10.20.13: Weekend Reading You Might Have Missed

While watching “Lincoln” this weekend for the millionth time, I had previously missed a scene where Abe Lincoln is in his bedroom with his butler and two sons, and his oldest son, Robert Lincoln, is giving it to his Father President for not letting him join the Union Army before the war’s end. They were talking about occupations and Lincoln says to his son who was in law school in Boston, and hating every minute of it, “The Law is a sturdy profession”, and the best quote of all by the 16th President from the same discussion, “Well, I’ve found that prophesying is one of life’s less profitable professions”.

Remember, in the investment business, predictions and prognostications about the market’s direction are easy. Accurate and timely predictions are far more rare.

John Brown, the Reformed Broker, as always, tops the list with this article. Food for thought.

One of the best prognosticators, Ryan Detrick, with the weekend link from Schaeffer’s. Ryan cautions that this coming week 10/21 – 10/25 is one of the weakest weeks in terms of historical returns, of the past 50 years. However, the 4th quarter of 2013 should be a good one from an “historical returns” perspective.

The TalentedBlonde and her blog. Kristen Bentz is a great retail analyst. Kept me out of taking a shot at JCP. Coach reports this week. On every one of our charts, daily, weekly and monthly, COH is sitting at support. This week’s earnings report is key. (none – sold at $54.12. Prefer other places in retail but that could change if COH trades back down to mid $40’s.)

Jeffrey Kleintop, LPL Strategist, ties earnings growth to a leading indicator here. Expect our forward 4-quarter growth rate to expand in the next month, given what Kleintop tweets here.

Jeff Matthews ges after Target (TGT) in this August 23rd blog post here. I could add something to Jeff’s comments, not on TGT, but on the quality of earnings, and another metric but it isn’t relevant for this post. More to come on our blog, and it is actually a positive for earnings, not a negative.

Puerto Rico continues to weigh heavy on the muni market, for good reason per Bob Brinker’s tweets. This debt service schedule shows $30 billion in P/R debt due, but listening to a video of a teleconference this week with Blackrock’s and Eaton Vance’s head of muni research, both of whom seemed pretty negative on P/R GO’s, a $75 billion debt figure was thrown out by Blackrock’s Muni head, far larger than the P/R economy can support. NUV, one of our Municipal CEF’s remains above technical support.

My buddy Jeff Miller at A Dash of Insight talks about SP 500 earnings and gives us a nice shout-out. I have to clarify one thing: our “forward 4-quarter” estimate is now the q3 ’13 through q2 ’14, and the metric is given us by ThomsonReuters in the weekly “This Week in Earnings”. Yardeni, whom Jeff cites here, might be using a different “forward 4-quarter” period, such as q4 ’13 through q3 ’14, or even calendar ’14’s EPS estimate and growth rate.

We’ll flush this out further in coming weeks. Always more to write about. What a fantastic business: seriously, I could post to this blog 15 hours a day on investing topics that range from corporate earnings to technical analysis, to investing by astrology.

Hopefully readers find it all worth while, or at least some of it anyway.

Trinity Asset Management, Inc. by:

Brian Gilmartin, CFA

Portfolio manager




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