Get Shorty

RIA DAILY PLAYBOOK     

FOR RELEASE ON FRIDAY, JULY 20, 2012

 

CLIENT TALKING POINTS

 

THE JAPANESE DON’T LIE

While the US market is busy getting squeezed amid tepid volume and earnings, the Japanese are showing us how it’s really done. The Nikkei has continued to open post-US close with a solid gain, only to be slammed down into negative territory, closing down -1.4% this time around. The global industrial slowdown is among us and it is quite noticeable.

 

GET SHORTY

You can wax poetic all you want about particular names in stockpicking, but the reality is unless you backup your call with a timestamp, it’s just another idea. We have been short the S&P 500 since 1375 – yes it’s at 1376 now. We’re off by a point. This “rally” will not last, and please keep in mind that hope is not a risk management process.

 

LEAVING OIL BEHIND

It’s about that time. The US dollar has been in a bullish formation and we’ve been liking it since about April. We went short oil yesterday in the Hedgeye Virtual Portfolio. Yes, the US dollar is ready to rip higher. Never mind the bollocks associated with the turmoil in the Middle East, threats or suicide bombings. It simply doesn’t matter. All that talk of $200 a barrel  oil is nothing but laughable at this point.

 

 

ASSET ALLOCATION

 

Cash: Down U.S. Equities: Flat

 

Int'l Equities: Flat Commodities: Flat

 

Fixed Income: Up       Int'l Currencies: Flat

 

TOP LONG IDEAS

 

PSS WORLD MEDICAL (PSSI)

The bulk of the bad news is on the table following disappointing F2012. Rebased F2013 estimates far more reasonable, and revenues should be supported by our expectations for rising physician utilization, and in the near-term, a flu season that is shaping up as a considerable tailwind.

                             

TRADE: LONG

TREND: LONG

TAIL: NEUTRAL

 

HCA (HCA)

SS volume accelerated in 1Q12 and employment remains a tailwind to both admissions & mix. We expect acuity to stabilize and births and outpatient utilization to accelerate out of 1Q12, while supply cost management continues as a margin driver and acquisition opportunities remain a source for upside.

 

TRADE: NEUTRAL

TREND: LONG

TAIL: NEUTRAL

 

UNDER ARMOUR (UA)

The company continues to control its own destiny through investments in all the right areas. We think 30%+ top line and EPS growth for 5+ years. One of its failures, however, has been in penetrating markets outside the US. That will happen. But for now, its failure is a competitive advantage in the face of a strengthening dollar. We like it in sympathy with a LULU sell-off.

 

TRADE: LONG

TREND: LONG

TAIL: LONG

 

THREE FOR THE ROAD

 

Tweet of the Day: “Indeed it looks like a free fall abyss @ekathimerini: Greece, Portugal & Spain are staring into the same economic abyss dlvr.it/1tQPQx”        -@Nouriel

 

Quote of the Day: “When a person can no longer laugh at himself, it is time for others to laugh at him.” –Thomas Szasz

 

Stat of the Day: 4500 jobs to fill at the Solaire Manila Resort & Casino. 


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