ANOTHER DOLLAR HOLLER
CLIENT TALKING POINTS
ANOTHER DOLLAR HOLLER
Time for another Dollar Holler as reality starts to set in for those who have been busy smoking the Bernanke peace pipe. There is most likely no further easing coming down the pipe at the Fed’s Jackson Hole meeting and you know what that means? Well if you’ve been paying attention to the market, you certainly would. Gold is heading lower, the US dollar is back in bullish business and commodity prices are set to deflate somewhat. You can’t just keep the QE bandwagon going forever, so now people are starting to holler at that dollar and Paul Ryan is loving it. Furthermore, a Washington Post article pulled an anti-Hilsenrath and basically suggested all we mentioned above, adding fuel to the fire.
TALKING TO JIM RICKARDS
For those of you who didn’t get a chance to dial-in to the call yesterday, our expert call with Jim Rickards was fascinating to say the least. Rickards touched on myriad topics ranging from chaos theory to countries in crisis reverting back to the gold standard to China buying the Euro. It was a privilege to be able to get so deep into the brain of a man as diverse as he is. Luckily, we live-tweeted the call and then put up a post highlighting the best points that Jim mentioned. You should check it out this morning if you haven’t already – this is the kind of stuff that gets your brain’s cogs turning.
URL: http://app.hedgeye.com/unlocked_content/22860-our-expert-call-with-jim-rickards
SPREAD RISK
The market may or may not have a boiling point. That’s more of a subjective call in terms of what your trading and investing strategy is. But in the big macro picture, there are a few relationships that are important to pay attention to. Measuring this spread risk in the market can help you make your next move accordingly. Keith highlighted three relationships in this morning’s Early Look we think are worth reiterating:
1. The long-term spread between Money Supply (rising as they print money) and Velocity of Money (falling, fast)
2. The long-term spread between the US Dollar and the CRB Commodities Index
3. The long-term spread between the SP500 priced nominally versus priced in Gold
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ASSET ALLOCATION
Cash: Flat
U.S. Equities: Flat
Int'l Equities: Flat
Commodities: Flat
Fixed Income: Flat
Int'l Currencies: Flat
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TOP LONG IDEAS
NIKE INC (NKE)
Nike’s challenges are well-telegraphed. But the reality is that its top line is extremely strong, and the Olympics has just given Nike all the ammo it needs to marry product with marketing and grow in the 10% range for the next 2 years. With margin pressures easing, and Cole Haan and Umbro soon to be divested, the model is getting more focused and profitable.
- TRADE: LONG
- TREND: LONG
- TAIL: LONG
FIFTH & PACIFIC COMPANIES (FNP)
The former Liz Claiborne (LIZ) is on the path to prosperity. There’s a fantastic growth story with FNP. The Kate Spade brand is growing at an almost unprecedented clip. Save for Juicy Couture, the company has brands performing strongly throughout its entire portfolio. We’re bullish on FNP for all three durations: TRADE, TREND and TAIL.
- TRADE: LONG
- TREND: LONG
- TAIL: LONG
LAS VEGAS SANDS (LVS)
LVS finally reached and has maintained its 20% Macau gaming share, thanks to Sands Cotai Central (SCC). With SCC continuing to ramp up, we expect that level to hold and maybe, even improve. Macau sentiment has reached a yearly low but we see improvement ahead.
- TRADE: LONG
- TREND: NEUTRAL
- TAIL: NEUTRAL
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THREE FOR THE ROAD
TWEET OF THE DAY
“Handlesblatt claims Weidmann may threaten to resign if ECB bond buying plan goes ahead and/or he does not get German govt support” -@OwenCallan
QUOTE OF THE DAY
“A wise man gets more use from his enemies than a fool from his friends.”– Baltasar Gracian
STAT OF THE DAY
$3.1 billion. The price Scotiabank is paying to gobble up ING’s Canadian business.
