Author Archives: Ket Garden

by | December 17, 2013 · 2:15 pm

Santa Claus rally

Nikkei rose on upbeat global growth signals. European shares and commodities fall before the Fed two-day meeting. The consensus still seems to be in favor of January or March for the first taper.

December is a better trading month than the others and better known as “the Santa Claus rally”. The markets has a tendency to go up the last 10 trading days of the year. Will this tradition continue this year, or will the Fed keep the markets grounded?

The Dow has gained an average of 1,7% since it was created in 1896. It is rising 77% during this seven-trading session period in December. That is much better than the 0,2% average gain in all other seven-trading session periods of the calendar.

The Fed has said it won’t cut stimulus until it sees signs of sustainable economic recovery. Unemployment has since fallen to a five-year low and third-quarter economic growth was stronger than forecast.

Is the U.S economy strong enough to start tapering now in December 2013? The FED has said it won`t start the tapering before it sees signs of a sustainable economic recovery.

The unemployment rate is now 7,0%. This is the lowest level since november 2008. This is encouraging news for the 11 million Americans who remain unemployed. 2013 is on the way to be the best year for job creation since 2005.

The market has a long way to go before it is healed from the recession, but unfortunately the job market still has a long way to go until it’s entirely healed from the recession. The meeting starts tomorrow. Let`s wait and see…. Do you belive in Santa Claus?

News today: Core CPI at 8:30am.

FED

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 16, 2013 · 1:15 pm

Market overview

European shares is up today, led by Aggreko with a bullish trading update. The European market is up despite the concern about the FED`s tapering plans this week. Much higher fear in Japan, while Nikkei sled -1,6%.

The S&P was down -1,65% last week. The worst week since August. Facebook (FB) went in the opposite direction and bucked the market trend lower, finished up +11,22%, trading at $53,32. Facebook will now join both the S&P 100 and the S&P 500.

Many investors are very satisfied with this bullish year 2013, but now all the investors eyes are on the Federal Reserve later on this week. The FED have a two-day policy meeting Wednesday.

FED is very powerful! Everything they say have a huge impact of the financial markets. The question now is whether they will continue QE or start to taper, the huge bond buying program that has made the massive mega-rally on Wall Street.

Look out for the brand news later on this week. The FED Statment will be launched at 2pm ET. Later on the same day, a FOMC Press Conference will be held at 2.30pm. This is very very very important news.

News today (all times are Eastern Times) : Empire State Manufacturing Index at 8:30am, TIC Long-Term Purchases at 9:00am, Capacity Utilization Rate & Industrial Production at 9:15am.

global-options

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 13, 2013 · 2:37 pm

M&A (merger and acquisition)

As I wrote about earlier, you must look for small cap stocks in the Russell 2000 now. It is risky, but high risk means high gain, and you have to spend money you can afford to lose. So why small cap stocks?

You see, America is for sale and that is for the highest bidder. What I am talking about is really good companies out there. The companies that no one is talking about. The cheap one. The innovative one.

There is a lot of money out there waiting for good investments. Many of the great companies are searching for the right small cap stocks. Why? They simply want to thrive by purchasing growth.

Take a look at Google. For example, they expanded and bought Youtube.com. Everyone is afraid of Google. They are a great example of a model for what a media company needs to be in order to be competitive in the future.

Cisco was smart enough to buy companies with great talents instead of developing them themselves. Cisco have done this over 140 times since 1993. They are infusing new ideas and new ways of thinking by doing it like this. It makes them strong and competitive. Google seems to do exactly the same thing and that makes them stay ahead of a rapidly changing competitive landscape on internet.

The really biggest day in e-commerce in history is Cyber Monday. $10 billion was spent from about 70 million online shoppers. That`s an increase of 18%. 30% of the purchases came from a mobile device. 80% of those came from an Iphone or iPad. unbelievable!

And here is the catch: Social sites generated only around 1% of the e-commerce sales on that day. An increase of only 2%. So, E-commerce is the real big thing. It`s business. 17% of the sales came from Email. That`s pretty nice.

Facebook, Twitter, Instagram and Pinterest are popular sites and people still think that social media is a marketing must. The numbers are falling and the money is not in here. Social media is better for branding, networking and community building, but direct sales is better other ways than social media. Will we see any M&A in this sector in 2014? Are those big ones looking for small caps?

This is a tremendous investment opportunity and you as an aggressive investor need to play on it. But how? I expect next year to be a takeover boom! You have probably seen it before and know that nothing jolts a stock higher than an unsolicited takeover offer. The stock prices skyrocket on rumors like that.

Who say no to a single-day return of 50% or more? I have many new and exciting companies on the radar, but I can`t tell you what stocks it is. It is a lot of research behind the work of finding the best stocks, so this is what I get paid for.

But I can tell what sectors you should look for. It is technology and healthcare. I expect a lot of action in those sectors next year. I really look forward to 2014. It`s gonna be a funny year. So, I am still bullish!

News today: PPI m/m at 8.30am.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 12, 2013 · 1:41 pm

Budget deal

U.S markets sold off yesterday and the Russell 2000 had the biggest drop, finishing down -1,6%. The S&P 500 slid -1,3%. Nikkei is down 1,1%. Investors are waiting for a FED tapering next week.

The Democrats were concerned about the possible effects on federal employees. Negotiators included pension payment increases for military personnel to mitigate the effects on federal workers. No one spend so much money on military than U.S. Why not cut the spending here?Republican leaders want to increase user charge paid by airline passengers and try to reduce the deficit by an additional $20 billion.

Investors are looking forward to next U.S Federal Reserve`s Open Market Committee (FOMC) meeting (December 17 – 18). Last friday we saw a stronger than expected U.S jobs report and that led the FED to move its timeline for implementing a tapering (QE) earlier than expected and that is at the next week`s FOMC meeting.

All the speculation on the tapering process is that it has numbed traders to the actual event, but some say that the markets have already mostly factored into their price structures the Fed tapering, when it does occur. If so, we will see the S&P at 1900 at the end of this year.

Ben Bernanke have a few weeks left as a chairman in Fed. Is he gonna do something before he steps down? How can the Fed stop QE, because QE is funding the U.S federal deficit? The U.S is spending more than they are earning.

They can start to taper 5 or 10 billion and probably cut some number of mortgages they are buying from the Wall Street bankers, but what is the odds for that? Anyway, this is not going to be easy for the middle class. Be prepared!

News today: Core Retail Sales, Retail Sales & Unemployment Claims at 8:30am, Business Inventories at 10:00am, 30 Year Bond Auction 1:01pm.

FOMC-dice

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | December 11, 2013 · 1:33 pm

Window dressing

It`s time to look at your stock portfolio. What is your winning and losing stocks? What are you gonna do with your winning stocks, and what are you gonna do with your losers? Do you have a strategy? The fund managers are focusing on two things: to outperform their competitors and to outperform a given sector benchmark.

Every year in late December, many investors, mutual fund and portfolio managers improves the appearance of theirs portfolio / fund performance to make it look better. Mutual funds usually do this before the presentation to clients or shareholders.

Many fund managers like to window dress. They look at their portfolio and sells the big losing stocks. This is good for tax planners. In addition; they purchase high-flying stocks, simply to improve their portfolio. This theory is questionable, because investors can see the actual performance of the fund at a given point of time.

The losing stocks tend to go up when all the investors are selling them. That`s why it can be lucrative to buy the losing stocks at the end of the year. Some mutual funds like commodity funds invest in other stock sectors like some hot sectors at the time, just to disguising the funds holdings. The clients do not know what really going on and what they are paying for.

In a short period of time, this strategy will make the mutual fund more attractive, but in the long run, it is difficult to hide poor performance. As a private investor you can buy some cheap penny stocks to make it look better. As you know, in average of 41 penny stock will double every trading day on Wall Street.

This is why December is so special, and this is why we traditionally see a so-called January effect. There is two reasons for that:

1. Tax loss selling: In (late) December investors sell stocks in which they have losses in order to lower their taxes on net capital gains, thereby further increasing the downward price pressure of losing stocks. In January the proceeds from these sales will be reinvested, resulting in large January returns.

2. Window dressing: In (late) December portfolio managers sell losing and risky stocks and hold cash and blue-chip stocks instead to make their year-end portfolios appear more conservative. In January the proceeds from these sales will be reinvested, resulting in large January returns.

It doesn`t mean that this is going to happen every year. So far, we have not seen any correction and investors are waiting for the FED meeting next week. If the FED start to taper, we will probably see a big selloff. Wait and see. News today: Crude Oil Inventories at 10:30am, 10 Year Note Auction at 1:01pm Fed Budget Balance at 2:00pm.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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