Missing The Point

Client Talking Points

What Me Worry?

People sure have made a lot of noise over the past two days with the market not closing in the green. It’s really funny, because the S&P 500 is still up above 1500; looks like the permabears are upset because they missed the +177 point move to the upside in the S&P 500 from the November lows. These days, people will say the craziest things just to make their position hurt a little less. We’re bullish on #GrowthStabilizing and the US dollar, which is good for consumption which helps boost stocks. We’re also bullish on US housing and US employment. As for the commodity game, that’s where our bearish stance lies. Gold, silver and food we are particularly bearish on. Perhaps the stock permabears should switch their asset class; maybe then they’d get something right.

Asset Allocation

CASH 37% US EQUITIES 24%
INTL EQUITIES 24% 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.

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

“Studies show, Caffeine can cause you to be more open-minded to viewpoints that contradict your own.” -@petenajarian

 

QUOTE OF THE DAY

“The public will believe anything, so long as it is not founded on truth.” -Edith Sitwell

STAT OF THE DAY

CRB Commodities Index is down -4% for the month. Strong Dollar = Weak Commodities.


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