Post by Admin/YBB on Nov 27, 2021 10:26:48 GMT -6
Pg 10-11.
REVIEW. HOME PRICES rose sharply in 2021 (+14.7% est) and may rise moderately in 2022 (+2.8% est). Hot markets were Austin/TX, Naples/FL, Boise/ID; bad markets were St Croix/VI, Shreveport-Bossier/LA.
PREVIEW. 2021 was a bad year for the DOGS of the Dow (+10.6% vs +18.9% for DJIA, +26.8% for SP500); the worst were VZ, AMGN. Dogs have lagged in 4 of 5 years but 2022 may be better with a starting yield of 4%. It seems that 9 of the 10 components will remain with INTC replacing CSCO.
DATA THIS WEEK. Pending home sales on MONDAY; home price index, ISM Chicago PMI, CB confidence index on TUESDAY; ADP national employment report, construction spending on WEDNESDAY; weekly initial jobless claims on THURSDAY; ISM services PMI, factory orders, jobs report (+525,000 to +530,000), unemployment rate (4.5%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Small-cap auto systems supplier Gentherm (fwd P/E 24; businesses – auto heated-seats, climate control, EV battery thermal management and medical devices; supplies traditional ICE cars and EVs; big customer Lear/LEA is taking some related business in-house; pg 22).
BEARISH. See other stories.
Pg 12: FOLLOWUP. SHOPPERS returned to malls and stores (M, WMT, TGT) on Black Friday and lot of store sales were at the expense of online sales. But there were no big discounts. However, several retailers have had supply-chain issues (GPS, JWN). Retail XRT +51.1% YTD, the best since 2009.
Pg 13: ECONOMY. What will POWELL-BRAINARD Fed do? A low probably event is that they pull Volcker 2.0 if inflation gets out of hand. Recent labor contracts with quarterly COLA remind of the 1970s price-wage spiral when workers with COLA peaked in 1975-76. A high probability scenario is that continuing pandemic/epidemic will keep a lid on economic growth and wouldn’t necessitate aggressive actions by the Fed. Another possibility is that the Fed may just move its average inflation target to +3% (from +2% now) and continue the pretense of transitory inflation. A very low probably event from lonely David ROSENBERG is deflation after the collapse of stocks and real estate but with Fed coming to rescue again. (So, there you have almost all possible scenarios to bet on.)
Pg 15: This week proved that Covid-19 scare(s) can still rattle the markets. A new Covid variant was found in Africa (Omicron) and it was already traceable in Europe (that already had growing Covid issues) and Asia. New travel restrictions were (or are being) imposed for Africa. So, briefly, the stay/work-from-home and pharma trades returned, and cyclicals tanked – but will this persist? The week also showed the value of having some fixed-income, and that cryptos weren’t the new gold (well, neither was gold).
Pg 23: FUNDS. ESG large-cap blend AFDIX (ER 0.79%; No-load/NTF at Fido and Schwab) has outperformed its category and SP500. Fund uses fundamental, quantitative and ESG factors and includes all sectors. M* rates it 5*, Bronze/Neutral due to recent manager turnovers including the departure of fund’s and firm’s head of ESG. American Century is 40% owned by Stowers Institute of Medical Research established by James Stowers, 1924-2014. (A related active nontransparent ETF is ESGA, ER 0.39%).
Pg 24: FUNDS. Those betting on strong holiday retail season may use online retail ETFs ONLN, IBUY, EBIZ (44% foreign).
Pg 25: INCOME. Active vs passive income funds are compared: For dividend-growth, active VDIGX vs passive VIG; for current-dividends, active VEIPX vs passive VYM. There aren’t huge differences in performances, so it is a matter of personal choices. (A comment pointed to dividend-blend SCHD as an alternative).
Pg 26: Teresa GHILARDUCCI, 64, New School in NYC. She doesn’t like the DIY retirement plans for common people and misses the old defined-benefit (DB) plans. She has in past proposed to overhaul 401k/403b plans and is now proposing to reform the Federal TSP plan (a 401k-like plan) – into a target-date fund (TDF) type plan that starts high in equities and ends in lifetime annuities. She proposes government matching of contributions up to 3%, but then most employees have to give up the DIY-thing with their 401k/403b (but she is OK with large companies also running optional 401k/403b on the side for high-income employees). Her universal government retirement plans will be in addition to Social Security. She denies that she is a socialist and says that her working with Kevin HASSETT (former CEA Chair, 09/2017-06/2019) proves that. She says that people should have 10-12 times of their income as retirement savings by 65. Her research shows that people with less wealth have shorter lifespans after retirement. She herself has no plans to retire from her endowed professorship until her 70s. (Her ideas become problematic when they change from providing options to making them mandatory for all.)
Pg 62: OTHER VOICES. Michael PEREGRINE, McDermott Will & Emery (law firm). Lessons from ENRON collapse 20 years ago are reviewed. Enron started out as electricity and natural gas pipeline company that transformed into an energy trading giant with complex structure, strategies and huge off-book liabilities that very few people understood. The stock peaked in August 2000 but then the end was swift, and the game was all over by 12/2/2001 bankruptcy. There were huge monetary and job losses; financial/economic impact; collapse of an accounting firm (Arthur Anderson); many people went to jail; the resulting creation of SARBANES-OXLEY Act. There was a movie, The Smartest Guys in the Room. The word Enron has become synonymous with mega-scandals. The resulting changes in corporate governance, accounting, law and ethics will remain with us forever. (To the investors, the lesson is to stay away from stuff that you just cannot understand.)
(EXTRAS from online Friday that didn’t make the weekend paper version)
BULLISH. Banks (JPM, BAC, WFC, ETF KBE; fwd P/E 10.7 only; selloff overdone on Covid-19 concerns from Africa and Europe; banks are in good financial shape assuming the scare to be transitory).
ETFs. Covid-19 worries emanating from Africa and Europe hit several ETFs hard: South Africa EZA; travel JETS, AWAY; commodities COMT, URA, XOP, FCG; crypto BITO, BITQ, BKCH. Rallies were seen in biotech IDNA, IBB; bonds TLT, IGLB.
Supplement GUIDE TO WEALTH has features on
TAXES (tax-loss selling, investing in opportunity zones, shifting income and spending, estate taxes, charitable gifts, Roth IRA Conversions; upcoming limitations on IRAs);
TAX INCREASES (now for high-income people to fund the stimulus, but that is how all taxes begin and trickle down);
taxes on CRYPTOS (like on assets; timely transactions reporting for $10K+ from 2024; Coinbase/COIN, Robinhood/HOOD, PayPal/PYPL, Square/SQ will voluntarily issue 1099-B or 1099-MISC, but most crypto investors have to keep their own tax records and IRS audits will be lot of “fun”; wash-sales for cryptos kick in 2022; owning crypto funds GBTC, BITW, BITO, BTF may make tax reporting easier);
Donor-advised funds (DAFs; fund with appreciated stocks in years one itemizes; but cannot just sit on this money and need to periodically make grants/donations – the DAF will prompt after a few years of inactivity and laws on DAF distributions may be changed too).
These are good features, but this is really an AD SUPPLEMENT for Top Advisor Guide and a state-by-state list follows; also listed are Top Advisory Teams and Top RIA Firms.
REVIEW. HOME PRICES rose sharply in 2021 (+14.7% est) and may rise moderately in 2022 (+2.8% est). Hot markets were Austin/TX, Naples/FL, Boise/ID; bad markets were St Croix/VI, Shreveport-Bossier/LA.
PREVIEW. 2021 was a bad year for the DOGS of the Dow (+10.6% vs +18.9% for DJIA, +26.8% for SP500); the worst were VZ, AMGN. Dogs have lagged in 4 of 5 years but 2022 may be better with a starting yield of 4%. It seems that 9 of the 10 components will remain with INTC replacing CSCO.
DATA THIS WEEK. Pending home sales on MONDAY; home price index, ISM Chicago PMI, CB confidence index on TUESDAY; ADP national employment report, construction spending on WEDNESDAY; weekly initial jobless claims on THURSDAY; ISM services PMI, factory orders, jobs report (+525,000 to +530,000), unemployment rate (4.5%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Small-cap auto systems supplier Gentherm (fwd P/E 24; businesses – auto heated-seats, climate control, EV battery thermal management and medical devices; supplies traditional ICE cars and EVs; big customer Lear/LEA is taking some related business in-house; pg 22).
BEARISH. See other stories.
Pg 12: FOLLOWUP. SHOPPERS returned to malls and stores (M, WMT, TGT) on Black Friday and lot of store sales were at the expense of online sales. But there were no big discounts. However, several retailers have had supply-chain issues (GPS, JWN). Retail XRT +51.1% YTD, the best since 2009.
Pg 13: ECONOMY. What will POWELL-BRAINARD Fed do? A low probably event is that they pull Volcker 2.0 if inflation gets out of hand. Recent labor contracts with quarterly COLA remind of the 1970s price-wage spiral when workers with COLA peaked in 1975-76. A high probability scenario is that continuing pandemic/epidemic will keep a lid on economic growth and wouldn’t necessitate aggressive actions by the Fed. Another possibility is that the Fed may just move its average inflation target to +3% (from +2% now) and continue the pretense of transitory inflation. A very low probably event from lonely David ROSENBERG is deflation after the collapse of stocks and real estate but with Fed coming to rescue again. (So, there you have almost all possible scenarios to bet on.)
Pg 15: This week proved that Covid-19 scare(s) can still rattle the markets. A new Covid variant was found in Africa (Omicron) and it was already traceable in Europe (that already had growing Covid issues) and Asia. New travel restrictions were (or are being) imposed for Africa. So, briefly, the stay/work-from-home and pharma trades returned, and cyclicals tanked – but will this persist? The week also showed the value of having some fixed-income, and that cryptos weren’t the new gold (well, neither was gold).
Pg 23: FUNDS. ESG large-cap blend AFDIX (ER 0.79%; No-load/NTF at Fido and Schwab) has outperformed its category and SP500. Fund uses fundamental, quantitative and ESG factors and includes all sectors. M* rates it 5*, Bronze/Neutral due to recent manager turnovers including the departure of fund’s and firm’s head of ESG. American Century is 40% owned by Stowers Institute of Medical Research established by James Stowers, 1924-2014. (A related active nontransparent ETF is ESGA, ER 0.39%).
Pg 24: FUNDS. Those betting on strong holiday retail season may use online retail ETFs ONLN, IBUY, EBIZ (44% foreign).
Pg 25: INCOME. Active vs passive income funds are compared: For dividend-growth, active VDIGX vs passive VIG; for current-dividends, active VEIPX vs passive VYM. There aren’t huge differences in performances, so it is a matter of personal choices. (A comment pointed to dividend-blend SCHD as an alternative).
Pg 26: Teresa GHILARDUCCI, 64, New School in NYC. She doesn’t like the DIY retirement plans for common people and misses the old defined-benefit (DB) plans. She has in past proposed to overhaul 401k/403b plans and is now proposing to reform the Federal TSP plan (a 401k-like plan) – into a target-date fund (TDF) type plan that starts high in equities and ends in lifetime annuities. She proposes government matching of contributions up to 3%, but then most employees have to give up the DIY-thing with their 401k/403b (but she is OK with large companies also running optional 401k/403b on the side for high-income employees). Her universal government retirement plans will be in addition to Social Security. She denies that she is a socialist and says that her working with Kevin HASSETT (former CEA Chair, 09/2017-06/2019) proves that. She says that people should have 10-12 times of their income as retirement savings by 65. Her research shows that people with less wealth have shorter lifespans after retirement. She herself has no plans to retire from her endowed professorship until her 70s. (Her ideas become problematic when they change from providing options to making them mandatory for all.)
Pg 62: OTHER VOICES. Michael PEREGRINE, McDermott Will & Emery (law firm). Lessons from ENRON collapse 20 years ago are reviewed. Enron started out as electricity and natural gas pipeline company that transformed into an energy trading giant with complex structure, strategies and huge off-book liabilities that very few people understood. The stock peaked in August 2000 but then the end was swift, and the game was all over by 12/2/2001 bankruptcy. There were huge monetary and job losses; financial/economic impact; collapse of an accounting firm (Arthur Anderson); many people went to jail; the resulting creation of SARBANES-OXLEY Act. There was a movie, The Smartest Guys in the Room. The word Enron has become synonymous with mega-scandals. The resulting changes in corporate governance, accounting, law and ethics will remain with us forever. (To the investors, the lesson is to stay away from stuff that you just cannot understand.)
(EXTRAS from online Friday that didn’t make the weekend paper version)
BULLISH. Banks (JPM, BAC, WFC, ETF KBE; fwd P/E 10.7 only; selloff overdone on Covid-19 concerns from Africa and Europe; banks are in good financial shape assuming the scare to be transitory).
ETFs. Covid-19 worries emanating from Africa and Europe hit several ETFs hard: South Africa EZA; travel JETS, AWAY; commodities COMT, URA, XOP, FCG; crypto BITO, BITQ, BKCH. Rallies were seen in biotech IDNA, IBB; bonds TLT, IGLB.
Supplement GUIDE TO WEALTH has features on
TAXES (tax-loss selling, investing in opportunity zones, shifting income and spending, estate taxes, charitable gifts, Roth IRA Conversions; upcoming limitations on IRAs);
TAX INCREASES (now for high-income people to fund the stimulus, but that is how all taxes begin and trickle down);
taxes on CRYPTOS (like on assets; timely transactions reporting for $10K+ from 2024; Coinbase/COIN, Robinhood/HOOD, PayPal/PYPL, Square/SQ will voluntarily issue 1099-B or 1099-MISC, but most crypto investors have to keep their own tax records and IRS audits will be lot of “fun”; wash-sales for cryptos kick in 2022; owning crypto funds GBTC, BITW, BITO, BTF may make tax reporting easier);
Donor-advised funds (DAFs; fund with appreciated stocks in years one itemizes; but cannot just sit on this money and need to periodically make grants/donations – the DAF will prompt after a few years of inactivity and laws on DAF distributions may be changed too).
These are good features, but this is really an AD SUPPLEMENT for Top Advisor Guide and a state-by-state list follows; also listed are Top Advisory Teams and Top RIA Firms.