Surfing Wall Street to Retire: January 2016

Thursday, January 28, 2016

How Low Can We Go!

I wish I had more money to through at the market today. I did buy 50 of AAPL however.

How does decelerating China, increasing dollar, dropping oil, and Fed Rate Hikes have to do with earnings? If you can answer that to each of your stocks you can see where the next 3 months may go.

Friday, January 15, 2016

What Makes this Bear Market Systematic?

Oil:
Oil typically pumps stocks up as does a tax rate decrease.    In today's market however this does not seem the case.    Saudi continued dumping and producers slower than slow drop in production have created a downward pressure that shows no signs of relief except for maybe small market bounces here and there.   This could get really concerning if the Saudi plan works and 1/3 of US producers go under in the next year or so.   Banks do hold a lot of the bad debt coming from these bankruptcies.

FED Rate Hikes:
Suggested that there would be another 4 hikes this year.    FAT CHANCE given the current market.   So one should probably expect no rate hike in the next 6 months.   This will not like get systemic, but will lower P/E ratios over time on rate hike at a time.

China:
Any good news from China will be great! We cant have any more ghost city being built any more however.   Also, given their market has been artificially pumped up for over a year and at the same time GDP has been cut drastically there seems to be plenty of downside available.

Long Term Market Equity - MacroThemes

1. How will the 46'-64' born baby boomers effect cash flows into and out of the market. Given the Dot Bomb and Housing Bubbles which help to define horrible stock market decade, more than likely there will be a movement towards perceived quality like bonds and out of riskier assets like stocks. Therefore, lower P/Es should be expected in the coming years for Stock Market investors. The Baby Boomers will be retiring at age 67 in 2013-2031. Hospital stocks and pharma stock should do well during the retirement.
2. The Information Age will become more and more pronounced by those defining what the information age is becoming. Stock exemplifying these would be IBM, MSFT, AAPL, GOOG, FB, and CRM. Salesforce.com and cloud computing seem to be where things will be headed in the next couple of years. Then likely there will be another correction in directions.
3. Emerging Markets - Additionally, all this free information available over the internet will allow emerging markets to compete without so much of an educational deficits. Look to EEM and emerging market stocks to continue to accelerate progress and prosperity. The China Age - China becomes worlds largest economy in 2032 -City Weekly January 6 2011. This theme has weakened significantly with the Chinese focus towards services and technology.
4. The Energy Age? Not defined yet, but the need will be originating from a peak in fossil fuel production coupled by increased demand originating from the largest part of the Globe. The 3rd World continues to industrialize at an accelerated pace. Small start-ups in Algae, Wind, Gas, and Fracking will be in demand as oil prices keep rising.
5. Resource Scarcity - Human activity will continue to pressure resources especially food, oil, and gold.
6. US Debtor Nation Status - Interest on the national debt should be pushing $1Trillion per year in 2020. City Weekly January 6 2011
7. Obesity kills more Americans than smoking City Weekly January 6 2011. Healthy and honest food options will become more and more in demand as the younger generations expand purchasing power.
8. Nature Deficit Disorder - Kids start getting disconnected from the natural environment at an accelerated rate. City Weekly January 6 2011
9. Emerging Markets - Rise in Food Costs driven by desire for higher protein diets. - DE, POT, ASCO re: Cramer 4-18-11
10. Emerging Markets - Power Management - Electicity will continue to follow the movement - ETN, HON, EMR
11. US - Healthy Food - Industrial Farming, Factory Farms, Hormons, Pesticides, Fertilizers, Chilpotle, Hanes Celestial Seasons, Whole Foods re: Cramer 4-18-11
12. Gold - Inflation Hedge and Especially GLD, SLV, GG, NG, BRK re: Cramer 4-18-11
13. Homeland Security - Even though defense is being cut around the world by developing nations, terrorism is a force that will stick around just like Middle East Terrorism Groups - NICE, Fortnet, American Science and Engineering re: Cramer 4-18-11 Trump should also expand insecurity through isolationism and uncertainty of campaign promises.
14. Currency Going Electronic - Consider credit card companies as a value growth proposition. DFS, MA, V, and AXP will all benefit from this trend.
15. Paperless Office - Though this was a theme in the 90s I believe the paperless office is happening now at an accelerated rate. Companies that can benefit might be ADBE which holds the keys to PDF productions. Other software and cloud plays will also benefit. There is a lack of a pure play paperless office company.

Demographic Influences of Investing

Baby Boomers Born 1946-1964 or Ages 64-46 (2010)
*Boomers might be focus on stable income investment like bonds and high yield large cap stocks.
*Catch ups will likely focus on international stocks

Baby Busters Born 1965-1977 or Ages 45-33 (2010)
*Focused even more so on 401k's and stock investment
*Not a large enough group to have great market inflow influence
*Possible Baby Boomer Inheritors

Echo Boomers Born 1978-1994 or Ages 32-16 (2010)
*AKA Millenials
*Too young to be buying homes, mostly a renter generations
*Probably more concerned with college debt and the like

Signs that a stock is a sell:

1. Accounting Irregularies are discovered - Extreme Concern.

2. The competition is starting to take market share away.

3. Caution! - when all the analysts say your stock is an "Aggressive Buy" be very careful and ready to sell.

4. PEG Ratio > 1.0

5. Short Ratio > .40 Indicator of Bearish Sentiment, but beware of a shorts squeeze.

6. P/B Price to Book = Stock Price/Total Assets-Intangible Assets and Liabilities > 1.0 = Overvalued Indicator

8. Technicals: Head and Should profile is bearish just as inverted Head and Shoulder Profile is bullish.

9. Remember Buy Low and Sell High!!!!!! You never have a profit until it is logged.

Let me know if you have others good rules to sell?

Signs That A stock May Be A BUY:

1. You believe the stock has long term earnings growth.

2. You believe the stock has a moat (Warren Buffett term). This is a form of monopoly or sustainable market control. Examples of a modern monopoly or duopoly (KO, PEP, HD, LOWS, CAT, DE, etc).

Insider Buying Tipoffs:

3.The stock is on the 52 week high list and there is significant and real insider buying.

4. The stock is heavily shorted and has significant and real insider buying.

5. The PEG Ratio is between 0-1. This is a tipoff the stock may be undervalued when considering price in relation to growth.

Let me know your favorite indicators to buy??

Thursday, January 28, 2016

How Low Can We Go!

Friday, January 15, 2016

What Makes this Bear Market Systematic?

Monday, January 4, 2016

What Are My Potential Buys and Sells

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