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  • Market And Meaning – The Week Ahead 9/1/14 2 comments
    Aug 29, 2014 11:21 AM | about stocks: GLUU, GTAT, INVN, AMZN, EBAY, GOOG, GOOGL, AAPL, TSLA, SPY, DIA, QQQ, IWM, GLD, SLV

    Market and Meaning is my weekly update on market movements and their meaning for you as an investor. Market and Meaning is normally reserved for premium subscribers but is currently being offered for free to all our readers. As always, everything here represents my personal views and not official recommendations, please do your own due diligence and come to your own conclusions.

    If you are new to Market and Meaning or investing in general, this newsletter may seem a bit overwhelming. No need to worry, I have you covered on that front. First thing to do, skip down to the section, "What does all of this mean for the investor?" Read this section, along with the section above it that discusses what moves I've recently made in stocks. Everything below these sections details any moves or changes in my thoughts on gold, silver, and Bitcoin. As always, questions are enthusiastically welcomed in the comments section.

    To follow us more closely at Investor in the Family, be sure to subscribe by entering your info in the field to the right of this article and follow us on Twitter, Facebook, Scutify, and even Pinterest.

    DUE TO THE HOLIDAY WEEKEND, I'M RELEASING AN EARLY ADDITION OF "MARKET AND MEANING." IT WILL BE LIGHTER THAN NORMAL AND ALL PRICES WILL BE LISTED AS OF WRITING.

    The S&P 500 broke 2000 for the first time ever this week. As with all benchmarks like this, they technically mean nothing, but can offer psychological boosts to fearful investors. The index held its own above the hallmark number before falling behind again on Thursday. The bullish view is that this could encourage fearful investors, the bearish view is that S&P 500 has reached this point on fumes. I think it's an exciting benchmark, but should not affect our investing.

    The Eurozone continues to give reasons to worry. Italy has technically fallen back into recession, French GDP is flat, and Germany has seen an unexpected fall in output. Despite he promise of Mario Draghi, the president of the European Central Bank, to do "whatever it takes" to support the Euro, the Eurozone has failed to dig out of the economic pit they have called home for years now. The threat of deflation threatens the continent. Europe needs courageous leadership to make tough choices, a public that will support radical reform, and a looser monetary policy to buy time as these deeper, structural changes take place. I expect the third variable to likely be implemented, but have little reason for optimism regarding the first two, and most important.

    The threat of Islamic terrorists in Iraq and Syria continues as the U.S. debates involvement. The U.S. has said that airstrikes will continue, even beyond Iraq, but nothing as of yet has happened. We know where the enemy is, what they want to do, and have the ability to cripple them before even more terrible things happen. Time will tell whether we act decisively or perform political dances out of fear of hurting the feelings of a ruthless dictator in Syria and a Russian imperialist to the north by the name of Putin.

    Just as talk of peace appeared to be winning the day in Ukraine, the tension and fighting begins to escalate. Ukraine is officially claiming a Russian invasion as Russian troops and armor have been confirmed coming into Ukraine. My take all along has been that Putin had no intention of being content with taking just Crimea, but would continue his imperialist dreams of a restored USSR. Every time there is talk of negotiations and peace, I hope that I am wrong, but so far things continue to get worse.

    The West continues to crank down stricter sanctions and Russia continues to become more aggressive in Ukraine. I am eager to see how things hold up once winter sets in and Europe once again becomes very dependent on Russia for natural gas to heat the freezing continent.

    Israel and the terrorist group Hamas have reached yet another ceasefire. The stop in fighting is scheduled to last a month while a longer lasting agreement is sought. Israel plans to slowly lift the economic blockade of Gaza in exchange for a demilitarized Hamas. These will not be easy variables to negotiate.

    Japan has plans to once again raise the national sales tax rate. Consumer spending has fallen 3% since the last tax increase in April. The next planned raise would lift the sales tax rate to 10%. Japan is struggling to find ways to free itself of crippling national debt as they simultaneously enact aggressive monetary policy that puts them deeper into debt.

    Tesla (TSLA) has reached new highs on the backs of skeptics. The stock was near $270 at the time of writing and Pacific Crest's Brad Erickson has a price target of $316. Oh, to have bought in March of 2013 at $35...

    Burger King (BKW) is in talks to buy Tim Hortons (THI), the popular Canadian coffee and food chain. Burger King has been accused of tax inversion since the new headquarters will be in Canada where corporate taxes are considerably lower. The two companies would make the 3rd largest fast-food chain in the world and both would remain distinct brands.

    Amazon (AMZN) announced the purchase of Twitch, the "YouTube" for video games, for $970 million. Twitch has over 50 million users and over 4,000 content providers. The average user is claimed to watch 95 minutes of content per day.

    Cloud marketing software developer HubSpot has filed for a $100 million IPO using the symbol HUBS. The company focuses on mid-market businesses and had 11,600 customers and 1,900 marketing agency partners at the end of June.

    Apple (AAPL) has officially announced an event on 9/9/14 that is expected to be the unveiling of the new iPhone 6 and the long awaited iWatch. The company is also preparing to create an even larger iPad measuring in at 12.9" (current versions are 9.7" and 7.9"). The device would be intended to replace a traditional laptop for many users.

    Mobile-payment company Square is looking to raise more money at a $6 billion valuation, up from an earlier estimate of $5 billion. Square is in heavy competition with PayPal (EBAY) and Amazon for market share in the lucrative mobile-payment space.

    It's official, Google (GOOG, GOOGL) has been working to develop delivery drones for two years now. The Google X initiative is known as Project Wing. The hope is to deliver products via drone within minutes. You'll remember that Amazon announced a similar program last year.

    After possibly the most catastrophic year in the history of aviation companies, Malaysia Airlines (MLYAF) is cutting 30% of its workforce. That translates to 6,000 jobs. A wealth fund has offered to buy out the company but no action has been officially taken.

    As for my personal portfolio, no moves this week. I've been on pause as I am already very long stocks right now and want to be cautious during the "YELLOW ALERT." As mentioned last week, I recently revealed a new position in InvenSense (INVN), a new pick from PTT Forensics. I encourage you to read the full article, New Position Announcement: InvenSense. I expect solid gains on INVN over the next year, perhaps even a double in a strong bullish case.

    My solar positions have grown to make up over 10% of my portfolio all-together, mostly made up of some promising picks from PTT Solar.

    Glu Mobile (GLUU) continues to be my largest position and my thesis of a $10 price target remains unchanged. I also released a few update articles on GLUU and GT Advanced Technologies (GTAT): Portfolio Updates: Glu Mobile and GT Advanced Technologies and New Product for GT Advanced Technologies.

    What does all of this mean for the investor? Global tensions continue toward apparent paths of escalation in Ukraine, Iraq, and Syria. In the meantime, Europe teeters on the edge of a double-dip recession as U.S. stock markets reach new all-time highs. We live in a crazy world. In the midst of all the bad news, companies like Google, Apple, and Amazon continue to strive for higher levels of excellence in attempts to make life better for people everywhere. If only the same could be said of our political leaders.

    No moves this week, the "YELLOW ALERT" remains in affect. Apart from some major global event, the next big negative catalyst will likely be the official end of QE by the Fed in October. That could bring the dip we've been warning of, but it's not something I'm letting myself get too worried about.

    Have a great Labor Day weekend, have fun and stay safe.

    Current Market Outlook: YELLOW ALERT

    "When will this 'YELLOW ALERT' go away?!" This is what I imagine all of you saying at this point. Rest assured, I feel the same way. The only certain thing that will buck this alert is a correction of 10% or more. The lack of a correction of this size for a long time is a big reason for the concern many investors have. Apart from that happening, we're taking things one-step at a time.

    The Current Market Outlook is like my traffic light for investing. Green means all systems go, yellow means to be cautious, and red means we believe there are major reasons to be concerned.

    The Dow (DIA) is up for the week, sitting at around 17,048.

    The S&P 500 (SPY) is up for the week, sitting just below 2000.

    The Nasdaq (QQQ) is up for the week, sitting at around 4562.

    The Russell 2000 (IWM) is up for the week, sitting at around 1166.

    Gold (GLD) is at $1289.60/oz and Silver (SLV) at $19.53/oz. for the week. Both are roughly even on the week.

    My opinion on gold and silver holds firm. As I have said for some time now, I are still looking for one more big drop. Gold below $1200 is a good range for me, but I am hopeful for even lower toward the $1000 range. I thought these lows could come by now, but that appears to not be the case. I am now looking at this larger drop, potentially below $900 or more, sometime in the next six to eight months. At the same time, I am preparing for the possibility this drop may never fully materialize.

    That said, if I did not own any physical gold or silver, I would consider the current prices to be a very good entry point for long-term investment. One of my favorite gold sources recently said that he expects the metals to at least double from current levels in coming years calling this a "generational buying opportunity." It is important to reiterate that I am talking about owning physical gold and silver coins and bars, not stocks or ETFs. My favorite coins are U.S minted Silver and Gold Eagles, they are universally recognized and offer tax protection. For information on how to buy gold and silver, please see "How To Buy Gold And Silver."

    Bitcoin is sitting at around $508.49. The crypto-currency has stabilized a bit after it's recent dive below $480. This all comes after an extended period of stabilization. Overstock (OSTK) plans on accepting Bitcoin for international sales beginning in September. This marks the largest retailer to adopt the currency since January. Expedia (EXPE) and Dell have already adopted Bitcoin. I am currently holding my small Bitcoin position and have plans to buy or sell any more at the moment.

    I continue to urge caution as we still think Bitcoin is a lottery ticket that could grow 10-100x or more and could even more easily go to $0. Caution and small amounts of money are strongly advised. For information on how to buy Bitcoin as well as my views on investing in it, please see my article, "How To Buy Bitcoin."

    Disclosure: I am long GLUU, GTAT, and INVN and own gold and silver bars and coins as well as some Bitcoin.

    Disclaimer: This article is for information purposes only. There are risks involved with investing including loss of principal. All readers must be responsible for and make their own investing decisions. Each reader bears the full responsibility for any decision to buy, sell, or hold any securities, precious metals, real estate, or other asset class as well as any decision regarding the starting or running of a business. Nothing in this newsletter is to be considered a formal recommendation. Investor in the Family LLC makes no explicit or implicit guarantee with respect to performance or the outcome of any investment or projections made. There is no guarantee that the goals of the strategies discussed by Investor in the Family LLC will be met. Please see full Disclaimer.

    Disclosure: The author is long GLUU, GTAT, INVN.

    Additional disclosure: I own physical gold and silver coins and bars as well as some Bitcoin.

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Comments (2)
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  • wheaton1
    , contributor
    Comments (3) | Send Message
     
    i bought some GLUU over 5 and hope i see it rising soon
    also went out on the limb and bought than expected of
    FB and i am so glad i did
    2 Sep, 11:31 AM Reply Like
  • Family Investor
    , contributor
    Comments (475) | Send Message
     
    Author’s reply » I believe that both should prove to be great investments over time!
    3 Sep, 08:32 AM Reply Like
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