We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Strategies & Market TrendsEffective Collaboration - Team Research for Better Returns:

Previous 10 Next 10 
From: Julius Wong6/19/2022 8:51:09 AM
1 Recommendation   of 7157
Wall Street Breakfast: The Week Ahead

Jun. 19, 2022 7:42 AM ET2 Likes

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Stitcher and Spotify.

Economic reports in the week ahead

Investors will strap in next week for more interest rate reality, with Federal Reserve Chairman Jerome Powell due to testify before Congress and expected to reiterate the need to combat inflation through aggressive rate hikes. The economic reports due out next week include updates on existing home sales on June 21, initial jobless claims on June 23, and the University of Michigan reading on consumer sentiment on June 24, which could come in at a record low. FedEx (NYSE: FDX) reports earnings on June 23 in what will be a closely watched report across several sectors. Meanwhile, the four-day Amazon (NASDAQ: AMZN) re:Mars event on AI, robotics, and automation innovation could turn some heads in the tech world. In the healthcare sector, the World Health Organization is in the spotlight, with the global agency set to vote on whether to declare monkeypox a public health emergency. Notable movers off monkeypox developments have included SIGA Technologies (NASDAQ: SIGA), Bavarian Nordic ( OTCPK:BVNRY) ( OTCPK:BVNKF), Emergent BioSolutions ( EBS), and GeoVax Labs ( GOVX). Gun and ammunition stocks will also be on watch next week, with some Republicans opening the door for a potential vote on a gun bill. Smith & Wesson (NASDAQ: SWBI), Sturm, Ruger ( RGR), Vista Outdoor ( VSTO), Sportsman's Warehouse ( SPWH), AMMO (NASDAQ: POWW) and Olin Corporation ( OLN) are some of the stocks that could see extra volatility.

Earnings spotlight: Tuesday, June 21 - Lennar (NYSE: LEN) and La-Z-Boy ( LZB).

Earnings spotlight: Wednesday, June 22 - Winnebago ( WGO), KB Home ( KBH) and H.B. Fuller ( FUL).

Earnings spotlight: Thursday, June 23 - Accenture (NYSE: ACN), FedEx ( FDX), Darden Restaurants ( DRI), Rite Aid ( RAD), Smith & Wesson Brands ( SWBI), and Blackberry ( BB).

Earnings spotlight: Friday, June 24
CarMax ( KMX).

IPO watch: Mobilicom ( MOB) is expected to start trading on June 23. The Israeli tech company provides a range of autonomous system control and related cybersecurity technologies. Moilicom plans to offer 2.2M American Depositary Shares, with each ADS representing 150 ordinary shares, at the assumed price of $4.65 per ADS. Also next week, the quiet period ends on Singing Machine (NASDAQ: MICS) to free up analysts to post ratings.

Dividend watch: Companies projected to increase their quarterly dividend payouts include Matson ( MATX) to $0.36 from $0.30, Kroger ( KR) to $0.24 from $0.21, Darden Restaurants ( DRI) to $1.20 from $1.10, and Saul Centers ( BFS) to $0.59 from $0.57.

FedEx earnings preview: Only about a week after approving a boardroom reshuffle and a raised dividend, FedEx Corporation ( FDX) is set to report its fiscal fourth quarter earnings after Thursday’s market close. The earnings call will be the first to be helmed by newly-named CEO Raj Subramaniam, who succeeded founder Fred Smith on June 1. While the package-delivery giant has significantly outperformed the broader market in recent months, Morgan Stanley recently warned clients that it expects the company to miss consensus EPS on earnings day. Meanwhile, JPMorgan anticipates a modest EPS beat from FDX and FY23 guide that will blanket expectations. Both firms think FedEx will hold back on issuing long-term targets until the analyst day event on June 28.

Accenture earnings preview: Accenture ( ACN) will report earnings on June 23 with analysts forecasting revenue of $16.05B and EPS of $2.85 will be disclosed. Just in front of the report, Bank of America tipped that guidance from Accenture could be stronger than anticipated. The firm expects revenue growth at the upper end of the +22% to +26% constant-currency guidance range. While recession scenarios are front and center with investors, BofA believes ACN's model would be resilient in a modest recession scenario, as much of ACN's work is noted to involve mission-critical digital transformation service offerings like cloud and security services, which in many cases will likely be treated as largely non-discretionary by enterprises. While ACN management commented during the FQ2 earnings call that quarterly bookings may be lumpy, BofA anticipates a healthy book-to-bill of ~1.1X in FQ3.

Corporate events: The Amazon ( AMZN) re:MARS event will run from June 21-24. The global event is focused on machine learning, automation, robotics, and space. CRISPR Therapeutics ( CRSP) will host an Innovation Day on June 21. The flurry of investor events on June 22 include presentations from Modine Manufacturing Company ( MOD), Intercorp Financial Services ( IFS), Univar Solutions ( UNVR), Cytek Biosciences ( CTKB) and Bitfarms Ltd. ( BITF). Volkswagen (OTCPK:VLKAF) will also hold its annual Capital Markets Day. Genpact (NYSE: G) will host an Investor and Analyst Day event on June 23. Read more about the events next week that could impact shares prices in Seeking Alpha's Catalyst Watch.

Conference schedule: Some of the notable conferences to watch for guidance and strategy updates are the Jefferies Consumer Conference, the BMO Chemicals & Packaging Conference, Wells Fargo Electric Vehicle Mini Conference, and the Cantor Fitzgerald PropTech Conference.

Data read: The latest report from Nielsen on food and beverage sales from retail outlets will get a closer look than normal amid all the inflation disruption. Beverage companies that have blazed strong in the last few Nielsen reports include Vita Coco ( COCO), Keurig Dr Pepper (NASDAQ: KDP), Coca-Cola ( KO), Oatly ( OTLY), Constellation Brands ( STZ), Pepsi ( PEP), and Zevia PBC (NYSE: ZVIA). In the spirits category, Brown-Forman ( BF.A) is on a recent hot streak, while PepsiCo ( PEP) and Utz Brands ( UTZ) have been posting solid gains in the salty snacks category. Some of the companies to watch for consumer pushback on pricing include Hershey ( HSY), Hain Celestial ( HAIN), Tyson Foods ( TSN), Flower Foods (NYSE: FLO), Mondelez International (NASDAQ: MDLZ), and Hormel Foods ( HRL). Beyond Meat (NASDAQ: BYND) is another name to watch, with shares sometimes volatile off the Nielsen update.

Fashionable things: Coty's (NYSE: COTY) partnership with Kim Kardashian formally begins on June 21 with the launch of the new Skkn By Kim skincare collection. The company said Skkn By Kim was born out of Kardashian's dream to bridge the gap between the world's most renowned dermatological experts and people at home seeking high-performance skincare. Skkn By Kim will launch through a new U.S. direct-to-consumer website that is being set up to be the go-to destination for all new product launches and will also feature tutorials and special collections. Shares of Coty are down 36% year-to-date and could use a burst of Kardashian media exposure.

Healthcare sector watch: Bank of America previewed some of the major catalysts to watch for in the healthcare sector in the months ahead. Investors were advised to stay alert on Alnylam Pharmaceuticals (NASDAQ: ALNY) with its Apollo-B readout due out, Ultragenyx Pharmaceutical ( RARE) with Phase 1-2 data on GTX-120 expected, ACADIA Pharmaceuticals ( ACAD) with an FDA action date on ADP set for August 4, Karuna Therapeutics ( KRTX) with Phase 3 data due on a Emergent-2 trial, Ionis Pharmaceuticals ( IONS) with Phase 3 data on TTR-LICA due out, and Bausch Health Companies ( BHC) with a Zifaxan patent ruling expected in Q3.

Stock split The Fortinet ( FTNT) 5-for-1 stock split will become effective on June 23.

Box office preview: Another huge box office weekend could be in store, with Pixar and Disney's ( DIS) Lightyear tracking to open in the U.S. across more than 4,200 theaters to a $70M to $85M haul over the Father's Day weekend. Universal's ( CMCSA) Jurassic World Dominion is forecast to bring in another $60M in its second weekend, while Paramount's ( PARA) ( PARAA) Top Gun: Maverick will add to its +$400M U.S. tally. Marcus Entertainment (NYSE: MCS) is the theater stock that has seen the best return over the last six weeks as the box office boom has run up against the stock market selling pressure.

Barron's mentions: A scan of valuations in the markets steers the publication to traditional asset managers, which are noted to be trading well below historical valuations and offering attractive yields. Industry demand is seen growing as the millennial generation saves for retirement. That adds up to strong upside for AllianceBernstein Holding (NYSE: AB), BlackRock ( BLK), Invesco ( IVZ), and T. Rowe Price Group ( TROW). The view is that the asset managers have strong balance sheets and dividends that generally look secure even in a tougher macroeconomic backdrop. In crypto world, the Barron's warning is that the crypto winter could turn into crypto hell. The defi platforms in particular are said to look at risk due to the potential for cascading failures from a high degree of contagion between the platforms.

Sources: EDGAR, Bloomberg, CNBC, Reuters, The Hollywood Reporter

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/19/2022 4:20:12 PM
   of 7157
Wells Fargo names 50 stocks to short (or at least avoid)


H-Gall/iStock via Getty Images

Corporate outlooks are set to shift dramatically next earnings season and some stocks will be vulnerable to reversal, Wells Fargo says.

Senior Equity Strategist Chris Harvey picked a "group of stocks (that) will underperform the market until we hear the Fed reference a slowing economy."

The short-or-avoid quant list is based on longer-term price momentum.

"In our assessment, stocks with fundamental issues become even riskier during tumultuous times," Harvey said in a note. "In our experience, Fundamental PMs do not bottom-fish in uncertain times like now; rather, they focus on high-conviction names, sell anything deemed 'marginal,' and save new ideas for another day."

"We expect these stocks to be subject to violent reversals."

The stocks to short or avoid in the Wells Fargo Equity Strategy Low Momentum Portfolio (weighted 2% each) are:

Communication Services ( XLC)
Disney (NYSE: DIS)
Match Group ( MTCH)
Meta Platforms ( META)
Dish Network ( DISH)
Netflix ( NFLX)

Consumer Discretionary ( XLY)
Etsy ( ETSY)
Caesars Entertainment ( CZR)
Norwegian Cruise Lines ( NCLH)
Penn National Gaming ( PENN)
Carnival ( CCL)

Consumer Staples ( XLP)
Walmart ( WMT)
Estee Lauder ( EL)
Lamb Weston ( LW)
Clorox ( CLX)

Energy ( XLE)
Schlumberger ( SLB)
Williams Companies ( WMB)
Phillips 66 ( PSX)
Kinder Morgan ( KMI)
Financials ( XLF)

Synchrony Financial ( SYF)
Citi ( C)
MarketAxess ( MKTX)
T. Rowe Price ( TROW)
Invesco ( IVZ)

Healthcare ( XLV)
Moderna ( MRNA)
DentSply ( XRAY)
Biogen ( BIIB)
Illumina ( ILMN)
Align Technology ( ALGN)

Industrials ( XLI)
Fortune Brands ( FBHS)
GE ( GE)
American Airlines ( AAL)
Stanley Black & Decker ( SWK)
Boeing ( BA)

Info Tech ( XLK)
EPAM Systems ( EPAM)
Ceridian ( CDAY)
Qorvo ( QRVO)
IPG Photonics ( IPGP)
PayPal ( PYPL)

Materials ( XLB)
Avery Dennison ( AVY)
DuPont ( DD)
Ecolab ( ECL)

Real Estate ( XLRE)
Equinix ( EQIX)
Simon Property ( SPG)
Alexandria Real Estate ( ARE)
Vornado ( VNO)

Utilities ( XLU)
American Water ( AWK)
Pinnacle West ( PNW)

See Wells Fargo's recession stocks portfolio.

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/19/2022 4:36:10 PM
   of 7157
Wells Fargo unveils its recession stock portfolio


gguy44/iStock via Getty Images

Wells Fargo says it is time to close out reopening trades and focus on the new landscape of a slowing economy.

The rise in the 2-year Treasury yield ( SHY) above 3% was the catalyst for a hard economic landing to become the base case, senior equity analyst Chris Harvey wrote in a note Tuesday.

The team is moving to Neutral from Overweight in their High Covid Beta reopening portfolio, which rose 48% since its inception in October 2020, compared with an 11% rise in the S&P 500 ( SP500) ( SPY). The High Beta portfolio is -10% year to date, besting the 21% drop in the S&P.

The economy faces a markets-driven recession, according to Harvey.

"According to Fed data, at the end of 2021 nearly one quarter (24.3%) of US household assets were in equities," he said. "We viewed this as a major risk as a material, extended sell-off likely would impair sentiment and discretionary spending."

"We believe this vicious cycle has been triggered - and is complicated by the corner the Fed has painted itself into. We estimate US household assets could decline some $6T (4%) in 2Q22 due to the market selloff."

Once in a recession, the Fed will likely turn quickly to easing, Harvey said.

"For equities, this would mean more volatility, a better bid for risk-aversion, and a decay of cyclicality until the easing cycle begins. Therefore, our shift on the reopening names."

"We are not looking for a level, but rather an event (or events) to stabilize equities," Harvey added. "Stocks likely will find a bottom when the market believes Fed hikes will begin to decelerate. To get there, we will need to see jobless claims numbers continue to rise, suggesting supply/demand is better aligning and breakevens continue to decline (implying inflation expectations are abating)."

"We believe this is still off in the distance."

The recession portfolio by sector (all stocks weighted 1.8%):

Communication Services ( XLC)
AT&T ( T)
Electronic Arts ( EA)
Comcast ( CMCSA)
Verizon ( VZ)

Consumer Discretionary ( XLY)
Lowe's (NYSE: LOW)
Garmin ( GRMN)
Genuine Parts ( GPC)
Yum! Brands ( YUM)
McDonald's ( MCD)

Consumer Staples ( XLP)
Hershey (NYSE: HSY)
Mondelez ( MDLZ)
Colgate-Palmolive ( CL)
Coca-Cola ( KO)
PepsiCo ( PEP)

Energy ( XLE)
Marathon (NYSE: MPC)
Chevron ( CVX)
Williams ( WMB)
Kinder Morgan ( KMI)

Financials ( XLF)
Travelers ( TRV)
W.R. Berkley ( WRB)
Chubb ( CB)
Loews ( L)
Berkshire Hathaway ( BRK.B)

Healthcare ( XLV)
Amgen ( AMGN)
Gilead ( GILD)
Merck ( MRK)
J&J ( JNJ)
Bristol-Myers ( BMY)

Industrials ( XLI)
3M ( MMM)
General Dynamics ( GD)
Republic Services ( RSG)
Ametek ( AME)
Waste Management ( WM)

Info Tech ( XLK)
Automatic Data ( ADP)
Broadridge Financial ( BR)
Roper Technology ( ROP)
Jack Henry ( JKHY)

Materials ( XLB)
Packaging Corp. ( PKG)
Air Products ( APD)
Dow ( DOW)
Corteva ( CTVA)
International Paper ( IP)

Real Estate ( XLRE)
Healthpeak Properties ( PEAK)
Mid-America Apartment ( MAA)
AvalonBay ( AVB)
Welltower ( WELL)
Realty Income ( O)

Utilities ( XLU)
DTE Energy ( DTE)
Dominion Energy ( D)
Public Service Enterprise Group ( PEG)
Duke Energy ( DUK)
Ameren ( AEE)

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/20/2022 7:29:47 AM
2 Recommendations   of 7157
Stock market checklist close to meeting all the conditions for a bottom

Jun. 19, 2022 2:03 PM ET SPDR S&P 500 Trust ETF (SPY) SP500By: Kim Khan, SA News Editor 78 Comments

primeimages/iStock via Getty Images

The stock market is 70% of the way to a bottom, according to Oppenheimer's technical analysis team.

"In regard to our Market Bottom Checklist, 7 of 10 indicators reached 'at a minimum' thresholds, but aren’t as deeply extreme as years like 2009 or 2020," analyst Ari Wald said in a note.

The three left to trigger are peak-to-trough duration, at five months with a target of seven, NYSE net new 52-week highs at -648 with a target of 1,000, and the put/call 10-day average at 0.98 with a target of greater than 1.

"For levels, we’re watching the 50% retracement of the S&P 500’s ( SP500) (NYSEARCA: SPY) 2020-22 advance at 3,500," Wald said. "The S&P also reached an 18-month low last week."

"While we use this as our one-rule definition of a bear cycle, rather than a signal, the equity cycle happened to have turned higher in 2016, 2018, and 2020 once the S&P reached an 18-month low."

Looking at market performance after a 75-basis-point hike in the fed funds rate, forward returns "have been below-average, by our analysis, though we’ve found the poorest performance occurred when the FF rate topped 10%," Wald said. "Better representing current conditions, forward returns were closer to the all-period average when the FF rate was below 10% (currently 1.75%)."

"We don’t believe last week’s post-hike sell-off should be considered significant either," he added. "Consider the last time the Fed hiked by at least 75bps on November 15th, 1994: the S&P dropped 4% over the subsequent week, built a base over another two weeks, and then rallied strongly into 1995."

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/21/2022 8:52:34 AM
   of 7157
Keep It Going

A quick story about athletes and investors.

A big difference between professional and amateur athletes is the intensity of training. The intuition of amateur athletes is to push as hard as they can, testing the limits of their potential, maximizing what they’re capable of, grind until you’re broken, no pain no gain.

The training schedules of professional athletes – once a good coach enters the picture – tends to be calmer.

A group of researchers recently looked at the training schedule of a dozen Olympic-level cross-country skiers, who are some of the most insane athletes you’ll ever witness.

Over a year the athletes trained an average of 861 hours – a couple hours a day. Each hour was broken up into three buckets: High intensity (>87% of max heart rate, huffing and puffing), medium intensity (82%-87% max heart rate, heavy breathing), and low intensity (60%-82% max heart rate, you can probably carry on a conversation).

After a year, the training schedule broke out like this:

88.7% of training hours were light intensity.

6.4% were medium intensity.

4.8% were high intensity.

The huge majority of the time was spent barely pushing themselves, almost cruising along at a leisurely pace.

You’ll find nearly the same percentage breakdown when studying professional runners.

And professional cyclists.

And rowers.

And swimmers.

It’s astounding, isn’t it? Some of the best athletes in the world spend almost all their time working way below potential, purposefully not pushing themselves to the limits.

They don’t race at that leisurely pace, of course – they might be at the highest levels of intensity for an hour or more during a competition.

But in training, you tend to build the best athletic machine when longevity is favored over intensity, when your body gets a signal to adapt vs. thinking it’s been temporarily tortured, and when you’re less subject to in jury and mental burnout.

Stephen Seiler, an exercise physiologist, explained:

[Professional endurance athletes] go for a long time at a low intensity where they can recover, and repeat it day after day. And that’s what really brings success. For the highest levels to be attainable over time, the training process has to be sustainable. At higher levels of intensity, chronic levels of stress leads to burnout and stagnation.

For the highest levels to be attainable over time, the process has to be sustainable.

Which is exactly how good investing works too, isn’t it?

The most important investing question is not, “What are the highest returns I can earn?”

It’s, “What are the best returns I can sustain for the longest period of time?”

Compounding is just returns to the power of time. Time is the exponent that does the heavy lifting, and the common denominator of almost all big fortunes isn’t returns; it’s endurance and longevity. “Excellent returns for a few years” is not nearly as powerful as “pretty good returns for a long time.” And few things can beat, “average returns sustained for a very long time.”

That’s the biggest but most obvious secret in investing: Average returns for an above-average period of time leads to magic.

I think we’re seeing the flip side of that recently.

So many investors over the last five years have gone out of their way to maximize annual returns, squeezing every potential penny out of every opportunity they could find. The highest-risk investments, often fueled with leverage.

They did that because the opportunities were everywhere – everything seemed to go up, every asset, month after month.

It felt great. Always does.

But now I think we’ll see that a lot of even the best investors were the equivalent of an athlete who pushed to 110% in every training session, and now they’re burnt out.

For a period of time they felt like champions. But over time they’ll be lapped by the guy who casually jogs each day way below his potential, who can sustain his training and build a body that can adapt and recover for the next day.

There are two kinds of investing burnout: financial and psychological. The first is when you’re leveraged, investing on margin, and your bid to maximize potential forces you out when the market turns. The second is psychological. It’s hard to predict how you might feel when a big chunk of your net worth evaporates in two weeks until it’s occurred. A lot of those investors will end up like a professional athlete who burns out, their mind giving up before their body.

It’s counterintuitive, but you will likely maximize investment gains over your lifetime if you go out of your way to not maximize annual returns, instead focusing on merely good returns that you can sustain for as long as possible.

Carl Richards once made the point that a house might be the best investment most people ever make. It’s not that housing provides great returns – it does not. It’s not even the leverage. It’s that people are more likely to buy a house and sit on it without interruption for years or decades than any other asset. It’s the one asset people give compounding a fighting chance to work.

This kid has it all figured out:

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/22/2022 7:04:15 AM
2 Recommendations   of 7157
Here's Warren Buffett's First Move in Any Stock Market Crash

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Buffett's success is largely due to his unwavering ability to buy high-quality companies when the market is selling everything.
With the recent market turmoil, I found myself looking for reassurance from one of the greatest investors of all time, Warren Buffett. At 91 years young, Buffett has lived through his fair share of market downturns, and with that comes some invaluable wisdom about the markets and where to put your money.

In October of 2008, Buffett published a truly inspirational piece in The New York Times titled "Buy American. I Am." His commentary and advice in the article provided insight into the moves of a master investor at what was roughly the low point of the Great Recession and they might be of some help today as we progress through another volatile downturn in the economy and the markets.

Image source: Getty Images.

Buffett looks for opportunities to buyIn his essay, Buffett starts by delivering one of his most famous quotes regarding his buying strategy:

"A simple rule dictates my buying: Be fearful when others are greedy and be greedy when others are fearful."

The ability to make level-headed decisions when the rest of the market is panicking is, in no small part, what separates the winners from the losers in the market. Buffett understands this better than most. The current market turmoil is probably the first time new investors have experienced true market "panic." Unlike the flash crash in March 2020 and the subsequent quick recovery, today's market has prolonged negative sentiment.

In fact, the Chicago Board Options Exchange (CBOE) Volatility Index (or the VIX) -- an index that generates a 30-day forward projection of volatility and is often viewed as a measurement of overall sentiment -- has closed above 30 on 30 days in the last six months. With the exception of 2020, the last time that happened was during the Great Recession, the very crash Buffett wrote about in his piece in The New York Times. Needless to say, fear has a stranglehold on the stock market at the moment.

Don't wait for the economy to turn to start buyingBuffett goes on to write that stocks often start to rise well before the economy turns positive:

"In the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank... In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked down price."

This is evident in the Consumer Price Index (CPI) numbers in the 1980s. The CPI peaked at nearly 15% in 1980, yet the S&P 500 rose 30% that same year. While Buffett reiterated that he does not try to time the market during crashes, the discounts offered to investors during poor economic periods are usually great bets over the long term.

Thus, negative headlines are often a lagging indicator of stock market performance. As long as investors are comfortable with stocks continuing to dip in the short term, times of economic downturn are an incredible entry point into strong businesses.

Buffett has been buyingSo, what is Buffett doing during this latest bear market? The short answer should not be surprising. He's been buying.

Some notable purchases made by Buffett's Berkshire Hathaway Inc. ( BRK.A 1.15%)( BRK.B 1.38%) have been:

The acquisition of insurance company Allegany.

The purchase of 121 million shares of HP Inc. -- over $4 billion.

Large bets on oil stocks like Chevron and Occidental Petroleum.

The purchase of 7 million shares of Apple.It's hard to know what the near-term future will hold for stocks, but it's obvious Buffett is seeing lots of buying opportunities in the market as prices recede.

Conclusion: negative sentiment is a buying opportunity

It's no secret that sentiment drives the market in the short term. Investing in high-quality businesses when every headline paints a picture of doom and gloom is one of the hardest parts of being an investor. But Warren Buffett has shown us over the decades that this is the exact time to go on the offensive. And if Berkshire Hathaway's recent buying activity is an indicator, the long-term prospects of the market have plenty of upside.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)

From: Return to Sender6/23/2022 1:15:55 PM
1 Recommendation   of 7157
Signs Inflation is Subsiding - Leavitt Brothers Blog:

Posted on June 23, 2022 by Jason Leavitt

Let’s talk commodities. We know inflation is high. Gas and food prices are front and center and are taking a bite out of most people’s disposable income.

Below I’ll flip through many charts. First agriculture and ag-related. The building materials. Then precious metals. And finally energy. Then I’ll sum everything up.

RJI is a commodities ETN, heavily weighted with agriculture. Its largest components include: wheat, corn, cotton, soybeans, coffee, soybean oil, livestock (cattle, hogs), sugar, lumber, cocoa, rubber, soybean meal, canola and orange juice. It’s a darn good representation of raw materials used in the food industry.

Let’s go though the most important components, along with fertilizer.


Wheat has double-topped and broken down to nearly a 3-month low.

Fertilizer is 30% off its high.

Corn has formed a 4-month top, and as of yesterday’s close, is at its lowest level since late February.

Coffee doubled in price in 2021 but is flat going back eight months from today.

Soybeans doubled from mid-2020 to mid-2021…dropped 30%…then rallied 50%. It’s currently unchanged since early March.

Cotton bottomed in April 2020, a few weeks after the market bottomed. Since then it’s up 3X, so inflationary pressures have been present for 2+ years.

Livestock also bottomed in April 2020, a few weeks after the market. It’s doubled since then but is trendless over the last 4+ months.

Sugar doubled off its April 2020 low but is flat going back 10 months.

Cocoa has been a sloppy mess for many years. It has been immune to all outside forces.

Building Materials

Lumber has swung wildly the last 30 months. It rallied 5X off its April 2020 low…then dropped 75%…then more than doubled. And now its 60% off its high. I’m not sure what this is indicative of because it’s been out of sync with other commodities.

Aluminum rallied 13X off its March 2020 low but is 50% off its high over the last three months.

Steel also rallied big off its March 2020 low (430%) but is 40% off its high and unchanged going back 12 months.

Copper initially rallied 2.5X off its March 2020 low but is unchanged going back 15 months and is breaking down from a range.

Precious Metals

Gold, Silver, Platinum, Palladium – they’re unchanged going back several years. They’ve rolled up and down in ranges but haven’t been able to maintain a trend.


Crude oil has trended up for most of the last two years. However, it’s unchanged over the last four months and has mostly traded in a large range.

Natural gas doubled in mid 2021 but then nearly got cut in half. Then it nearly tripled before breaking down last week.

Heating oil rallied 6X off its April 2020 low and has been very volatile the last four months.

Gasoline has rallied a couple hundred percent – it’s a double this year alone – and is currently off its high and unchanged going back to early March.

Most of the food-related commodities posted huge gains off their 2020 lows but haven’t done much the last few months. Either they’re consolidating within an uptrend and will break out again, or they’re in a topping process.

Building materials followed the same path – big moves in 2020 and 2021, but they’re all well off their highs and unchanged going back many months.

Precious metals don’t matter, other than informing us they are not an inflation hedge.

Energy is up huge off its 2020 lows and would mostly still be considered in an uptrend. But in all cases, prices are no higher now than they were a few months ago.

It is my belief a recession is needed to force prices down further. Lumber, aluminum, steel and copper are all well off their highs. I don’t think it’s a coincidence housing prices are dropping, demand has declined, and basic building materials have come down in price.

The same will happen elsewhere. If we go into a recession, companies will lay off employees, who will then spend much less money. Others, shocked by gas and food prices, will spend less too. And eventually the lower demand will force prices down. The solution to high prices is higher prices because eventually people will cut back and force prices down. I don’t expect them to go back down to pre-COVID levels because wages are much higher today, but they will come down.

It’s already happening with food commodities.

Wheat, fertilizer, corn and others are off their highs and unchanged going back several months.

And with building materials.

Lumber, aluminum, steel and copper are well off their highs.

And it’s starting to happen with energy.

Oil and natural gas could be breaking down.

Per the charts above, inflation is not running out of control. Most commodities experienced massive gains off their lows but haven’t done much the last few months. A few more rates hikes and a recession would bring inflation back down. And since this is our biggest threat, it serves as a sliver of hope the market can bottom later this year.

Jason Leavitt

email list:

Posted in Charts/Essays/Reports

Share RecommendKeepReplyMark as Last Read

To: Julius Wong who wrote (6941)6/23/2022 8:11:37 PM
From: kidl
2 Recommendations   of 7157
Warren Buffett on Why Wall Street Is Wrong About Inflation (

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/23/2022 9:54:27 PM
1 Recommendation   of 7157
Jim Rogers warns of the ‘worst bear market’ in his lifetime – these are the ‘least dangerous’ assets to own today

Jim Rogers warns of the ‘worst bear market’ in his lifetime – these are the ‘least dangerous’ assets to own today
With the S&P 500 down 21% year-to-date, the situation for stocks is pretty grim — but according to legendary investor Jim Rogers, it’s just the start.

“This has to be the worst bear market in my lifetime, which means it will go down a lot and it will last a long time,” the 79-year-old told ET Now earlier this month.

Rogers knows a thing or two about making money in turbulent times. He co-founded the Quantum Fund with George Soros in 1973 — right in the middle of a devastating bear market. From then till 1980, the portfolio returned 4,200%, while the S&P 500 rose 47%.

If you are looking for a safe haven, Rogers says “there is no such thing as safe” in the world of investments. Still, the multimillionaire points to two assets that could help you withstand the upcoming onslaught.


Precious metals are a go-to choice for investors in dark times, and Rogers is a long-time advocate.

“Silver is probably less dangerous than other things. Gold is probably less dangerous,” he says.

Gold and silver can’t be printed out of thin air like fiat money, so they can help investors hedge against inflation. At the same time, their prices tend to stay resilient in a crisis.

But that doesn’t mean they are crash-proof.

“I'm not buying them now, because in a big collapse, everything goes down. But I probably will buy more silver when it goes down some more.”

Silver is widely used in the production of solar panels and is a critical component in many vehicles’ electrical control units. Rising industrial demand, in addition to its usefulness as a hedge, makes silver in particular a compelling asset for investors.

You can buy silver coins and bars directly at your local bullion shop. You can also invest in silver ETFs like the iShares Silver Trust (SLV).

Meanwhile, silver miners such as Wheaton Precious Metals (WPM), Pan American Silver (PAAS) and Coeur Mining (CDE) are also solidly positioned for a silver price boom.


You don’t need an MBA to see the appeal of agriculture in a bear market: No matter how big the next crash is, no one is crossing “food” out of their budget.

Rogers sees agriculture as a potential refuge in the upcoming collapse.

“Silver and agriculture are probably the least dangerous things in the next two or three years,” he says.

For a convenient way to get broad exposure to the agriculture sector, check out the Invesco DB Agriculture Fund (DBA). It tracks an index made up of futures contracts on some of the most widely traded agricultural commodities — including corn, soybeans and sugar. The fund is up 9% in 2022.

You can also use ETFs to tap into individual agricultural commodities. The Teucrium Wheat Fund (WEAT) and the Teucrium Corn Fund (CORN) have gained 38% and 27%, respectively, in 2022.

Rogers also likes the idea of investing in farmland itself.

“Unless we’re going to stop wearing clothes and eating food, agriculture is going to get better. If you really, really love it, go out there and get yourself a farm and you’ll get very, very, very rich,” he told financial advisory firm Wealthion late last year.

Some real estate investment trusts specialize in owning farmland, such as Gladstone Land (LAND) and Farmland Partners (FPI).

Meanwhile, new investing services allow you to invest in farmland by taking a stake in a farm of your choice. You’ll earn cash income from the leasing fees and crop sales — and any long-term appreciation on top of that.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Share RecommendKeepReplyMark as Last Read

From: Julius Wong6/26/2022 7:15:41 AM
1 Recommendation   of 7157
Wall Street Breakfast: The Week Ahead

Jun. 26, 2022 7:06 AM ET

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Stitcher and Spotify.

Economic reports in the week ahead

A rough second quarter in the market will come to an end next week, but not before big earnings reports from Nike (NYSE: NKE) and Micron (NASDAQ: MU) land on the laps of investors. The economic calendar includes updates on durable goods orders on June 27, home prices on June 28, GDP on June 29, PMI on June 30, and construction spending on July 1. Near the end of the week, oil traders will be watching the OPEC+ meeting to see if the plan is to proceed with the targeted August oil production increase against a backdrop of high prices and limited spare capacity for some members. Also watch for news out of Hewlett Packard Enterprise Company (NYSE: HPE) with the company holding its three-day edge-to-cloud HPE Discover conference. A big stock split at Shopify ( SHOP) and the mad rush at Tesla ( TSLA) to generate late-quarter deliveries will also capture attention. Those events all fall in front of a three-day holiday and with firms like JPMorgan noting that portfolio managers will be rebalancing ahead of Q3 and potentially buying more stocks in order to keep their asset mix at the expected levels.

Earnings spotlight: Monday, June 27 - Nike ( NKE), Jefferies ( JEF), and ( TCOM).

Earnings spotlight: Tuesday, June 28 - Progress Software ( PRGS) and Aerovironment ( AVAV).

Earnings spotlight: Wednesday, June 29 - Paychex ( PAYX), General Mills ( GIS), Bed, Bath & Beyond ( BBBY), and McCormick ( MKC).

Earnings spotlight: Thursday, June 30 - Constellation Brands ( STZ), Walgreens Boots Alliance ( WBA), and Micron ( MU).

IPO watch: Onfolio (NASDAQ: ONFO) is expected to start trading in the U.S. on July 29. In Asia, Chinese podcasting startup Ximalaya is considering launching its planned Hong Kong IPO as soon as next week. Also keep an eye on Zhong Yang Financial Group ( TOP), with the first analyst ratings expected to follow the expiration of the analyst quiet period.

Nike earnings preview: Nike ( NKE) will provide its earnings report after the close on June 27. In its last quarterly update, NKE gave Wall Street a pleasant surprise, overcoming supply chain issues and inflationary pressures to beat expectations and expand margins. However, since that release, shares of the shoemaker have dropped more than 20%, amid general market fears of a recession. Meanwhile, analysts have recently focused on NKE's performance in China, with both Barclays and Morgan Stanley publishing notes recently forecasting softer-than-expected revenue in the region. BTIG is also cautious on Nike into the report. The firm said that in addition to the seemingly well-known China demand issues which could increase the probability of excess inventories building in the region, there are some emerging signs pointing to a sharp slowdown in online spending by consumers in North America. Recession talk, high gas prices, and post-stimulus consumer fatigue are also seen weighing on consumers. On the other side of the argument, Baird analyst Jonathan Komp expects China sales to come in above the consensus and lead to a top-line beat. Bank of America is also a bit more positive, with an expectation that Nike will speak constructively on the reopening in China and outlook for a rebound in its growth trajectory. However, BofA reminded that currency swings are working against Nike in 2022 and could impact guidance.

Micron earnings preview:
Micron Technology ( MU) will report its fiscal third quarter results on June 30. The semiconductor company, which specializes in DRAM and NAND memory storage, has seen shares fall sharply since the start of June, hurt by a cautious outlook by industry heavyweight Intel ( INTC). Last quarter, MU topped expectations with its financial figures and offered an upbeat forecast. Ahead of the report, Wells Fargo noted that Micron issued a positive update at their recent Investor Day, but the firm also warned that data points have continued to turn more negative and near-term guidance could disappoint. The firm is still positive on the risk-reward profile for long-term investors, with management noted to be disciplined and memory expected to continue to play an increasingly important role in core-to-edge compute. Micron's strong balance sheet and buyback firepower of $5.3B were also highlighted.

Corporate events: Shareholders with Agrico Acquisition Corp. (NASDAQ: RICO) meet to vote on June 27 on the SPAC deal to combine with vertical farming company Kalera. Beginning on June 28, Hewlett Packard Enterprise Company ( HPE) will hold its three-day edge-to-cloud HPE Discover conference. Watch for the keynote address from CEO Antonoio Neri to include some details on the company's strategy. Avalara ( AVLR) will host a Virtual Analyst Day event on June 28. In the crypto world, the distribution date of Cryptyde to shareholders of Vinco Ventures (NASDAQ: BBIG). On June 28, BBIG holders will receive one share of Cryptyde ( TYDE) common stock for every ten shares of Vinco common stock held. Cryptyde is a crypto upstart focused on leveraging blockchain technologies to disrupt consumer facing industries. Performance Food Group Company (NYSE: PFGC) will host an investor day event on June 29 that will be of interest to the broad food supplier sector. Read more about the events next week that could impact shares prices in Seeking Alpha's Catalyst Watch.

Data reads: Watch for updates on monthly deliveries from Chinese automaker Li Auto ( LI), Nio ( NIO), and XPeng ( XPEV). Tesla ( TSLA) could also post its quarterly deliveries report. In the casino sector, the Macau gross gaming revenue report for June is also due out with a disappointing tally expected to be released for the local properties for Las Vegas Sands ( LVS), Wynn Resorts ( WYNN), and MGM Resorts ( MGM).

Conference schedule: The European Blockchain Convention 2022 bills itself as the most influential blockchain & crypto event in Europe. Speakers will include reps from Meta ( META), Coinbase Global ( COIN), Google ( GOOG), and American Express ( AXP). There is also some buzz around the Wells Fargo 4th Annual Bricks to Clicks Digital Conference, with Chewy ( CHWY), NuSkin ( NUS), the RealReal ( REAL), ThredUp ( TDUP), and ( BOXD) on the list of participants. Other conferences of note include the H.C. Wainwright 1st Annual Mental Health Conference, the Cantor Fitzgerald Technology ESG Conference, the Wells Fargo’s 2022 Virtual Bricks to Clicks Digital Conference, Morgan Stanley's Putting the Tech in Biotech Conference and the Stifel Virtual Cell Therapy Conference.

Stock split The Shopify ( SHOP) 10-for-1 stock split will become effective at the end of the trading day.

Box office preview: The U.S. box office is forecast to see four films grab a lion of the market share. Holdovers Top Gun: Maverick and Jurassic Park will be challenged by Warner Bros.' ( WBD) Elvis and Universal's ( CMCSA) The Black Phone. Those four films are all given a decent chance of topping $50M for the weekend, while Lightyear is also expected to top $25M to give AMC Entertainment ( AMC), Marcus Corporation ( MCS), and Cinemark ( CNK) momentum into the big 4th of July holiday weekend.

Barron's mentions: Carvana's (NYSE: CVNA) tower of problems is highlighted in the cover story. The auto retailer is in the spotlight, with some customers complaining about the registration and titling process. In Carvana's home state, the Arizona Department of Transportation is noted to have received more than 80 complaints about the company over a four-year period. The breakdown on Starbucks (NASDAQ: SBUX) in the issue was more positive, with the China business expected to finally turn around. Valuation makes sense to some analysts, with SBUX trading at just over 22X 12-month forward earnings vs. the five-year average of 27.3X. Of note, closing that gap to 25X 2024 earnings would put the stock at $98, up about 30% from the current level. Finally, the question of which are the cheapest stocks for investors to consider is tackled. Home builders and steelmakers dominate the list of value plays, led by D.R Horton ( DHI), Lennar ( LEN), Toll Brothers ( TOL), Cleveland-Cliffs ( CLF), Nucor ( NUE), Stelco Holdings ( OTCPK:STZHF), Steel Dynamics (NASDAQ: STLD) and U.S. Steel (NYSE: X).

Sources: EDGAR, Bloomberg, CNBC, Reuters, The Hollywood Reporter

Share RecommendKeepReplyMark as Last Read
Previous 10 Next 10