Soos Global Investor Update...Monday, June 15, 2015

As a follow-up to the chart I sent earlier showing the price history of the DJIA over the past 2 ½ years, I’ve had a number of email exchanges w/investors who had comments and questions.  Below are some cut/pastes from my responses in those exchanges….but first….a friendly reminder from my Compliance folks:

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I actually think we’ll give the 200ma a good test this time, and might even break below it…but I don’t anticipate that it would be a long-lived sell-off.  Once the Fed actually does it’s dirty work of raising rates, say 25 or even 50bps, I think markets will be more at ease, and then stocks can recover, and then long yields can come down.

I still think that the ‘yieldy’ stuff, such as HYG, JNK, the Preferred ETFs, XLU, the REITs, are all oversold.

I also think EWA( Australia) looks attractive, as does the Emerging Market local fixed income ETF, EMLC.

Finally, SYMC (cyber sec) has fallen back to attractive levels.

If you look at the chart below and focus on the recent 4 or 5 months, it’s basically been a straight-across consolidation….lots of daily ups and downs, but basically, not going anywhere.  It finally feels, however, that we’re close to a move out of this band….in my view, first lower, then back up, especially as Q2 and Q3 economic data show meaningful improvements over Q1!

(Continued below the chart>>)

                Yes, today’s selloff, I believe, provides some opportunity….for example…. EWA:  Been eyeing Australia, looking to add, on expectations that China will do additional stimulus and that should help Australia’s iron ore and other commodity export markets.  The housing and employment data has been encouraging too.  This ETF pays a dividend 2x per year, and the next one is going exdiv later this month.  Following through on plan to scale in on pullbacks.

DVA…had already taken profits on ½ of our position some time ago, and have been looking to exit the balance.  Exited today.  May re-enter at some point, but we’ve made good profit in this stock and I’m concerned that it could top out here ahead of election campaigning that might bring added attention to government spending on healthcare.   Given relatively light cash holdings in the portfolios, I believe using the money from DVA for SYMC is a better risk/reward trade-off.

SYMC…been looking to add to our cyber-security positions, and had taken an initial 1% in SYMC some time ago.  The stock has been volatile, and of late, along w/most tech, it’s been hit.  Today’s downtrade to <$23.75 appeared to me to be good value, so I added another 1%.  With all the recent high-profile hacking situations, such as the Chinese (alleged) hacking of the US Gov’t, I believe that the cyber space will continue to be strong.

WM…there have been reports recently that ‘scrap’ demand from overseas has fallen off, and in turn, scrap prices have fallen.  That should weigh on WM. In addition, today’s industrial production data was the sixth straight month of decline, again, something that has and might continue to weigh on WM.  So I lightened up the position, taking 1% off the table, leaving 2.4%.  The dividend is another compelling reason to hold on, but the real key is the likelihood that as the US economy improves over time, WM’s unique position in this high-barriers-to-entry-space  should set it apart to the upside.

NSC…I put the 1% from WM into NSC, which has been badly beaten down in recent weeks.  The new regulations in the rail sector have put pressure on all rails, but in NSC’s case, the fall-off in coal transport, has also taken its toll.  I think the sell-off is overdone, down nearly 25% from late ’14 highs.  Increased position to 3.4%.

If you have any questions, or comments, please keep them coming in!!

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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 including NSC, SYMC, WM, EWA, EMLC, XLU, preferred REITs, HYG, JNK.  Positions may change at any time without notice.