Everyone has centered their portfolio on the emerging market middle class,overlooking that they make 8,000 a year,not 50,000 a year like the American middle class,and buy different things than Americans do,points out value investor Bill Smead,CEO and CIO of Smead Capital Management in Seattle.As things slow in the economy,the consumer staples companies won't have the customers that they thought they would in the emerging markets.Earnings are going to be difficult.What will accelerate,will be domestic revenue streams,and the S&P 500 is not well set-up for that.
The balance sheet of the average 28 year-old is the best it's ever been,because the majority of 28 year-olds were married in previous decades.Since people wait so late to get married,they don't worry about student loan debt until they get a wife and a child-someone to worry about other than themselves.Warren Buffet has staked his company Berkshire Hathaway on them,with second tier companies that cater to them in its portfolio.
These millenials are doing things later,but they're going to do them.These echo-boomers are going to be the most exciting emerging market you ever saw.They're just getting married and having their first child,and when they do,they're going to want that stand-alone home.Everybody's scrambling around trying to find companies that make money off of them.*
The Ireland-based retailer Primark is coming to America in 2015.They sell bargain fashion,such as jeans for 7.00 a pair.They may well change the retail landscape.Primark Stores,Ltd. is a subsidiary of Associated British Foods.It has stores throughout Western Europe,where it sells its own brands of children's,men's and women's wear;homeware,acessories and foot wear;as well as beauty products and confectionary.Walmart,watch out.*
Right now,a lot of the offshore oil players are feeling the pain at a search cost of 50.00 a barrel,while the onshore oil shale search is only 20.00 a barrel,says Chad Brownstein of Rocky Mountain Resource Holdings.What you're going to see in the market in 2015 is,a lot of activism turning their guns on the oil companies.Hedge funds will come after small and mid-cap firms to consolidate and sell them.*
Everyone is saying stocks are overvalued,but they're not-when you look at a 2.2% yield on a ten year Treasury note,I think stocks are still a good value,said CNBC stock market reporter Bob Pisani.You've got dividends and earnings going up.*
Some large-cap stocks to consider:Gannett(CGI),eBay(EBAY),Amgen(AMG),Bank of America(BAC),Merck(MRK).They were the top five holdings of the Smead Value Fund(SMVLX) as of September 30,2014.
Monday, December 29, 2014
Thursday, December 25, 2014
Wednesday, December 24, 2014
Tuesday, December 23, 2014
Monday, December 22, 2014
Santa Claus Rally Continues;Where Oil Is Headed
I want to wish all of you a Happy and Merry Christmas.Thank you for coming to the blog.It's a Christmas party day.
Wall Street was in a party mood,with tech stocks leading the way as investors gobbled up shares of Intel,Qualcomm,Apple and Facebook.The S&P 500 reached its 50th record high of 2014 today,closing at 2078.54,up 0.38%.The Dow Jones Industrial Average also broke its record,closing at 17959.44,up 0.87%;and the NASDAQ closed up for the day at 4781.42,up 0.34%.*
I think oil probably does stay down here-maybe just a tad lower,says Dennis Gartman of The Gartman Letter.I think the time for being overly bearish on crude oil has probably passed.I doubt that we're going to see a great good deal lower from here.Clearly we see demand has decreased a good bit,and supply has increased a good deal.Libya and Kurdish have come back on the market.This was very complicated.There were a lot of things happening.
The Keystone Pipeline would have an amazing response.It can only be beneficial to us and to our Canadian friends to the north.*
I'm really skeptical about China,said author and investment banker Chis Whalen.China is pulling in credit.I think we're pretty stable into next year.I think oil will stabilise in the mid-60s.There are two stories here:large cap oil got sold off;I think you'll see the majors recover.The small ones that have been in the loan markets are going to have to deal with this.
I think in a lot of ways,consumers have still been suffering,because the cost of living still goes up.While low oil prices are good for the US,they're not good for the rest of the world.What's the catalyst for growth in the emerging markets if commodity prices are flat?Mr.Whalen inquired.*
Apple Computer(AAPL),Intel(INTC),Qualcomm(QCOM),Facebook(FB)
Wall Street was in a party mood,with tech stocks leading the way as investors gobbled up shares of Intel,Qualcomm,Apple and Facebook.The S&P 500 reached its 50th record high of 2014 today,closing at 2078.54,up 0.38%.The Dow Jones Industrial Average also broke its record,closing at 17959.44,up 0.87%;and the NASDAQ closed up for the day at 4781.42,up 0.34%.*
I think oil probably does stay down here-maybe just a tad lower,says Dennis Gartman of The Gartman Letter.I think the time for being overly bearish on crude oil has probably passed.I doubt that we're going to see a great good deal lower from here.Clearly we see demand has decreased a good bit,and supply has increased a good deal.Libya and Kurdish have come back on the market.This was very complicated.There were a lot of things happening.
The Keystone Pipeline would have an amazing response.It can only be beneficial to us and to our Canadian friends to the north.*
I'm really skeptical about China,said author and investment banker Chis Whalen.China is pulling in credit.I think we're pretty stable into next year.I think oil will stabilise in the mid-60s.There are two stories here:large cap oil got sold off;I think you'll see the majors recover.The small ones that have been in the loan markets are going to have to deal with this.
I think in a lot of ways,consumers have still been suffering,because the cost of living still goes up.While low oil prices are good for the US,they're not good for the rest of the world.What's the catalyst for growth in the emerging markets if commodity prices are flat?Mr.Whalen inquired.*
Apple Computer(AAPL),Intel(INTC),Qualcomm(QCOM),Facebook(FB)
Thursday, December 18, 2014
Tuesday, December 16, 2014
Monday, December 15, 2014
The Problem With Falling Oil Prices
Plummeting oil prices are affecting those who deal in bundles of loans to energy companies.Collateralised Loan Obligation managers are being forced to sell.We're seeing a lot of pressure on these businesses that have automatic sell programs.I believe we're at a technical level here that's being forced to be sold by the global markets,said Chad Brownstein,CEO of Rocky Mountain Resource Holding Inc.I clearly believe that a stable number for the energy industry is about 70.00 a barrel.*
The problem they're going to have is,the large offshore oil drillers are going to feel it.The real victims are the large drillers at a cost of 50.00 a barrel to produce.Oil services are going to get hurt,the technical levels and the prices of the debt that are attached to the major oil companies.Currencies of oil dependent countries such as Canada,Mexico and Norway are getting crushed,Mr.Brownstein pointed out.*
Sustained low prices could halt some drilling projects,postpone others,squeeze certain fracking operations and even lead to the loss of certain jobs within the energy sector,wrote contributor Kevin Mahn in the December 3 issue of Forbes magazine.The net long-term effect could actually become somewhat of a drag on US GDP if oil prices drop further and/or remain at those lower prices for an extended period of time.*
If credit dries up for energy companies,restaurant chains may suffer in oil-dependent states like Texas and California.Every major restaurant chain has high exposure in these states.*
Rocky Mountain Resource Holdings is a limited liability company that acquires and develops natural resource assets such as oil and gas reserves,agribusiness,energy infrastructure,and industrial minerals and chemicals.With offices in Los Angeles and Denver,it seeks to leverage its deep relationships in the industry to facilitate off-market acquisitions of private assets,including family-owned assets,in the midst of both asset and generational transitions,the company says.*
In Monday trading,WTI crude closed at 55.91 a barrel,down 2.14,or 3.70%;while Brent crude closed at 61.06 a barrel,down 1.83,or 2.96%.
The problem they're going to have is,the large offshore oil drillers are going to feel it.The real victims are the large drillers at a cost of 50.00 a barrel to produce.Oil services are going to get hurt,the technical levels and the prices of the debt that are attached to the major oil companies.Currencies of oil dependent countries such as Canada,Mexico and Norway are getting crushed,Mr.Brownstein pointed out.*
Sustained low prices could halt some drilling projects,postpone others,squeeze certain fracking operations and even lead to the loss of certain jobs within the energy sector,wrote contributor Kevin Mahn in the December 3 issue of Forbes magazine.The net long-term effect could actually become somewhat of a drag on US GDP if oil prices drop further and/or remain at those lower prices for an extended period of time.*
If credit dries up for energy companies,restaurant chains may suffer in oil-dependent states like Texas and California.Every major restaurant chain has high exposure in these states.*
Rocky Mountain Resource Holdings is a limited liability company that acquires and develops natural resource assets such as oil and gas reserves,agribusiness,energy infrastructure,and industrial minerals and chemicals.With offices in Los Angeles and Denver,it seeks to leverage its deep relationships in the industry to facilitate off-market acquisitions of private assets,including family-owned assets,in the midst of both asset and generational transitions,the company says.*
In Monday trading,WTI crude closed at 55.91 a barrel,down 2.14,or 3.70%;while Brent crude closed at 61.06 a barrel,down 1.83,or 2.96%.
Thursday, December 11, 2014
Tuesday, December 9, 2014
Monday, December 8, 2014
Sunday, December 7, 2014
Thursday, December 4, 2014
Monday, December 1, 2014
Market Prospects December 2014
Jefferies and Company says that generic drugmaker Mylan Labs is the most likely Pfizer takeover target.Pfizer,the world's largest drug company,is also rated a buy by Jefferies.*
Gold has really been pressured by the rising dollar and falling inflation expectations,said Ari Wald,CFA,CMT,executive director and market technician with Oppenheimer&Co.'s Portfolio Strategy Team.The setup is actually there to turn lower again.I'd be selling here for the next few months,Mr.Wald advised.*
The Alpine Global Infrastructure Fund has a five star rating by Morningstar Associates.In the developed markets,the infrastructure is aging;while in the emerging markets,infrastructure is being built for the first time.Canadian Pacific is one of the fund's holdings because the transport of crude oil by rail is growing.Rail allows a flexibility to go to different refineries;while pipelines are point to point.When real inflation rises,that would be the risk to owning shares of Canadian Pacific,said Joshua Duitz,CPA,co-portfolio manager at Alpine Woods Investments LLC.
Social infrastructure firms such as prison outsourcers like Geo Group are also owned by the fund.Geo has 77,000 beds and 6,000 vacancies.*
Mylan Labs(MYL),Pfizer(PFE),Canadian Pacific(CP),The Geo Group Inc(GEO),Alpine Global Infrastructure Fund(AIFRX)
Gold has really been pressured by the rising dollar and falling inflation expectations,said Ari Wald,CFA,CMT,executive director and market technician with Oppenheimer&Co.'s Portfolio Strategy Team.The setup is actually there to turn lower again.I'd be selling here for the next few months,Mr.Wald advised.*
The Alpine Global Infrastructure Fund has a five star rating by Morningstar Associates.In the developed markets,the infrastructure is aging;while in the emerging markets,infrastructure is being built for the first time.Canadian Pacific is one of the fund's holdings because the transport of crude oil by rail is growing.Rail allows a flexibility to go to different refineries;while pipelines are point to point.When real inflation rises,that would be the risk to owning shares of Canadian Pacific,said Joshua Duitz,CPA,co-portfolio manager at Alpine Woods Investments LLC.
Social infrastructure firms such as prison outsourcers like Geo Group are also owned by the fund.Geo has 77,000 beds and 6,000 vacancies.*
Mylan Labs(MYL),Pfizer(PFE),Canadian Pacific(CP),The Geo Group Inc(GEO),Alpine Global Infrastructure Fund(AIFRX)
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