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The #1 Stock In The World

This article came to me from member Drew and I think it's a name you need on your watch list.  Volume is great and who doesn't love 4x the SPX.   Read on........

A recent article asked the following questions,

1. If you could only own one company in your portfolio, which would it be? Why?

2. If you had $25,000 to invest today on one company and you planned to hold it for 10 years or more, which company would you buy? Why?

For years, my #1 favorite stock in the world has been the Credit Suisse AG - VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ:XIV). It has returned almost four times the S&P 500 (NYSEARCA:…

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Admin

U.S. Rental Crisis Or The New Reality

In my typical day I read 20+ articles pertaining to the the stock market and investing.  Only occasionally posting one here which stands out in my mind but one yesterday at Sober Look caught my eye.  It's author begins right off the bat with "The United States is not building enough homes to meet the nation's housing demand." and I almost spit out my tea.  Not building enough homes when you compare the aging ones being thrown out versus the new ones being constructed or are we looking at what a consumer can afford to buy?  He is clearly in the camp that we should crank out more housing which would cause prices to drop at some point and suddenly "Joe the Plumber" will move out of his apartment an into a new home.  I simply don't buy that…

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Admin

Social Media - TV For The Next Generation

When it comes to where younger Americans get news about politics and government, social media look to be the local TV of the Millennial generation. About six-in-ten online Millennials (61%) report getting political news on Facebook in a given week, a much larger percentage than turn to any other news source, according to a new Pew Research Center analysis. This stands in stark contrast to internet-using Baby Boomers, for whom local TV tops the list of sources for political news at nearly the same reach (60%).

At the same time, Millennials’ relatively low reliance on local TV for political news (37% see news there in a given week) almost mirrors Baby Boomers’ comparatively low reliance on Facebook (39%).

Gen Xers, who bridge the age gap between Millennials (ages 18-33 at the time of the 2014 survey) and Baby Boomers (ages 50-68), also…

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Admin

Market Following U.S. Confidence?

For the week ending May 24, 23% of Americans said the economy is excellent or good while 29% said it is poor, resulting in a current conditions score of -6. The economic outlook score of -11 is the result of 42% of Americans saying the economy is getting better and 53% saying it is getting worse.

Economic Confidence Index Components -- Weekly Averages From May 2014

Well this chart from Gallup certainly makes one wonder. Where will the U.S. see growth?  We need a catlyst......

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Admin

Saw this and had to share it because clearly, there are enormous masses out there that just are not feeling giddy over the economic "recovery".  Trickle down effect?  Yeah, o.k.   Sure, the stock market is enjoying all time new highs but is the economy truly humming along?  The numbers show obviously not for the majority.  Bribe your kids.  Do whatever it takes.  They'll need it later, even more than they need it today.

From Ritholtz:

The economy is, in a word, “lumpy.” It is strong in some regions, anemic in others. Strength by economic sector varies widely. There are myriad reasons for this: Some parts of the country were much harder hit by the real estate collapse; some sectors naturally rebound more…

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Admin

BofAML When Will The Fed Raise Rates?

From BofAML's latest Global Fund Manager Survey: more than 50% of investors now expect Fed to lift off in Q3 or later.  Courtesy of MatthewB

Obviously June seems off the table.  Markets however, tend to bake in any moves long beforehand therefore remain long and accumulate banks and if you haven't already, lighten up on the utilities.  There's still money to be had; just in the right areas.

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Admin

Why CEO Pay Is So High (And Going Higher)

The numbers are in on 2014 CEO compensation, and as the old Seinfeld joke goes, they are real and they are spectacular. CEO pay is also controversial as the income gap widens in America.

The average S&P 500 company CEO made 373 times the salary of the average production and non-supervisory worker in 2014, up from 331 times in 2013, according to the AFL-CIO.

Why is CEO pay rising sharply, and how are CEO pay packages structured to maximize executive compensation? Here are the basics you need to know to understand the big numbers behind the CEO headlines.

1. How much do CEOs get paid?

The average pay package last year was $22.6 million, up from $20.7 million in 2013,…

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Admin

Remain Long China. The QE Continues

I see no reason why not to stick with Shanghai at this point.  They're behind us at in terms of supporting their economy and it's not an easy ride (as Ben Bernanke will attest). 

According to BusinessInsider, a bunch of data about the state of China's economy came out Tuesday night, and altogether it told us one thing — nothing the government has been doing to save its economy from falling deeper into a slowdown is working.

Since November, China has cut benchmark interest rates three times, including once Saturday. It has also loosened mortgage policies to prop up the housing market.

But none of it's enough. Especially when you look at the data from Tuesday night.

Lets walk through the scariest…

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Admin

50 years And 12 Items Later From Warren Buffett

With 50 years at Berkshire Hathaway, I still read in on articles featuring Mr. Buffett.  You just never know what you'll find..

1. “We are limited, of course, to businesses whose economic prospects we can evaluate. And that’s a serious limitation: Charlie and I have no idea what a great many companies will look like ten years from now.”

“My experience in business helps me as an investor and that my investment experience has made me a better businessman. Each pursuit teaches lessons that are applicable to the other. And some truths can only be fully learned through experience.”

Treat an investment security as a proportional ownership of a business!  A security is not just a piece of paper. Not all businesses can be reasonably valued. That’s OK. Put them in the “too hard pile” and move…

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Admin

Random Notes

Life has intervened of late however I felt I would post my random thoughts viewing my port yesterday:

  • Russia is still working. RSX at it’s 100d today. I will add more if it comes back to the 50d http://screencast.com/t/Eh88iqLP   Long hold, definitely.  Throw it in a drawer and forget about it.

  • Buffet lowered his XOM stake and bought DE.  DE Monthly sure looks like its coiled up for something. Buffet obviously thinks new all time highs http://screencast.com/t/rlyFa0yzLeb  DE earnings this Friday bmo. I'd be long common and get put protection.  Buy or add on any selloff.  Daily view, bouncing off that 50% fib (to me) equals good chance it wants to challenge/break the high…

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Spruce Up Your Home Without Hiring a Professional

Depending on the condition of your home, the list of upgrades required to make it the home of your dreams might seem daunting and impossible to complete on your own.  Hiring a professional is not always a bad idea, especially when major work needs to be done to make a home safe to reside in.  But many times hiring a professional is not necessary if all the home needs is some tender love and care from its owners.  So before scouring the internet for the best contractor in your area, first determine how many of the upgrades you can complete on your own.
 
Why do-it-yourself projects are worth the time
 
You might have the skills to complete home improvement projects on your own, but have little time to do so.  You might have even heard rumors that do-it-yourself projects can be even more costly than hiring a professional to complete the projects.  You might be limited on time, so hiring a professional seems ideal. So why should you…

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Admin

Gundlach On GDP, Oil, Bonds And More

It seems not all money managers out there have the warm-n-fuzzies for equities in 2015.  Especially considering the almost two year sell-off in commodities, finally joined by crude oil in dramatic, face ripping action.  In fact, one feels that the rise in interest rates in 2015 will do what is not expected; flatten the yield curve.

If the curve flattens gradually, most traders said it probably means investors believe the Fed will keep future inflation in check with gradual rate hikes. Bond traders hate inflation because it erodes the value of their fixed-income investment.

But if the curve-flattening trend speeds up?…

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Admin

Dangers Of Underestimating Deflation

Deflation = Low wages + negative interest rates

Deflation will be the dominating theme of 2015. Deflation occurs when prices of production factors (wages and interest rates) fall to the extent of limiting labour and capital from drawing higher prices. The culprit to these conditions is typically an excess supply of labour and capital to the extent that wages and interest rates weaken substantially until they draw sufficient demand to the point of stabilising their price.

But as demand for labour and capital fails to fill the supply of workers and available liquidity, the spiral of excess supply takes over wages and interest rates remain weak, and even negative. Deflation hurts borrowers relative to lenders. Countries whose central banks combat deflation, or conduct reflationary policies, should see their…

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Admin

Enjoy The Holiday Season

U.S. markets will close early tomorrow, Christmas Eve and remain closed on Christmas day.  Regular trading will return on Friday although who's really going to be around?  Not me.  Even though it's a holiday week though, I will still be charting in the background (mental health time) so check back when you find spare moments and checkout our "Charts" section for new setups. See you back here full time next Monday.

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Admin

The Big Market Squeeze

Volatility definitely increased leading up to this weeks quadruple witching and the S&P (400, 500 and 600) index re-balancing taking place tonight after the close.  Selling the last two weeks resulted in oversold conditions in the near term charts and massive short covering at the market as every fund and investment bank bought new shares (as they rebalanced ahead of the indexes), resulted in two astounding days of back to back two percent gains.  Bulls were partying in the streets but is it warranted?   Has anything truly changed? 

Yes, the Fed has reassured…

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Admin

After hearing one analyst commenting that lower prices at the pump would translate into increased oil demand, I had to open up the commentary notepad.  (click on charts to enlarge)

The first thing that immediately came to mind was the rising costs elsewhere in Americans pocketbooks that would take up the slack of lower gasoline prices, such as rent.  Social Security recipients for example will see an increase of 1.9% in 2015 however this is no where on pace with the increases in average rents which continue to climb.  In fact, how about a rent increase of 6.9% in November according to Trulia?  Ouch!

Indeed incomes, when adjusted for inflation, have definitely not kept pace since 2000. (chart…

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