Thursday, April 10, 2014

The Glass is 1/2 Filled w/Putinization....What's in the Other 1/2???

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With all the geopolitical fear-mongering going on re the Putinization of Eastern Europe, and I don’t mean to belittle the negativity that this rightfully engenders in market participants, it’s easy to lose sight of some global positives.
Question….if you don’t already know from this morning’s news, and had to guess where Greece would be able to borrow in the public markets for a 5yr bond, what yield would you put on it?
Correct answer:  4.95%!!!
How far we’ve come!!   While many wonder if the market is being too optimistic about Greece’s navigation out of its financial mess and believe that the market is far too complacent about the risks, for the moment at least, today’s bond sale, for Greece, is an unqualified success.
Also, and this is still a ‘wow’ item, though a touch less so, Italy and Spain’s debt is trading in the low 3% levels.  That’s a big positive for the European story.  Every day that goes by where they borrow at such low levels really helps on their fiscal and debt adjustments.
Add into that last night’s liberalization move by China re cross-border equity trading, and Australia’s strong employment data, and continued improvement in the jobs picture here in the US, and you have a good set up for the post-tundra winter when the sun ought to shine, not just literally, but figuratively on sales and earnings.
As I’ve been writing in these missives, I’ve selectively put cash to work on pullbacks in what I believe are quality names.  And I remain in that mode.  FYI, on my radar screen to either add to existing positions or to initiate new longs include:  Nike (NKE), Pembina Pipeline (PBA), Fresenius (FMS), US Ecology (ECOL). 
On the other hand, watching recent run-ups in Deere (DE) and Caterpillar (CAT) to assess valuation at these levels (still room to run?  Or, overextended?)
Will keep you posted.

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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Additional Disclaimer: currently long many stocks/ETFs incl. NKE, DE, CAT.  Positions may change at any time without notice.