Weekly Update, August 27, 2017

By | August 27, 2017
  • Doug Short’s weekly SPX graph –
  • I still think the transports are a valuable indicator – does not matter where the goods were purchased (inside bricks or inside bytes), supply chain transportation needs to deliver the goods.  My take away is that there is no HUGE good news, but there is also an absence of bad news.  Report – I really like data visualizations that put multiple year slices across same seasonality; for example, http://econintersect.com/images/z%20truck1.PNG?v=34
  • Not much immediate value to this visualization, but interesting nonetheless  – is the key variable, the capital required for the business?  That premise held until Lam Research, which is fairly capital intense (Semi tools)
  • Jeff Miller’s Weekly indicator dashboard – the most striking data pattern is still the 10yr and anticipated inflation … really runs counter to the ‘expansion and higher rates’ narrative
  • Another very interesting graphic from Jeff Miller – take a look at the 2050 forecast and notice the current developed countries drop from the list, e.g., Russia, Japan, as well as the rise of Nigeria
  • Here is a new author (referenced  by Jeff Miller) with an interesting statement that reflects some of my thinking about Europe:
    • “What’s happening is that we’ve gone from a period where the strong dollar was distorting corporate earnings to now where the weak dollar is helping the bottom line. It comes down to this: Europe’s economy is trailing by about three years. All of what Mr. Draghi is doing, and has been doing, comes largely from Mr. Bernanke’s playbook.”
    • The full report is here:  http://www.crossingwallstreet.com/archives/2017/08/cws-market-review-august-25-2017.html
  • For beginner FAST graph users, Chuck’s review of NVDIA is a treat https://seekingalpha.com/article/4101039-nvidia-forecast-profits-cash-flow-prices
    • I still have not taken a stance on NVDA … i am not a buyer at these levels, and cannot quite cross the chasm to a short.
  • A push for a more negative stance on US equities … this parallels my thinking and hence why i am ‘more or less’ looking for long positions in EU or Asia and shorts in US  https://seekingalpha.com/article/4102119-riding-storm
  • Another beat on the drum, but this concept is worth some thought … can an ETF be more liquid than the underlying assets?  Maybe in minutes, but not longer would be my thought https://seekingalpha.com/article/4102097-canary-watch
  • An update from SA author “Rose” https://seekingalpha.com/article/4102054-84-stock-portfolio-oh-buy-evaluation-process i love her methodical and easy to understand approach; i just do not see how she keeps clarity on 84 positions and watch lists.  I have less than 50 entries in both buckets and find myself superficially understanding more than i expect.
  • A new idea for non-taxed account https://seekingalpha.com/article/4102053-pattern-energy-wind-back – i have not done due diligence yet, but it has surfaced at the top of US longs
  • Morningstar on the ‘herd’ http://beta.morningstar.com/articles/822654/our-ultimate-stockpickers-top-10-highconviction-an.html

Commentary

  • My bias is short US, long EU and Asia (way more value-careful in Asia) though i am incredibly cautious – with >15% cash in accounts that typically would be <3%.
  • My vulture, scavenger investor personna is out in force watching for others’ dramatic exaggerations; even as a trader, e.g., last fortnight’s DSW trade
  • After increasing CSCO position recently, GE is back in my radar as a short term (1-3 years) opportunity.  Just seems that the pressure lower exceeds reality given GE business model of large capital intensive sales that follow with support and services reocurring revenue.  That revenue analysis i have yet to see carefully done.

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