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Client Talking Points

If You Fight It...

If you fight the market, you’ll get crushed. If you use common sense and more practical methods to move with the market, then you might stand a chance. We have two things happening right now: bullish and bearish formations. For instance: the US stock market is in bullish formation and is set to continue heading higher; that doesn’t mean we don’t ever have a down day, mind you. Gold, however, is in bearish formation and continues to get crushed. Anyone who bought the metal at $1750/oz has to be hurting. And while the S&P 500 is signaling overbought on the TRADE duration at 1533, that doesn’t mean were’ dropping back down to 1400. It means we’re due for a bit of a correction and today, we may very well get it.

Asset Allocation

CASH 47% US EQUITIES 15%
INTL EQUITIES 20% COMMODITIES 0%
FIXED INCOME 0% INTL CURRENCIES 18%

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.

FDX

With FedEx Express margins at a 30+ year low and 4-7 percentage points behind competitors, the opportunity for effective cost reductions appears significant. FedEx Ground is using its structural advantages to take market share from UPS. FDX competes in a highly consolidated industry with rational pricing. Both the Ground and Express divisions could be separately worth more than FDX’s current market value, in our view.

HOLX

HOLX remains one of our favorite longer-term fundamental growth companies given growing penetration of its 3D Tomo platform and high leverage to the 2014 Insurance Expansion from the Affordable Care Act.

Three for the Road

TWEET OF THE DAY

“Housing Starts missing is bullish for pricing” -@KeithMcCullough

QUOTE OF THE DAY

“It is difficult to get a man to understand something when his job depends on not understanding it.” -Upton Sinclair 

STAT OF THE DAY

STAT OF THE DAY
JAN HOUSING STARTS: 890K V 920KE; BUILDING PERMITS: 925K V 920KE