Post by Admin/YBB on Jan 1, 2022 7:22:59 GMT -6
Pg 8-9. FOMC Minutes on WEDNESDAY.
REVIEW. REAL ESTATE prices are rising sharply in states with fastest rising POPULATIONS (from migration): ID, AZ, MT, SC, DE, FL, NV, SD. States with high natural population growth include UT, TX.
PREVIEW. ARKK and TSLA are no longer correlated highly. It seems that Cathie WOOD sold some TSLA to buy sinking ROKU, ZM, COIN as her hot hand turned cold.
DATA THIS WEEK. Construction spending on Monday; JOLTS report, ISM manufacturing PMI on TUESDAY; auto sales, ADP national employment report on WEDNESDAY; ISM services PMI, durable goods, factory orders, weekly initial jobless claims on THURSDAY; jobs report (+374,000), unemployment rate (4.1%) on FRIDAY.
CLOSED. Many global markets including UK, Canada, Japan on MONDAY (but the US is open).
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Small-cap Graham Holdings (GHC; yield 1%; fwd P/E 12; fwd P/EBITDA 4; 26.6% discount from book value; 48.5% discount from sum-of-the-parts valuation; some buybacks and small acquisitions; overfunded pension plan; like a mini-BRK; businesses include TV stations, Kaplan (for-profit education), manufacturing, healthcare, auto dealerships, restaurants, stock portfolio; CEO Tim O’Shaughnessy (Facebook page) from Graham family that has control via super-voting stock; very low profile, little analyst coverage; pg 12).
BEARISH. See other stories.
Pg 10: FOLLOWUP. Covid-19-Omicron and bad weather may be the transient factors for TRAVEL, and travel stocks have held their gains so far. But watch leisure and business travel bookings.
Pg 14: Many RETIREES, WEALTHY and financial ADVISORS are moving to Florida. There are no income and capital gain TAXES in FL, and property taxes are low. Population in FL (21.5 million) has grown at 2x the national rate since 2010. Some of this movement of financial advisors was Covid-19 related and CT was also a big beneficiary; loser was NY. Most of the advisory work can be done REMOTELY and advisors can travel to meet big clients anywhere. Many who are thinking of selling their businesses move to FL first. Several firms are building office facilities as existing spaces are not easily available. All this influx is driving REAL ESTATE prices up in FL and, ironically, some FL residents are moving out to cheaper locations. STAFFING may be difficult in FL and many firms are relocating employees from elsewhere.
Pg 22: FUNDS recommended for high inflation and rising rates include BGHAX (HY), PTCIX (HY, FR/BL, EM) and ORNAX (HY muni; more in infrastructure). Basically, high credit risks may payoff so long as there is no recession.
Pg 23: FUNDS. Ajay KRISHNAN of EM WAESX (ER 1.5%) likes India (30% weight) over China (only 6% weight). Fund uses a mix of quantitative and fundamental approaches and can go-anywhere; top sectors now are techs and financials; top 10 holdings account for 51.2%. Beware that rising US rates and strong dollar are headwinds for EMs. (He also comanages WAEMX, WAGOX, WAINX).
Pg 25: TECH TRADER. It was a wild year for techs as Nasdaq Comp (+23%) underperformed SP500 (+28%) for the first time since 2016. So, some techs had tough 2021 and it was just ugly for some former highflyers (ZM, DOCU, OKTA). Several old techs did well (ORCL, HPQ, DELL). Among the mega-techs, AMZN lagged and looks attractive for 2022; FB did fine even with lot of bad press. NVDA may be the next to join the trillion-dollar club. Videogame stocks (ATVI, TTWO, EA) were hurt by semi chips shortages, industry scandals and people escaping from homes. Telcos (T, VZ, TMUS) were bad. Streaming didn’t help DIS, VIAC, DISCA, ROKU, but NFLX did well. Cloud-hardware (ANET, CSCO, CIEN, STX (yep, no longer just PC storage)) did well but cloud-software lagged. Of course, chips shortages benefitted chip stocks (AMAT, KLAC) but the giant TMSC was a laggard due to high capex and China-Taiwan tensions.
Pg 11: With CHIP shortages, chip stocks are hot (SOX index +43%, fwd P/S 7.9). But cheapest SOX stocks are MU (fwd P/E 9.9), AMKR (fwd P/E 10), ORVO, SWKS, INTC, QCOM, AVGO, AMAT, LRCX.
Pg 26: ECONOMY. Anthony KLOTZ, Texas A&M. He correctly predicted GREAT RESIGNATION a year ago. He saw several elements at the micro level: early in the pandemic, the QUIT-RATE dropped, but it surged as vaccines became available; frontline workers and caregivers at home were BURNED OUT; focus shifted away from workplace; stuck at home, many thought about their priorities and LIFESTYLES; waves of STIMULUS checks and strong STOCK market helped financially; many got used to working from home and didn’t want to return to workplaces; many who were near retirement or were thinking of retiring decided to RETIRE; many switched to part-time work or started their own businesses; many workers became more SELECTIVE in jobs. In this new environment, companies that have flexible work possibilities (office, home, hybrid model) will benefit. But companies that must have in-person work/services will experience most difficulties. The tight labor conditions may persist for years but many jobs will eventually be replaces by AI/ROBOTS/AUTOMATION – but that won’t happen tomorrow or the next year.
Pg 28: ECONOMY. Covid-19-Omicron has impacted behavior of CONSUMERS and WORKERS. Most affected by mild illnesses are public transportation, restaurants, entertainment shows, large events. This may slowdown the economy, but it should rebound later. There will be no lockdowns and people will have to learn to live with Covid-19. The 7-day US average of new Covid-19 cases is 316.3K and that may peak soon. Q1 GDP may be impacted but 2022 GDP may be OK.
Pg 54: OTHER VOICES. Judith RODIN, former President of Rockefeller Foundation, former President if U Pennsylvania. The new soft-infrastructure stimulus (BBB) money should be spent wisely on worthy projects. Suggested are public-private partnerships on sustainability; local infrastructure projects (roads, bridges, power, sewer, transportation, ports); climate adaptations and strengthening business resilience.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
REVIEW. REAL ESTATE prices are rising sharply in states with fastest rising POPULATIONS (from migration): ID, AZ, MT, SC, DE, FL, NV, SD. States with high natural population growth include UT, TX.
PREVIEW. ARKK and TSLA are no longer correlated highly. It seems that Cathie WOOD sold some TSLA to buy sinking ROKU, ZM, COIN as her hot hand turned cold.
DATA THIS WEEK. Construction spending on Monday; JOLTS report, ISM manufacturing PMI on TUESDAY; auto sales, ADP national employment report on WEDNESDAY; ISM services PMI, durable goods, factory orders, weekly initial jobless claims on THURSDAY; jobs report (+374,000), unemployment rate (4.1%) on FRIDAY.
CLOSED. Many global markets including UK, Canada, Japan on MONDAY (but the US is open).
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Small-cap Graham Holdings (GHC; yield 1%; fwd P/E 12; fwd P/EBITDA 4; 26.6% discount from book value; 48.5% discount from sum-of-the-parts valuation; some buybacks and small acquisitions; overfunded pension plan; like a mini-BRK; businesses include TV stations, Kaplan (for-profit education), manufacturing, healthcare, auto dealerships, restaurants, stock portfolio; CEO Tim O’Shaughnessy (Facebook page) from Graham family that has control via super-voting stock; very low profile, little analyst coverage; pg 12).
BEARISH. See other stories.
Pg 10: FOLLOWUP. Covid-19-Omicron and bad weather may be the transient factors for TRAVEL, and travel stocks have held their gains so far. But watch leisure and business travel bookings.
Pg 14: Many RETIREES, WEALTHY and financial ADVISORS are moving to Florida. There are no income and capital gain TAXES in FL, and property taxes are low. Population in FL (21.5 million) has grown at 2x the national rate since 2010. Some of this movement of financial advisors was Covid-19 related and CT was also a big beneficiary; loser was NY. Most of the advisory work can be done REMOTELY and advisors can travel to meet big clients anywhere. Many who are thinking of selling their businesses move to FL first. Several firms are building office facilities as existing spaces are not easily available. All this influx is driving REAL ESTATE prices up in FL and, ironically, some FL residents are moving out to cheaper locations. STAFFING may be difficult in FL and many firms are relocating employees from elsewhere.
Pg 22: FUNDS recommended for high inflation and rising rates include BGHAX (HY), PTCIX (HY, FR/BL, EM) and ORNAX (HY muni; more in infrastructure). Basically, high credit risks may payoff so long as there is no recession.
Pg 23: FUNDS. Ajay KRISHNAN of EM WAESX (ER 1.5%) likes India (30% weight) over China (only 6% weight). Fund uses a mix of quantitative and fundamental approaches and can go-anywhere; top sectors now are techs and financials; top 10 holdings account for 51.2%. Beware that rising US rates and strong dollar are headwinds for EMs. (He also comanages WAEMX, WAGOX, WAINX).
Pg 25: TECH TRADER. It was a wild year for techs as Nasdaq Comp (+23%) underperformed SP500 (+28%) for the first time since 2016. So, some techs had tough 2021 and it was just ugly for some former highflyers (ZM, DOCU, OKTA). Several old techs did well (ORCL, HPQ, DELL). Among the mega-techs, AMZN lagged and looks attractive for 2022; FB did fine even with lot of bad press. NVDA may be the next to join the trillion-dollar club. Videogame stocks (ATVI, TTWO, EA) were hurt by semi chips shortages, industry scandals and people escaping from homes. Telcos (T, VZ, TMUS) were bad. Streaming didn’t help DIS, VIAC, DISCA, ROKU, but NFLX did well. Cloud-hardware (ANET, CSCO, CIEN, STX (yep, no longer just PC storage)) did well but cloud-software lagged. Of course, chips shortages benefitted chip stocks (AMAT, KLAC) but the giant TMSC was a laggard due to high capex and China-Taiwan tensions.
Pg 11: With CHIP shortages, chip stocks are hot (SOX index +43%, fwd P/S 7.9). But cheapest SOX stocks are MU (fwd P/E 9.9), AMKR (fwd P/E 10), ORVO, SWKS, INTC, QCOM, AVGO, AMAT, LRCX.
Pg 26: ECONOMY. Anthony KLOTZ, Texas A&M. He correctly predicted GREAT RESIGNATION a year ago. He saw several elements at the micro level: early in the pandemic, the QUIT-RATE dropped, but it surged as vaccines became available; frontline workers and caregivers at home were BURNED OUT; focus shifted away from workplace; stuck at home, many thought about their priorities and LIFESTYLES; waves of STIMULUS checks and strong STOCK market helped financially; many got used to working from home and didn’t want to return to workplaces; many who were near retirement or were thinking of retiring decided to RETIRE; many switched to part-time work or started their own businesses; many workers became more SELECTIVE in jobs. In this new environment, companies that have flexible work possibilities (office, home, hybrid model) will benefit. But companies that must have in-person work/services will experience most difficulties. The tight labor conditions may persist for years but many jobs will eventually be replaces by AI/ROBOTS/AUTOMATION – but that won’t happen tomorrow or the next year.
Pg 28: ECONOMY. Covid-19-Omicron has impacted behavior of CONSUMERS and WORKERS. Most affected by mild illnesses are public transportation, restaurants, entertainment shows, large events. This may slowdown the economy, but it should rebound later. There will be no lockdowns and people will have to learn to live with Covid-19. The 7-day US average of new Covid-19 cases is 316.3K and that may peak soon. Q1 GDP may be impacted but 2022 GDP may be OK.
Pg 54: OTHER VOICES. Judith RODIN, former President of Rockefeller Foundation, former President if U Pennsylvania. The new soft-infrastructure stimulus (BBB) money should be spent wisely on worthy projects. Suggested are public-private partnerships on sustainability; local infrastructure projects (roads, bridges, power, sewer, transportation, ports); climate adaptations and strengthening business resilience.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None