2.15.15: Haven’t Done a Linkfest In A While

Josh Brown is hilarious: read the caption under the G20 picture. JB is a must-read every week. The best of TheReformedBroker is linked. I learn so much from Josh and use his research in client meetings.

This tweet made me cringe: one of the downsides of being self-employed and working alone, and yet doing so much tweeting and blogging is that I do not proofread my blog posts or tweets. Killer and highly embarrassing. Sorry for all the typo’s – i really hate it and will do better.

Chart of the Week: Norm Conley from JA Glynn out of St. Louis with a chart that he updates on occasion. If I stopped here, the Linkfest would be complete. Great stuff from Norm, always, although he is a St. Louis Blues fan and I am a Blackhawks fan. Won’t hold it against him.

This PEG ratio chart by sector is also from Norm. I wonder how much of this is Apple’s valuation “distortion”. Being overweight tech for clients, and a lot of old tech specifically, I am comfortable with tech’s valuation in 2015. Financials too.

Thought I read this week, Mr. Icahn threw a $200 price target on Apple. Here is a Wall Street Journal article detailing Mr. Icahn’s call from August, 2013.

From Bob Brinker’s blog, this could possibly negatively impact Wal-Mart’s earnings due Thursday, February 19th, pre-open.  The big plus to Wal-Mart’s quarter should be the drop in gasoline prices. The WMT demographic could be a beneficiary of lower pump prices. We’ll see. Check www.seekingalpha.com for my earnings preview of WMT Monday or Tuesday of this week. (Long WMT)

Another great blogger, UKarlewitz or UrbanCarmel. Note the graphs on the oil collapse. I think he is right to compare this correction  to 1986 since that drop in crude was supply driven as well. Those comparing their energy charts to 2008 is not the right analog in my opinion. Also note UK’s comments on the equity put-call ratio.

Tend to agree with Jeff Carter (@pointsnfigures) on most things economic. I do think the tax bill is the one wild card this year, for the capital market. Jeff talks about President Obama’s budget here.  After this budget hit the wires, the first thing that struck me was Paul Ryan’s somewhat optimistic response. I expected a spitting contest. Maybe something meaningful in terms of pro-business tax reform gets done this year.

Best article read all week: the post-mortem on Justine Sacco and how one tweet ruined her life.  Reminds me of Warren Buffett’s comment about how it takes a lifetime to build a reputation and 5 minutes to ruin it.

Found this Shiller P/E chart on FundamentalMomentum’s twitter feed. Jeff Miller of a Dash of Insight has cautioned his large following many times to be wary of the Shiller P/E ratio, but also did a good job of describing for readers how brokerage houses use the Shiller P/E. Check out Jeff’s latest piece here, on www.seekingalpha.com this weekend, and scroll through to find hos comments on the Shiller P/E.

Michael Blatnick @irrelevantinvestor, is part of the Ritholtz Wealth Management team, and an excellent blogger. Here is his link to “international” aspect of investing. What i found puzzling in this piece is that the EAFE index actually performed best in the periods when the SP 500 performed well, i.e. note 1983 – 1988, and 2003 – 2007. Frankly Id rather own US companies and sectors than non US when the risk-reward is about the same. What worries me about the Emerging Markets (EEM) and the non-US exposure is that during 2013, when the Bernanke taper news hit and US Treasury rates began to rise sharply, many segments of Non US or International declined very sharply. That tells me that when the Fed truly does start to raise short-term rates, and “normalize” the US yield curve, some of the non US markets might be too levered to the carry trade, and short-term rates.

We had a nice trade into year-end 2014, being long the UUP. Been out of it for a few weeks now, locking in 7% – 8% gain. Some think the dollar will correct and roll over. I say it depends on the Fed. Watch the 10-year Treasury yield.

Thanks for reading.

 

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