Market Currents
Dear growth investors: Earnings growth is getting hard to find and is increasingly concentrated...
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Saturday, January 5, 8:45 AM ETDear growth investors: Earnings growth is getting hard to find and is increasingly concentrated to fewer big firms (last year: financials). If Fed help is less effective, where to find growth in 2013? Sectors that might see better sales-boosting chances: consumer discretionary (on rising consumer optimism), and those that get their revenues from China and emerging economies, like GM and industrials, as well as those based in emerging markets.
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That's how I read it.
Consumer discretionary? Yes as long as the gov't transfer payments keep on coming and there continues to be complete denial about the retirement endgame among the majority of Americans.
GM?? You're kidding right? This channel stuffing monster has forced boatloads of inventory down their dealers throats. I am going to see if I can relocate a chart I came across last month that shows the amount of inventory sitting in dealer lots that they cannot sell.
Hint: The chart looks like a moonshot straight into space.
GM: has only been able to "appear" healthy for that reason.
I agree with AG.
Financials worry me a bit. They rely on the financial ponzi for their life.
Agriculture
Energy Infrastructure
Reits
Physical Silver and Gold (nothing crazy)
Utilities (Renewable Companies)
That's part of my list.
Without financials, there is no credit expansion and, ergo, no impetus to expanded growth. It's now become in vogue (post-2008) to bash financials, but we're seeing what the effects of lackluster participation in lending does to overall economic growth.
Current monetary policy, coupled with the constant harassment of banks, has suprressed their desire to make loans, so the vast sums created by the Fed keep getting recycled back to the Government. Of course, we have an Administration that loves it that way, no matter what else they may profess.
The good news for community bank shareholders is that this environment is pressuring some small banks to realize that they need to merge with bigger banks, often at fairly big premiums.
Still in the financials riding gains from 4th Q '12 - BAC,C,GS
5 dogs of the Dow for income - GE,INTC,T,MRK,MCD
Tech - NVDA,FFIV,QCOM
Looking for a possible entry here for Gold at these levels.
Well, of course, there are other things on the list, too, but various European stocks still appear highly attractive on a valuation basis, even after 2012 gains.
I'm a novice regarding foreign equities ,Only exposure I've had is with NVS (Novartis) , any suggestions or do u play that using an ETF.
I have invested in both individual names and ETF's. Here are some European issues that I have in my own current portfolio:
SAN
SAN-B
BBVA
RBS
RBS-Q
FTE
TEF
REPYY
TOT
RDS.A
VE
EWP
EWI
FTE is starting to look interesting at $11/share or under--even with the French gov grabbing 30% of the dividend in withholding (not to mention the recently enacted 3% dividend tax that France imposes on companies that have the nerve to pay dividends).
Larger purchases should see small but steady growth.
I don't see a huge year IMO for corporate profits.
Energy MLP's, REITs, BCD's - take the yields and keep re-investing is the best move in 2013. I've been shifting some REIT money into BCD's as I view many reits fully valued.
One investment I held and added to in 2012 is MNHVF - Norwegian salmon company - if it drops back to .75 its a solid buy IMO. And no its not a penny stock - its a Norwegian company that issues shares when they expand and as a result has a high share count. They have set up a dividend policy and I expect them to pay a dividend this year after not paying one last year.
And my best pick in energy MLP's currently is ARP. Strong drilling program in addition to NG production - and I expect them to make one more decent sized purchase. If you believe NG can find the $5 dollar level this is a cash machine looking 3-4 years out.
Arguably, it could be called the "Obama tax cut" as it was passed as part of the 2010 tax cut extensions. Which also points out the fact that it's only been around 2 years, a lot less than the Bush tax cuts.
Oh yeah, in response to the other part of your comment I too like MLPs, but am not too overly crazy about them. I like them because I expect growth to overall be subdued so I like the idea of distributions and dividends a lot in this environment. I like utilities more than I like energy producers, I see NG flatish and oil down, and think utilities will benefit, esp. in that they trailed in 2012.
I agree it shouldn't have been passed unless we were willing to also modify the whole program.
NG demand should slowly increase as industry demand continues to increase. And with well costs coming down (and becoming more effective in terms of recovery) it sets up MLP producers and transporters for a lot of growth over the next 5 years.
I stayed out of discretionary and missed its nice move in 2012 but I think the move was based on the mild winter. I still don't like discretionary, but this time it's a regular winter. Take higher energy costs on top of the $83 and then it really seems like discretionary might not have anywhere to go. But I don't see energy prices themselves higher.
I like midstream mostly, but not for growth. I see demand unable to outpace supply. That said, I missed out on a big part of (PSX) move this year, I was a believer and wanted to grab it close to the IPO price ~$33 but picked it up much later. I'm still flat to bullish on it but I think rail will slow down in the later part of the year or early '14 and most of the move may have been made.
I also think it's a good idea to watch how low cost NG plays out: fertilizer/ag benefit, and whatever happens vis a vis LNG.
http://on.wsj.com/TTZwYU
The truth is our Government is broke and they know it. Obama claims that this recent aversion of not going over this mini-fiscal cliff (part 1, stay tuned for part 2 and 3) that he just helped the middle class. He continually says his concern is for protecting the middle class, this is simply a lie and not the case. The only thing Obama is concerned about is his own pocket, so his wife and family can continue to take vacations on the taxpayers money.
Most of the people out there (not anyone here) don't even understand what happened because nobody has spelled it out for them.
The real travesty in this cavalcade of lies from the White House is that we no longer have a main stream media who will expose the lies to the average Joe on the street.
Rather, we have boot licking lap dogs as a MSM who are so in love with our president that they refuse to do anything that might shed light on the truth.
I continue to hold out hope that eventually some Black Swan event will force the MSM to do their bloody jobs and report truthfully what is occurring to this country.
It may be just hopefull thinking however.
The MSM has for decades been sympathetic to socialist and communist causes, so there's not the slightest chance they'd hold Obama to task, or anybodyelse espousing his liberal agenda.
As investors, we just have to live with reality.
Also Domestic energy producers. Along with recovery there is increased need for oil and gas. Like MHR, NFX and PTEN.
Energy storage and alternative energy could have a breakout year once we get past all the backwash from Solyndra, A134, etc. When the market starts driving rather than ill-advised government intervention the clear winners will emerge.
Favorite here is a small battery company AXPW. Also ZBB and XIDE.
http://bit.ly/viu9MH
Kind regards,
The Valuentum Team
Been in and out of SAN for some scalping, but I think it's a great long term hold. I would throw it in my 401k and forget about it but would lose the foreign tax credit, so that's too bad as it's perfect to just load up on and forget about for 5 years.
I think the big cap gains in REITs are done, so it's now of a more high yielding assignment.
Energy: MLPs, PSX, STO (Europe)
Insurance: PRE
Everything else seems to be fairly valued right now but occasionally value shows up.
1) The absolute hottest brands on the planet. I maintain that the best plays on this idea are KORS and APP.
2) Oil juniors with triple-digit projected growth. My top pick of these is SN, with 377% projected growth for 2013 and no debt.
3) Manufactured EPS growth, due to a large buyback program. My favorites here are PNRA and DPS, but there are lots of others.