Seeking Alpha

Camari Ellis'  Instablog

Camari Ellis is an assistant portfolio manager who mainly uses macro economic, technical and fundamental analysis to find great investment opportunities for his clients. Camari holds a BA degree in finance from Temple University and resides in the Greater Philadelphia area.
My business:
StoneRidge Investments Partners
My blog:
A Coin Toss
  • First Solar's Ultraviolet Earnings
    Solar Energy has been one of the most notable of all the Green/Clean technologies. Solar energy is not a new phenomenon; it can be traced back before the birth of Christ, but did not start getting serious notice until the multiple The Energy Crisis' of the 1970’s crippled America. The oil embargo of 1973 was the first incident, with OPEC’s “October War” when they decided to stop shipping oil to countries that supported Israel. Followed by the “Energy Crisis of 1979”, which saw Iran’s oil infrastructure impeded due to a coup d’état that installed Ayatollah Khomeini as the new ruler.
                      
    In response to this massive disruption, the US government began instituting legislative policies to reduce the country’s dependence on foreign energy sources. …reminds me of a T. Boone Pickens commercial. Thus the “Crude Oil Windfall Act of 1980” was enacted, for oil companies that earned extra profit due to the increase in oil prices. The act established an excise tax, which would tax the difference between the current market price and a 1979 base price, as well as energy tax credits. Businesses and homeowners who utilized alternative energy sources, such as solar, wind, and geothermal,  received this energy credit. Unfortunately, these tax credits were phased out in 1986, as oil prices subsided.
    More »
    Tags: FSLR, TAN, Alternative Energy
    Oct 29 12:05 am | Link | Comment!
  • Thurday Earnings Preview

    Thursday delivers another installment in the 3Q earning season saga. This episode will showcase earnings from many market heavyweights, such as AT&T (T), Phillip Morris (PM), Merck (MRK), Occidental Petroleum (OXY), McDonalds (MCD), American Express (AXP), Amazon (AMZN), and United Parcel Services (UPS). This small group will command the attention of the entire street, since they are some of the most heavily traded stock in the world.

     

    The street is looking at top line growth and bottom line increases through cost cutting measures.

    More »
    Tags: T, MCD, AMZN, UPS, Earnings
    Oct 22 01:18 am | Link | Comment!
  • King of the Mountain-DJIA Closes above 10k
    Since the March 6 lows the entire market has been praying for the return of the Dow Jones Industrial Average (DJIA or Dow) to the 10,000 level, which it has not seen since October 3, 2008. The 10,000 level for the DJIA has always held a special place in the heart of the investment community. It first closed above this landmark level on March 29, 1999. This historic day was so celebrated that they actually had a party on the trading floor on the NYSE. Ironically this bust through took place during the infamous tech boom of the 1990’s, while today’s break out is occurring during a time of economic uncertainty & turmoil. The Dow closed today’s session to the tune of 10015, leaving the market jubilant and overjoyed, as I write this Asian markets are rally off of this news, at last glance the Nikkei is up 1.77% for the day. Bifurcation comes to mind when thinking about overall investor sentiment, some feel that the economy has come to far to fast, without showing any signs of independence from US government intervention, and feel the market is positioned for a correction/crash vs. the camp that feel that the market is an early signal of economic recovery and is a leading indicator and feel that we are currently in a bull market. The true is both sides have valid concerns, but at the end of the day the only thing that matters, is if your investments are profitable or not!
     
     
     
    The Optimistic Side
     
    A large majority of investment industry analyst are forecasting a strong 3Q earnings season, already evidenced by JP Morgan’s and Intel’s beating analyst expectations hands down by 62% and 23%, respectively.------ This is just the beginning!---- Major Dow and S&P companies are reporting  before months end, Apple, General Electric, Wells Fargo, Morgan Stanley, American Express, MetLife, Caterpillar, Boeing and ExxonMobil and if the pattern of beating analyst continues you could see the markets move even higher.
     
    Tom Lee, Chief US Equity Strategist for JP Morgan stated on Oct 2nd, that there were many things favoring a positive month for October:
     
    v     3 Qtr earnings will  beat Top & Bottom lines estimates, setting stage for the market to move higher
     
    v     Found that 44% of the crashes, since 1960 have occurred in October and severely bad Octobers in the 1930’s and the 1970’s have led to souring investor sentiment.
    JP Morgan’s Research Found:
         
    Ø      Crashes are unpredictable
     
    Ø      Reviewed the last 18 crashes and found a combination of three common factors that preceded these crashes
     
    ·        Sharp 3 month rise in the VIX of 50%-100%
    ·        Widening of high grade bond spreads over a 3 month period
    ·        Strengthening Dollar
     
    v     Less likely to see tax loss harvesting, since January to September period has been positive for asset manager and about 15% of mutual funds have an October year end
     
    Tom goes on to say that, according to their research in order to have a crash you have to have at least  one of the conditions involving the VIX, widening Bond spreads or a stronger dollar to have to significantly increase the probability of an a crash in October.
     
    JP Morgan’s research coupled with the Dow breaking the 10000 level, presents a clear case for a sustainable rally.
     
     
     
    The Pessimistic Side
    Economists are keeping a keen eye on the unemployment rate which is at 9.8% with projections of double digit rates on the horizon. Initial Jobless claims (4 wk first time unemployment claims) loom around the 500,000 rate and continuous claims married to a 6 million plus figure incessantly. These rates are catastrophic for the US economy because approximately 70% of GDP (Gross Domestic Product) is generated by consumer spending. Not to mention the stalled housing market and a financial industry that still have not quantified the total liabilities outstanding for residential and commercial mortgages. None of this is new!  
     
    In Mark Zandi’s, of MoodyEconomy.com commentary, “U.S. Macro Outlook: Training Wheels Still Needed”, Zandi states “An economic recovery is underway, but it remains tentative and fragile.” Zandi also states “The Great Recession is over, but the current economic recovery will be a difficult slog through much of the next year. Like many others Zandi is predicting delayed recovery in 2011 or 2012ish, which could translate into a selloff in the overall markets, if these type predictions prove to be worse then anticipated.
     
      
     
    The Technical Side
    Below I have attached some charts of the DJIA. In the chart I have drawn Fibonacci retracement lines. In the chart it is clear the Dow usually breaks through a level, tests that level and moves higher. Also volume has increased drastically over the last few trading sessions. Interestingly, the first leg of DJIA recovery occurred between March 9th and July 10th, returning approximately 24%. The second leg up took place from July 10 to Oct 14th, producing an estimated 23%. Ironically, both legs took place between a 3 and 4 month time frame, and return between 23% and 24%. Is it possible for this rally to continue with the same measure of momentum? Who Knows?? A similar upward movement would put the DJIA above 12000….    
     
     
     Fibonacci Levels
     

    Finally, the media has been constantly reporting that there is plenty of cash on the sidelines and it is waiting for the right time to step back into the market. Clearly the DJIA close above 10,000 is a positive signal that the coast is clear or at least clearer for now. YTD the DJIA has returned 14.12% and over the last 12 months starting from October 2008 until now the Dow has returned 16.76% (assuming dividend reinvestment). With the Dow being in positive territory from last October, you will have even more media personalities and sales man(financial advisors) shouting how great the market is, and convincing retail investors to make the switch from cash to stocks, and take the Great Leap, since the “Great Recession” has ended ,  during this last quarter of the year.
     

    DJIA w/ Volume
     
     
     


    Disclosure: No Positions
    Tags: DIA, Dow
    Oct 15 04:02 am | Link | Comment!
  • A Different Perspective on Bond ETFs
    There was a wonder article titled “Bond ETFs are Popluar But Pricing Is a Problem”, written by Eleanor Laise, in the Wall Street Journal today. The article highlighted many of the short comings of bond ETFs, particularly the huge difference between the share price and the underlying Net Asset Value, but despite this phenomenon, investors are still demanding these investment vehicles.
     
    “Share prices of many bond ETFs are drifting far from the value of their underlying holdings, which can create big trading cost for investors. Some of the funds are straying from their benchmarks, meaning investors aren’t getting the returns they expected.
    More »
    Tags: BND, JNK, LQD, TIP, SHY, AGG, TLT, ETFs
    Oct 06 10:45 pm | Link | Comment!
  • The $2.8 Billion UnderWater African Forest


    Green Shoots continue to emerge from the African continent, once again disproving many skeptics that feel that African geopolitical issues are to convoluted for entrepreneurial development. Today plans were announced to start an underwater logging project on Lake Volta, in Ghana, estimated to be valued over $2.8 billion. Two Canada companies are partnering on this lucrative venture, Clark Sustainable Resource Development(CSRD) and Triton logging. CSRD has partnered with the Ghanaian government for cite control and Triton logging is an expert in underwater logging expeditions. The project consists of 350,000 hectares (864,500 US Acres) of area. Volta Lake was originally created as a result of the construction of the Akosombo Dam in 1964.



    The project is estimated to generate $100 million in Foreign Direct Investment(FDI) over the next four years in Ghana. Clearing of the underwater lumber will reap boundless benefits for the local economy. According, to an employment study produced by CSRD, this development is expected to employ approximately 400 people and have a employment multiplier effect of 3.5, thus creating upwards of 1400 jobs in the region and creating broader tax base to support infrastructure projects for the country. Regional prospects of entrepreneurial development are more favorable once the underwater forest is cleared and lake transportation established, which has been quite hazardous since the dam's construction, due to shallow waters and unseen deeply rooted trees within the lake.


    Once operational, Volta Lake has a potential to produce $100 million in FDI annually. Projects like these and many others in the incubation stage continue to prove “The Investment Case For Africa”(See the Dark Continent Shining Star” Sept. 2008). This region is overlooked far to often for investments, due to much of the political strife abound on the continent. Many companies listed on the Ghana Stock Exchange(GSE), which is down -39.86 YTD will be able to participate in this project directly or indirectly. Also Van Eck's Market Vectors division has an Exchanged Traded Fund(ETF) AFK, that covers African continent and has exposure to Ghana which has returned 35.6% YTD. Ghana is just one of many countries in Africa and Frontier Markets alike that present a unique opportunity for ground floor investments.

    More »
    Tags: AFK, Emerging Markets, Commodities
    Sep 29 11:56 pm | Link | Comment!
  • Japan's Miracles

    The World’s second largest economy has been rocked by the global recession, Japan once revered as a global economic titan has been unable to ignite its economy’s flame, to break the cycle of a deflating economy. This Island nation has a reputation for producing miraculous economic growth during in the 1960s, 1970s, and 1980s. Falling prey to a series of market dislocations, such as the real estate market bubble, in the 1990s, the tech crash in 2000 and recently the global recession that is currently is place. Deflation has over come this great nation, with current GDP at -8.8% and CPI (YoY) at -1.1%. This net exporter, also has to balance a delicate relationship involving Japan’s currency, the yen, has with other major currencies, especially the US dollar.  

      
     
    More »
    Tags: JPP, YCS, DXJ, PJO, EWJ, EZJ, International Developed Markets/Currency
    Jul 21 08:02 am | Link | Comment!
Full index of posts »
Latest Followers
Posts by Ticker
AAPL, AFK, AGG, AMZN, BND, DIA, DXJ, EWJ, EZJ, FSLR, ITB, JNK, JPP, LQD, MCD, PJO, SHY, SPX, T, TAN, TIP, TLT, UPS, XHB, YCS
Posts by Themes
Alternative Energy, Commodities, Dow, Earnings, Emerging Markets, Entertainment Retailer, ETFs, International Developed Markets/Currency, Real Estate
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.