Sunday, December 07, 2014

Disney, McDonalds, Market Thoughts and Sci Fi

  • image Still long stocks heading into year end. While it seems like many are talking about high valuations and the aging bull market, many are also talking about upbeat economic news such as Friday’s jobs report.  Jobs do tend to pick up later in an economic recovery, but that isn’t the same as ringing the bell at the top tick of the market.
  • Assessing the fallout from the fall in oil pricesEnergy earnings expectations have continued to crater. On Monday, the fourth-quarter estimate was for a year-over-year decline of 11.2 percent for S&P energy stocks. By Friday, that had dropped to 14.7 percent decline.  I think a lot of people are trying to pick the bottom in oil stocks.  Be careful!
  • Anyway, while I am long stocks I was hoping for a pullback to get more aggressive in high flying names.  That hasn’t happened.
  • Which Was a Better Sci-Fi Film: Big Hero 6 or Interstellar?  Hmm…  (I haven’t watched either film).  But it’s hard not to like Disney stock - $DIS.  I do own that one.  Heck, they just raised their dividend by 34%! "Disney delivered the highest results in its history in Fiscal 2014, reflecting the extraordinary quality of our creative content and the unparalleled strength of our brands," said CEO Robert Iger.
  • I do like Sci-Fi films.  I saw “Man of Steel” over the weekend on cable, and thought the combination of superhero and spaceships was cool. Now, I did go in with low expectations, and that helps, too.
  • The Dow and SP500 made new highs last week, by the way.  The bull market marches forward.  Do you see a reason to sell before year end?  I don’t.  Heck, the Fed speaks on the 17th and at some point folks will worry about rising interest rates.  But I don’t think the Fed will ruin Christmas.
  • $MCD – McDonalds trying a “Create Your Taste” program, where customers can order and customize their burgers from tablet-like kiosks instead of ordering from the counter.  Hmm… Well, facing competition and declining sales, the company was bound to try something.  (Long $MCD).
  • I saw that some firm updated their price target on Facebook $FB to $105.  Heck, I’m still targeting $1000!  (It will just take a bit longer).

Thursday, December 04, 2014

$TSLA vs Cheap Gas

$TSLA - I think Tesla Motors may have a tough time selling electric cars when gas prices are falling. It was tough enough with the steep price tag, as the difference in price between a TSLA and a conventional car will buy a lot of gasoline!

I finally did see one Tesla on a Sacramento freeway during commute time. Other than that, I only see them on TV.  I did also see one inside the local Red Hawk Casino as part of a "win this car" promotional drawing.  They are nice looking cars.

But I'm not sure most folks are ready for all-electric cars.  Financially, they're not feasible for folks who want a car that takes them to and from work during the weekdays, but will also take them on a 6-hour drive on the weekend.  Battery technology has improved, but it would be nice if the charge lasted longer and there were rapid-charging facilities along the highways.

Someday, maybe.

But then that's when Toyota comes out with their electric car - for much less!

Just thinking out loud…

Will Cheaper Oil Burn Tesla?

Anthony Mirhaydari

Fiscal Times - Fiscal Times - ‎Wednesday‎, ‎December‎ ‎3‎, ‎2014

Some things are simply immutable. It doesn't matter how much we wish things were different. Or how h...

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More Thoughts on Stocks and Stuff Randomosity

  • The US is #2 economy! The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is no longer the leading economic power on the planet.
  • I'm still long the market and believe that there will be a continued uptrend into the end of the year.  I believe the rally will be concentrated in the winners, and that the losers will continue to face tax loss selling.  That being said, I was hoping for a pullback this week to provide a chance to get long some winners but they keep running!
  • Did you see that The Biggest Loser's Damien Gurganious died at 38 after suffering from a sudden onset of a rare autoimmune disorder that caused bleeding in his brain.
  • Jim Cramer blesses Kinder Morgan Inc. - $KMI. The energy sector has taken a hit.  I wonder if once tax loss selling eases up in some of the names - and that's soon, it could be time to buy a few names.  (Disclosure - long $XOM).
  • Job report tomorrow.  Don't sleep in!  You know, this is the recurring monthly event where the government makes the employment rate look better by decreasing the labor participation rate.
  • I'm not sure what to think about the white cop - black victim news in recent headlines. It seems that if someone commits a crime and then resists the police, there is an increase risk of something unfortunate happening. Anyway, more protests going on as I type.
  • Today is my 2 year anniversary since my $AAPL iPhone 5 purchase.  And I didn't go buy the 6 plus!  (Thought about it!)  Ah, tomorrow's another day.
  • So the US deficit ballooned past $18 trillion.  But, they say there's nothing to worry about because as a percentage of GDP, the deficit is shrinking.  Ya.  Uh-huh.  Fuzzy math still alive and well - brought to you buy the brain trust at the East Anglia CRU.

Wednesday, December 03, 2014

‎Oil Prices

$USO - Folks are talking about the increase in oil supply due to fracking and tar sands oil in North America, and the lack of demand due to slower economies across the globe.  Another reason is the strengthening dollar.  Oil is denominated in US dollars, and as the dollar gets stronger then each dollar can buy more commodities, such as oil.

The dollar gets stronger as other world central banks print money at the same time the US Federal Reserve ends QE.

Filling up at the gas pump is about to get even cheaper

By Claudia Assis, MarketWatch

MarketWatch - MarketWatch - Wed Dec 3 21:40:14 UTC 2014

SAN FRANCISCO (MarketWatch) — Fill'er up! The good times at the gas pump will continue to roll. ...

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Thoughts on ‎McDonald's - $MCD

$MCD - The problem I see with McDonald's is that there is a lot of competition in the same strip malls and shopping centers.  And the competition sells better food at a similar price!

That being said, my local Mickey D's is always busy.  I also find myself going there more often because of the "supersized" menu issue the linked-to article claims is a problem.  I like salads and I do stop there for a coffee now and then, too.

I do think the company can continue to expand into new markets and neighborhoods, while maintaining existing customers.  But it seems as if it will be difficult to expand the visits-per-week from existing customers.

Disclosure: long $MCD

McDonald's Menu Problem: It's Supersized

Julie Jargon

The Wall Street Journal. - The Wall Street Journal. - ‎Wednesday‎, ‎December‎ ‎3‎, ‎2014

McDonald's Corp.'s menu may have grown too big to succeed. The fast-food giant has added oatmeal,...

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Monday, December 01, 2014

OMG - Stocks Have Down Day

  • OMG! Stocks had a down day! PANIC!  
  • Oil prices dropping puts money in consumers wallets.  Consumers spend more at malls.  Inflation coming?  
  • So I am a big believer of a little pullback and then a big end of year uptrend - especially in the stock leaders.  
  • Stock pullback could be due to tax loss selling of some losers or a news headline, but money will want to rally in the leaders into the year end. IMHO.  
  • The Miami Dolphins are usually fantastic at blowing must win games against lousy teams.  
  • Minimum wages increasing, which will end up pushing up other wages. Many wages are based in formulas and salary surveys of other wages. Raising the floor pushes everything else up.  Inflation coming?
  • I didn't go to the malls or do any online shopping. None!  Might take a vacation for Christmas and avoid the gift giving nonsense! 
  • Spoiler alert: I was sad Beth died last night in The Walking Dead.  Just saying.   
  • The Jets have over 200 yards rushing IN THE FIRST HALF!
  • One reason for the drop in oil and other commodities is the strong dollar.  Oil is denominated in dollars.  
  • Hey, the strong dollar means that goods produced overseas should cost less. Including imported oil. Hey, that should be good for the trade imbalance!  That could put downward pressure on inflation but we tend to spend all we have, so probably not.  

Sunday, November 23, 2014

IBD Top 50 Stocks Strategy – 11/23/2014

Here is the latest on the IBD 50 stocks investing strategies vs. $SPY

image  Since the last update near the October lows, the market has raced ahead of the IBD 50 stocks.   For the week, there were 25 stocks up and 25 stocks down for the IBD 50.

VRX led the IBD 50, up 8.32% for the week.  The biggest loser for the IBD 50 was VIPS, down 7.32%.

The IBD 50 portfolios total return since 2/8/2014 are underperforming the SP500.  None of the strategies are beating the simple SP500 at this point. I would have expected to see the leading stocks lead, but there has been more volatility in some of the top stocks as measured by IBD.

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.  Dividends are excluded from total returns.

Trading costs $805.95.

image The IBD monthly strategy is also underperforming  the SP500.

All of the portfolios have a positive return for the month, but have a positive total return. 

The IBD 50 has 28 gainers and 22 losers in November.

AFSI is the top performer for the IBD 50, returning 13.91%.  The weakest stock in the IBD 50 so far is SLXP, losing 28.47%.

Trading costs $169.15

I will assume a $9.95 trading cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif.  Note that Motif limits the size of portfolios to 30 stocks).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered.  The value for SPY is based on buying 2/8/2014.

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.