{"id":3143,"date":"2014-01-12T16:11:21","date_gmt":"2014-01-12T16:11:21","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=3143"},"modified":"2014-01-12T16:11:21","modified_gmt":"2014-01-12T16:11:21","slug":"1-11-14-good-weekend-reads-from-our-favorite-bloggers","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=3143","title":{"rendered":"1.11.14: Good Weekend Reads from our Favorite Bloggers"},"content":{"rendered":"<ul>\n<li>Norm Conley (@JAG_Norm), the St. Louis portfolio manager at JAG Capital, notes the outperformance of Industrials in <a href=\"http:\/\/www.slideshare.net\/slideshow\/embed_code\/29816302\">this <\/a>tweet.\u00a0Basic Materials is our longshot sector for the year.<\/li>\n<li>Another great <a href=\"http:\/\/www.slideshare.net\/slideshow\/embed_code\/29815270\">post<\/a> from Norm, on the SP 500 Returns Deviation: still bullish. Coupled with this<a href=\"https:\/\/twitter.com\/ReformedBroker\/status\/421704152448643072\/photo\/1\"> post <\/a>from Josh Brown\u00a0tweeted on 1\/10\/14 on &#8220;The Long-Term Outlook&#8221; showing the SP 500 back to 1913, I&#8217;d say we\u00a0remain in a secular bull market.<\/li>\n<li>Final grab from Norm Conley: Norm details TTM SP 500 operating earnings <a href=\"http:\/\/www.slideshare.net\/slideshow\/embed_code\/29815162\">here<\/a>.\u00a0\u00a0This &#8217;14 EPS forecast\u00a0of $120 confirms our ThomsonReuters estimate of $120 found on our weekly earnings update.\u00a0It is a guess on my part, but I suspect we come in a little stronger than $120 &#8211; $121 when the final results are reported on 3\/31\/15.<\/li>\n<\/ul>\n<p>Everyone knows Josh Brown&#8217;s work (@ReformedBroker) and it is quite good. In my opinion Norm continues to be the best kept secret in Twitter-land. Value-added posts every week.<\/p>\n<ul>\n<li>Here is a <a href=\"http:\/\/thisweekonwallstreet.com\/\">chart<\/a> that is a few days old from &#8220;This Week on Wall Street&#8221;, a blog to which Gary Morrow contributes. This fits with Norm Conley&#8217;s first bullet point: Staples do not look good from a relative performance perspective. We have not owned Altria (MO) or Philip Morris International (PM) in years. Our Staples holdings are KO, WMT, PG and a little COST. A strong dollar probably wouldn&#8217;t help the sector either.<\/li>\n<li>One of our thesis&#8217; coming into 2014 was that the year could be similar to 1994, particularly of the Fed wound up tapering faster than expected. Friday&#8217;s payroll report shot that theory to Hades, at least temporarily, but it was somewhat debunked by Jeff Miller&#8217;s A Dash of Insight post from January 8, &#8217;14, where he <a href=\"http:\/\/oldprof.typepad.com\/\">showed<\/a> the relationship to interest rates and stock prices.<\/li>\n<li>Here is a great tweet from UKarlewitz, showing retail investors just getting back to average in terms of asset allocation to stocks from a <a href=\"https:\/\/twitter.com\/ukarlewitz\/status\/422114063691161600\/photo\/1\">graph<\/a> dating back to 1987. A lot of this &#8220;return&#8221; could imply be the appreciation in the SP 500, without really having retail investors allocating more back to stocks in terms of a conscious decision. Cumulatively, the SP 500 is up 90% since the Jan 1, 2009.<\/li>\n<li>Speaking of which, using our<a href=\"https:\/\/fundamentalis.com\/?p=3096\"> Excel spreadsheet<\/a> (See link in post to &#8220;SP500longtermdata&#8221; which shows long-term earnings growth and return data for the SP 500), the SP 500 is up 90% since Jan 1, 2009, but SP 500 earnings are only up 54%, or just a tad more than half the entire gain. Would a fair conclusion be that p.e expansion has accounted for 46% (or the remainder) of the 5-year gain in the SP 500 ?<\/li>\n<li>Another <a href=\"https:\/\/twitter.com\/ukarlewitz\/status\/422172718625079297\/photo\/1\">tweet<\/a> from Ukarlewitz on the 10-year Treasury (TNX) and its downward channel. Being bullish the 10-year is the contrarian trade and it is the right one for now as this channel-trend reflects. As you might imagine, we had a sharp rally on Friday, with the weak jobs number. Gary Morrow (@GarySMorrow) has been telling me about the series of lows the TLT has been putting in, near the $102 area, both in August &#8211; September &#8217;13 and then again near year-end. TLT chart looks like nice double-bottom has formed, supporting above tweet.<\/li>\n<li>On days like Friday, with weak non-farm payroll numbers, I immediately look to the corporate high-yield market for clues. Both the HYG and the JNK (high yield ETF&#8217;s) were up on Friday. Corporate credit is always the early warning indicator if there is a problem with the equity market: both junk ETF&#8217;s remain above their 200 dma&#8217;s.<\/li>\n<li><a href=\"http:\/\/acrossthecurve.com\/\">Acrossthecurve<\/a> is a decent blogger on corporate credit spreads and Treasury market activity. Good coverage of mist fixed-income asset classes. He updates spread activity in the corporate bond market which is always valuable to equity investors.<\/li>\n<\/ul>\n<p>To wrap up the week, The Reformed Broker, Josh Brown included Trinity Asset Management in his outlook for 2014, entitled &#8220;<a href=\"http:\/\/www.thereformedbroker.com\/2014\/01\/05\/you-are-here-2\/\">You Are Here<\/a>&#8220;. I don&#8217;t have a clue how the year will wind up, but US equities are still one of the asset classes where the probabilities for positive returns this year seem better than average. I am tilted towards Josh&#8217;s 1994 scenario more than any other, but the weak payroll number from Friday, and ukarlewitz&#8217;s TNX trend-channel graph, makes me thing I&#8217;m all wrong about a stronger economy, stronger economic data, faster corporate earnings growth, and a more pensive Fed.<\/p>\n<p>The year has started off weakly, but like our Weekly Earnings Update written <a href=\"https:\/\/fundamentalis.com\/?p=3127\">yesterday<\/a>, it wont take much for the SP 500 to hit an 18% &#8211; 20% return again, in terms of p.e expansion and earnings growth.<\/p>\n<p>Our next post will be on historical SP 500 revenue growth.<\/p>\n<p>Thanks for reading. There is a lot of attention for your eyeballs and we appreciate you talking a minute reading through our weekend study program.<\/p>\n<p>Trinity Asset Management, Inc. by:<\/p>\n<p>Brian Gilmartin, CFA<\/p>\n<p>Portfolio manager<\/p>\n<p><a href=\"mailto:brianglm@trinityasset.com\">brianglm@trinityasset.com<\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Norm Conley (@JAG_Norm), the St. Louis portfolio manager at JAG Capital, notes the outperformance of Industrials in this tweet.\u00a0Basic Materials&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[94],"tags":[],"class_list":["post-3143","post","type-post","status-publish","format-standard","hentry","category-weekend-link-fest"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3143"}],"version-history":[{"count":10,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3143\/revisions"}],"predecessor-version":[{"id":3155,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3143\/revisions\/3155"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}