Japaniflation

Client Talking Points

Pump It Up

The Japanese are being watched by the rest of the world’s central planners, politicians and investors right now. People are interested to see exactly how Japan plans on fixing its economy and whether it will follow in the path of the United States, footstep after footstep. Japan’s Finance Minister Taro Aso is saying he wants to buy not only domestic bonds but European bonds as well. They also want to print money and devalue the yen as much as possible. They claim it’s all in the name of keeping the yen at a “reasonable” level. We’ll see what the Japanese are capable of doing soon enough and the people of Japan probably won't be too happy about it.

Asset Allocation

CASH 43% US EQUITIES 21%
INTL EQUITIES 21% COMMODITIES 0%
FIXED INCOME 0% INTL CURRENCIES 15%

Top Long Ideas

Company Ticker Sector Duration
ASCA

We believe ASCA will receive a higher bid from another gaming competitor. Our valuation puts ASCA’s worth closer to $40.

ADM

ADM has significantly lagged the overall market in 2012 over concerns that weakness in the company’s bioproducts (ethanol) and merchandise and handling segment will persist. Ethanol margins suffered from higher corn costs, as well as weak domestic demand and low capacity utilization across the industry. Merchandising and handling results were at the mercy of a smaller U.S. corn harvest. Both segments could be in a position to rebound as we move into 2013 and a new crop goes into the ground. With corn prices remaining at elevated levels, the incentive to plant corn certainly exists, and we expect that we will see corn planted fencepost to fencepost.

FDX

Margins are in a cycle trough as the USPS is on the brink. FDX is taking more share in the U.S. and following the recent $TNT news flow we think $UPS is in a tough spot.

Three for the Road

TWEET OF THE DAY

“BATS says their customers lost around $420k due to a system bug that hit 430k trades since 08. Problem discovered Friday.” -@nathanielpopper

QUOTE OF THE DAY

“The thing I hate about an argument is that it always interrupts a discussion.” -G.K. Chesterton

STAT OF THE DAY

Jobless Claims 371,000; below our #GrowthStabilizing level of 385,000.


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