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Market Commentary by: James Investment Research

James Investment Research's picture
(Monkey, 45
 
Points)
 on 4/2/13 at 5:30am
market commentary.jpg

Stock Market Analysis, week of 3/2513 - 3/29/13

Conclusions: Stocks moved ahead last week, with 1,883 advancing and 1254 declining. More than 600 stocks set new highs against fewer than 55 new lows. Generally speaking, volume increased on most advancing days. Commodity indexes and especially industrial metals sold off while energy moved higher. The dollar and bond yields generally moved in favorable directions.

Consumer confidence increased last month as citizens began to realize the slowdown in government spending (Sequester) does not foretell disaster. The administration has lost credibility by claims otherwise. Indeed, our work shows that 29 of the 30 quarterly cuts in government spending since 1946 have preceded stronger GDP growth.

Interview with 'That Analyst that Joked about Starting His Own Fund'... and Actually Did It

tt1254's picture
HF
(Orangutan, 294
 
Points)
 on 4/1/13 at 3:30pm
fund.jpg

The following is an interview with tt1254, an analyst who quit and started his own fund. He is also available to answer your questions, ask away.

Are you a professional and want to do an interview? View our interview template here and then email me your responses to [email protected]

  1. Tell us a little bit about yourself:

    2. Recent graduate from undergrad who started an equity fund after a year or so in s&t at a bb. Was ultimate goal since second year of undergrad and having interned in m&a, s&t, pe, realized investing in public markets best fit. First stock buy was VV (same as SPY) on Sept 1st, 2008.

  2. What experience/class in school best prepared you to start your own fund?

    3. Econ 101 – less about supply/demand curves and more about incentives that drive human behavior. Psych 101 is a close second.

Market Commentary by: James Investment Research

James Investment Research's picture
(Monkey, 45
 
Points)
 on 3/26/13 at 5:30am
stock market.jpg

Stock Market Analysis from the week of 3/17/12 to 3/23/12

Conclusions: The markets were down on the week as the S&P 500 index fell 0.24% and small cap stocks declined 0.63%. Commodity based sectors fell the most as both the basic materials and energy sectors were down 1.9%. Defensive sectors such as consumer non-cyclical and utilities were the two sectors that were able to advance on the week. Volume was light averaging only 670 million shares a day.

Recent Market Commentary by James Investment Research

James Investment Research's picture
(Monkey, 45
 
Points)
 on 3/15/13 at 5:00am
stock market.jpg

This was originally posted on 3/11/12

Conclusions: Stocks broke up to new highs but on reduced volume, as almost 2,400 stocks advanced against 840 declined. More than 700 stocks hit new highs against 100 new lows. For a change, lower daily volume was seen on the day that stocks declined, (Monday)-- bullish. Most stock averages gained 2 percent or more, the advance was led by financial and consumer stocks, while utilities and energy stocks lagged. Commodities also advanced, except for gold and corn. The dollar was stronger.

Marty Lipton: Shareholder Champion, Stakeholder Protector or Management Tool?

Aswath Damodaran's picture
(Gorilla, 579
 
Points)
 on 3/12/13 at 11:30am
martin lipton.jpg

I do not personally know Marty Lipton, nor have I met him. Based on what I have read about him and by him (he is a prolific writer), he strikes me as an extremely competent lawyer and he is certainly a good friend and champion of New York University (the institution that I teach at), chairing the board of the trustees for the university. I have never, though, thought of him as a champion of long term shareholders in publicly traded companies, which is the role he plays in a recent article by Andrew Sorkin in the New York Times.

The article itself was precipitated by a post, titled "Bite the Apple, Poison the Apple", by Mr. Lipton in the Harvard Law School Forum on Corporate Governance and Financial Regulation, where he argued that the threat to the company from activist shareholders (and David Einhorn, in particular) should serve as a clarion call for action to deal with the misuse of shareholder power. I am not sure what powers Mr. Einhorn misused in making his case that Apple should do something with its cash, but knowing Mr. Lipton's views on corporate governance (which is to side with incumbent managers, no matter what), I was not surprised by the article, but I was that it was picked up in the New York Times by Sorkin. In his article, Sorkin implicitly accepts Lipton's view that activist investors are short term, that they do damage to companies by being vocal and that long term shareholders are not served by activism.  I think he is wrong on all three counts.

Market Commentary by James Investment Research

James Investment Research's picture
(Monkey, 45
 
Points)
 on 2/26/13 at 5:30am
market commentary.jpg

This is syndication from jir-inc.com

Stock Market Analysis

Conclusions: The market hit a headwind last week as the S&P 500 index had its first weekly loss in 2013. The index fell 0.22%. The smaller stocks in the Russell 2000 index fared worse, slipping 0.74%. The basic materials and consumer discretionary sectors were hit the hardest as both were down over 1%. Volume was light for the shortened week, only averaging about 760 million shares a day but the heaviest volume came on the days the markets declined.

At first glance, the housing recovery appeared to have a setback as housing starts fell 8.5% in January. Fortunately, after looking into the numbers we still see signs of strength within the industry. Single family home starts actually advanced 0.8% for the month and are back to levels last seen in 2008. Most of the decline was due to the decline in apartment and condominium starts. Low mortgage rates and solid traffic levels of prospective buyers are additional encouraging signs for the housing recovery. Anecdotally, we have heard banks are being careful about flooding the market with foreclosures which also helps the market remain firm.

Japan Market Making

4n0n43v3r's picture
(Chimp, 2
 
Points)
 on 2/18/13 at 7:14am

Does anyone here market make Japan cash? I'd like to speak over PM. I have an offer to trade Japan for a bank, but I'm worried about exit opps and transferability of skills.

Thanks

WTF? Can someone explain?

xxkdjxx's picture
 
Points)
 on 1/29/13 at 4:24pm

I feel completely dumbfounded and want to know why.

Apple has a record breaking quarter and their stock prices takes it up the ass.

Now, after market closed today, Amazon reported their earnings and they MISSED every single mark set by analysts.

Amazon's EPS was .07 below analysts, and Amazon's revenue from Q4 was 21.27B vs 22.3B from analysts.(Q4)

According to MarketWatch, their stock price is up $25.91 from its closing price during After Hours trading.

How does this happen?

How does a company post a loss, but their stock prices rise?

Question on taxing stock trading

the_red_baron's picture
ST
(Orangutan, 257
 
Points)
 on 12/15/12 at 7:49pm

I just received a notice from IRS saying I didn't get my taxes right for 2011. So, my question is, do they tax you on proceeds(how much money you receive when you sell the stocks), or on net profit?

It seems that they want to tax me on proceeds, and this doesn't make sense to me, because this is not really money I made. It seems a little crazy, and I don't want to seek tax lawyers for this stuff.

Thanks a lot

America's Stock Market Thrives Under Democrats?

Silicon Economist's picture
 
Points)
 on 10/9/12 at 12:39pm
American Politics

I found this to be pretty interesting. The general perception seems to be that Democrats are responsible for stifling government regulations, therefore the Republicans are the white knights of the street.

This says otherwise.

http://www.economist.com/blogs/graphicdetail/2012/...

Discuss.

The "dividend tax" cliff approaches: Implications for stocks

Aswath Damodaran's picture
(Gorilla, 579
 
Points)
 on 10/1/12 at 12:30pm
dividend tax.jpg

A great deal has been written about the "fiscal cliff" that US taxpayers, investors and companies are faced with at the end of this year. Put simply, all of the tax changes made in 2002 and 2003 expire at that time, and the tax code will, in large part, revert to what it was prior to those changes. I will leave it to others to debate the macro economic implications of going over the cliff but I want to focus on one "segment" of the code that has implications to valuation.

In 2003, the tax code was altered to bring the tax rate on dividend income down to 15%, to match the tax rate on capital gains. That was, in a sense, a revolutionary move, at least for the US, since dividends had been taxed much more heavily than capital gains for much of the previous century. I did write a paper in 2003 about the potential implications of the tax law change for businesses that you can read. In effect, I argued that the tax change would have a positive effect on stock prices, that the effect would be greater for "high" dividend paying stocks than for non-dividend paying stocks and that corporate dividend policy would be altered by the change. Now that there is the possibility that the law will be reversed, it is time to revisit the issue.


Dividends, Expected Returns and Stock Prices: Why taxes matter...

In dire need of understanding valuation

soules9219's picture
(Monkey, 45
 
Points)
 on 9/14/12 at 11:21pm

The title is a bit dramatic but basically I have been learning about investing here and there since 4 months...

Before this time I had no idea about investing and I was one of those people who imagined making MM's on $1000 starting capital ... lol ..

Well since then I have obviously smartened up read a lot of books,programs etc mainly:
Beating the Street Peter Lynch
Letters to Berkshire Shareholders W. Buffet
Boundless SEC filings 10-K 8-Q
Some boring books on technical analysis
Bloomberg,Capital IQ

On my list I currently have:
Security Analysis, Ben Graham
Intelligent Investor, ^

Buying the Pukes

Market Squeeze's picture
 
Points)
 on 9/13/12 at 3:26pm
Nike-Logo1.jpg

There’s a trend these days in stocks selling off huge only to rebound in a matter of days if not minutes. It’s the old buy the dips. Better yet, it’s buy the pukes because once the stock throws up it starts to feel better very quickly. It’s as if all the bad stuff gets out of their system and the stock can move forward – onward and upwards. The “weak hands” are out and the believers buy back in.

Take Nike (NKE) for example. The stock sold off hard on worries about a slow down in Europe, only to bounce back and then above where it sold off in a few weeks. And it seems like Nike isn’t getting enough credit for the data aspects of it’s new smart shoes and the Nike FuelBand. Plus, Nike will put data collecting sensors on golf clubs.

What play did you do this week?

killahcheese's picture
(Chimp, 5
 
Points)
 on 8/30/12 at 12:06pm

Hey everyone,

I was wondering what type of plays you guys had this week towards Bernanke's speech tomorrow.

How are the traders playing it? Straddles?

Are you allowed to trade stocks after you've been an SA?

lonestaffer's picture
(Monkey, 58
 
Points)
 on 8/10/12 at 6:09pm

I just finished my SA stint at a BB. I know BBs have compliance rules about opening up these type of accounts (Scottrade, TD Ameritrade, etc..)

I finished my internship, so am I allowed to open up one of these accounts? Is there a certain time period that I must wait until I am allowed to do so? I received an offer, so if I come back, I dont want any issues.

Futures and Foreign Exchange trading questions

kyleyboy's picture
HF
(Gorilla, 743
 
Points)
 on 7/30/12 at 11:12pm

I've been asking a lot of questions on here lately hope no one minds. This is a great resource for me
So I have been trading stocks for a while and have always been more interested in the concept of futures and foreign exchange. I like to focus on the world economy and the bigger picture. I like the Idea of Global macro. So what I'm really asking here is
1. Is 5000 dollars enough for A futures and FX account

2. What platform do you recommend? I currently use TD Thinkorswim (is that good enough?)

3. Are there any research sites you recommend that will really help me out in finding my information?

4. are there any books you recommend? I've read a lot of the obvious ones for Stocks but there doesn't seem to be as much on FX and Futures

How do you research your trades?

kyleyboy's picture
HF
(Gorilla, 743
 
Points)
 on 7/29/12 at 8:45pm

Hey guys, lately i've been doing a lot of trading in my own account with TD ameritrades thinkorswim. I usually use Yahoo finance for news but i've had problems with most of the articles not having helpful information in actually making a trading decision and I want to be more efficient and find important information and not articles on how to dress up for a wall street interview. So really what I am asking here is. How do you do your research and how do you sift through the bullshit to choose your stocks.
I am trying to kind of refine my approach to investing so I am trying to start from the beginning on how I actually research my stock. Do you often call up peers to get information and opinions on a stock? or do you pay for information as well.

Thanks In advance.
Kyle

Global Stock Markets: Long Hope, Short Reality

anaxi's picture
(Orangutan, 318
 
Points)
 on 7/3/12 at 1:00pm
ecb

This is a big week for markets in terms of economic data. Yesterday we had a data dump of mammoth proportions and the data wasn’t very promising.

A glance, we saw Australian, Korean, Spanish, Italian, French, German, UK, and Brazilian Purchasing Managers Index (PMI) all print sub-50 (contractionary) numbers. US PMI fell to 52.5 and Chinese PMI fell to 50.2 (lowest in three years. In addition, Eurozone unemployment rose to a record 11.1%, Brazilian consumer default rates spiked higher, and the US Institute for Supply Management survey (ISM) came in at a contractionary 48.7 (another three year low).

OK, you get it. The data was bad yesterday, but markets still rallied? What can we learn from the market reaction?

Why I Am Long Baidu.

anaxi's picture
(Orangutan, 318
 
Points)
 on 6/13/12 at 6:00am
baidu

Last week after the Chinese central bank (PBOC) announced a 25 basis point rate cut, I gained enough conviction to take a long position on Baidu which has sold off greatly along with most other Chinese equity flotations this year.

The PBOC move made me believe that Chinese policy makers may engineer a bottom in their equity markets through a wave of easing. I decided to go shopping for the higher quality Chinese names which are on sale, BIDU being amongst the first that I am adding.

Wealth Management Advice

mammoth91's picture
(Chimp, 4
 
Points)
 on 5/30/12 at 2:45am

Hello all,

Just had my first day of work for a UBS PWM internship in New York. It's clear to me that the position is very open-ended, and the members of the group are primarily interested in giving me tasks that can help me learn/develop. To all who have done internships like this; what kind of work should I be asking for and gravitating towards? So far, it looks like I will be doing a fair amount of researching/pitching stocks.

Background: Sophomore at a target school, interested in getting a position next summer in either IBD or buyside/sellside research.

Writing a long report on a Chinese ADR stock

Brady4MVP's picture
HF
(Neanderthal, 3,161
 
Points)
 on 5/19/12 at 5:55pm

Monkeys, I would really appreciate your help in this matter.

So I have to write a 5-6 page long report on a Chinese stock that trades on a U.S. exchange (ADR). I was told that it shoud contain an investment thesis, executive summary, couple of reasons why it's a buy, valuation, potential risks. I have about 10 days or so to complete it, and it's for a distressed debt fund that invests in China. (Can't give any more info on the company or why they asked me to do this for them).

I've looked at sample reports on sumzero as a starting guide. Anything else I should look at? I've never done a buyside fundamental report before, so I'm trying to get up to speed.

Thanks a lot.

The 5 and 5 Club

noke2012's picture
(Orangutan, 271
 
Points)
 on 5/8/12 at 3:04pm

Watched an interesting segment today on Bloomberg TV about stocks with 5% dividend yield and 5% earnings growth. I know some people here have been asking about safe places to park their money while capturing a decent yield, so hopefully these give you guys some ideas.

They came up with-

Leggett and Platt
ATT
People's United Bank
Reynolds American
Altria

and another one whose name escapes me right now.

Apple to become the first $1 trillion company?

go.with.the.flow's picture
EN
(King Kong, 1,109
 
Points)
 on 4/3/12 at 3:09pm
wtf

WSO,

So today a Piper Jaffray's analyst predicted Apple stock to reach $1 trillion by 2014. As most as of you know Apple's market cap is $582.90B currently. So where does the $400B come from? According to the analyst from Apple's competitors RIM, Microsoft, Nokia, Sony, Dell, HP.

read the full article here

What do you guys think, will Apple be the first company to reach $1 trillion by 2014?

7 Stocks Billionaire Hedge Funders Are Crazy About

Insider Monkey's picture
(Baboon, 170
 
Points)
 on 3/23/12 at 4:48am
apple.jpg

Insider Monkey tracks nearly 400 hedge fund managers and prominent investors. Thirty nine of these fund managers are billionaires. Nowadays readers have access to websites that track the daily changes in billionaires’ wealth. We wanted to track the performance of billionaires’ top stock picks. By looking at our Billionaire Hedge Fund Index, investors may be able to decide whether it makes sense to imitate billionaires’ stock picks without paying them hefty fees.

10 Most Popular Stocks Among Hedge Funds

Insider Monkey's picture
(Baboon, 170
 
Points)
 on 3/1/12 at 2:10am
apple.jpg

We have been tracking the most popular stocks among hedge funds for more than a year now. Hedge funds are known to be short-term oriented but when we look at the most popular stocks among hedge funds we see that they are focused on the long-term more than expected. Apple (AAPL) and Microsoft (MSFT) have been among the top three most popular stocks since at least the end of 2010 (see the 10 most popular stocks at the end of September). This is consistency and both stocks outperformed the market over the last year. For the past two quarters Google (GOOG) joined them.

Insider Purchases in Three Large-Cap Stocks

Insider Monkey's picture
(Baboon, 170
 
Points)
 on 2/25/12 at 11:17am
mocuff.jpg

Inside information pays. Corporate insiders usually have access to material non-public information about their companies. They sometimes trade illegally on such information and make great profits. Some of them were investigated, caught and sent to jail, but there are still many other insiders trading in the grey area and they never get caught. In fact, insiders do not have to act directly on material non-public information to benefit from it. They can delay their purchases if they know negative news is about to be released. On the other hand, ordinary investors who do not have access to inside information will still buy the stock and lose money. As you might have guessed imitating insider purchases is potentially a very profitable strategy.

The new dividend tax rate in 2013 would be 44.8%

Nobama88's picture
RE
(King Kong, 1,676
 
Points)
 on 2/22/12 at 3:45pm

http://online.wsj.com/article/SB100014240529702048...

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

How Would You Invest $1 Million?

Banker88's picture
IB
(King Kong, 1,650
 
Points)
 on 2/17/12 at 11:13am

If you had $1 million of personal savings, how would you invest it? Would you use a wealth manager, split it among several mutual funds, buy individual stocks, etc...

Smaller private investment firms?

oracle's picture
(Monkey, 47
 
Points)
 on 2/15/12 at 12:34am

Would anyone in the community know of any smaller (<50 employees) private investment firm that are similar to http://www.kingdom.com.sa in terms that they are diversified globally but are located in the U.S? I am looking for firms that are invested in real estate(commercial), Stocks/bond, PE/VC, loans, "hard" assets, etc but are small. I would like to do research on how exactly they were started but I am not sure how to classify this type of asset management.

Three Large-Cap Stocks Insiders Are Selling Like Crazy

Insider Monkey's picture
(Baboon, 170
 
Points)
 on 2/10/12 at 10:45pm
market.jpg

Academic research has shown that insider purchases on average outperformed the market over the following 12-month period. On the other hand, insider sales are usually not informative. This is because most insider sales are motivated by diversification or liquidity needs. Therefore, insider sales really do not mean much compared with insider purchases.