Seeking Alpha

Marc Courtenay's  Instablog

Marc Courtenay
Send Message
Marc is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor at the internationally acclaimed web site www.ChecktheMarkets.com. He holds an MS in Clinical Psychology from California Polytechnic State University, and is a former senior vice-president... More
My company:
Advanced Investor Technologies LLC
My blog:
ChecktheMarkets.com
View Marc Courtenay's Instablogs on:
  • Investing in The Michael Jackson Story

    Most of us saw at least parts of the Michael Jackson funeral. I met Michael on two occassions and I personally felt he was a misunderstood and very sincere human being.

    The last time I spoke with him was in 1992 when he was 33 years old. It was like talking to an innocent child who just happened to be a few inches taller than myself. Yet he was a "big thinker" and devoted professional, and those who worked for him said he was a "perfectionist". No wonder his work and talents are so enduring.

    Since his death we understand more completely what a " franchise" his body of work was and what timeless commercial value was embedded in every song, every video and every symbol (especially that silver-white sparkling glove).

    Marc Lichtenfield, a Senior Analyst at The Smart Profits Report (SmartProfitsReport.com) wrote a clever but thought-provoking article which I have permission to quote from here and there are lessons for all investors:

    Four Companies At The Center Of The Michael Jackson Story

    ~ eBay
    (Nasdaq: EBAY): As soon as tickets to the memorial were released, they predictably went on sale on eBay for thousands of dollars.

    A search for "Michael Jackson" on eBay yielded 47,611 results, including an autographed photo for $3,200, a sealed version of "Thriller" for $1,200 and even this $1 million bill with Jackson's face on it. And people say the Federal Reserve has recklessly printed money!

     


    ~ Amazon.com (Nasdaq: AMZN) - If it's for sale, chances are Amazon sells it. You can download the mp3 of "Thriller" for $1.29, purchase a "Michael Jackson Superstar of the 80s" outfit doll for about $1,000, or the Michael Jackson $1 million novelty notes above for $0.99 each (or 100 for $30). At that price, you can't afford to be without your fake Michael Jackson currency.

    ~ Sony (NYSE: SNE): Michael Jackson's record label was Epic Records, part of Sony Entertainment. He's sold half a million albums since his death, compared with 10,000 the week before he died. You can be sure Sony will try to capitalize on his newfound popularity with some greatest hits albums in the near future.

    ~ Time Warner (NYSE: TWX): With the vast amount of media coverage that the story is attracting, detailing every morsel of Jackson's life and death, one outlet is emerging from the hungry pack.

    Already a well-established site for entertainment news, celebrity gossip and video, the death of the greatest entertainer since Elvis has launched TMZ.com into the stratosphere. Mainstream outlets like CNN and Fox credited TMZ with breaking the story of Jackson's death.

    TMZ is a joint venture between two TWX divisions, AOL and Telepictures Productions. Anyone looking for this type of news now has to consider TMZ the go-to website. And over the past three months, page views have jumped more than 26%, in large part due to the spike in Michael Jackson traffic just in the past few weeks.

    In short, while it might be difficult to play this news directly, companies with exposure to Michael Jackson's popularity could see a bump in revenue.

    Hoping your longs go up and your shorts go down. Marc Lichtenfeld

    We thank Marc for reminding us that unexpected events and the lives of great celebrities usually lead to some meaningful investment opportunities for those prescient enough to spot them.

    Since Michael Jackson's death, the three big precious metals, platinum, gold and silver, have all taken an overdue correction. I assume there is no correlation between this correction and Michael's passing.

    But since Michael did love "glitz and sparkle" and since I personally discovered that he also loved quality items and polished, shiny objects, there will always in my mind be a connection with him and precious metals.

    Since we all realize that the time to buy the 3 Big Precious Metals is after a correction, we all ought to be getting ready to buy when they become oversold.

    My friends at Casey Research today reported that, "After little change on Tuesday, traders handed the precious metals a pummeling yesterday, with all three suffering significant setbacks and gold plumbing a two-month low.

    "There really wasn’t anything to prop up the market, with equities spinning their wheels, the dollar reaping the benefits of a flight from currencies perceived as riskier, and crude prolonging its losing streak.

    "Continuing to weigh on gold and silver was this week’s announcement from India that it is doubling import taxes on both metals as the government seeks to use its citizens’ affinity for them to raise money. The move could certainly put a lid on India's gold imports and pressure gold prices.

    "Gold’s recent weakness has “gold bulls on the defensive,” said Ralph Preston, a Heritage West Futures commodity analyst in San Diego. “I have a very specific trade recommendation to short the gold market on today’s break of $915 support.”

    "Preston is advising clients to short gold “at $912 with an $8 stop-loss at $920,” with “a price objective of $870, risk $8, for a potential profit of $42.”

    "Looking at yesterday’s trend numbers, Dan Norcini, writing on jsmineset.com, said that “gold broke down technically in today’s session once it pushed past the $920 level and downside momentum carried it even lower to violate the $915 level. With today’s move it is now solidly below all of the major moving averages with the short term trend firmly in favor of the bears.

    "The broad consolidation pattern of the last 5 months shows support near the $890 level followed by more substantial support near $880. Those will have to hold to prevent a rout of the longs that could conceivably take it down as low as $865. It will take very strong buying from overseas to offset the speculative selling that has now arisen. It did seem to uncover some buying of a value nature just above $900 in today’s session.”

    Those holding ETFs like GDX, GLD and SLV are now sweating it out, but those who don't or who want to add to their positions, an golden opportunity appears to be unfolding, and it "...don't matter if you're black or white...or "bad" for that matter.

    So it appears that we investors might be getting ready to experience our own version of "Thriller" if we are patient enough and prepared enough to "buy low, sell high, and then buy low once again".

    The world will miss Michael Jackson, but his legacy and the financial benefits of his talents will live on for generations to come. No matter what you thought of Michael, you'd be a fool not to admire his talent, work ethic and precious uniqueness.

     Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please remember investments can fall as well as rise. And they will! - Advanced Investor Technologies LLC accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this content.

    Disclosure: Of the stocks and ETFs mention, the only ones I'm long is GLD and SLV.

    Jul 09 2:34 PM | Link | 1 Comment
  • Another Way to Profit from a Dollar Decline

    One of the great controversies raging right now is which direction the dollar is going from here. There seems to be strong arguments in the camp that thinks the dollar will soon plunge and equally as strong opinions about the dollar not only hanging tough but actually increasing in value over the months ahead.

    This article would be most valuable for those who believe that the dollar is about to decline and they wonder about investments that would benefit.

    Of course the usual "suspects" or "beneficiaries" if the dollar tumbled from here are commodities like gold, silver, copper, oil and eventually natural gas.

    That is why I believe everyone should own some GLD, SLV, FCX, PCU, USO, DBO, and UNG. When to buy these and at what price levels is up to each of us depending on our outlook and circumstances.

    My friend and colleague Lou Basenese, the Senior Analyst at The Oxford Club (OxfordClub.com) gave me permission to share with you an article he wrote lately which he titled "A Second Way to Prosper From a Dollar Decline".

    I do want to say that personally I don't like investing in tobacco stocks and I personally don't endorse those type of investments. That being said, here's what Lou wrote and I hope you find it as useful as I did. It certainly is a positive example of the level of work that those of us who are Oxford Club members benefit from on a regular basis.

    "Last week, I suggested that you prepare for a U.S. dollar decline by scooping up shares of Philip Morris International, Inc. (NYSE: PM) because 100% of its sales come from overseas.

    "Well, you should also consider buying Diageo (NYSE: DEO) — the world's largest spirit maker — for similar reasons...

    "Headquartered in London, roughly 70% of the company's sales come from outside the United States. So any dollar dip will increase the value of our ADRs.

    "Moreover, management concedes that positive currency tailwinds in the other countries where Diageo sells spirits will help the company easily grow earnings by double digits this year.

    "Sound dollar hedge? Double-digit earnings growth? Those two factors alone justify an investment. But it gets better. Diageo also sports top-notch fundamentals...

    "As the world's biggest spirits company, it operates in over 180 countries, which provides notable benefits in terms of economies of scale and an unparalleled distribution network.

    "It's also the world's best spirits company, with eight of the world's top 20 brands. This leadership gives Diageo the upper hand in the hottest growth sector: emerging markets. Consumers, with newfound disposable income, flock to the aspirational qualities of its brands.

    "Look no further than the most recent results for proof. Over the last six months, emerging markets in Africa and Latin America grew by 11%, outstripping all other areas.

    "Another plus? Diageo spins off gobs of cash — $2.5 billion in the last year alone. Yet, management still sees room for improvement. In fact, it's rolling out another restructuring effort to increase the efficiency of the business.

    "At the end of the day, we benefit from the strong cash flows because it allows management to buy back shares in the open market and increase the dividend.

    "Speaking of the dividend, Diageo yields a respectable 3%, almost on par with 10-year Treasuries. As I've expressed concern over Treasuries before, I'd argue investing in Diageo for the yield alone is a safer investment.

    "The fact that shares trade on the cheap — at 12.5 times earnings or roughly 30% below its historic P/E ratio — only sweetens the opportunity. On top of a solid and safe dividend, we get the potential for strong capital appreciation.

    "If you're still not ready to raise your glass and purchase shares, consider this: The latest academic studies prove investing in so-called vice stocks like Diageo pay — consistently.

    "In two separate studies out of Yale and Princeton, researchers proved vice stocks outperformed virtuous ones in 35 out of 37 years.

    "One study attributes the outperformance to the lack of attention pension funds and other investors pay to sin stocks in order "to maintain an aura of respectability." The other believes it's because companies in sin industries benefit from high barriers to entry, thanks to strict regulations and taxation.

    "Ultimately, explanations matter little. It's the investment results we care about. And so far, so good.

    "We're up 18% since our entry about three months ago. Shares still have a long way to go before reaching anything close to fair value, so keep buying.

    "If you're wondering why I prefer hedging against a dollar decline with stocks (instead of simply buying an ETF like the PowerShares DB US Dollar Index Bearish Fund), it's simple.

    "Buying companies with significant international exposure allows us to profit in two ways — from the currency hedge and the success of the underlying business.

    "Or, more plainly, it increases the number of ways we can profit, which is never a bad thing.

    "Incidentally, Warren Buffett also "prefer[s] this method of acquiring non-dollar exposure." I've found following his lead is never a bad thing, either. "

    Our "Thanks" to Lou and The Oxford Club for sharing this valuable insight with all of us in the Seeking Alpha Community.

    Disclosure: Of the ETFs and stocks mentioned, I'm only long GLD, SLV and UNG.

    Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please remember investments can fall as well as rise. And they will! - Advanced Investor Technologies LLC accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this content.

    Jun 29 3:49 PM | Link | Comment!
  • Investment Ideas and Timing

     

    "Timing is everything" goes the old adage. But all investors and traders know that timing an entry point or exit point of an investment idea and strategy is like predicting the weather without sophisticated radar equipment. In fact it might be more difficult.

    Why? Not only because the fundamentals these days are enormously complicated, whether we are speaking of the stock markets, the bond markets, or the commodities markets, but because there are so many factors beyond our control and knowledge.

    The "usual suspects" come to mind. The exchange specialists, the large instutional traders, the big financial firms with their trading desks, and now we are all competing with the Federal Reserve and the U.S. Treasury, who appear to be able to buy and sell anything they decide to whenever they want. Isn't that your perception as well?

    So none of us can effectively "time the markets". We can look back with 20/20 hindsight and see where the markets have been. The main good that does is it tells us when something is historically cheap or expensive.

    I heard a pundit on CNBC telling people yesterday (Thursday) that "...the stock market is overpriced, and when the S&P hits 1,000 you should short the market." I assume he would use investment vehicles like the "shorting ETFs" such as SH, DOG, SBB, and SKF. How can he say that so dogmatically? When to take the risk of shorting a market is a very difficult, risky call that isn't appropriate for everyone.

    That is why many investment analysts write that "the trend is your friend" and that we shouldn't commit ourselves to an investment until that trend is "established". Would someone please tell me the short answer to how you do that?

    The technicians like to use the Moving Averages and all those supposedly reliable sophisticated "indicators", but are they truly reliable enough to have a better than 50-50 chance of being right (and conversely of being wrong!). How many of them hit close to the stock market bottom during the March 8-9 time period?

    Then there are commodities like precious metals and energy. Investors seem to like supply and production reports to gauge when to buy or sell.I was reading Gary Gordon's interesting article (see the link below). Some of the comments were surprising to me.

    seekingalpha.com/artic...

     
    The idea that some report on the current supply of oil or natural gas would be a reliable enough piece of information to base a decision on whether to buy or sell an ETF like USO or UNG hasn't been accurately proved to me over the past 12 months.
     
    Remember when they were telling us that the reason oil went to nearly $150 is because the demand was so badly outstripping the supply and we were in the throes of "Peak Oil"?
     
    A few months later oil had "magically" dropped by 70%. Later we found out there had been a great deal of speculating and manipulation that drove the price way up and way down. 
     
    So if you had the foresight, courage and conviction to buy when everyone was selling oil (especially true in the period between Dec.2008 and the end of February 2009) you'd be taking some profits off the table right now with huge gains to celebrate.

    When it comes to the supply issues with natural gas, I'm a bit astounded at the apparent naivete of many of the comments at the end of Gary's article. Yes, recent storage data does speak of current oversupply, but that could change over the summer and perhaps that's what some traders are anticipating.

    Like so many commodity markets, manipulation, computer-triggered programs and other collaboration by the big traders (the ones who can move a lot of money in and out of the market through exchanges like the COMEX in a NY minute) still play a predominant role (in my opinion). Come on people, it isn't an "all-or-nothing&a... opportunity.

    No one knows what the "big players" are going to do next, and, we've all seen those so-called "reliable supply numbers" change all of a sudden or be altered by the approach of the first hurricane in the Gulf of Mexico.

    I remember when oil was below $40 a barrel and all the supply reports were screaming "excess" and "over-supply" and the talking-heads were saying that we had too much oil for the next 12 to 18 months.

    Sure enough, when the major market movers decided to move the oil price up, all of a sudden it started heading north and recently hit $73 a barrel, all on the perceived "green shoots" hope and hype. Give me a break!

    If you think you can find the bottom in the natural gas market (or any investment market for that matter), all I can say is "good luck"!  I'd rather accumulate when a commodity,stock, bond, ETF, or mutual fund is historically cheap then pretend I can trust supply figures and my own sense of timing.

    As my regular readers probably know, this very topic is why I wrote a free report titled "Five Secrets for Creating Wealth in a Financial Crisis" which you can receive by going to the home page of my web site.

    Sadly, many of the best secrets, including how to be a "Black Swan Investor" are not widely talked about and that is why I included that as one of the "Secrets" in my report.

    Warren Buffett isn't the only one who has learned the hard way that we "should be greedy when everyone is fearful, and fearful when everyone is greedy". But why don't the Uber-Investors remind us that "it doesn't have to be all-or-nothing".

    We can be systematic sellers when "everyone is greedy" and systematic buyers when "everyone is fearful" and prices are plunging. That's why I wrote the recent article on the strategy of accumulating and being, like Jeremy Grantham puts it, "market neutral" during volatile times like these.

    Greed, fear, and gullibility often get in the way of the retail investor. That is why many "older and more experienced" investment writers appreciate the disciplined approach which often includes dollar-cost-averaging on the buy-side and trailing stop-losses on the sell-side.

    Investment ideas, supply reports, analysts opinions and "hot tips" can often burn holes in our pockets and our pocket-books. Keeping our emotions out of our investment decisions (which helps us with the "wisdom of doing nothing" most of the time) and having disciplines that we believe in can be our best approach.

    "If you don't stand for something you'll fall for anything" is a saying that is as true as ever when it comes to being an investor or a speculator. This summer is a good time for each of us to do a personal "reality-check" on that subject and to examine our approach with more care (not fear) then ever before. I wish you good fortune and outstanding success!
     

    Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please remember investments can fall as well as rise. And they will! - Advanced Investor Technologies LLC accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this content.
     
    Disclosure:  Of the funds I've mentioned in this article, UNG is the only one I'm currently long in.

    Jun 12 3:31 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
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.