Posts Tagged ‘Amp’
Adam Hewison: A Sneak Peek S&P 500, Dollar, Gold, and Crude Oil
Tuesday, March 16th, 2010
Adam Hewison is back with four new videos, sharing his outlook for the S&P500, the dollar, gold, and crude oil in the near term. Even if you’re not a trader, Hewison’s seasoned way of explaining ideas is very well informed and useful, and his videos are worth watching, and keeping tabs on.
Title : A Sneak Peek At The S&P 500
This week could be shaping up to be an extraordinary week in the markets. I strongly recommend that traders everywhere take precautionary measure measures to protect capital.
“While the S&P 500 made new highs for the year last week, it did not do so in a very convincing manner. In today’s short video I show you some of the elements that I think should be cause for concern.”
Title: Is The US Dollar Reversing Again?
“It’s been a while since we did a video on the euro/dollar relationship. This relationship may be reversing again based on recent price action. In today’s short video I point out some of the changes we see happening in this market.”
Last week, Jim Rogers discussed his long position in the euro. The reversal of the dollar, may also be a sign that ‘risk’ is back on, though I suspect that will have more to do with the USDJPY cross. For the time being, however, the dollar looks set to weaken against the yen too.
This week could be shaping up to be an extraordinary week in the markets. I strongly recommend that traders everywhere take precautionary measure measures to protect capital.
Title: A Sneak Peek At Gold
This week could be shaping up to be an extraordinary week in the markets. I strongly recommend that traders everywhere take precautionary measure measures to protect capital.
“Last week we gave you a Trade Triangle alert to exit the gold market on the long side. Since that alert was issued gold has dropped significantly.”
Hewison points to a very specific key level of $1091.19. If gold breaches that level, Hewison says it will test around 1060, a he believes that gold will be range-bound for the next while.
Title: A Quick Peek at Crude Oil
Tags: Advertisement, Amp, Breaches, Capital Gold, Commodities, Convincing Manner, Crude Oil, Dollar Gold, Elements, Euro Dollar, Exit, Gold, Gold Market, Jim Rogers, Measures, New Highs, Outlook, Precautionary Measure, Relationship, risk, Sneak Peek, Tabs, Trade Triangle, US Dollar, Videos, Yen
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Why Gold is Declining (The King Report)
Friday, March 12th, 2010
We received several inquiries about why gold is declining. Our view is gold is retrenching because:
• UK QE has ended (for now)
• US QE will end in three weeks (for now)
• The ECB did a massive €295B drain (can you imagine the market reaction if Bennie Mae drained $500B in one shot?]
• China is signaling that it wants to rein in inflation by tightening credit, hiking real estate down payments to 50% and allowing the yuan to appreciate
• Europe’s sovereign debt crisis has ebbed (for now)
• Food commodities have broken down
• Gold stocks have greatly underperformed gold since mid-January (gold stocks tend to lead) S&P
S&P 500 Index, Gold and Gold Stocks (GDX) – Gold stocks out-performed gold until late October. Then they traded together until mid-January. Since then gold stocks have under-performed gold.
Source: The Big Picture, March 12, 2010
Tags: Advertisement, Amp, Big 12, Big Picture, China, Debt Crisis, ECB, Europe, Food Commodities, Gold Source, gold stocks, Imagine, Index Stocks, inflation, Inquiries, Lead, Mae, Qe, Real Estate, Sovereign Debt, Yuan
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Goldman Sachs’ VIP List: Most Important Stocks For Hedge Funds
Thursday, March 11th, 2010
This article is a guest contribution from MarketFolly.com, an excellent blog which tracks the activities of the hedge fund industry’s finest.
Given our focus on following hedge fund movements, we thought it would be prudent to post up Goldman Sachs’ VIP list. The ‘VIP’ stands for ‘Very Important Positions‘ for hedge funds that employ fundamental strategies rather than technical or trading. In essence, these are the 50 stocks that most frequently appear among the top ten holdings of hedge funds. In our hedge fund portfolio tracking series you may have noticed various stocks popping up over and over again in their top 10 holdings. This is simply an aggregation of a larger set of data and stems from our previous coverage of the top ten hedgie holdings.
This basket of stocks returned 40% in 2009 versus 27% for the S&P 500. Goldman also notes that this list has, “outperformed the S&P 500 by 81 bp on a quarterly basis since 2001, with a Sharpe Ratio of 0.29.” Quarterly turnover on this list is typically around 15 positions out of the 50. Those of you with Bloomberg Terminal access can look it up via GSTHHVIP.
Goldman has aggregated data from 487 funds based on the recent slew of 13F filings so these were the most popular stocks owned as of December 31st, 2009. Again, they focus on fundamentally focused hedge funds but have taken a much broader view of hedge fund land than we typically have. We instead focus on a select list of funds to track that are ideal due to their strategy and portfolio concentration. What’s most interesting about the data Goldman has assembled is that many of the positions have actually been down year-to-date for 2010. We found that intriguing given that these are essentially ‘groupthink’ or consensus picks.
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Below you will find Goldman Sachs’ VIP List with the name of the stock followed by the number of hedge funds that own that stock in their top ten holdings.
- Apple (AAPL): 67 hedge funds hold it as a top ten holding
- Pfizer (PFE): 45
- Bank of America (BAC): 37
- Google (GOOG): 37
- JPMorgan Chase (JPM): 36
- Microsoft (MSFT): 36
- Mastercard (MA): 29
- DirecTV (DTV): 27
- Wells Fargo (WFC): 27
- CVS Caremark (CVS): 24
- Citigroup (C): 23
- Hewlett Packard (HPQ): 23
- Monsanto (MON): 23
- Visa (V): 23
- Cisco Systems (CSCO): 21
- Walmart (WMT): 21
- Oracle (ORCL): 18
- Qualcomm (QCOM): 18
- Exxon Mobil (XOM): 18
- Ebay (EBAY): 17
- Wellpoint (WLP): 17
- Intel (INTC): 16
- Mead Johnson Nutrition (MJN): 16
- Merck (MRK): 16
- Johnson & Johnson (JNJ): 15
- Liberty Media (LSTZA): 15
- Amazon (AMZN): 14
- Apache (APA): 14
- EMC (EMC): 14
- Express Scripts (ESRX): 14
- Ford Motor (F): 14
- IBM (IBM): 14
- Lear (LEA): 14
- Teva Pharmaceutical (TEVA): 14
- Yahoo (YHOO): 14
- Crown Castle (CCI): 13
- McDonald’s (MCD): 13
- Transocean (RIG): 13
- Barrick Gold (ABX): 12
- SBA Communications (SBAC): 12
- US Bancorp (USB): 12
- Anadarko Petroleum (APC): 11
- Berkshire Hathaway (BRK.B): 11
- Philip Morris International (PM): 11
- Transdigm Group (TDG): 11
- Target (TGT): 11
- Thermo Fisher Scientific (TMO): 11
- American Tower (AMT): 10
- Comcast (CMCSA): 10
- Freeport McMoran (FCX): 10
Of the stocks mentioned, there are a handful that are brand new additions to Goldman’s VIP list. This means that enough hedge funds have brought their stakes in the company up to a top 10 position in their respective portfolios. Positions that hedgies added largely to in the fourth quarter include: Wells Fargo (WFC), Mead Johnson (MJN), Merck (MRK), Liberty Media (LSTZA), Amazon (AMZN), Apache (APA), IBM (IBM), Lear (LEA), Crown Castle (CCI), SBA Communications (SBAC), US Bancorp (USB), Anadarko Petroleum (APC), Target (TGT), American Tower (AMT), and Freeport McMoran (FCX).
Readers will take note that all three major tower stocks are included as we’ve been harping on this for some time now. We’ve highlighted how hedgies had increased exposure to AMT, CCI, and SBAC as demand for wireless data service continues to grow. Overall, an insightful list and now you can easily follow the smart money with these consensus plays. For more research from Goldman Sachs, head to our other post which covers an extensive look at the top hedge fund holdings. And don’t forget that you can also get specific hedgie portfolio updates by heading to our tracking series where we specifically focus on bottom-up stockpickers.
Source: Marketfolly.com, March 5, 2010
Tags: 13f Filings, Advertisement, Aggregation, Amp, Apple, Bp, Concentration, Consensus, Consensus Picks, Fund Portfolio, Goldman Sachs, Hedge Fund, Hedge Funds, Hedgie, Quarterly Basis, Sharpe Ratio, Slew, Stems, Stock, Stocks, Turnover, Vip
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Technical Talk: View pullback as buying opportunity
Tuesday, March 9th, 2010
The comments below were provided by Kevin Lane of Fusion IQ.
We said several weeks back that it was hard to see the market top when bullish sentiment surveys were so neutral. Additionally we stated that tops were usually met with exuberant buyers not traders salivating to put on shorts. So here we are several weeks later and two indices - the Nasdaq Composite and the Russell 2000 - are both at new post-market low highs. When the Nasdaq and Russell 2000 are both making highs it again is hard not to maintain a bullish bias.
[Graphs inserted by PduP.]
Source: StockCharts.com
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Source: StockCharts.com
Given that the market has rallied nearly 10% in the last few weeks, expect a shallow to moderate pullback to occur; however, we believe this pullback will present a buying opportunity.
The economic calendar will remain volatile as investors overinterpret every release; however, by and large we believe the economic recovery will continue on its course and this will cause the last reluctant sideline monies to finally join the party. Only when all liquidity is exhausted and all the buyers are in will this move likely end. Our guess is this will occur somewhere in the range of S&P 500 1,200 to 1,300.
So for now weakness appears to be an opportunity to buy stocks, especially in the areas that are working, i.e. technology and small caps.
Source: Kevin Lane, Fusion IQ, March 8, 2010.
Tags: Advertisement, Amp, Bias, Bullish Sentiment, Buy Stocks, Economic Calendar, Economic Recovery, Fusion, Graphs, Guess, Investors, Iq, liquidity, Market Sentiment, Monies, Nasdaq Composite, Pullback, Russell 2000, Shallow, Sideline, Small Caps, Tops
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Where is Bruce Berkowitz Finding Value Now?
Monday, March 8th, 2010
This week on Wealthtrack, Consuelo Mack, sits down with Bruce Berkowitz. He is Morningstar’s Domestic Equity Fund Manager of the Decade and portfolio manager of the five-star Fairholme Fund.
Berkowitz explains how he has beaten the S&P by more than 200 percent over the past decade and where he is finding value now.
Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.
Source: Wealthtrack, March 5, 2010.
Tags: Amp, Bruce Berkowitz, Consuelo Mack, Decade, Domestic Equity, Equity Fund, Five Star, Morningstar, Portfolio Manager, Wealthtrack
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The Line Is Drawn In the Sand In the Equity Markets?
Thursday, March 4th, 2010
Seasoned trader, and INO.com founder, Adam Hewison, discusses key market levels to keep your eye on which will signal a reversal in equity markets, particularly for the Dow, Nasdaq, and S&P 500. For the time being however, the strong uptrend is in tact, but proceed with caution, and watch the levels.
Hewison is reliable and insightful, and you may watch these tutorials without obligation.
Video: The Line Is Drawn In the Sand In the Equity Markets?
“To many technicians, it is very clear where the equity markets will reverse, and for those folks who don’t follow the technicals, this is a key reversal area in the S&P 500, the NASDAQ, and the Dow.
In my new short video I show you the exact levels that I think will reverse this market, if in fact it’s ever going to reverse to the downside.
Currently the major trend remains positive for all the indices and we would only become negative on the these markets should the key levels I show you today, are broken.”
Tags: Amp, Caution, Dow, Downside, Equity Trader, Ino, Market Levels, Nasdaq, Obligation, Tact, Technicals, Trend, Uptrend
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Technical Talk: Expect More Volatility for Equities
Friday, February 26th, 2010
The comments below were provided by Kevin Lane of Fusion IQ.
As seen from the chart below, the S&P 500 Index hit minor resistance a few trading sessions back near the 1,112 level (red line and red arrow). Until this level is taken out the near-term directional bias remains neutral.
Lower down, the key level to watch is in the 1,072 area (lower green line). This line represents a much more significant uptrend line and if violated would suggest a bigger correction.
Sentiment indicators are neutral at present, which is a positive, while market breadth remains a mixed bag.
Clearly the recent trading activity suggests volatility will be more present in day-to-day trading than over the past few months.
Source: Kevin Lane, Fusion IQ, February 25, 2010.
Tags: Amp, Day Trading, Directional Bias, Fusion, Iq, Kevin Lane, Market Breadth, Red Arrow, Red Line, Resistance, Sentiment Indicators, Trading Sessions, Uptrend Line, Volatility
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The Problem of Persistence
Friday, February 26th, 2010
By Michael Nairne, Tacita Capital
On January 1, 2000, Jim Smith invested with Manager X. Jim had done his homework: he had compared Manager X’s performance over the prior decade against the relevant benchmark. Although Manager X stumbled in 1990, his returns had beaten the S&P 500 every year after that. This outperformance is illustrated in the following graph. $1.00 invested with Manager X on January 1, 1990 was worth $7.05 on December 31, 1999 (see green), far in excess of the $5.32 earned by the S&P 500 (see red).
Jim had dug even deeper and reviewed several years of analysts’ reports. They were unanimous. Manager X’s performance warranted a role as core equity holding. Jim also hired his own financial analyst to analyze Manager’s X’s performance from a risk–adjusted perspective. Again, Manager X came through with flying colours. Although his returns were more volatile than the S&P 500, his higher returns more than compensated for the bumpier ride. With his homework done, Jim confidently selected Manager X as his core U.S. equity manager and allocated him a sizeable portion of his portfolio.
Fast forward to December 31, 2009, and Jim is ruefully assessing the results of his selection decision. Although Manager X’s performance had outstripped the S&P 500 through the first half of the decade, he suffered massive losses in the market meltdown. Every $1.00 Jim invested with Manager X in 2000 was worth 72 cents (see green) at the end of the decade, more than 20% less than the 91 cents yielded by the S&P 500 (see red).
Analysts’ reports now say this manager is too volatile to be a core holding. Jim’s own financial analyst ran the numbers and now concludes that Manager X’s recent risk-adjusted performance is poor. Jim wonders where he went wrong.
Jim’s experience highlights the critical question of persistence in manager performance – whether a manager’s past performance is predictive of his or her future performance. Certainly, considering the avalanche of media articles on top winning funds and the endless sales pitches to investors trumpeting “best in class” managers, one would assume that there is some reasonable level of persistence in performance.
Fortunately, we can garner insights based on empirical evidence, not puffery. Over the past half a century, there have been over 100 academic studies on the question of persistence in managed money performance. In 2003, the Fund Management Research Centre undertook a sweeping review of 49 of the most recent or robust of these studies from the U.S., U.K. and Australia in a report
to the Australian Securities and Investment Commission.
The report’s major conclusions provide serious investors with some clear answers:
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Good past performance is, at best, an unreliable and weak predictor of future good performance over the medium to long-run. Approximately 50 percent of the studies found no correlation at all between good past performance and good future performance. Where persistence was found, it tended to be short–term, i.e. only one to two years.
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In those studies that found some level of persistence in positive performance, the outperformance tended to be small and in many cases, would be swamped by the cost of swapping between funds.
The report’s authors hypothesized some reasons for the lack of persistence in past performance – style cyclicality; the erosion of competitive advantage as managers battle it out for better staff and methods, and; the negative impact of large capital inflows on outperforming managers.
The implications for investors are clear. An analysis of past performance alone is not sufficient for the selection of an investment manager. The chance of a given outperforming manager repeating this performance is almost random. An investor might as well use a dartboard if he or she is selecting managers solely on past return numbers.
If active managers are to be used in a portfolio, extensive investigation far beyond a simple review of past performance is required. A recent study, for example, suggests that analysis of a manager’s portfolio holdings and the extent of their deviation from the benchmark as well as historic returns might point the way to managers who are more likely to exhibit positive performance persistence. However, once adjusted for style, size and momentum factors, much of this positive performance disappears and hence, more research is needed to validate these findings.
Finally, since managers as a group underperform the market by their fees and costs, the absence of positive performance persistence by active managers in general suggests that low cost, tax efficient index funds should form the core of a portfolio and that active managers, if included, should be used in a satellite role. Jim Smith wishes he had taken this approach in 2000.
February 25, 2010
Tacita Capital Inc. (”Tacita”) is a private, independent family office and investment counselling firm that specializes in providing integrated wealth advisory and portfolio management services to families of affluence. We understand the challenges of affluence and apply the leading research and best practices of top financial academics and industry practitioners in assisting our clients to reach their goals.
Tacita research has been prepared without regard to the individual financial circumstances and objectives of persons who receive it and is not intended to replace individually tailored investment advice. The asset classes/securities/instruments/strategies discussed may not be suitable for all investors and certain investors may not be eligible to purchase or participate in some or all of them. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Tacita recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor.
Tacita research is prepared for informational purposes. Neither the information nor any opinion expressed constitutes a solicitation by Tacita for the purchase or sale of any securities or financial products. This research is not intended to provide tax, legal, or accounting advice and readers are advised to seek out qualified professionals that provide advice on these issues for their individual circumstances.
Tacita research is based on public information. Tacita makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. We have no obligation to inform any parties when opinions, estimates or information in Tacita research changes.
All investments involve risk including loss of principal. The value of and income from investments may vary because of changes in interest rates or foreign exchange rates, securities prices or market indexes, operational or financial conditions of companies or other factors. There may be time limitations on the exercise of options or other rights in securities transactions. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. Management fees and expenses are associated with investing.
Tags: Amp, Benchmark, Core Equity, Critical Question, December 31, Equity Manager, Financial Analyst, Flying Colours, Homework, January 1, Jim Smith, Manager Performance, Manager X, Market Meltdown, Massive Losses, Outperformance, Persistence, Selection Decision, Sizeable Portion, Tacita
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Q4 Earnings in Perspective
Tuesday, February 23rd, 2010
With most of the S&P 500 companies having reported financial results for Q4 2009, the chart below, courtesy of The Chart Store (via The Big Picture), shows how S&P 500 earnings declined by 92% from their Q3 2007 peak to the low of Q1 last year, and then subsequently rebounded by more than 600%. However, as shown by various measures of historical and prospective price/earnings multiples (see text in blue), the S&P 500 is not in cheap territory. Justifying current price levels will require stronger earnings growth than currently estimated by Standard & Poor’s.
Click the image below for a larger graph.
Source: The Chart Store (via The Big Picture), February 22, 2010.
Still on the earnings front, Bespoke highlights the final earnings and revenue beat rate for all US companies that reported this earnings season. “For the third quarter in a row, 68% of companies beat earnings estimates. The revenue beat rate was really strong this quarter at 70% - the highest reading since Q4 ‘04. Does this put the ’strong bottom line, but weak top line’ bearish argument to rest?” argued the report. Although these are good readings, more work is necessary to take stock prices higher without stretching valuations even more.
Source: Bespoke, February 19, 2010.
Tags: Amp, Big Picture, Bottom Line, Earnings Estimates, Earnings Growth, Earnings Season, February 22, Graph, Measures, Perspective, Price Earnings, Q3 2007, Q4 Earnings, Stock Prices, Valuations
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Wealthtrack – The intersection of stocks, politics and energy
Sunday, January 31st, 2010
This week on Consuelo Mack’s Wealthtrack: the intersection of stocks, politics and energy and what they mean for your portfolio. Consuelo sits down with Wall Street’s number one Washington analyst, ISI Group’s Tom Gallagher; five-star FPA Crescent Fund manager, Steve Romick; and Weeden & Co.’s legendary energy analyst, Charles Maxwell.
This is excellent viewing material. Click play to watch:
Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.
Source: Wealthtrack, January 28, 2010.
Tags: Amp, Charles Maxwell, Consuelo Mack, Energy Analyst, Five Star, Fpa Crescent Fund, Intersection, Isi Group, Politics, Portfolio, Stocks, Tom Gallagher, Wall Street, Weeden
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Year-End/New-Year Indicators: Progress Report
Saturday, January 30th, 2010
An old stock market saw tells us if the month of January is higher, there is a good chance the year will end higher, i.e. the so-called “January Barometer”. On the other hand, every down-January since 1950 has been followed by a new or continuing bear market or a flat year. “As January goes, so goes the year,” said Jeffrey Hirsch (Stock Trader’s Almanac).
The result for January is in, and it is not a good one: The Dow Jones Industrial Index closed 3.5% down on the month and the S&P 500 Index 3.7% lower.
Also, according to Hirsch, the “December Low Indicator” says that should the Dow Jones Industrial Index close below its December low anytime during the first quarter, it is frequently an excellent warning sign. The key number to watch was the low of 10,286 (December 
- now history with the Dow down to 10,067.
Although this is not particularly scientific research, it is clear we are not seeing a good start to 2010 and should at least be mindful of these indicators.
Considering the short-term technical picture of the Nasdaq Composite Index, Adam Hewison (INO.com) provides a short analysis showing a rather negative downside break. Click here to access the presentation. (He also recently analyzed the Dow Jones Industrial Index and the S&P 500 Index. Click here and here.)
Tags: Almanac, Amp, Barometer, Bear Market, Dow Jones, Dow Jones Industrial, Dow Jones Industrial Index, Downside, First Quarter, Good Chance, Jeffrey Hirsch, Key Number, Month Of January, Nasdaq Composite Index, New Year, Progress Report, Stock Market, Stock Trader, Warning Sign, Year End
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Technical Talk: A Correction - not a Top
Thursday, January 28th, 2010
The comments below were provided by Kevin Lane of Fusion IQ.
A few days before the correction began, we stated:
“Now that said, can we have a correction of five to ten per cent? Of course!! However, we continue to find it hard to believe the ‘top’ is in play when everyone continues to call for it! After all, tops are formed when everyone becomes so comfortable with stocks they invest all their available liquidity without hesitation or a care in the world. And clearly that is not the current sentiment.”
We further stated, “Again it is very likely we will have some semblance of a decent size pullback soon, seeing the S&P 500 has run up 10% from just November 2009, 31% since July 2009 and 64% from the March 2009 lows.”
However, do we think a major top is in? The answer again remains no.
But regarding the protection of capital from a drawdown or the risk of putting new money to work today, a different answer is required. The answer in this scenario is the run-up in equities puts investors at risk to a correction, not a top, but a correction. Our guess is that the correction would be similar in size and scope to the June/July 2009 correction that saw the S&P fall 9.0%.
All that said, we still believe this is a correction. Corrections tend to be fast and furious and down 5+% on the S&P 500 in five days would meet the definition of fast and furious. We do believe this corrective wave will go lower still, likely another 5% before we see a more sustainable bounce.
At this stage we are of the opinion that stop losses should be honoured and risk disciplines adhered to as corrections (even though they may not be tops) can be very painful if one just watches like a dear in the headlights. A 10% correction would take the S&P 500 down to its first Fibonacci retracement (support) level near 1,035. Near that level we would expect the market to stabilise.
Our faith that this is not a major top lies in several observations: First, many industry groups still remain in positive price trends (even with the current sell-off taken into account). Second, sentiment remains too negative and disaffectionate towards stocks for this to be a top. Tops are formed on excessive optimism, complacency and a lust for stocks (none which presently exists). Last but not least, investor liquidity remains more than adequate as most asset allocation surveys still have equities underweight relative to their historical norms.
So for now the tape remains defensive and the sellers for the first time in a while are in control of that tape. While this condition exists it will be hard to see anything but shallow bounces.
However, at lower levels we believe buyers will re-emerge. When they do, along with the negative sentiment and trading strategies that are currently in place, equities are likely to surge once more.
Source: Kevin Lane, Fusion IQ, January 27, 2010.
Tags: Amp, Corrective Wave, Dear In The Headlights, Decent Size, Disciplines, Drawdown, Few Days, Fibonacci Retracement, Guess, Hesitation, Indu, Iq, liquidity, Losses, Lows, New Money, Pullback, Scope, Semblance, Sentiment
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