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Dear growth investors: Earnings growth is getting hard to find and is increasingly concentrated...

Dear 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.
Comments (31)
  • Archman Investor
    , contributor
    Comments (2319) | Send Message
     
    Read the WSJ with a grain of salt.
    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.
    5 Jan 2013, 09:14 AM Reply Like
  • tcbracing
    , contributor
    Comments (252) | Send Message
     
    Might want to check the latest data. GM has sold their 106 day vehicle supply at the end of November, down to 76 days the end of December. With over 75% of their models soon to refresh and the truck plants going down to re-tool for the next generation in 2013, it is no wonder inventories are high. It is how it works in the auto industry...
    5 Jan 2013, 12:51 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    For me..its ag...financials and insurers..long term.
    5 Jan 2013, 10:12 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2319) | Send Message
     
    Computer:
    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.
    5 Jan 2013, 10:21 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    Arch:

     

    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.
    5 Jan 2013, 12:12 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2100) | Send Message
     
    I agree with Tack's opinion here in general with perhaps a slight difference: I have sympathy for small banks but not the TBTF banks, as they have an implicit financial backstop that the small banks do not have. If one reads a number of recent earnings reports from (small) community banks, there's a common theme. The executives bemoan the fact that they can't make decent money on lending because of suppressed interest rates--in spite of giving bank customers little more than a free toaster for their deposits. The executives also explain that recent fee-capping regulations and increased expenses for financial reporting are hitting their bottom lines in a big way.

     

    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.
    5 Jan 2013, 05:57 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    As far as renewable utilities, any thoughts on NRG Energy?
    5 Jan 2013, 10:42 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4079) | Send Message
     
    Agree with Ag.- POT,UAN, Energy Infrastructure- EPD ,Reits -DLR.

     

    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.
    5 Jan 2013, 10:42 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    One word: Europe

     

    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.
    5 Jan 2013, 12:15 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4079) | Send Message
     
    Tack,

     

    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.
    5 Jan 2013, 01:29 PM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    F&G:

     

    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
    5 Jan 2013, 01:37 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4079) | Send Message
     
    Tack, Thanks for the info!
    5 Jan 2013, 01:38 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2100) | Send Message
     
    Last summer was a great time to buy EWP and EWI. The 10-year P/E for these markets was so low that it would be hard not to make money long-term if the banking systems in Italy and Spain don't collapse. On the other hand, both indices are heavily weighted to financials--which rightfully scares away many conservative investors.

     

    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).
    5 Jan 2013, 06:17 PM Reply Like
  • vallies
    , contributor
    Comments (352) | Send Message
     
    Look at Forbes comments regarding this,' Large inflows for European stocks detected'. Not this past Oct, but the previous year when no one wanted any exposure to Euro stocks, I started to look at these stocks. Some of the stocks I looked at were FEZ, EWG, and TEF. FEZ was about 27. TEF was at 20. and I do believe I almost pulled the trigger on EWG when it was at 17. Thinking TEF was already down to 20. from 27, that's the one I purchased. Well that was a mistake. I dumped it at 19.' fearing the pay out div might come under pressure. Fez, or one might more that is not mentioned above is VGK, could be on your list. Fez, when you check, notice I stated when not if, core holdings consists SAN, SAP ect. I remember when SAP was around 57. I was very interested in SAP because of its movement in the cloud play along with Euro. SAP is now much higher. Maybe the lesson here is a basket. EWG might have some run up into Merkel's election and then sell into it, I am not sure. Keep watching Spain's 10yr. You might want to consider a world wide basket, DEW, or an American company that has great world wide growth and an incredible CEO,HOT. HOT is expanding it's hotel base world wide nicely, please read the comments from HOT. I myself own a closed ended fund CAF. I purchased CAF around 22., and more around 24. I believe, watch language coming from earnings reports if they state believe way too much, that the Shanghai has the possibility for great upside. Check the 10yr chart on this. Since CAF's inception, the Shanghai has been falling. So when the turn happens with the Shanghai CAF, along with the FXI will turn up with it. DEW has Chinese stocks included in it also. DO NOT BUY levered products or unless your really good future contract ETNs. I was looking at BAL for a cotton play, no thanks, I am just not that good. My suggestion is to do home work, and always have some cash to the sidelines. Do not trade earnings, you can make a grand one day and lose two the next. March is coming up and I am sure those knuckleheads will screw up the debt ceiling. I also like some of the regional banks for the long term. KEY, PNC, FITB. CINF and HBAN, of which I own. I will be trying to establish KEY on a sell off. I also look who is doing secured note/ bond offerings. I own MGM and F for that. They will be a 4 to 7 year holds. up down or sideways. Thank You for your time and good luck.
    6 Jan 2013, 10:56 AM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
     
    Smaller consumer purchases will take a hit due to payroll taxes reverting back to previous level.

     

    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.
    5 Jan 2013, 03:11 PM Reply Like
  • kmi
    , contributor
    Comments (3967) | Send Message
     
    I have no idea why the payroll tax takes up so much mental energy in the media and here on SA; it really isn't much money for the average american. It was never a big deal to begin with, and probably should never have been passed in the first place.

     

    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.
    5 Jan 2013, 04:05 PM Reply Like
  • davidbdc
    , contributor
    Comments (3139) | Send Message
     
    If you earn 50K pre-tax - that 2% is $1K. I would say that 80% of Americans were spending that $1K. So if you own consumer staple or consumer discretionary then it will dampen growth.

     

    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.
    5 Jan 2013, 04:34 PM Reply Like
  • kmi
    , contributor
    Comments (3967) | Send Message
     
    It breaks down to $83/mnth, it never seemed like a meaningful number to me.

     

    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.
    5 Jan 2013, 05:04 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2426) | Send Message
     
    Watch those ag names, potash prices are well off the highs.
    5 Jan 2013, 07:28 PM Reply Like
  • kmi
    , contributor
    Comments (3967) | Send Message
     
    I think that's seasonality, I could be wrong.
    6 Jan 2013, 07:43 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2426) | Send Message
     
    Good article in the WSJ about potash a few days ago:

     

    http://on.wsj.com/TTZwYU
    6 Jan 2013, 10:38 AM Reply Like
  • vallies
    , contributor
    Comments (352) | Send Message
     
    Read comments coming MOS concerning India's subsidized urea, and China holding down pot ash prices.
    6 Jan 2013, 11:14 AM Reply Like
  • Rickthegeek
    , contributor
    Comments (118) | Send Message
     
    The extra 2% tax hurts everybody, no matter their income. I guess our government thinks everything is fine so they allowed the Bush payroll tax cut to expire, which is a mistake.

     

    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.
    6 Jan 2013, 11:52 AM Reply Like
  • wyostocks
    , contributor
    Comments (7410) | Send Message
     
    rick............

     

    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.
    6 Jan 2013, 12:14 PM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    wyo:

     

    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.
    6 Jan 2013, 01:57 PM Reply Like
  • alsobirdman
    , contributor
    Comments (355) | Send Message
     
    Should be a big year for financials, as long as you ignore all of the negativity and pay attention to what is really happening, which is recovery. AIG is my favorite and like BNCN and looking into other regional banks where housing is improving.

     

    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.
    5 Jan 2013, 03:46 PM Reply Like
  • vallies
    , contributor
    Comments (352) | Send Message
     
    Keep watching imports from China. There has been a number of electrical batteries coming in. China was after A123, a battery company in Ohio that went bankrupt, systems. Yes the best in batteries. Wind got a shot in the arm. GE has developed, for wind/ a material to combat rare earth prices. Jeff say hello to the Pres for me.Yes batteries, I own F for that. ETN is nice for both of the above mentionrd, plus you get Sandy and a solid growing div for that. AXPW, ZBB and XIDE added to watch list. Thank you for reminding me. O'l Eric Schmidt will have his way. E.S., will you say hello to the Pres also. Warren you to, IBM.
    6 Jan 2013, 11:33 AM Reply Like
  • Valuentum
    , contributor
    Comments (1201) | Send Message
     
    Are there really any investors out there that still bucket stocks into growth and value? Here's what the Oracle of Omaha had to say about that:

     

    http://bit.ly/viu9MH

     

    Kind regards,

     

    The Valuentum Team
    5 Jan 2013, 06:24 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3532) | Send Message
     
    Agree with energy infrastructure, which is constantly growing, and if you don't like banks, go for insurance. Currently loading up on PRE and will take long positions in CB when it pulls back during special events.

     

    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.
    6 Jan 2013, 01:21 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    SAN: No withholding taxes if you choose dividend in shares.
    6 Jan 2013, 01:27 AM Reply Like
  • Ocean Man
    , contributor
    Comments (520) | Send Message
     
    Here are three ways to find growth:

     

    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.
    6 Jan 2013, 10:06 AM Reply Like
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