Month: November 2013

Favorite Sketch Tuesday – Dead Kevin “Clogged Pipes” and Chappelle Show “Howard Dean – B-yahh!”


Dead Kevin’s latest sketch is one of my favorites by them, and we re-visit Chappelle Show, home to all of the best sketches ever made.

 

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My Latest Stock Picks


Following up yesterday’s article on where I think the market is headed. Here are my current positions, followed by positions changed as of late.

Current Holdings:

– YHOO (@18.94/share on 11/28/2012) – Jumped on the Marissa Meyer bandwagon early – Price as of Friday 11/15 – $35.47

– HTGC (@10.58/share on 11/28/2012) – which has an +8% dividend yield – Price as of Friday 11/15 – $16.85

– TCPC (@14.95/share on 11/28/2012) – which has an +8% dividend yield – Price as of Friday 11/15 – $17.30

– DDD (@48.45/share on 8/23/2013) – Price as of Friday 11/15 – $80.17 – more on this one late

– JCI (@37.30/share on 5/17/2013) – Price as of Friday 11/15 – $49.45

– V (@182.00/share on 5/17/2013) – Price as of Friday 11/15 – $202.00

– GDXJ (@33.75/share on 6/27/2013) – Price as of Friday 11/15 – $35.98

– DTYS (@31.30/share on 5/17/2013) – Price as of Friday 11/15 – $29.41

Moves over the last few months

– Sold YUM on 10/10 for a 9% loss, and since then it is back up to my original purchase price of $74

– Sold LUV for a loss on 9/17, but up 28% since then (DOH!, but put that to work in DDD, which as been far more lucrative)

– Sold FB at $25 in June, now it’s at $50. Good news is I took the proceeds from that sale and put it in FB options, which I made 10x my money on. So this sounds like a poor sale, but if you’re bullish short-term, not long-term, buy options

– Sold ADT at $41.47, slight loss in June, and has hovered around $43 as of late

Biggest Industry I’m Bullish on 3D Printers. Here’s why:

Wall Street doesn’t fully understand this industry. And when they don’t understand and see the opportunity, that’s a huge opportunity for you as an investor. I think the message on Wall Street was “3D printers will never be able to replace manufacturers.” This is a true statement for the foreseeable future. But the opportunities that the industry is capitalizing on aren’t the mass production industries. They are things like organ regeneration using stem cells or easily replacing household items (focusing on having a 3D printer in every home, as evidenced by Windows 8.1 3D Builder). I think this is a long-term buy, with DDD, SSYS, and there are few health care focused companies as well. Health care is a focus of DDD, but not their only focus.

 

 

 

Where’s the Stock Market Headed…..Quarterly Update #2


Let me start by saying, this is NOT a cyclical bull market, this is definitely a secular bull, which means there is plenty of life left in this market. I believe the reason you’ve seen such a large number of negative pundits from the financial media declare this a top is because this would be the “typical” end of a cyclical bull market. (Small rant: The fear that the financial media drives into the public is disgusting. Listen to price and volume, that will be your confirmation and real voice of reasoning. The returns that main street has missed out on is shameful and if you’re a financial advisor, I hope you haven’t let your clients get caught up in the noise).

Not to toot my own horn, but I’ve been extremely bullish on this rally since the end of 2011, after the minor correction. If I would have been in the Wall Street Consensus year-end price target, I would have been the most bullish, but also the most correct. BOOM! (Note, my past performance is not an indicator of future performance.)

All back-padding aside, we’ve past my original target at the beginning of 2013 of a year-end finish for the S&P of 1,700. Then in August I raised my target to 1,775 due to some near-term consolidation with the belief that the “Santa Claus” rally (November to December, with historically good returns, on average a 3-4% return) would be intact this year following the near-term consolidation/pullback.

As of Friday, the S&P closed 1,798, which is over my year-end target, but is also close to the “evil” psychological number of 1,800. During this rally, we’ve seen anywhere between a 4-10% pullback before each new “round” number was closed above. (Courtesy of Ukarlewitz). I largely believe this will be the case this time around too, even with the market getting overheated the last few weeks (it’s on a seven week winning streak). Although, the scary thing to think about is fund managers are chasing returns to better performance and tend to make one last attempt to meet or beat the market. This could cause this further “parabolic” movement of the market and could lead to a near-term irrational exuberance, only to translate to a poor start to next year.

So, I’m sticking with my year-end target of 1,775. I really believe that we will finish above that, which is always a good thing.

To wrap things up, I’ll list out my reasons/risks for my 1,775 price target at the end of 2013, and my 2,000 price target for year-end 2014. Bottom line, don’t be afraid to put your money to work! Tomorrow I’m sharing my latest positions

Reasons for 1,775 at year-end 2013 (neutral to bearish view, look elsewhere to get same or better returns for the risk being taken):

– Investors are close to being at a historic high of bullishness (approaching 70%, 70% and above has been associated with tops like in 2000 and 2008)

– Also, investors cash on the sidelines is low. So what money are they going to put to work to continue this rally through the year end?

– The put/call ratio is at a typical short-term sell-off level

– The “evil” psychological round number 1,800 and the market’s ability to close above it

Risks  (reasons to finish above 1,775)

– Santa Claus rally historically strong, indicating a possible end of 1820-1830, assuming a 4% increase from 1,760 at the beginning of November

– Breadth is confirming (with 8 of 9 sectors reaching new highs recently). Indicating this is a strong broad-based rally

Reasons to finish at 2,000 for year-end 2014

– Secular bull market with strong, confirming breadth. Remember the last secular bull ran from 1982 to 2000 and consists of multiple cyclical bull markets, each lasting roughly two years. This one started in 2009….

– Favorable rates with QE-infinity. Also a hike in rates usually signals a strong economy, with the stock market usually peaking anywhere between 8 and 41 months after the first rate hike

Risks

– The second year of an election year is usually the weakest of the four year cycle

– On a valuation basis, most measures are at the top-end of their range, which usually indicates a top (TTM PE, margins contracting slightly with no organic growth in sight, trailing and forward PE, 10-year PE (PACE), Tobin’s Q, price to sales……..to name a few 🙂  )

Favorite Sketch Tuesday – Dead Kevin “Pulling Out” and “Spin the Bottle”


Eye-grabbing title, but amazing premise. We’ve all been in a showdown backing out at the same time as someone else. No matter what happens, someone is always an asshole.

Next Dead Kevin appeared on another sketch group’s channel. They played spin the bottle with terrible liquors, including an extremely spicy vodka. I bet you can guess what happens in this one.

iOS is Becoming Android, and What Your Choice of Operating System Says About You


Let me start this post off by saying I’m a fan of Apple products (although most are overpriced, in my opinion). I own a few Apple products (iPod, iTouch) and have sat down with all of them (iPhone, iPad, Macbook, etc.). One thing I’ve noticed is that with iOS, it always seemed like a “chore” to get to where I wanted, instead of just being right in front of my face.

Enter iOS 7 and a majority of my friends are “wowed” by what they are able to do: power control, multi-tasking, lockscreen, and Apple Music. Unfortunately as an Android user, I’ve had these features for well over a year. There are many arguments for this late adoption, I think it was Apple vetting all of the risks that other OS’s took and cherry-picked all of the fan favorite features. They definitely picked my favorites.

Before I piss off too many people talking iOS down, many of the counter arguments surround the Apple’s App Store. How from a consumer’s standpoint, it has every app first, and from a developer’s standpoint, they develop for iOS before Android (easier to develop on and, by and large friendlier  way to get affordable exposure).

This lead me to look at the top 40 apps on each store, the App Store and the Play Store. What I found was fairly interesting and ultimately leads to more questions. App stores rank their “top 40” differently, but assuming the algorithms are similar, we can draw some good conclusions. I’ve shared the spreadsheet in a Google Doc here. Let’s start with the observations:

– Only 14 of the 40 overlap (FB, Twitter, Snapchat, Instagram, to name a few)

– 5 of the top 10 in the App Store (iOS) were games

– Games take up the most in each store: 15 iOS and 12 Android

– The average rank of the 15 in iOS is 19th, while Android average rank is 22nd

– The second highest for each is Social: 8 iOS and 11 Android

– The average rank of the 8 in iOS is 20th, while Android’s average rank is 15th

– After that for iOS, it’s a mixed bag, there is no clear favorite. Music, Utility, and Shopping all come in third with 3 each

– But for Android, the third highest is Utility apps with 9!

My thoughts:

– iOS has the market for college, post-grad, and 30-somethings (evidenced by strong Games and the diversity of its top 40)

– Android has the market of high school and post 40’s (High school because of the cheaper phones Android comes on, so they are easily replaceable) (post 40’s evidenced by the high Utility section, ie, the Flashlight is ranked in the top 10!)

Shares your comments below, and take the poll!