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JPMorgan Chase Is Still the Stock Market Barometer – Voice of the People
Zacks highlights commentary from People and Picks Member «inthemoneystocks».
For more Voice of the People, visit http://at.zacks.com/?id=7872
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JPMorgan Chase Is Still the Stock Market BarometerIf you want to know what the stock market is doing just follow J.P. Morgan Chase & Co (JPM – Analyst Report). This stock is the leading financial company in the United States and possibly the entire world, therefore, it will generally lead the major stock indexes. At this time, there is a banking crisis going on around the world. Sure, the European banks might be where all of the recent focus is, however, all of these banks have some exposure to European debt and that is why these bailouts are being talked about or tried by the central banks.
JPM stock has staged a sharp three day rally and so has the major stock market indexes. If JPM stock begins to slide this short term rally could end as quickly as it began.
Other financial stocks that are trading higher today include Goldman Sachs Group Inc (GS – Analyst Report), Deutsche Bank AG (DB – Snapshot Report) and Credit Suisse Group (CS – Snapshot Report). All of these stocks are very important and should be followed, however, JPM stock is certainly the most important and a stock market barometer.
Nicholas Santiago
InTheMoneyStocks.com 
In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more about People And Picks, visit http://at.zacks.com/?id=7870
Follow us on Twitter: http://www.twitter.com/PeopleAndPicks
About ZacksZacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=7867.
Read the full analyst report on JPM. GS
Read the full analyst report on DB
Knowing Stock Market Technical Levels Make You Rich – Voice of the People
Over and over again the markets reward those investors and traders that use technical analysis. I am not talking about nonsense like stochastics, MACD or RSI. I am simply talking about looking at the chart and using common sense to determine price, pattern and time. To 99% of the public, this is a foreign language. However, it is the way to become filthy rich.
Let’s give a great example. Going into Tuesday of this week, everyone knew the markets were going to take at tumble. The previous day, when the markets in the United States were on holiday, Europe took a major hit, dropping almost 5%. Right away, smart traders go to the charts, trying to figure out whether or not the markets will dump to the August 9th, 2011 low of $110.27 on the SPDR S&P 500 ETF (SPY) or just gap lower and reverse higher.
A technical trader simply had to look at the chart and connect the pivot lows. If you connect all the lows from August 9th, they form a perfect trend line. The next step is to understand this line.
Understanding the line is simple. Should the market close below the trend line, the markets would be in break down mode and see the $110.27 SPY low within days. Should they rally back above that line, upside would follow for days.
Sure enough, the markets closed above the trend line and held off the bears. Traders who utilized this bought the market into the close yesterday. They are being rewarded with big time profits today.
Goodbye Good Friend – the Bull Market Leaves – Voice of the People
Goodbye Good Friend – the Bull Market Leaves
In my opinion the bull market is over and the bear market is beginning. This doesn’t mean stock prices will collapse immediately.
Bear markets are a different type of beast. They have sideways actions, big bounces and bigger sells. The bear market of the 1970’s lasted almost the entire decade. It was a great time for option premiums. The bear of 2000 to 2003 and 2007 to early 2009 were pretty severe with losses of more than 50%.
The chance of this bear market seeing such collapses is probably as great as any previous ones. Just remember that bear markets take months to unfold and normally collapse near the end. In-between there are lots of opportunities to make profits. There is no need to fear a bear market, but it is worthwhile implementing different strategies and remaining conscious of the fact that the bull market is probably ending.
My strategy, part of it, will be purchasing index puts on any bounce higher. The future DiviMo and BearMo postings and commentary will relate to my strategy during the bear market period. Meanwhile for my positions that have covered calls, I will be taking opportunities in any rise in stock values to sell calls in the money as I am sure that many of the covered calls once sold in the money, will eventually end up out of the money as stocks pull lower.
The bull market – Mar 2009 to April 2011 – was fun, entertaining, profitable and educational. As stated in an earlier blog, this will be MightyMo’s last blog….that is the plan at least until there is a direction turn in the market or our strategy changes.
The most recent picks by «MightyMo» are:
A buy rating on Complete Production Services (CPX – Snapshot Report),
a buy rating on Ryder (R – Analyst Report) and
a buy rating on The Talbots (TLB – Snapshot Report).
Anatomy of a Bear Market – Voice of the People
Zacks highlights commentary from People and Picks Member «BearMo».
For more Voice of the People, visit http://at.zacks.com/?id=7872
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Anatomy of a Bear MarketA bear market should never be confused with a correction. Correction can be severe but bear markets are far worse. A bear market is a period in time when the price of securities fall. There is usually widespread pessimism and negative sentiment grows as the bear market lingers. Bear markets normally see enormous price drops and as prices fall, investors become even more pessimistic and normally end up selling stocks at even lower prices.
Usually a drop of 20% or more and a continuation of declining prices that lasts longer than 2 months constitutes a bear market.
Bear Markets can easily wipe out 40% or more of an indexes value. They can wipe out much higher amounts of individual stocks.
The bear market of 2007 to 2009 saw losses of 56% in the market index .
Bear Markets normally last a minimum of 6 months out to 2 or 3 years.
Eventually panic will ensue as investors give up on stocks and will sell at any price driving stocks to new lows as investors flee stocks.
Warren Buffett has a name for bear market panic. He referred it to as “blood in the streets”.
Whether panic is the time to buy stocks, is difficult to say. I prefer to buy stocks after a panic and when there is a bit of a rally starting. The exception would be a core dividend stock (with a proven bounce-back in good times history) whose price has fallen to provide an excellent yield.
Postscript: In my prior blog, “The Bear, Embrace It,” I provided possible strategies to employ in a bear market. I also indicated what I did and what I am doing going forward. In today’s world, in lieu of cashing out with losses, with the amount of inverse ETF’s available and with a good understanding of options, one can play in a bear market and win.
The most recent picks by «BearMo» are:
A sell rating on Terex Corp. (TEX – Analyst Report),
a sell rating on Horsehead Holding (ZINC – Snapshot Report)
a sell rating on Short-Term VIX ETN (TVIX).
In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more about People And Picks, visit http://at.zacks.com/?id=7870
Follow us on Twitter: http://www.twitter.com/PeopleAndPicks
About ZacksZacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=7867.
Read the full analyst report on TEX
Read the full analyst report on ZINC
Free Stock Analysis From Zacks Includes Zacks Long-Term Recommendation and Target PricePlease login or register to post a commentMaking Money in the Stock Market – Voice of the People
Making Money in the Stock Market
When you invest money in stocks, ideally, you would like to see the returns weekly grow with a constant percentage, like compounding savings. Unlike savings, investments carry risks that can be quantified as the drawdowns your investment portfolios suffer with progressing time. A well balanced market-cap weighted portfolio like the S&P500 draws down some -10% during a correction, -50% in a recession and -85% in a depression. It is generally known that even the best dividend stock funds carry more risks in terms of draw downs than the S&P500.
Quantitative back testing of portfolio strategies reveals these risks. Forward testing reveals trading with foreknowledge and stock market manipulation. For instance, forward testing four-weeks’ estimate revisions of analysts reveals that these revisions maximize your returns only when you would have known those five weeks in advance. Hence, you can safely conclude that this information has been held back from the general public for some five weeks. For the larger stocks that appears to be generally the case.
The question then is how are you going to beat a drawdown risk of some -50% without that foreknowledge and in a world where drawdowns appear to return with increasing periodicity? Risks are always calculated on the basis of historical performance. Life insurance companies calculate their premiums on the basis of life expectancy, which appears to increase with increasing age. Life expectancy is a statistical concept that does not predict anything about the age that a given individual out of the statistical population is going to reach. Similarly, when the S&P500 drew down by -54.7% on March 06, 2009, relative to its latest top on October 12, 2007, it doesn’t tell you anything about the drawdowns of the individual stocks in this population, nor does it predict anything about the future of this population of 500 stocks. Every one to two weeks we can observe that this portfolio of 500 stocks is rebalanced with a new stock with another one taken out. The selection rules are simple and are based on historical cash flow, balance sheet and income performance. However, satisfying these rules imply that you qualify, but not necessarily that you will become a member.
Successful stock picking is a statistical activity where your chosen population or watch list determines the risk for a certain drawdown based on historical performance. From this watch list you can weekly, monthly or quarterly pick the best dozen to a few thousand stocks, whatever you name as “best”. S&P appears to do that on a weekly basis, and they continuously market-cap weight their portfolios. However strange it may sound, market cap weighting puts your largest investment amount on the largest cap, hence on the stock with the largest drawdown risk in terms of absolute money. A drawdown of -40% of Exxon leads to a much larger financial loss than a -80% drawdown of a small cap in a market cap weighted portfolio. Equal weighting much better balances those risks as it doesn’t favor any stock category.
For instance, for stocks with an average minimum daily Money Flow of $ 0.5 mil, Wall Street’s 500 smallest caps compound 26%/year in equally weighted portfolios of these 500 stocks and 0.1%/year in their market-cap weighted counterparts over the full past 12.5 years. The maximum drawdown of the equally weighted portfolios was -58%, versus -76% for its market-cap weighted version and -55% for the S&P500.
You can use a simple trading tactics to improve on these drawdowns. That is what is called Tit-For-Tat tactics taken from game theory. When you play on a highly competitive field with many participants, always start with a cooperative approach until the game (the market) turns its back to you. Then you get out until after the market returns what you set as a minimum threshold. That minimum expectation can be found empirically on the basis of optimum historical performance back testing. For these 500 stocks it is found that you should minimally expect -1.8% as a weekly return. You would have been 78% in the money with this threshold. This very simple trading tactics improves your maximum drawdown to -25% while keeping the annually compounded growth rate at 26%/year. To a much lesser degree, it improves the market-cap weighted portfolios, mainly because of the unequal weighting of the parts.
Your weekly stock turnover of this P&P500 is only 3.5% (sell and buy 18 stocks per week plus fully get in and out about nine times per year). The Net Present Value of this P&P500 is about $3.5 mil, assuming a discount rate of 6.5% and stock commission costs of 2%. These 500 stocks by far outperform the 250 Zacks’ Ranked #1 stocks. In fact, I don’t know any ranking system that beats this one, even if you just start to select the 12 to 40 best ones. The 40 best ones returned over 35%, YTD. Compare that to the 40 best ZR#1’s. These 40 ZR#1’s did 7%, YTD, the S&P500 7.6%.
What Research Wizard doesn’t give is the stocks with the best drawdowns prior to each week. Hence, RW is not able to select for you each week the stocks with the best measure for the margin of safety. Calculating all these maximum drawdowns each week for all those 14,000 stocks in the Zacks Dbases is only a matter of turning on your laptop, adding a few simple programming lines and let it run. The same holds for building in Tit-For-Tat and ranking the stocks according to trend. Trends of each stock are most objectively calculated by smoothing the 26 periods (weeks) of data prior to any week by a Fourier series expansion and calculate the tangent at the end of each smoothing period. That is just 20 lines of programming of standard mathematical functions, all available in VBA Excel. The larger the tangent, the stronger the trend. The smaller the tangent, the stronger the downwards trend.
Our own back test results reveal that only a few parameters really matter when you speculate or invest. Investing in larger stocks on the basis of fundamentals gives you on average returns that show that you have been investing after the fact. In other words, the numbers appear to reveal that other parties must have known the data earlier and made their gains before the general public got access to them. Hence, use the fundamentals to consolidate them into sectors and the total market so that you get a pretty good idea of how the activities are running of the various industries from a financial point of view. But be careful to timely use these fundamentals for future investments as past performance doesn’t warrant any future performance.
One of the most successful watch lists I ever saw was the one that came about in a discussion between Mo, JaiH and myself. This watch list contains the 85 stocks that came out best in terms of maximum drawdowns from both the Internet and Credit crises. YTD, the 12 best out of this pack made 24%. No fundamentals. Seems hard to beat to me.
The most recent picks by «JohntheWizard» are:
A buy rating on Molson-Coors (TAP – Analyst Report),
a buy rating on Sherwin-Williams (SHW – Analyst Report) and
a buy rating on Rock-Tenn Co. (RKT – Snapshot Report).
In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more about People And Picks, visit http://at.zacks.com/?id=7870
The Secret to Staying Ahead of the Market
There’s an old concept in statistics and economic modeling known as parsimony–or, simply, less is more.
Economic models and analysis that rely on the consistent application of fewer indicators often yield better and clearer forecasts.
Unfortunately, most of today’s market “experts” have apparently never heard of that concept.
Former Federal Reserve Chairman Alan Greenspan was famously fond of obscure economic statistics and data points. Economists in general love to underscore arguments with pet indicators or proprietary indexes.
And the financial media, of course, love to hype any of the hundreds of economic data reports that are released every week. Whatever they think they can spin for ratings.
All of these indicators never point in the same direction at the same time, so if you try to follow them all, it can lead to confusion, frustration and some really bad investment decisions.
Let me show you a smarter way to cut through the static and get to the truth about the economy and what lies ahead for the market.
A Day Late and A Dollar Short
The best way to avoid falling into these traps is to identify and follow a set of indicators or data points that have a reasonable track record of success.
A major mistake that many investors make when evaluating economic indicators is to focus too much attention on lagging indicators. Lagging indicators often deteriorate after the economy is already in a recession and improve after conditions have troughed; stocks often post their biggest gains in the first six to 12 months after the economy exits recession.
My favorite quick and simple indicator of the US economy’s health is the year-over-year change in the Conference Board’s Index of Leading Economic Indicators (LEI). When this year-over-year change is negative, it’s a good sign the US is headed for recession; when the year-over-year change in LEI turns up, it’s a signal that recovery is on the way.
This graph tracks the year-over-year change in LEI going back to 1960. The official start and end dates for every U.S. recession since 1960 are shaded.
The Business Cycle Dating Committee (BDC) of the National Bureau of Economic Research (NBER) is the accepted official arbiter of the beginning and end of US business cycles.
But the business cycle dates provided by NBER aren’t particularly useful for investors, save for historical purposes.
It wasn’t until December 2008 that the NBER established that the most recent recession started in December 2007. Then, in late September 2010, the NBER finally declared that this recession had ended in June 2009.
Not exactly the type of advance notice that you need to profit and protect yourself.
But those of us who follow LEI do typically get an advance warning. As you can see in “Leading Indicator,” the year-over-year change in LEI has turned negative before every recession since 1960.
In the most recent cycle, LEI flashed recession in October 2007, two months before the downturn started. At that time, many economists and market pundits—armed with more complex models–forecasted only a short-term slowdown or a shallow recession.
In July 2009, when many pundits called for continued weakness and the potential for a second financial crisis, LEI turned positive, indicating the recession had ended. Investors who followed these signals would have avoided being overly invested in 2008 and early 2009, one of the worst periods for U.S. stocks in market history.
And those who saw the signal to buy in summer 2009–as I did–participated in one of the most dramatic rallies in the past century. Personal Finance readers were snapping up select technology, energy and industrial stocks well before most investors realized the market had turned.
And we have the profits to show for it.
In fact, we’ve beaten the market over the last three-, five- and 10-year periods. In times like this, you need that kind of proven, battled-tested strategy on your side.
Learn more about the leading economic indicators we use to stay one step ahead of the market with a risk-free trial to Personal Finance. You’ll get immediate access to my current investing strategy for this volatile market, my complete list of recommendations, plus free copies of my three newest Special Reports–just click here.
City by the Bay
Elliott Gue is thrilled to be returning to San Francisco this year and invites you to join him at The MoneyShow, August 10-12, 2011, at the San Francisco Marriott Marquis Hotel. Be there as recommendations and advice are revealed for how to best position your portfolio for profit–in 2011 and beyond. As this new era of investing unfolds, smart investors know it’s imperative to stay informed and educated. The MoneyShow is your one-stop resource for the most comprehensive education, efficient research, and valuable advice. Don’t miss out…register FREE today and be sure to mention Priority code 022447!
Adjusting Withdrawals for Market Changes
There’s a lot of turmoil in the investment markets. We saw these troubles brewing in our last webinar. If you missed it, or want a refresher, it’s available at TJT Capital. We review the problems in Europe, China, and the U.S.
Retirees are learning there’s no magic in the magical 4% Rule. For years financial advisors touted this as the safe rate of withdrawal from retirement funds. For many people, it’s not looking so safe now. Fortunately, there are alternatives that have more reliable results.
The 4% Rule states you can withdraw about 4% of your investment funds in the first year of retirement. After that, you can add 3% inflation to the previous year’s withdrawal and continue this practice the rest of retirement. Following this policy through retirement means you’re unlikely to run out of money by the end of a 30-year retirement. Retirees are learning the rule is not as safe as they thought. That’s because they overlooked some assumptions used in developing the rule and some details in its conclusions.
The studies that developed the 4% Rule assumed a portfolio is 60% invested in the S&P 500 and 40% in a bond index. Many investors, often without realizing it, had riskier portfolios than this, so they had steeper losses in the financial crisis. The rule also assumes your portfolio allocation doesn’t change. Many people shifted to more conservative portfolios near the worst phase of the crisis, so their portfolios didn’t recover as much as the model portfolio did.
The 4% Rule never said you’ll never run out of money. Studies that developed the rule used Monte Carlo analysis, which calculates the results over a wide range of possible scenarios. Most studies found the 4% rule left you with enough money 90% to 95% of the time. That means you’d still run out of money 5% to 10% of the time. Most people thought they were safe following the 4% Rule. They thought, “What are the odds I’ll be caught in one of those historically bad situations?” It turns out the odds were 100% for this generation.
Another oversight was that the 4% rule carried calculations only to 30 years of retirement. That’s too short a period for many retirees, especially married couples.
Following the rule also assumes you’ll have the confidence market returns will rebound to result in the long-term average over your lifetime and will stick with the plan. During the low points in the markets, it’s tough to keep drawing out money and hold your portfolio allocation steady when recent returns are low and almost all forecasts are for low returns going forward.
Investment returns are not static. While the long-term return from stocks is around 9%, there are few years when the indexes return 9%. Most years returns are dramatically higher or lower than the average. Also, there are extended periods during which returns are significantly higher or lower than the long-term average for a decade or longer.
Markets are dynamic, and your retirement spending and withdrawal strategy also needs to be dynamic. There are different ways to adopt a dynamic “cash out” strategy that will greatly reduce the probability you’ll run out of money and will increase the potential to leave something for your loved ones and charity.
The easiest way to modify the 4% Rule is to eliminate the automatic 3% inflation increase each year. After a year of bad investment returns, suspend the annual increase for three to five years to get things back on track. This inflation increase is a very expensive part of a retirement plan. During the early years of retirement, it’s a good idea to avoid the automatic inflation increase even when markets are good to build a cushion against major market losses.
You can take a stronger step. Actually reduce spending after a period of subpar investment returns. Most people’s budgets have some flexibility. You can dine out less, travel less, postpone some purchases for the home or to replace a vehicle, and so forth. It’s not what we intended for those post-career years, but it’s better than putting financial independence at risk. T. Rowe Price issued a study recently in which it concluded that the best way to get a plan back on track after a severe bear market is to reduce the distributions by 25% and hold that level for three to five years.
Examine your investment strategy as well. Resist the natural impulse to hunker down in cash after a market decline. Instead, consider two other strategies.
Review your portfolio to determine if it is sufficiently diversified. Most buy-and-hold portfolios are too closely tied to the stock indexes. You need a portfolio with true diversification, such as the “hedge fund” mutual fund portfolio available to my subscribers. Such a portfolio grows steadily during good times and holds much more of its value much better during tough times.
An alternative is to make your portfolio, or at least part of it, more dynamic. In Retirement Watch I offer Managed Portfolios and a Retirement Paycheck Portfolio that change in response to the markets and economy, so the portfolio allocation isn’t locked in during a poor investment period. You also might want to put 5% to 10% of your investments in my Invest With the Winners Strategy, so it’ automatically adjusting to market changes.
There’s one more cash distribution strategy to consider. I always recommend retirees consider a version of the Yale Endowment spending policy instead of the 4% Rule. This policy automatically adjusts distributions for changes in the portfolio and inflation. But the formula ensures the changes are gradual. It’s explained in detail in my book, The New Rules of Retirement, but here’s a capsule.
First, you decide on the safe withdrawal rate for you. Let’s say you choose 4% of the portfolio the first year plus an increase of the actual Consumer Price Index in subsequent years. Then, you decide what portion of the annual distributions should be based on this formula and which portion should fluctuate with the portfolio. Let’s say you decide 70% of distributions should be based on the safe withdrawal rate and 30% on the portfolio’s value. To keep it simple, we’ll say your portfolio is $100,000. Here’s how it works.
The first year you withdraw $4,000 (4% of $100,000). If inflation is 2% after the first year, the safe withdrawal rate distribution is $4,080 ($4,000 plus 2%). You calculate 70% of that as $2,856. Suppose after the first-year distribution and investment returns, the portfolio ends the year with a value of $105,000. You calculate 4% of that as $4,200, and 30% of that is $1,260. Adding the two components gives you a second year distribution of $4,116 ($2,856+$1260). That’s an increase of $116.
This formula allows spending to increase gradually during periods of good returns and decline gradually during poor markets. Likewise, distributions increase gradually as inflation rises.
A retirement plan is a process, not something that’s locked in. A plan is based on assumptions and forecasts, you adjust it as real world results come in and differ from the forecasts and assumptions. That’s the best way to avoid running out of money and increase the odds you’ll be able to leave something for loved ones and charity.
Prepare for a Market Correction this Summer
After the release of disappointing economic data, the S&P 500 in June has given back almost all the gains it had accumulated in 2011. Employment data released on Friday showed that only 54,000 jobs were created in May. The news rattled markets, which had forecast the addition of at least 150,000 jobs. The latest housing statistics showed that real estate prices continue to fall in many parts of the US; the Case-Shiller Price Index plunged below levels last seen during the 1920s.
On top of that, most economists expect gasoline prices to top $5 this summer, hurting seasonal travel and cutting into household budgets. That’s also bad news for retailers eager to attract shoppers.
The result has been growing pessimism regarding US economic growth. Economists at Barclays Capital recently cut their forecast for second-quarter economic growth to 2 percent from their previous estimate of 3.5 percent.
Weakness in the labor and housing markets has renewed fears of another recession. But the odds of another significant downturn in the economy are long.
Although May’s employment numbers were weak, they followed three consecutive months of respectable job growth. Furthermore, the May report showed the greatest weakness in the automotive and retail sectors. The auto industry has been hit by supply disruptions resulting from the March 11 earthquake in Japan. The weakness in the retail sector is the result of seasonal factors. Neither of these short-term challenges mean the US economy is headed for another recession.
On the real estate front, there were some glimmers of hope embedded within the disappointing data. The Case-Shiller Price Index is a composite reading of 20 urban markets in the US. Although the headline number plunged, prices stabilized in half of the localities comprising the index. It’s an encouraging sign, although we’re still far away from a true recovery in the real estate market.
Finally, prices for food and energy are beginning to stabilize. The price of crude oil has dipped below $100 per barrel, albeit by just a few pennies. Although one can never rule out the possibility of another spike in crude oil prices in the coming months, I doubt that gasoline prices will rise above $5 per gallon.
Nevertheless, I anticipate a textbook market correction this summer. Trading volumes are always lighter during the season and it doesn’t take much bad news to result in a downturn in the market. Expect the S&P 500 to decline by 10 percent in coming months. However, investors should view any correction as a buying opportunity.
What’s New
The summer doldrums are upon us; only two new exchange-traded funds (ETF) launched last week.
Global X Management added to its lineup of food-related ETFs with the launch of Global X Farming ETF (NYSE: BARN). Tracking the Solactive Global Farming Index, the fund invests in a mix of agribusiness names, livestock operations and producers of farming products and equipment.
The fund is well diversified across geographical regions; the US accounts for about 32 percent of investable assets and the remainder of the fund’s holdings are spread across developed and emerging markets. Global X Farming ETF employs a modified weighting strategy that assigns a greater weighting to companies with larger market capitalizations. However, no single holding will account for more than 4.75 percent of assets. The fund will charge an annual expense ratio of 0.68 percent.
I have a straightforward logic for investing in food-related ETFs. A growing global population combined with a rising standard of living in emerging markets will increase demand for food. This secular trend will stretch capacity and drive up prices, leading to opportunities for investors with a long time horizon. Global X Farming ETF is a promising fund for investors who see the same trends at work.
IQ Japan Mid Cap Index (NYSE: RSUN) replicates an index of 100 Japanese mid-cap stocks with market capitalizations of less than $3 billion.
The fund has allocated 23 percent of investable assets to industrials, 18 percent to financials and 16 percent to consumer discretionary names. Because the fund invests in mid-cap companies, few of the portfolio holdings derive significant business from exports. This makes IQ Japan Mid Cap Index a more direct way to invest in Japan’s domestic economy than a Japan-focused large-cap fund.
The fund’s 0.69 percent annual expense ratio is reasonable, making this fund an interesting offering for investors seeking to play Japan’s post-quake recovery.
For more about investing in ETFs, try a free trial of Global ETF Profits…
Is This Bull Market Over? – Voice of the People
Zacks highlights commentary from People and Picks Member «globlchrtanlysis».
For more Voice of the People, visit http://at.zacks.com/?id=7872
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Is This Bull Market Over? How To Trade This MarketTo View This Entire Report Click Here
It looks like they are still selling into every bounce in the market which is a very bad sign for the bulls. We are reaching stretched levels that the market only sees 1 or 2 times per year and is normally followed by a bounce. But does it stick?
As our readers know, one should never look to get short or get long after a move has already occurred so one needs to sit tight and fight the temptation of getting short at this point. What we need to see here in the next day or 2 is a reverse off the lows, followed by a close near the highs of the day. This would give us a high probability market timing setup and allow us to trade off our strongest stocks list which have been holding support. This particular bounce should be tradable but will most likely give us a trade of only 1-3 days.
At the end of this next bounce higher we expect the play to be getting short stocks that bounced into resistance. At that point getting short this market into resistance is the stronger play and the weakest stocks should tumble as well. If this short play works, and the market can’t get back above resistance than one should really be picky about any longs they still hold in their portfolio.
Any stock one is holding should be holding support levels and have favorable volume patterns. Any recent selloffs in these strong stocks should be followed by strong buying back above support levels. If one is not careful about carefully analyzing each position they are long they at this point, they could be hit by powerful profit taking and could see any profits disappear quickly.
Remember never jump the gun especially in market like this. For the rookies who are used to having the markets bail them out during periods of strong trends these are the situations where rookie accounts get blown up (and surprisingly stubborn portfolio managers).
To review a few of our rules: Don’t chase after extended moves higher or lower and don’t watch your portfolio get shaken apart like a majority of the players out there. Breakouts traders tend to fail more often than not but especially in these markets. Play the orderly pullbacks into support we point out instead.
Also, don’t hold any stocks breaking support on heavy volume no matter how much you love the story.
One final note, always keep emotion out of any trading or investing decisions you are making.
As always in times of big moves up or down in the market we can list 10 great reasons to buy this market just like we can give 10 great reasons why we should sell this market. Don’t listen to any reasons you hear either bullish or bearish just let the market be your guide. This is all that matters. It’s time to drown out all the noise and play it smart. If you aren’t an expert in technical analysis than follow our lead here or just sit on the sidelines until a trend is re-established.
The most recent picks by «globlchrtanlysis» are:
A buy rating on Green Mountain Coffee Roasters (GMCR – Analyst Report),
a buy rating on Ulta Salon (ULTA – Snapshot Report) and
a buy rating on AmerisourceBergen (ABC – Analyst Report).
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Free Stock Analysis From Zacks Includes Zacks Long-Term Recommendation and Target PricePlease login or register to post a commentTop Economic and Market Forecasters Predict: QE3 Is Coming
Over the weekend some of the biggest economic and market prognosticators met to discuss the US and global economies according to the Wall Street Journal.
Amongst those who met on Lake Winnipesaukee in New Hampshire were
David Blanchflower, formerly of the Monetary Policy Committee of the Bank of England; Marc Faber, Swiss born, Mr. Doom and Gloom; Fred Hickey, Editor of the High-Tech strategist newsletter; Stephen Roach, Morgan Stanley Exec; and economic forecasters David Rosenberg, Nouriel Roubini, and Gary Shilling.
Their conclusion was QE3 is going to happen.
They forecast that QE3 will lift stocks and commodities prices but in a lesser magnitude compared to QE2.
Ed Yardeni, who was there, had this to say:
“The conversations were spirited with lots of debates. The consensus was quite pessimistic about the outlook for the US and global economies. Everyone seemed to agree that the FED would most likely leave the federal funds rate at zero for a long time and that a third round of quantitative easing is likely later this year. David Blanchflower, who is a former member of the MPC of the BOE, is in favor of QE-3.0. The rest of us were against it. Most agreed that it would probably boost stock and commodity prices again, though not as much as QE-2.0.”
Dallas Federal Reserve President Richard Fisher said today that there is no need for QE3, Fed’s Fisher: No need for QE3, US Dollar Implications.
The Secret to Staying Ahead of the Market
There’s an old concept in statistics and economic modeling known as parsimony–or, simply, less is more.
Economic models and analysis that rely on the consistent application of fewer indicators often yield better and clearer forecasts.
Unfortunately, most of today’s market “experts” have apparently never heard of that concept.
Former Federal Reserve Chairman Alan Greenspan was famously fond of obscure economic statistics and data points. Economists in general love to underscore arguments with pet indicators or proprietary indexes.
And the financial media, of course, love to hype any of the hundreds of economic data reports that are released every week. Whatever they think they can spin for ratings.
All of these indicators never point in the same direction at the same time, so if you try to follow them all, it can lead to confusion, frustration and some really bad investment decisions.
Let me show you a smarter way to cut through the static and get to the truth about the economy and what lies ahead for the market.
A Day Late and A Dollar Short
The best way to avoid falling into these traps is to identify and follow a set of indicators or data points that have a reasonable track record of success.
A major mistake that many investors make when evaluating economic indicators is to focus too much attention on lagging indicators. Lagging indicators often deteriorate after the economy is already in a recession and improve after conditions have troughed; stocks often post their biggest gains in the first six to 12 months after the economy exits recession.
My favorite quick and simple indicator of the US economy’s health is the year-over-year change in the Conference Board’s Index of Leading Economic Indicators (LEI). When this year-over-year change is negative, it’s a good sign the US is headed for recession; when the year-over-year change in LEI turns up, it’s a signal that recovery is on the way.
This graph tracks the year-over-year change in LEI going back to 1960. The official start and end dates for every U.S. recession since 1960 are shaded.
The Business Cycle Dating Committee (BDC) of the National Bureau of Economic Research (NBER) is the accepted official arbiter of the beginning and end of US business cycles.
But the business cycle dates provided by NBER aren’t particularly useful for investors, save for historical purposes.
It wasn’t until December 2008 that the NBER established that the most recent recession started in December 2007. Then, in late September 2010, the NBER finally declared that this recession had ended in June 2009.
Not exactly the type of advance notice that you need to profit and protect yourself.
But those of us who follow LEI do typically get an advance warning. As you can see in “Leading Indicator,” the year-over-year change in LEI has turned negative before every recession since 1960.
In the most recent cycle, LEI flashed recession in October 2007, two months before the downturn started. At that time, many economists and market pundits—armed with more complex models–forecasted only a short-term slowdown or a shallow recession.
In July 2009, when many pundits called for continued weakness and the potential for a second financial crisis, LEI turned positive, indicating the recession had ended. Investors who followed these signals would have avoided being overly invested in 2008 and early 2009, one of the worst periods for U.S. stocks in market history.
And those who saw the signal to buy in summer 2009–as I did–participated in one of the most dramatic rallies in the past century. Personal Finance readers were snapping up select technology, energy and industrial stocks well before most investors realized the market had turned.
And we have the profits to show for it.
In fact, we’ve beaten the market over the last three-, five- and 10-year periods. In times like this, you need that kind of proven, battled-tested strategy on your side.
Learn more about the leading economic indicators we use to stay one step ahead of the market with a risk-free trial to Personal Finance. You’ll get immediate access to my current investing strategy for this volatile market, my complete list of recommendations, plus free copies of my three newest Special Reports–just click here.
City by the Bay
Elliott Gue is thrilled to be returning to San Francisco this year and invites you to join him at The MoneyShow, August 10-12, 2011, at the San Francisco Marriott Marquis Hotel. Be there as recommendations and advice are revealed for how to best position your portfolio for profit–in 2011 and beyond. As this new era of investing unfolds, smart investors know it’s imperative to stay informed and educated. The MoneyShow is your one-stop resource for the most comprehensive education, efficient research, and valuable advice. Don’t miss out…register FREE today and be sure to mention Priority code 022447!
U.S. Housing Market is in a Double-Dip Recession
U.S. Housing Market is in a Double-Dip Recession
Canada’s financial system is among a handful–a small one–that can claim to be “sound.” Canadian authorities have already taken steps to restrain growth in home mortgage loans and incomes are climbing up north.
— Roger Conrad, Canadian Edge
Last week, I was disheartened to read that Fannie Mae (OTC BB: FNMA.OB) is asking U.S. taxpayers to pony up an additional $8.5 billion to cover the company’s mortgage losses. This brings the company’s total government bailout to a staggering $100 billion, none of which (other than via dividend payments made on government-owned preferred stock) will ever be paid back. As I wrote last year in Greed Caused Fannie and Freddie to Fail, the blame for Fannie’s demise lays squarely with former CEO Daniel Mudd, who in 2006 reportedly told his employees: “get aggressive on risk-taking, or get out of the company.” It angers me that Mudd received $80 million in executive compensation for leading Fannie Mae into the abyss and has not been required – or voluntarily offered – to return any of the ill-gotten money.
Equally outrageous, after the U.S. government took over Fannie in September 2008 and forced out Mudd for his incompetence, he subsequently latched on as CEO of private equity firm Fortress Investment Group (NYSE: FIG) where he is being paid $25.7 million per year! Fortune Magazine ranks him as the 24th highest-paid executive in the U.S. While millions of Americans are facing massive losses from having their depreciating homes foreclosed on them, Mudd made a $4 million profit in 2009 when he sold his 11,500-square-foot, six-bedroom home in Washington D.C.
Where is the justice? Charles Ferguson, maker of the Academy Award-winning documentary “Inside Job,” asked the same question when he received his award back in March:
Forgive me. I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail – and that’s wrong.
Fortunately, the chickens may be coming home to roost for Mr. Mudd. Last month, the Securities and Exchange Commission announced that it was investigating Mudd for lying to Congress about the extent of Fannie’s subprime loan exposure. Mudd said Fannie’s exposure was “minimal, less than 2.5 percent” when it was actually much higher. Let’s hope the Feds require Mudd to pay back some of his millions.
A large reason the U.S. housing market is in such a mess is that Fannie Mae and Freddie Mac (OTC BB: FMCC.OB) – which own or guarantee 40% of all U.S. residential mortgages ($4.2 trillion) – encouraged mortgage lenders to issue loans to borrowers that couldn’t afford their home payments. The result is a seemingly endless string of foreclosures and distress sales, which have caused housing prices to decline.
The double-dip recession in U.S. housing that I warned about last year has finally come to pass. Last Thursday (May 5th) Clear Capital, a property valuation outsourcing firm, released a report declaring that the U.S. housing market has officially entered a double-dip recession. The average national home price is now 0.7% below the previous low set in March 2009 during the depths of the global financial crisis. The report’s main conclusions are as follows:
National quarterly home prices changed -4.9%; while year-over-year national price changes reached -5.0%.National home prices have fallen 11.5% over the previous nine-month period, a rate of decline not experienced since 2008.All the major Metropolitan Statistical Areas (MSAs) showed quarter-over-quarter price declines.National REO saturation rate reaches 34.5%.REO stands for “real-estate owned” and means the home is owned by a bank after a foreclosure. I find it amazing that more than one-third of all home sales are foreclosure properties. No wonder home prices are going into the tank!
Unlike last year, there is no federal home buyer tax credit. Given this fact, real estate data firm Zillow.com doesn’t forecast the U.S. housing market to bottom until 2012:
Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011.
More than 28% of all U.S. mortgages are underwater, meaning homeowners owe more than their houses are worth.
The housing situation is completely different in Canada. According to the Canadian Real Estate Association, not a single Canadian province will experience a decline in home prices in 2011. In fact, home prices in Canada have increased every since 1998, with the lone exception of 2008 when prices fell by less than one percent! As Sal Guatieri, senior economist with the Bank of Montreal (NYSE: BMO) recently stated: “There is a world of difference between the Canadian and U.S. housing markets.”
According to housing analysts at Bank of America (NYSE: BAC), the reasons why the Canadian housing market is so much healthier than the U.S. market is four-fold:
1. We find government guaranteed mortgage insurance mitigates risk to financial institutions. Unlike the US where financial institutions were clearly over exposed and the solvency of insurance providers were questionable. 75% of mortgages in Canada are fully insured with Government guarantees and all mortgages with an LTV higher than 80% must be insured by regulated lenders.
2. Legal recourse laws reduce the risk of households walking away from their mortgage and implicitly improve lending quality, unlike the US where reports of abandoned vacant homes were and remain rampant. By our estimation around 90% of mortgages are full recourse in Canada, creating a more lender-friendly environment.
3. About 30% of the mortgage funding market has a federal government guarantee, which likely reduces the risk of a US style funding freeze. Indeed during the height of the credit crisis, the Government of Canada initiated a very effective Insured Mortgage Purchase Program which essentially kept the Canadian mortgage market functioning.
4. Canadian’s have historically held lower leverage ratios than their US counter parts and tend to gravitate to more conservative mortgage options. Canadian household balance sheets have deteriorated and have been treading into more risky areas like variable rate mortgages, but sub prime lending remains a virtually non-existent market in Canada.
A healthier housing market suggests stronger consumer spending which suggests higher profits for Canadian companies. Now seems like a good time to invest in Canada.
It may be wise to diversify out of the U.S. and invest in Canada. Roger Conrad, editor of the market-beating Canadian Edge investment service, has uncovered not only the highest-yielding Canadian stocks, but those with the strongest business fundamentals to sustain their dividends and grow them further. Not only is the Canadian economy growing, but its currency is also set to appreciate further against the U.S. dollar:
As we’ve pointed out here many times, the loonie is strong for many reasons. For one thing, it’s tended to follow oil prices, which have been in a bull market since early in the last decade. The loonie itself has been in a bull market for a decade as well.
Canada’s federal government is in a sound fiscal position, the aftermath of more than a decade’s worth of budget restraint and deficit reduction. Canada is the ultimate “straight and narrow” country. It is therefore a natural destination for US income investors’ capital and is still home to the highest yields — backed by solid businesses — in the world.
Canada is an economic oasis of peace and prosperity. To find out the names of the Canadian high-income stocks Roger likes best right now, give Canadian Edge a try today!
Jim Fink is the senior online editor for Investing Daily and is also chief investment strategist for Jim Fink’s Options for Income. He has traded options for more than 20 years and generated personal profits of more than $5 million. When not trading options, he writes the “Stocks to Watch” daily column that provides readers with timely insight into current events and their potential impact on publicly listed companies.
Hopelessly overeducated, Jim holds a bachelor’s degree from Yale University, a master’s degree from Harvard’s Kennedy School of Government, a law degree from Columbia University, and an MBA from the University of Virginia’s Darden School of Business. For good measure, he has been a member of the Illinois and D.C. bars and is a CFA charterholder.
Prior to joining Investing Daily, and when not incurring student loans hiding out in academe, Jim practiced telecommunications regulatory law for nine years until he realized that he made more money trading stock options than writing briefs. After attending business school, Jim switched gears to the investment realm full-time, working for a university endowment, a private wealth management firm, an insurance and financial planning company, and as a Senior Analyst for an online investment newsletter service that encourages the wearing of funny hats.
A possible but unlikely descendant of legendary brawler and boatman Mike Fink, Jim defies his heritage, believing that investing success requires patience and analysis, not swashbuckling bravado. Besides his passion for analyzing and writing about stocks, Jim likes to hike in the desert Southwest, vacation in Las Vegas, play tennis, and feed his toddler son cheerios.
How to Make 50% Per Year in the Stock Market
HomeHow to Make 50% Per Year in the Stock Market
For 26 years, I’ve been out there hunting the big yields and bringing them home to my readers.
Warren Buffett has had a bad week. First, his heir apparent David Sokol was forced to resign because of insider trading allegations involving Berkshire Hathaway’s (NYSE: BRK-A) (NYSE: BRK-B) agreement to acquire cleantech powerhouse Lubrizol (NYSE: LZ). Second, just yesterday legendary hedge fund manager Michael Steinhardt went on CNBC and called Warren Buffett a con artist whom he doubts has actually beaten the S&P 500 on a risk-adjusted basis over time. Steinhardt also said that Buffett’s philanthropy was too late and thoughtlessly performed and his decision to fire Salomon Brothers CEO John Gutfreund back in 1991 was “disgusting.”
I’m pretty sure that Berkshire’s annual meeting on April 30th won’t be much fun for Buffett either, because shareholders will want to know why, when Sokol told Buffett that he had purchased Lubrizol shares, Buffett didn’t ask him when or how much. And why did Buffett assert that Sokol’s actions were “not in any way unlawful” when they were so clearly unethical at the very least? If Buffett refuses to answer these questions at the annual meeting, he might actually hear some boos for the first time in his life. It now seems that his disappointing Moody’s (NYSE: MCO) testimony last June before the Financial Crisis Inquiry Commission was not an aberration but just an early sign of ethical lapses.
I’m not going to pile on poor old Warren except to say this: all of us small investors can beat Buffett at investing and earn 50% annual returns. No, I’m not talking about making profits from illegal insider trading a la David Sokol – that was so last week. And no, I am not exhibiting the same chutzpah that I accused SEC Accounting Chief Gus Rodriguez of for thinking he knows how to value stocks better than Buffett.
Rather, what I am talking about is smart investing based on Buffett’s own investment principles. You see, Buffett himself admits that, while he aims to beat the S&P 500 by several percentage points per year on average, he can’t outperform the market by as much as he used to. It’s not because he’s old; it’s because the size of his portfolio is so huge. According to Buffett’s 2010 shareholder letter (page 6), Berkshire’s investment portfolio of stocks, bonds and cash totals $158 billion! Buffett bemoans the fact that he can no longer buy the high-growth, small-cap stocks that produced such stellar investment returns for Berkshire in its early years.
The larger the pot of money to invest, the worse off investment returns will be. Back in 1999, Buffett was quoted as saying the following:
If I had $10,000 to invest, I would focus on smaller companies because there would be a greater chance that something was overlooked in that arena. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that. But you can’t compound $100 million or $1 billion at anything remotely like that rate.
He made a similar comment about size a decade later in 2009: “With tiny sums to invest, it’s extraordinary what you can find. Most of the time, big sums are one hell of an anchor.” It’s not that Buffett can’t find great small-cap stocks, but that these stocks can’t absorb the large amount of capital that Berkshire needs to deploy in order to “move the needle” on Berkshire’s overall performance. So Buffett has to forego the 50% growers and settle for capital-intensive slower growers that can absorb the investment capital he needs to throw at them.
Okay, so the first two criteria for earning 50% annual returns are:
The third criteria – high return and low capital expenditure requirements — can be found in Buffett’s 2009 shareholder letter on page 9:
In earlier days, I shunned capital-intensive businesses such as public utilities. Indeed, the best businesses by far for owners continue to be those that have high returns on capital and that require little incremental investment to grow. We are fortunate to own a number of such businesses, and we would love to buy more.
Buffett provides an example of his ideal business on page 7 of the 2007 shareholder letter:
Let’s look at the prototype of a dream business, our own See’s Candy. The boxed-chocolates industry in which it operates is unexciting: Per-capita consumption in the U.S. is extremely low and doesn’t grow. We bought See’s for $25 million when its pre-tax earnings were less than $5 million. The capital then required to conduct the business was $8 million. Consequently, the company was earning 60% pre-tax on invested capital.
Last year See’s pre-tax profits were $82 million. The capital now required to run the business is $40 million. This means we have had to reinvest only $32 million since 1972 to handle the modest physical growth – and somewhat immodest financial growth – of the business. In the meantime pre-tax earnings have totaled $1.35 billion. All of that, except for the $32 million, has been sent to Berkshire.
I think that does it. We now have all of three ingredients needed to generate 50% annual returns. Using my trusty Bloomberg terminal, I ran a stock screen looking for the following criteria:
Return on invested capital greater than 20% in at least 4 of the past 5 yearsAt least $5 of operating cash flow for every $1 of capital expense in each of the past two yearsMarket cap less than $3 billionThe screen yielded nine results:
Operating Cash Flow Per Dollar of Capital ExpenseTexas Pacific Land Trust (NYSE: TPL)
USANA Health Sciences (NYSE: USNA)
Quality Systems (NasdaqGS: QSII)
PetMed Express (NasdaqGS: PETS)
J2 Global Communications (NasdaqGS: JCOM)
Source: Bloomberg
Would buying these nine stocks result in a 50% return over the next year? With S&P 500 companies growing profits at a record pace, there’s hope for small company growth as well, but only time will tell.
Small-cap stocks with high returns on invested capital and low capex requirements may generate double-digit annual returns, but they sure don’t pay high dividends. For double-digit yields, check out Big Yield Hunting, the high-yield investment service from Roger Conrad and David Dittman. Roger and David take an “income plus” approach to their recommendations. High yield alone is not enough; they demand high yield “plus” a healthy and growing business:
High yields without strong businesses behind them will be at perpetual risk of devastating dividend cuts. And they have no chance of growing either, so they’re guaranteed losers if inflation emerges.
In contrast, only growing and healthy companies will continue to pay their distributions. If we see more inflation, growth is our best chance of keeping pace. Adopting an “income-plus” strategy won’t save your portfolio from all volatility if credit or inflation conditions worsen. But it remains the best approach.
An “income plus” investment standard disqualifies many high-yield companies from Roger and David’s consideration. So far, Big Yield Hunting has recommended two Canadian income trusts, three telecommunications companies, a master limited partnership (MLP), and a fascinating stock/bond hybrid security. All of these top-notch stocks sport very high yields that are stable and sustainable.
Give Big Yield Hunting a try today!
Jim Fink is senior online editor for Investing Daily. He writes the “Stocks to Watch” daily column that provides readers with timely insight into current events and their potential impact on publicly listed companies.
Hopelessly overeducated, Jim holds a bachelor’s degree from Yale University, a master’s degree from Harvard’s Kennedy School of Government, a law degree from Columbia University, and an MBA from the University of Virginia’s Darden School of Business. For good measure, he has been a member of the Illinois and D.C. bars and is a CFA charterholder.
Prior to joining KCI, and when not incurring student loans hiding out in academe, Jim practiced telecommunications regulatory law for nine years until he realized that he made more money trading stock options than writing briefs. After attending business school, Jim switched gears to the investment realm full-time, working for a university endowment, a private wealth management firm, an insurance and financial planning company, and as a Senior Analyst for an online investment newsletter service that encourages the wearing of funny hats.
A possible but unlikely descendant of legendary brawler and boatman Mike Fink, Jim defies his heritage, believing that investing success requires patience and analysis, not swashbuckling bravado. Besides his passion for analyzing and writing about stocks, Jim likes to hike in the desert Southwest, vacation in Las Vegas, play tennis, and feed his baby son pureed carrots.
Stocks, Forex and Gold 