at zero for years.
- In this bleak environment, Mr. Prince says stocks remain vulnerable to “air pockets” from shocks, such as bad news out of Europe. But for longer-term investors looking out over the next decade, he says, equities may be a good buy. There is even money to be made in U.S. Treasurys, despite interest rates near record lows, and gold is likely to resume its climb as central banks print money to bolster their economies. Mr. Prince says.
- Recent better-than-expected news on the U.S. economy is unlikely to be the start of a healthy expansion, he says. The uptick in economic growth has been fueled by a decline in the savings rate, which, without material income and employment gains, is unlikely to be sustainable as
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Manufacturing Jobs Coming Back, but Workers Face a New Era of Lower Wages
by - December 31st, 2011 3:20 pm
Courtesy of MarketMontage. View original post here.
I’ve written often in the past stories showcasing the statistics about “what” kind of jobs are coming back, rather than simply focusing on “how many”. What has been striking during the Great Recession and its aftermath (also known as a recovery), is the loss of jobs in the higher strata of wages, and the replacement of those jobs with those at the lower strata. The long term societal implications of this if it does not reverse itself in the future are many. With the full flowering of globalization I’ve written since 2007 this will not reverse – indeed the wages of those in developing countries will increase, while the wages of those (in direct competition) in developed countries will decrease. I’ve called this “global wage arbitrage”. While these wages between developed and developing will not exactly converge (many other items such as regulation, environment, taxes et al will impact) they will become much closer as a global labor force becomes closer to reality. I’ve written long ago this is going to mean much tougher times for those in high cost of living countries and I believe this has surfaced over the past decade in the States.
This NYT story takes a look at one of those sectors of the economy in global competition – manufacturing. Yes, some jobs are being created but most are a far cry from the type of wages (relative to cost of living in the country at the time) once offered. Locally, with the Big 3 there is now a two tier wage system with recent union contracts. Work that once was done for $28+/hour is now being done by $14/hr workers. Considering Walmart pays cashiers somewhere around $11-12/hr for a much less physically taxing type of workload we can see how the expectations of many in this country need to change to the new reality. It also poses a lot of challenges to the government as there will be much more strain on social services, and far less of a taxpayer base to create revenue. So as we celebrate job ‘creation’ each first Friday of the month, we need to think much deeper than just the raw number – it’s not just quantity but quality.
Please note – as stock speculators whose only ‘concern’ is profits, we ‘embrace’ these changes as…
Investors Rushing In… and Out… Together
by - December 31st, 2011 2:19 pm
Courtesy of MarketMontage. View original post here.
One of the major themes since 2008 has been the immense increase in correlations among asset classes. While this was already a growing trend since mid decade with the proliferation of computerized trading techniques and the rise of the ETF (i.e. when an ETF is bought en masse, all underlying equities are bought regardless of individual merits…. and vice versa) – it has accelerated in the 2008-2011 period. Headline risk and macro movements have come to dominate causing neck breaking whiplash. We call this “risk on”, “risk off” – although I’ve called it ‘student body left (right) trading’ before the former terms became popular. While there have been times these correlations lessened during 2010 and early 2011, the back half of 2011 brought the return of this action in force. To wit, James Grant has noted that in the entire history of the S&P 500 there have been 11 instances where 490+ of the 500 stocks traded in the same direction. Of those 11, 6 have happened since July 2011. An incredible statistic. Essentially each day you “buy risk” (risk on) or you “buy US Treasuries” (risk off) – and every 24 hour period is unto itself, with no memory of the previous day.
This type of movement has created havoc for anyone trying to outperform the index, because often the market moves down (en masse) than 48 hours later a rumor or a ‘rescue’ will move all the same assets up en masse. And this gyration continues day after day, week after week, making it impossible to ride this bucking bronco. To that end, both mutual funds [Dec 20, 2011: Average Mutual Fund Down 5.9% with a Handful of Days Left in the Year] and hedge funds [Dec 20, 2011: Every Major Hedge Fund Strategy Also a Loser in 2011] have had a horrid year trying to beat the indexes. Last evening, I went through the Morningstar top fund performers of the year to see what I could glean. Not much. It was a whose who of utility (yield) mutual funds – trailed by dividend paying (yield) large cap healthcare and REIT (again a reach for yield) funds. These are now the most crowded trades on earth, now that gold has been bludgeoned of late. As these ‘safe’ sectors become…
Unbelievable
by - December 30th, 2011 4:05 pm
Courtesy of MarketMontage. View original post here.
S&P 500 close
Dec 31, 2010: 1257.64
Dec 30, 2011: 1257.60
In one of the most volatile years on record…
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
Chinese HSBC Manufacturing Rises from 47.7 to 48.7
by - December 29th, 2011 9:38 pm
Courtesy of MarketMontage. View original post here.
While this figure is still contractionary (below 50) frankly I don’t know what the market wants at this point: weaker readings = more easing down the road from Chinese authorities, etc versus stronger readings = no hard landing.
That is the last piece of economic news of the year as tomorrow should be quiet.
Via Reuters:
- HSBC Purchasing Manager’s Index, designed to preview the state of Chinese industry before official output data are published, inched up to 48.7 in December from a 32-month low of 47.7 in November but fell short of the flash reading of 49. The HSBC PMI has been mostly under 50, which demarcates expansion from contraction, since July.
- Underlying indices showed softening demand at home and abroad, according to the data collated by UK-based information firm, Markit. The sub-index for overall new orders edged up to 46.9 in December from November’s 45, but still signaled falling demand. New export orders also shrank. ”While the pace of slowdown is stabilising somewhat, weakening external demand is starting to bite,” said Qu Hongbin, China economist at HSBC.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
Best and Worst of the S&P 500 for the Year
by - December 29th, 2011 2:57 pm
Courtesy of MarketMontage. View original post here.
With a session to go the S&P 500 is just above break even on the year. Believe it or not despite the massive correlations there were still some major out (and under) performers in the index. Some of the former were acquisitions but beggars can’t be choosers. Below are the top 25 and worst 25 in the index.
BEST
| Ticker | Company | YTD | Mkt Cap | Industry |
| COG | Cabot Oil & Gas Corporation | 101.8% | 7,963 | Independent Oil & Gas |
| EP | El Paso Corp. | 91.2% | 20,244 | Oil & Gas Pipelines |
| ISRG | Intuitive Surgical, Inc. | 77.6% | 17,846 | Medical Appliances & Equipment |
| MA | Mastercard Incorporated | 67.2% | 47,444 | Business Services |
| BIIB | Biogen Idec Inc. | 64.4% | 26,770 | Biotechnology |
| HUM | Humana Inc. | 61.5% | 14,328 | Health Care Plans |
| CMG | Chipotle Mexican Grill, Inc. | 60.0% | 10,646 | Restaurants |
| OKE | ONEOK Inc. | 59.8% | 8,847 | Gas Utilities |
| ROST | Ross Stores Inc. | 55.0% | 11,084 | Apparel Stores |
| VFC | V.F. Corporation | 53.4% | 14,239 | Textile – Apparel Clothing |
| FAST | Fastenal Company | 49.0% | 12,915 | General Building Materials |
| TJX | The TJX Companies, Inc. | 48.0% | 24,454 | Department Stores |
| LO | Lorillard, Inc. | 46.7% | 15,436 | Cigarettes |
| SBUX | Starbucks Corporation | 44.6% | 34,124 | Specialty Eateries |
| V | Visa, Inc. | 44.3% | 81,964 | Business Services |
| CBS | CBS Corporation | 43.3% | 17,610 | Broadcasting – TV |
| UNH | Unitedhealth Group, Inc. | 42.3% | 54,058 | Health Care Plans |
| GR | Goodrich Corp. | 41.9% | 15,456 | Aerospace/Defense Products |
| AET | Aetna Inc. | 41.7% | 15,481 | Health Care Plans |
| EL | Estee Lauder Companies Inc. | 41.2% | 21,742 | Personal Products |
| NI | NiSource Inc. | 40.5% | 6,645 | Diversified Utilities |
| PM | Philip Morris International, Inc. | 39.9% | 136,370 | Cigarettes |
| HRB | H&R Block, Inc. | 39.3% | 4,648 | Personal Services |
| GWW | W.W. Grainger, Inc. | 39.1% | 13,174 | Industrial Equipment Wholesale |
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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