A Friendly and Important Disclaimer Note (in
addition to legal language below): If you’re reading this post and are not currently investing with Soos Global (which, of course, is
something we should discuss!), please bear in mind that while we share details
on changes made to our portfolios, it's important to consider that our
portfolio decisions are taken in a much broader context of our overall
portfolio strategies and our assessment of each of our investor's unique
financial profiles. As such, what we do, and when we do it, is specific
to our investor portfolios and is NOT intended, in any way, as advice for use
by others. Readers are reminded that all comments posted here are for information
and entertainment purposes only!
Any commentary, especially those that include specific mentions of
'buying' or 'selling' or 'positions', is made solely for those limited
informational and entertainment purposes, and NOT as advice.
Thanks for reading. And please
email or call w/any questions or to discuss in more detail. Also,
please visit http://stockcharts.com/public/1587236
to see our charts of close to 100 stocks/etfs on our radar screen.
Best, Ed
(If you'd like to exchange thoughts on this post or on other subjects, please connect with me through the Private Chat tool on the right side of this page, or if you'd like to email thoughts, please do so through the Contact Form feature. For public airings, please use the Comment feature below. Looking forward to hearing your thoughts!)
(If you'd like to exchange thoughts on this post or on other subjects, please connect with me through the Private Chat tool on the right side of this page, or if you'd like to email thoughts, please do so through the Contact Form feature. For public airings, please use the Comment feature below. Looking forward to hearing your thoughts!)
(Below is a note sent to investors yesterday as part of our ongoing regular portfolio updates..fyi).
Just a quick update on the portfolio and market thoughts.
You'll recall that in late September, I moved some of our
cash position into fixed income ETFs with the thought that the market was
overly pessimistic about interest rates rising. Given the capacity
excesses both in terms of labor and other means of production, it seemed then,
and continues to seem to me now that long-term interest rates would be unlikely
to spike higher any time soon. Yes, with the Fed having completed QE and
with the US economy continuing to show some signs of life, especially in the
labor market, the market is correct to anticipate a move upwards in short-term
rates by the Fed, but anything more than a small, deliberate move would not be
in sync, in my opinion, with the economic realities. In particular,
while the Fed minutes of late have made a big deal of the improving labor
market, the reality is that job growth of roughly 200k per month is still only
a 'slow' pace of job growth and would really need to be over 300k per month to
make a serious dent in the un- and under-employed numbers which then could
trigger some meaningful wage pressures. Until then, it's not surprising
that wage growth has remained stagnant.
As we continue to be in an environment where equity markets
are at or near all-time highs, where earnings are likely to have trouble
keeping pace with previous quarterly gains, where Japan has recently been
confirmed to be in recession and where Europe continues to struggle
economically (in addition to geopolitically with Russia/Ukraine on its
doorstep), I continue to believe that putting some portion of the portfolio in
income producing assets makes sense, and, as I've been doing when specific
equities retreat to more compelling valuations, using our cash, or money that
is in fixed income ETFs, to then purchase more equities.
Currently, I'm considering adding some preferred bond/stock
ETFs to the mix. Their yields are north of 5%, they trade generally
with less volatility, and the credit quality of the companies appears to be
good. I'm also looking to add some of the fixed income ETFs that
we already have.
As for equities, I continue to position the portfolio around
our key global macro themes, most notably being the global emergence of middle
class consumers in a growing number of countries around the world. While
we have many successes in the diversified mix, and I'd be delighted to discuss
them with you any time, I do want to comment on some of the 'hot spots' in the
portfolio so that you're up to date on my tactical and strategic plans:
XLE, TAN: The rout in oil prices has put
pressure on our XLE etf, and our solar etf whose ticker is TAN. I
believe that oil prices will bounce from current levels, so I expect to hold
both for now, but I'm considering selling TAN at higher levels as the
theme of a global move into alternative energy sources should lose some urgency
with oil and natural gas prices having fallen so low. Some M&A
activity in the wind/solar space of late has helped give TAN a boost, but a
more meaningful run up in TAN, I believe, would have to be preceded by a move
up in oil and related companies, which might likely be captured by XLE.
Yamana (AUY)….continues to suffer on weak gold
prices, mostly due to strong USD, but also due to expectations of lower demand
from India as the country looks to slow gold purchases in order to stem the
current account deficit. The stock got hit hard on its last earnings
release which missed expectations and was muddied by higher taxes in Chile and
by problems with their Brazilian mines. Given how low the stock trades,
it could easily be a target by other gold miners as the whole space is
suffering currently from weak global growth, strong USD and ample
supplies. There was talk last week that AUY would spin off their
Brazilian mines, news that the market liked. I plan on holding on and
expect the current extreme negative sentiment in this pace to abate, at which
point, AUY, being a low-cost producer, could stand to do well.
HIMX…has had a hard time recovering from market
expectations that Google Glass is not going to happen. HIMX, being partly
owned by Google, was expected to play a big role in the Google Glass wearable
market. The whole wearable market is still evolving, and I expect HIMX to
be a player in that space. In the meantime, it is not a one-horse
wonder. It's ICs and semis are used in a growing diversity of products
with a growing diversity of customers. The coming months should be
particularly telling as to consumer appetite for 'wearables'. Many new
products are being featured for the upcoming shopping season, and I'd expect
the flurry of activity amongst designers and manufacturers to pick up once the
most compelling versions of the products are identified.
In each of the cases above, I'm keeping a particularly close
eye on how events unfold and will keep you posted if things evolve in a way
that warrants a change in course.
In the meantime, please email or call if you have any
questions.
Best,
Ed
Please continue to visit Soos Global Market Musings for updates.
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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).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs incl HIMX, AUY, XLE, TAN, PFF, PFXF, PGF. Positions may change at any time without notice.
(Sign up to "Follow by Email"! And share with others!)
(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).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs incl HIMX, AUY, XLE, TAN, PFF, PFXF, PGF. Positions may change at any time without notice.