Archive for December, 2016

  • The 2017 Buy List
    , December 31st, 2016 at 6:33 pm

    Here are the 25 stocks for the 2017 Buy List. It’s locked and sealed and I can’t make any changes for 12 months.

    For tracking purposes, I assume the Buy List is a $1 million portfolio that’s equally divided among 25 stocks. Below are all 25 positions with the amount of shares for each and the closing price for 2016. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.

    Company Ticker Price Shares Balance
    AFLAC AFL $69.60 574.7126 $40,000
    Alliance Data Systems ADS $228.50 175.0547 $40,000
    Axalta Coating Systems AXTA $27.20 1,470.5882 $40,000
    Cerner CERN $47.37 844.4163 $40,000
    Cinemark CNK $38.36 1,042.7529 $40,000
    Continental Building Products CBPX $23.10 1,731.6017 $40,000
    Cognizant Technology Solutions CTSH $56.03 713.9033 $40,000
    CR Bard BCR $224.66 178.0468 $40,000
    Danaher DHR $77.84 513.8746 $40,000
    Express Scripts ESRX $68.79 581.4799 $40,000
    Fiserv FISV $106.28 376.3643 $40,000
    HEICO Corporation HEI $77.15 518.4705 $40,000
    Hormel Foods HRL $34.81 1,149.0951 $40,000
    Ingredion INGR $124.96 320.1024 $40,000
    Intercontinental Exchange ICE $56.42 708.9685 $40,000
    Microsoft MSFT $62.14 643.7078 $40,000
    Moody’s MCO $94.27 424.3131 $40,000
    Ross Stores ROST $65.60 609.7561 $40,000
    RPM International RPM $53.83 743.0801 $40,000
    Sherwin-Williams SHW $268.74 148.8427 $40,000
    Signature Bank SBNY $150.20 266.3116 $40,000
    JM Smucker SJM $128.06 312.3536 $40,000
    Snap-on SNA $171.27 233.5494 $40,000
    Stryker SYK $119.81 333.8619 $40,000
    Wabtec WAB $83.02 481.8116 $40,000
    Total $1,000,000

    The ten new stocks are Axalta Coating Systems, Cinemark, Continental Building Products, Danaher, Ingredion, Intercontinental Exchange, Moody’s, RPM International, Sherwin-Williams and JM Smucker.

    The five deletions are Bed Bath & Beyond, Biogen, Ford, Stericycle and Wells Fargo.

    The 25 stocks range from a market cap of $483 billion for Microsoft to $924 million for Continental Building Products. The average market cap is $38 billion, but that’s heavily distorted by Microsoft. Take out MSFT and the average market cap is just under $20 billion. Fourteen of the 25 stocks fall between $4 billion and $20 billion in market value.

    Eighteen of the 25 stocks pay dividends. Currently, the Buy List has a yield of 1.48%.

    Only AFLAC and Fiserv have been on the Buy List all 12 years. This is Stryker’s 10th year. Danaher is returning to the Buy List after a seven-year absence.

    Here’s a brief look at the ten new stocks.

    Axalta Coating Systems (AXTA) is a Philadelphia-based coatings company. The stock had its IPO two years ago. It was previously owned by The Carlyle Group.

    Cinemark Holdings (CNK) runs a chain of movie theaters in the United States, Taiwan and South America.

    Continental Building Products (CBPX) is a “leading manufacturer of gypsum wallboard, joint compound and complementary finishing products.”

    Danaher (DHR) is a diversified manufacturer. The stock has been an amazing long-term winner.

    Ingredion (INGR) calls itself “a global ingredient-solutions company.” They turn plants into ingredients for food.

    Intercontinental Exchange (ICE) runs several exchanges, including the New York Stock Exchange.

    Moody’s (MCO) is a credit-rating agency. They also own Moody’s Analytics.

    RPM International (RPM) makes building materials and adhesives. The company has increased its dividend for 43 consecutive years.

    Sherwin-Williams (SHW) is mostly known for its line of paint. The company recently bought Valspar for $9 billion.

    JM Smucker (SJM) makes a lot more than jelly. The company makes a broad line of food products. Of course, with a name like Smucker’s, it has to be good.

  • The 2016 Buy List
    , December 31st, 2016 at 1:35 pm

    The 2016 trading year is on the books! For 2016, the S&P 500 gained 9.54%, while our Buy List gained 0.99%. Although we did make a profit, we trailed the broader market. This was only the second time in the last decade in which we lost to the market.

    Including dividends, the S&P 500 gained 11.96% this year, while our Buy List gained 2.17%.

    Over the long haul, we’re still doing quite well. Over the last 11 years, the total compounded gain for the Buy List is 169.39%, compared with 126.63% for the S&P 500.

    Our biggest winner this year was HEICO (HEI) which gained nearly 42%. Stryker (SYK) was a distant second with a 28.91% gain. Stericycle (SRCL) was our biggest loser with a loss of 36.12%. Next came Cerner (CERN) and Express Scripts (ESRX) which both lost just over 21%.

    For people who care about such things, the “beta” of our Buy List in 2016 was 1.0164. The correlation of the daily changes of the Buy List to the changes of the S&P 500 was 92.6%.

    The chart below details the Buy List’s performance. I’ve listed each stock, along with the number of shares and the starting and ending prices. For tracking purposes, I assume the Buy List is a $1 million portfolio that starts equally divided among the 20 stocks.

    Stock Shares 12/31/15 Beginning 12/30/16 Ending Profit/Loss
    ADS 180.7861 $276.57 $50,000.00 $228.50 $41,309.62 -17.38%
    AFL 834.7245 $59.90 $50,000.00 $69.60 $58,096.83 16.19%
    BBBY 1,036.2694 $48.25 $50,000.00 $40.64 $42,113.99 -15.77%
    BCR 263.9358 $189.44 $50,000.00 $224.66 $59,295.82 18.59%
    BIIB 163.2120 $306.35 $50,000.00 $283.58 $46,283.66 -7.43%
    CERN 830.9789 $60.17 $50,000.00 $47.37 $39,363.47 -21.27%
    CTSH 833.0556 $60.02 $50,000.00 $56.03 $46,676.11 -6.65%
    ESRX 572.0169 $87.41 $50,000.00 $68.79 $39,349.04 -21.30%
    F 3,548.6160 $14.09 $50,000.00 $12.13 $43,044.71 -13.91%
    FISV 546.6871 $91.46 $50,000.00 $106.28 $58,101.90 16.20%
    HEI 919.7940 $54.36 $50,000.00 $77.15 $70,962.11 41.92%
    HRL 1,264.5422 $39.54 $50,000.00 $34.81 $44,018.71 -11.96%
    MSFT 901.2257 $55.48 $50,000.00 $62.14 $56,002.16 12.00%
    ROST 929.1953 $53.81 $50,000.00 $65.60 $60,955.21 21.91%
    SBNY 326.0090 $153.37 $50,000.00 $150.20 $48,966.55 -2.07%
    SNA 291.6642 $171.43 $50,000.00 $171.27 $49,953.33 -0.09%
    SRCL 414.5937 $120.60 $50,000.00 $77.04 $31,940.30 -36.12%
    SYK 537.9815 $92.94 $50,000.00 $119.81 $64,455.56 28.91%
    WAB 703.0371 $71.12 $50,000.00 $83.02 $58,366.14 16.73%
    WFC 919.7940 $54.36 $50,000.00 $55.11 $50,689.85 1.38%
    Total $1,000,000.00 $1,009,945.07 0.99%

    Note that Hormel Foods (HRL) split 2-for-1 on February 10.

    Here’s how the Buy List performed throughout the year:

    Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price. My source for dividend-adjusted prices is StockCharts.

    Symbol Start Finish Adju Start Gain Gain w/Divs
    ADS $276.57 $228.50 $275.87 -17.38% -17.17%
    AFL $59.90 $69.60 $58.44 16.19% 19.10%
    BBBY $48.25 $40.64 $47.84 -15.77% -15.05%
    BCR $189.44 $224.66 $188.54 18.59% 19.16%
    BIIB $306.35 $283.58 $306.35 -7.43% -7.43%
    CERN $60.17 $47.37 $60.17 -21.27% -21.27%
    CTSH $60.02 $56.03 $60.02 -6.65% -6.65%
    ESRX $87.41 $68.79 $87.41 -21.30% -21.30%
    F $14.09 $12.13 $13.17 -13.91% -7.90%
    FISV $91.46 $106.28 $91.46 16.20% 16.20%
    HEI $54.36 $77.15 $54.23 41.92% 42.26%
    HRL $39.54 $34.81 $38.95 -11.96% -10.63%
    MSFT $55.48 $62.14 $54.00 12.00% 15.07%
    ROST $53.81 $65.60 $53.32 21.91% 23.03%
    SBNY $153.37 $150.20 $153.37 -2.07% -2.07%
    SNA $171.43 $171.27 $168.69 -0.09% 1.53%
    SRCL $120.60 $77.04 $120.60 -36.12% -36.12%
    SYK $92.94 $119.81 $91.68 28.91% 30.68%
    WAB $71.12 $83.02 $70.77 16.73% 17.31%
    WFC $54.36 $55.11 $52.67 1.38% 4.63%
    Total 0.99% 2.17%
  • Every Buy List Stock
    , December 31st, 2016 at 11:04 am

    Here are all 77 Buy List stocks and when they made the cut.

    Stocks ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17
    ABT X
    ADS X X
    AFL X X X X X X X X X X X x
    APH X X X
    AXTA X
    BAX X X
    BBBY X X X X X X X X X X X
    BCR X X X X X X
    BDX X X X
    BER/WRB X X
    BIIB X
    BLL X
    BMET X X
    BRO X
    CA X X X
    CBPX X
    CERN X X
    CLC X
    CNK X
    CTSH X X X X X X
    DCI X X X X
    DELL X
    DHR X X X X X
    DLX X
    DTV X X X
    EBAY/PYPL X X
    ESRX X X X X
    EV X X
    EXPD X
    F X X X X X X
    FDS X X X X X
    FIC X X
    FISV X X X X X X X X X X X X
    GDW/WB X
    GGG X
    GILD X X
    HCBK X
    HD X
    HEI X X
    HOG X X X
    HRL X X X
    HRS X X
    IBM X
    ICE X
    INGR X
    INTC X
    JNJ X X X
    JOSB X X X X X X
    JPM X X X
    LLY X X
    LNCR X
    LUK X X X X
    MCD X
    MCO X
    MDT X X X X X X X X X
    MOG-A X X X X X X X X
    MSFT X X X X X
    NICK X X X X X X X
    ORCL X X X X X
    QCOM X X
    RAI X X X
    RESP X X
    ROST X X X X X
    RPM X
    SBNY X X X
    SEIC X X X X X
    SHW X
    SJM X
    SNA X X X
    SRCL X
    SYK X X X X X X X X X X
    SYY X X X X X X X
    UNH X X X
    VAR X X
    WAB X X X
    WFC X X X X
    WXS/WEX X X X X
  • CWS Market Review – December 31, 2016
    , December 31st, 2016 at 7:08 am

    “Don’t you see what’s happening? Potter isn’t selling;
    Potter’s buying! And why? Because we’re panicking and he’s not.”

    The 2016 trading year has come to a close. For the year, the S&P 500 gained 9.5%, but a lot of that came late in the year. As late as November 4th, the index was up a measly 2% on the year.

    This was a very unusual year for Wall Street—and the world. I would guess that if I had told the average professional investor the outcomes of the Brexit vote and the U.S. election beforehand, having that info probably would have harmed his or her portfolio. Here’s an amazing stat: 295 stocks in the S&P 500 beat the index this year.

    Not only did the unexpected happen, but those unexpected events drew unexpected responses. In this week’s CWS Market Review, I’ll go through all the numbers on our Buy List’s performance. I’ll also list the details on the 2017 Buy List.

    The Final Numbers for 2016

    Now let’s get to the numbers. For 2016, the S&P 500 gained 9.54%, while our Buy List gained 0.99%. Although we did make a profit, we trailed the broader market. This was only the second time in the last decade in which we lost to the market.

    Including dividends, the S&P 500 gained 11.96% this year, while our Buy List gained 2.17%.

    Over the long haul, we’re still doing quite well. Over the last 11 years, the total compounded gain for the Buy List is 169.39%, compared with 126.63% for the S&P 500.

    With the Buy List, I always try to be as transparent as possible. The table below details the Buy List’s performance for 2016. I’ve listed each stock, along with the number of shares and the starting and ending prices. For tracking purposes, I assume the Buy List is a $1 million portfolio that starts out equally divided among the 20 stocks.

    Stock Shares 12/31/15 Beginning 12/30/16 Ending Profit/Loss
    ADS 180.7861 $276.57 $50,000.00 $228.50 $41,309.62 -17.38%
    AFL 834.7245 $59.90 $50,000.00 $69.60 $58,096.83 16.19%
    BBBY 1,036.2694 $48.25 $50,000.00 $40.64 $42,113.99 -15.77%
    BCR 263.9358 $189.44 $50,000.00 $224.66 $59,295.82 18.59%
    BIIB 163.2120 $306.35 $50,000.00 $283.58 $46,283.66 -7.43%
    CERN 830.9789 $60.17 $50,000.00 $47.37 $39,363.47 -21.27%
    CTSH 833.0556 $60.02 $50,000.00 $56.03 $46,676.11 -6.65%
    ESRX 572.0169 $87.41 $50,000.00 $68.79 $39,349.04 -21.30%
    F 3,548.6160 $14.09 $50,000.00 $12.13 $43,044.71 -13.91%
    FISV 546.6871 $91.46 $50,000.00 $106.28 $58,101.90 16.20%
    HEI 919.7940 $54.36 $50,000.00 $77.15 $70,962.11 41.92%
    HRL 1,264.5422 $39.54 $50,000.00 $34.81 $44,018.71 -11.96%
    MSFT 901.2257 $55.48 $50,000.00 $62.14 $56,002.16 12.00%
    ROST 929.1953 $53.81 $50,000.00 $65.60 $60,955.21 21.91%
    SBNY 326.0090 $153.37 $50,000.00 $150.20 $48,966.55 -2.07%
    SNA 291.6642 $171.43 $50,000.00 $171.27 $49,953.33 -0.09%
    SRCL 414.5937 $120.60 $50,000.00 $77.04 $31,940.30 -36.12%
    SYK 537.9815 $92.94 $50,000.00 $119.81 $64,455.56 28.91%
    WAB 703.0371 $71.12 $50,000.00 $83.02 $58,366.14 16.73%
    WFC 919.7940 $54.36 $50,000.00 $55.11 $50,689.85 1.38%
    Total $1,000,000.00 $1,009,945.07 0.99%

    Note that Hormel Foods (HRL) split 2-for-1 in February.

    The 2017 Buy List

    Now let’s turn our attention to the new Buy List. We’re expanding the Buy List to 25 names. Here again are the 25 stocks for 2017:

    AFLAC (AFL)
    Alliance Data Systems (ADS)
    Axalta Coating Systems (AXTA)
    Cerner (CERN)
    Cinemark Holdings (CNK)
    Continental Building Products (CBPX)
    Cognizant Technology Solutions (CTSH)
    CR Bard (BCR)
    Danaher (DHR)
    Express Scripts (ESRX)
    Fiserv (FISV)
    HEICO (HEI)
    Hormel Foods (HRL)
    Ingredion (INGR)
    Intercontinental Exchange (ICE)
    Microsoft (MSFT)
    Moody’s (MCO)
    Ross Stores (ROST)
    RPM International (RPM)
    Sherwin-Williams (SHW)
    Signature Bank (SBNY)
    JM Smucker (SJM)
    Snap-on (SNA)
    Stryker (SYK)
    Wabtec (WAB)

    Here’s the new $1 million portfolio, now divided equally among 25 stocks. Below are all 25 positions, with the number of shares for each and the closing price for 2016. Whenever I discuss how well the Buy List is doing, the list below is what I’m referring to. The Buy List is now locked and sealed, and I can’t make any changes for 12 months.

    Company Ticker Price Shares Balance
    AFLAC AFL $69.60 574.7126 $40,000
    Alliance Data Systems ADS $228.50 175.0547 $40,000
    Axalta Coating Systems AXTA $27.20 1,470.5882 $40,000
    Cerner CERN $47.37 844.4163 $40,000
    Cinemark CNK $38.36 1,042.7529 $40,000
    Continental Building Products CBPX $23.10 1,731.6017 $40,000
    Cognizant Technology Solutions CTSH $56.03 713.9033 $40,000
    CR Bard BCR $224.66 178.0468 $40,000
    Danaher DHR $77.84 513.8746 $40,000
    Express Scripts ESRX $68.79 581.4799 $40,000
    Fiserv FISV $106.28 376.3643 $40,000
    HEICO Corporation HEI $77.15 518.4705 $40,000
    Hormel Foods HRL $34.81 1,149.0951 $40,000
    Ingredion INGR $124.96 320.1024 $40,000
    Intercontinental Exchange ICE $56.42 708.9685 $40,000
    Microsoft MSFT $62.14 643.7078 $40,000
    Moody’s MCO $94.27 424.3131 $40,000
    Ross Stores ROST $65.60 609.7561 $40,000
    RPM International RPM $53.83 743.0801 $40,000
    Sherwin-Williams SHW $268.74 148.8427 $40,000
    Signature Bank SBNY $150.20 266.3116 $40,000
    JM Smucker SJM $128.06 312.3536 $40,000
    Snap-on SNA $171.27 233.5494 $40,000
    Stryker SYK $119.81 333.8619 $40,000
    Wabtec WAB $83.02 481.8116 $40,000
    Total $1,000,000

    The 25 stocks range from a market cap of $483 billion for Microsoft to $924 million for Continental Building Products. The average market cap is $38 billion, but that’s heavily distorted by Microsoft. Take out MSFT, and the average market cap is just under $20 billion. Fourteen of the 25 stocks fall between $4 billion and $20 billion in market value.

    Eighteen of the 25 stocks pay dividends. Currently, the Buy List has a yield of 1.48%.

    Only AFLAC and Fiserv have been on the Buy List all 12 years. This is Stryker’s 10th year. Danaher is returning to the Buy List after a seven-year absence.

    Our Ten New Members

    Here’s a brief look at our ten new stocks, plus their starting Buy Below prices. I’ll have more to say on each stock in upcoming issues.

    Axalta Coating Systems (AXTA) is a Philadelphia-based coatings company. The stock had its IPO two years ago. It was previously owned by The Carlyle Group. Buy Below $30 per share.

    Cinemark Holdings (CNK) runs a chain of movie theaters in the United States, Taiwan and South America. Buy Below $42 per share.

    Continental Building Products (CBPX) is a “leading manufacturer of gypsum wallboard, joint compound and complementary finishing products.” Buy below $26.

    Danaher (DHR) is a diversified manufacturer. The stock has been an amazing long-term winner. Buy below $83 per share.

    Ingredion (INGR) calls itself “a global ingredient-solutions company.” They turn plants into ingredients for food. Buy below $134.

    Intercontinental Exchange (ICE) runs several exchanges, including the New York Stock Exchange. Buy below $61.

    Moody’s (MCO) is a credit-rating agency. They also own Moody’s Analytics. Buy below $103.

    RPM International (RPM) makes building materials and adhesives. The company has increased its dividend for 43 consecutive years. Buy below $58.

    Sherwin-Williams (SHW) is mostly known for its line of paint. The company recently bought Valspar for $9 billion. Buy below $289.

    JM Smucker (SJM) makes a lot more than jelly. The company makes a broad line of food products. Of course, with a name like Smucker’s, it has to be good. Buy below $136.

    I’m also lifting the Buy Below on CR Bard (BCR) as $230 per share.

    That’s all for now. The new trading year begins bright and early on Tuesday morning. We’ll get some of the key turn-of-the-month econ reports. ISM comes out on Tuesday. The ADP payroll report is on Thursday. Then the big jobs report comes out next Friday. Be sure to keep checking the blog for daily updates. I want to wish everyone a happy, healthy and profitable New Year. I’ll have more market analysis for you in the next issue of CWS Market Review!

    – Eddy

  • About Those Forecasts for 2017
    , December 30th, 2016 at 12:02 pm

    The guys at Bespoke recently posted a chart looking at how well analysts have done in predicting the S&P 500. As you might guess, it’s not a great track record.

    I was curious to see if there’s a method to the analysts’ madness, and indeed there is. Their forecasts for next year are largely dependent on what the market did this year. I was surprised to see how strong the relationship is.

    The analysts are paid tons of money to tell us that the market is subject to…are you ready for this…simple mean reversion. Good years will be followed by bad years, and bad years by good years. The correlation works out to -0.627.

    Here’s the scatterplot for the last 16 years.

    The horizontal axis is the market’s return for this year. The vertical is the gain expected by Wall Street analysts. Note the fairly strong negative relationship. You’ll also notice the tight range of analysts’ forecasts compared with the real world. (Bear in mind that the horizontal axis is really four times wider than the vertical. I had to zoom in to make it more readable.)

    The standard deviation in returns for the analysts is only 4%. It’s nearly 18% for reality.

    I’ll simplify what the equation means. Assuming the market will return 10% next year, divide this year’s gain by six, and subtract it from 10%…and presto, you’re now a Wall Street analyst.

    So what’s the real world explanatory of this year’s returns for next year? Here you go:

    The R^2 is less than 1%.

  • Morning News: December 30, 2016
    , December 30th, 2016 at 7:00 am

    Euro Jumps 1.6% in Minutes as Algo Orders Surprise Market

    China’s Yuan Suffers Biggest One-Year Loss Since 1994

    China Vows to Ease Curbs on Foreign Investment in Finance

    India Is Gearing Up To Recapitalise Its Big Banks

    Oil, Metals Post Stellar 2016 Gains on Output Cuts, Demand Hopes

    Minimum Wages Set to Increase in Many States in 2017

    Wall Street’s Trump Bonanza Won’t Avert Job Cuts at Banks in ’17

    Silicon Valley’s Obscure Unicorns Could Boost 2017 IPO Market

    Twitter Seeks a Little Help From Its Users

    Sears CEO to Open His Wallet Once Again to Keep Retailer Afloat

    Takata Said to Be Close to Deal With U.S. Over Deadly Airbags

    Run-DMC Sues Wal-Mart, Amazon for $50 Million

    General Cable to Pay More Than $75 Million To Settle Bribery Charges

    Jeff Carter: Objections In The Sales Process-Handle Them And You Are Awesome

    Jeff Miller: Stock Exchange: How to Find New Trading Ideas

    Be sure to follow me on Twitter.

  • All Quiet on the Wall Street Front
    , December 29th, 2016 at 10:53 am

    The stock market is pretty quiet this week. The Dow has come close to 20,000, but so far has refused to cross the line.

    This morning we learned that jobless claims dropped to 265,000. That’s a good number. The next jobs report will be next Friday, January 6.

    This morning, the government said that the trade deficit for goods widened to $65.3 billion last month. Bear in mind that the dollar has been rallying since the election.

    I wanted to pass along a “Year in Review” look at Cerner (CERN) by the Kansas City Business Journal. This has been a very difficult year for Cerner, and the stock is down 20% YTD.

    Still, I decided to keep the stock on the Buy List for next year. Oftentimes with stock-picking, you’re buying dented merchandise. The question to ask is, how severe and how fixable are the problems? I think Cerner is a good example of a company that ran into difficulties but is in a position to ride out the storm.

  • Morning News: December 29, 2016
    , December 29th, 2016 at 7:13 am

    Italy Government Not Indifferent to Vivendi’s Stake Building in Mediaset

    China’s Currency Drops But Pressure Still Builds

    China Warmly Welcomes a Giant Rooster With Trumpian Characteristics

    What History Has to Say About the Economy Trump Will Inherit

    The Golden Era of Hedge Funds Draws to a Close With Clients in Revolt

    U.S. Refiners Face Severe Labor Shortage For Deferred Maintenance

    Toshiba’s Looming Writedown Wipes Out Gain From 2016 Share Rally

    Amazon Tries To Recreate Prime Day Magic With The First-Ever Digital Day Sales Event

    Nvidia Falls as Citron Research Says Stock ‘Belongs at $90’

    Panasonic to Invest Over $256 Million in Tesla’s U.S. Plant for Solar Cells

    How China Built `iPhone City’ With Billions in Perks for Apple’s Partner

    Trump Takes Credit for Sprint Plan to Add 5,000 Jobs in U.S.

    Dentsu Chief Ishii Resigns Amid Mounting Pressure Over Employee’s Suicide

    Cullen Roche: Modern Finance is (Still) a Rip-Off

    Howard Lindzon: The Year 2016 in Stocks – Stocktwits Style

    Be sure to follow me on Twitter.

  • Morning News: December 28, 2016
    , December 28th, 2016 at 6:54 am

    Vietnam Sees 2016 Growth At 6.2%, Aided By Building Boom

    Mexico Gasoline Prices to Surge by the Most in Two Decades

    Oil Nudges Higher as Output Cuts Near

    Rising Consumer Confidence Is Driven by High Expectations for Trump

    U.S. Accuses Chinese Citizens of Hacking Law Firms, Insider Trading

    Qualcomm Faces $853 Million Fine From South Korea Over Alleged Antitrust Violations

    Writedown Fears Wipe $5 Billion Off Toshiba’s Value As It Weighs Options

    Delta Drops Boeing Dreamliner Order Inherited From Northwest

    Airbus’s A380 Woes Deepen as Top Buyer Emirates Delays Jets

    Here Comes The Sun: Elon Musk’s Ambitious Solar Panel Factory Vision Highlights The Challenges of a Globalized Economy

    For the Trumps, `Made in U.S.A.’ May Be a Tricky Label to Stitch

    As Populists Won 2016 Ballots, World’s Richest Made $237 Billion

    Jeff Miller: Is Forecasting Always A Folly?

    Roger Nusbaum: 2016 Looks to Finish With Double Digit Gains

    Jeff Carter: Filtering By Risk

    Be sure to follow me on Twitter.

  • George Acs on BBBY (and Us)
    , December 27th, 2016 at 10:56 am

    George Acs, one of my favorite Twitter follows, said some very nice things about Crossing Wall Street:

    If you follow Crossing Wall Street, you know that its founder, Eddy Elfenbein, is one of the most transparent stock pickers out there and one of the most credible.

    He is a true buy and hold investor and his new ETF, AdvisorShares Focused Equity ETF (NYSEARCA:CWS) is based upon his annual buy list that has had a long term record of market out-performance.

    While for many Bill Miller is the name that pops up when thinking long term out-performance, I think of Eddy. He is also a great Twitter follow because he is funny, self-effacing and shares relevant data and facts more readily than anyone I’ve ever seen, read or heard.

    I believe that in an era where quantitative easing is no longer in effect and thereby no longer indiscriminately propping up most everything, true diligence will make the difference between one stock picker and the next.

    You just don’t get more diligent than Eddy Elfenbein.

    This year’s buy list has been released and Bed Bath and Beyond is no longer a part. Elfenbein describes it as one of the most frustrating stocks that he has owned and I continue to feel that pain.

    But following this past week’s washout of an earnings report, I’m taking another look, but unlike Elfenbein, for whom diligent stock picking validates a buy and hold strategy, I have only short term interest in adding those shares and no interest in doing my due diligence.

    For me, all the due diligence that I needed was seeing that its shortfall in earnings was less than the 20% off they offer on any single item with their frequent coupon mailings to my home.

    I do see some continued downside risk, perhaps to the $39 level, but I would be very happy to see Bed Bath and Beyond shares tread water for a while as I would seek to serially sell call options on those shares at the $40-$42 level.