Author Archives: Ket Garden

by | November 4, 2013 · 2:00 pm

Russell 2000 vs S&P 500

Japan`s Nikkei fell on friday, dragged down by Sony Corp, Nitto Denko Corp (Apple Inc supplier) and NTT Data Corp. All of them lowered their earnings guidance. Sony had a huge drop last week. European shares rise on hopes of dovish signals from ECB.

The ECB is expected to set a more dovish tone at its policy meeting on Thursday. Many people are scared because we are at an all time high and wonder where to go now. Credit Suisse said it believed equity markets would be significantly higher in 6 and 12 months’ time.

Gold are trading at $1316,70, and it is still above the support at $1300. This presious metal seems to go sideways for a while now. VIX is still low and stock market also seems to trade sideways, but I will take a closer look at it this week.

Janet Yellen wants the FED to work strenuously (like outgoing chair Ben Bernanke) to buy up bonds. She want the money to float into the private market and to increase theoretically available credit. In other words: she wants the money to be “loose”.

So far, this strategy have never been solving any recession problems. I don`t think FED have even one example in the the FED`s 100 year of history where loose money has borne along an economic recovery. She stands for something that have never worked.

The small cap stocks is the sweet spot I am talking about today. The best measure of small caps is the Russell 2000, and it has outperformed the S&P 500 by 2 to 1 over the last three months.

The Russell 2000 is up an incredible 27% over the last 10 months, while the S&P 500 is up “only” 19%. Is the small cap ride over now? Not by a long shot. And remember: 40 small cap stocks will rise 100% today! Take a look at the chart below. I have typed in the Russell 2000 compared to S&P 500.

RUT and SPX

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 | November 1, 2013 · 1:55 pm

Samsung Up

Gold bugs are trading down and are now below 50MA. Many of the gold stocks have had a terrible year so far in 2013.

It`s difficult in this mining business. Barrick gold plans $3B capital raise. This stock has plummeted so far this year. Stock price yesterday was down -4,8% AH, after announcing plans for a bought-deal public offering of 163,5M common shares at $18,35 each, for gross proceeds of $3B.

Barrick Gold plans to use 2,6B of the net proceeds to strengthen its balance sheet and improve its long-term liquidity position by redeeming or repurchasing outstanding debt.

It`s better to stick with the tech stocks, but as we all know; shares follow earnings. How is to take over a job after a geniues like Steve Jobs? John Sculley know everything about that when he became the new boss at Apple in 1983.

Steve Jobs died October 5, 2011. The new boss is Mr Tim Cook, and he has a tough job to fill Jobs shoes. The two last quarters has not been so good for Apple, but I hop the holiday season is gonna be good for Apple so we can see a change for Apple.

Samsung is a huge competitor for Apple and thay are doing it well. The earnings are still raising and they are probably going to change the tech battle soon. When you look their earnings compared to Apple`s, you know what stock you should own?

News today: ISM Manufacturing PMI @ 10:00am

Samsung

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 | October 31, 2013 · 2:16 pm

Facebook slid

Nikkei fell 1,2% today. The index is so far down 0,9% in October but still up 38% so far this year. The broader Topix was down 0,9% today. 2,82 billion shares changing hands and that is down from a six-week high of 3,48 billion.

European shares is down today with the FED`s less-dovish-than-expected statment rainsing concerns the U.S central bank could start trimming its stimulus sooner than foreseen. Gold is trading at $1334, down -1,11%.

LinkedIn plummeted 9,32%. Facebook slid -0,78%. LinkedIn`s revenue growth per user is slowing down. LinkedIn Q3 revenues came in at $393,0 million, up 56% from last year. Losses came in at $0,03 per share. Earnings came in at $46,8 million, up from $25,1 million last year.

LinkedIn is probably overvalued. The stock is up 107,8% the last 12 months. Stockprice should be much lower than it is today. P/E is 852. LinkedIn is 22 times sales and 25 times book. How is that possible? This is a bubble and how big is it gonna be?

Facebooks (FB) earnings in Q3 beat the expectations as the number one website in social media continue to expand with their mobile ads. Revenues from mobile ads rose to 49%. That`s up 8% since Q2 this year.

Profit in Q3 doubled to $621M, and EPS is now at $0,25. Revenue came in at $2,02B, up 60%. Facebook will not increase the number of ads in user feeds, and Mr. Mark Suckerberg says that the teenagers were using the Web site less. That is not good new for the future. The shares went down and are now trading at 49,01.

News today: Unemployment Claims at 8:30am, Chicago PMI at 9:45am.

facebook logo

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 | October 30, 2013 · 2:06 pm

FOMC conclusion today

Nikkei rose (1,23%) today on expectations that the FED will maintain its easy money policy for the next months. Europe is up today, and Copper jumped 0,9% extending the longest streak since July 24. Gold is trading at $1354,30.

FED started its meeting yesterday and will release a conclution later today. It is expected that the FED will continue the bond-buying campaign into 2014, and they will announce its policy decision at 2 p.m today. The FED has held interest rates near zero since 2008. They have quadrupled the size of its balance sheet to $3,7 trillion. All this with three rounds of bond buying.

It is expected that the FED will keep buying bonds at an $85 billion monthly pace until march next year. If Yellen win confirmation from the Senate, it goes the way people think. She will probably face tough questions from the Republicans who is critical of the Fed`s ultra-easy monetary policy, which is risky for the financial stability and for the future inflation.

The shutdown has slowed down the economy in Q4, and it will be interesting to see the numbers of months of economic data that may convince the FOMC that the recovery is continuing at a solid pace.

The FED conclusions today is important, but I will also look for Facebook earnings today. The traffic on the nr. 1 website in this social media business is expanding. So are the advertising, and so should the number. They could reach $100 billion in sales in the next five years.

Surprisingly, Pinterest drives more traffic to publishers than Twitter. Facebook, and it is undoubtly the best, nearly doubled its traffic since 2012. Forget the rest. Google+, LinkedIn, Youtube and other sosial media is a flop so far.

News today: ADP non-farm Employment change at 8:15am, Core CPI m/m at 8:30am, FOMC statment at 2:00pm.

FOMC-dice

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by | October 29, 2013 · 1:16 pm

Apple`s profit and margins slid

Last year, Apple`s earning rose 61% in september 2012, but fell this year for the first time in at least a decade. On a conference call yesterday Mr. Tim Cook said that fourth-quarter profits slipped roughly 8.5%. Earnings: 7,5 billion in Q3, per diluted share, 2013 (8,2 billion in Q3 2012). EPS:$8,26 in Q3, 2013 ($8,67 in Q3, 2012). Revenue is $37,5 billion. Gross margin came in at 37 percent compared to 40 percent in the year-ago quarter.

Right after the results was released, the stock fell as much as 5,1%. After the closing bell, Apple was trading at $529,88. It is down about 25% since the top in September 2012 following the debut of the Iphone 5. Apple is not a growth company anymore. I hope the holiday season can change that.

Apple sold 33.8 million iPhones, (record for the September quarter), compared to 26.9 million in the year-ago quarter. They sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter. Mac sales came in at 4.6 million, down slight from 4.9 million in the year-ago quarter.

Mr. Tim Cook reported its best quarter in education ever, generating over $1 billion in revenue on sales of iOS and Mac products, including iPads, which took a staggering 94 percent tablet marketshare in schools.

Apple have a huge competition from Samsung, Amazon, Google and Microsoft. Lower-priced products from Samsung are taking marketshares along with the other mentioned companies above. Q4 is a very important season for Apple, and Chief Executive Officer Tim Cook is planning to sell new IPhones and Ipads at the end of this year.

Apple have spent a lot of time in their inovation this summer, and they are exploring new product categories with “significant opportunities,” Tim Cook said on a conerence call today. They will release a new iPad Air on Nov. 1. Later on, they will follow up with their new iPad mini with a high-definition screen.

Apple is happy to go into the holidays with their new products like iPhone 5c, iPhone 5s, iOS 7, the new iPad mini with Retina Display and the icredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS. The new iPhone will be available in 100 countries by the end of the year.

Not only the competitors are pressing Apple on margins. The shareholders are giving them some pressure too. Investor Carl Icahn (The one I wrote about, selling 50% of his shares in Netflix) has publicly said he want Apple to initiate a $150 billion buyback to boost the company`s stock price.

Apple paid out $36 billion in dividends and buybacks in the past 5 quarter, and are now discussing what to do with their cash. News on that case will follow early in 2014. Apple`s cash dividend will be $3,05 per share of the common stock, and is payable on November 14, 2013, to shareholders of record as of the close of business on November 11, 2013.

Market participants will continue to look at the earnings this week, as well as the FOMC meeting that will be released on Wednesday. News today: Core Retail Sales/Retail Sales & PPI at 8:30am, CB Consumer Confidence at 10:00am.

too-green-130910

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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