Post by Admin/YBB on Dec 24, 2022 8:02:33 GMT -6
Pg 8-9.
REVIEW. After a great 2021, the IPO market was nearly dead in 2022 (only $7 billion raised, the lowest since 1990); the data don’t include SPACs; new ADRs, REITs, CEFs. Causes were Fed rate hikes and Nasdaq collapse.
PREVIEW. Meme CRYPTO token Dogecoin (it started as a joke but is #8; #1 Bitcoin, #2 Ethereum) now has higher market-cap than crypto company Coinbase/COIN (-86% YTD; bonds distressed at 50c); COIN is a crypto exchange, broker-dealer, custodian. While this is a silly apples-to-oranges comparison, it shows how bad things have been for cryptos, and then came the failure of FTX (SBF).
DATA THIS WEEK. Home price index, Dallas Fed manufacturing outlook, wholesale inventories on TUESDAY; pending home sales, Richmond Fed manufacturing survey on WEDNESDAY; weekly initial jobless claims on THURSDAY; ISM Chicago PMI on FRIDAY.
CLOSED. The US stock and bond markets, and banks, are closed on MONDAY. Some foreign markets will be closed on MONDAY (London, Paris, Frankfurt, HK, etc). London and HK will also be closed on TUESDAY.
REMINDER – The US markets are open normally on FRIDAY for TLH by procrastinators; it’s the TRADE DATE that counts, not the settle date. Also review some humongous distributions by funds that brokerages don’t identify clearly on their websites (e.g. Schwab doesn’t except in History but Fido does in Tax tab) and don’t get surprised by 1099s in early-2023.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Costco (COST; yield 0.8%; fwd P/E 29; private-label products and membership renewals remain strong; pg 14);
Madison Square Garden Sports (MSGS; sold majority stake in Phoenix Suns (NBA); owns NY Knicks (NBA), NY Rangers (NHL); DOLAN-discount exists due to family ownership/control (Dolans also control MSGE, AMCX); may sell a minority stake; pg 15).
BEARISH.
Pg 10, ECONOMY. 2022 was a year of reality for investors and the FED. In 2023, look for higher RATES (fed funds 5%+; probably no cuts despite CME FedWatch projections for so in Q4) and a mild RECESSION (H2). High and sticky inflation will be tamed only by monetary tightening and higher unemployment. Forecasts for 2023 are mixed due to different expectations for the Fed (pivot or not) and US consumers. The Fed will still fail in its 2% average inflation target and inflation may stabilize in 3-4% range. Companies will deploy more AI/robotics/automation to address tight labor markets and high wages. Decoupling from China and US RESHORING (and REGIONALIZATION) will continue; this will boost the US spending on infrastructure, R&D and industrial production (there will be support from the US federal funding too – CHIPS Act, Inflation Reduction Act, SECURE 2.0). Think of 2023 as a TRANSITION year with some pain before eventual recovery and expansion.
Pg 12: The VACCINE market will continue to grow, building upon successes from the pandemic. There will be new mRNA vaccines for Covid-19, flu, RSV, etc. Big players include PFE, MRNA, GSK, SNY; others mentioned include JNJ, BNTX, etc.
Pg 21, FUNDS. Jonathan EDWARDS of small-cap value VSCAX (load 5.5%; ER 1.12%) looks for cash flow yields and stocks trading below their intrinsic value; he has 3-5-year time horizon but may trade quicker if there are unexpected developments. Uncertainties now may provide opportunities. He also manages mid-cap value VVOAX.
Pg 23, INCOME INVESTING. Good riddance, 2022 (AGG -11% YTD). Inflation was alarmingly high, and the FED woke up to rush with rate hikes, from 0-0.25% to 4.25-4.50%; the expected terminal rate is 5.00-5.25%. Some bond proxies were bad too, preferreds, REITs; but FR/BL and utilities were OK. But 2023 should be better. Yields are higher and one would at least get paid to wait. Short-term instruments remain attractive, Treasuries, CDs, money-market funds.
Pg 24, TECH TRADER. In the tech wreck of 2022, IBM did well (+11% YTD). Techs peaked in 11/2021 and were hard hit by monetary tightening by the Fed that also took froth away in other speculative areas of SPACs, meme stocks and cryptos.
Pg 26: Bill MILLER, Retiring 12/2022; recently managed LGOAX. He is splitting his firm into 2: Son BM IV will run the part with LMCJX, Samantha McLemore is buying the other part; he will retain 25% stakes in both parts. Inflation is high. The Fed miscalculated – first saying that inflation was transitory, now going too far based on backward-looking indicators. He looks at free cash flow (yield, present value) for his valuation analyses. He likes small-caps, cryptos (Bitcoin – the only cryptocurrency he likes, COIN, SI), and an eclectic mix of stocks, AMZN, DAL, CHK, OMF, QUAD, GCI, YOU, FTCH, SHOP. His philanthropy is in education and science.
Pg 54, OTHER VOICES. Alex CAPRI, Hinrich Foundation (Singapore, US; promotes sustainable global trade); National U Singapore. Disruption of global SUPPLY-CHAINS is providing opportunities innovation and growth, especially in semiconductors. Taiwan Semi/TSM (Taiwan) has 60% global market share for chips, 90% for advanced chips. Such super-concentration (of the bygone globalization era) is not healthy and that is now changing. Public-private and university-industry partnerships will be involved in R&D and financing of RESHORING and regionalization. Some funding will from the US Chips and Science Act, the US Inflation Reduction Act, the European Green Deal. TSM itself is developing 2 semi fabs in AZ; Intel is developing new facilities in the US and Europe; new players include SkyWater/SKYT (it has a partnership with Purdue U). His forthcoming book, Techno-Nationalism: How It’s Reshaping Trade, Geopolitics, and Society, 01/2024.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Heavy outflows from active OEFs continued while active ETFs had inflows. Notable new active stock ETFs were DFSV (a cousin of DFSVX) and CGGR (a cousin of AGTHX); other notables were muni SCMB, equity AVGE, SC equity AVSC. The worst ETF introductions were short-crypto BITI, leveraged-long Tesla TSL (flip side was leveraged-short Tesla TSLI). The ETF industry has been offering products that most investors don’t need or those that may not survive.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. After a great 2021, the IPO market was nearly dead in 2022 (only $7 billion raised, the lowest since 1990); the data don’t include SPACs; new ADRs, REITs, CEFs. Causes were Fed rate hikes and Nasdaq collapse.
PREVIEW. Meme CRYPTO token Dogecoin (it started as a joke but is #8; #1 Bitcoin, #2 Ethereum) now has higher market-cap than crypto company Coinbase/COIN (-86% YTD; bonds distressed at 50c); COIN is a crypto exchange, broker-dealer, custodian. While this is a silly apples-to-oranges comparison, it shows how bad things have been for cryptos, and then came the failure of FTX (SBF).
DATA THIS WEEK. Home price index, Dallas Fed manufacturing outlook, wholesale inventories on TUESDAY; pending home sales, Richmond Fed manufacturing survey on WEDNESDAY; weekly initial jobless claims on THURSDAY; ISM Chicago PMI on FRIDAY.
CLOSED. The US stock and bond markets, and banks, are closed on MONDAY. Some foreign markets will be closed on MONDAY (London, Paris, Frankfurt, HK, etc). London and HK will also be closed on TUESDAY.
REMINDER – The US markets are open normally on FRIDAY for TLH by procrastinators; it’s the TRADE DATE that counts, not the settle date. Also review some humongous distributions by funds that brokerages don’t identify clearly on their websites (e.g. Schwab doesn’t except in History but Fido does in Tax tab) and don’t get surprised by 1099s in early-2023.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Costco (COST; yield 0.8%; fwd P/E 29; private-label products and membership renewals remain strong; pg 14);
Madison Square Garden Sports (MSGS; sold majority stake in Phoenix Suns (NBA); owns NY Knicks (NBA), NY Rangers (NHL); DOLAN-discount exists due to family ownership/control (Dolans also control MSGE, AMCX); may sell a minority stake; pg 15).
BEARISH.
Pg 10, ECONOMY. 2022 was a year of reality for investors and the FED. In 2023, look for higher RATES (fed funds 5%+; probably no cuts despite CME FedWatch projections for so in Q4) and a mild RECESSION (H2). High and sticky inflation will be tamed only by monetary tightening and higher unemployment. Forecasts for 2023 are mixed due to different expectations for the Fed (pivot or not) and US consumers. The Fed will still fail in its 2% average inflation target and inflation may stabilize in 3-4% range. Companies will deploy more AI/robotics/automation to address tight labor markets and high wages. Decoupling from China and US RESHORING (and REGIONALIZATION) will continue; this will boost the US spending on infrastructure, R&D and industrial production (there will be support from the US federal funding too – CHIPS Act, Inflation Reduction Act, SECURE 2.0). Think of 2023 as a TRANSITION year with some pain before eventual recovery and expansion.
Pg 12: The VACCINE market will continue to grow, building upon successes from the pandemic. There will be new mRNA vaccines for Covid-19, flu, RSV, etc. Big players include PFE, MRNA, GSK, SNY; others mentioned include JNJ, BNTX, etc.
Pg 21, FUNDS. Jonathan EDWARDS of small-cap value VSCAX (load 5.5%; ER 1.12%) looks for cash flow yields and stocks trading below their intrinsic value; he has 3-5-year time horizon but may trade quicker if there are unexpected developments. Uncertainties now may provide opportunities. He also manages mid-cap value VVOAX.
Pg 23, INCOME INVESTING. Good riddance, 2022 (AGG -11% YTD). Inflation was alarmingly high, and the FED woke up to rush with rate hikes, from 0-0.25% to 4.25-4.50%; the expected terminal rate is 5.00-5.25%. Some bond proxies were bad too, preferreds, REITs; but FR/BL and utilities were OK. But 2023 should be better. Yields are higher and one would at least get paid to wait. Short-term instruments remain attractive, Treasuries, CDs, money-market funds.
Pg 24, TECH TRADER. In the tech wreck of 2022, IBM did well (+11% YTD). Techs peaked in 11/2021 and were hard hit by monetary tightening by the Fed that also took froth away in other speculative areas of SPACs, meme stocks and cryptos.
Pg 26: Bill MILLER, Retiring 12/2022; recently managed LGOAX. He is splitting his firm into 2: Son BM IV will run the part with LMCJX, Samantha McLemore is buying the other part; he will retain 25% stakes in both parts. Inflation is high. The Fed miscalculated – first saying that inflation was transitory, now going too far based on backward-looking indicators. He looks at free cash flow (yield, present value) for his valuation analyses. He likes small-caps, cryptos (Bitcoin – the only cryptocurrency he likes, COIN, SI), and an eclectic mix of stocks, AMZN, DAL, CHK, OMF, QUAD, GCI, YOU, FTCH, SHOP. His philanthropy is in education and science.
Pg 54, OTHER VOICES. Alex CAPRI, Hinrich Foundation (Singapore, US; promotes sustainable global trade); National U Singapore. Disruption of global SUPPLY-CHAINS is providing opportunities innovation and growth, especially in semiconductors. Taiwan Semi/TSM (Taiwan) has 60% global market share for chips, 90% for advanced chips. Such super-concentration (of the bygone globalization era) is not healthy and that is now changing. Public-private and university-industry partnerships will be involved in R&D and financing of RESHORING and regionalization. Some funding will from the US Chips and Science Act, the US Inflation Reduction Act, the European Green Deal. TSM itself is developing 2 semi fabs in AZ; Intel is developing new facilities in the US and Europe; new players include SkyWater/SKYT (it has a partnership with Purdue U). His forthcoming book, Techno-Nationalism: How It’s Reshaping Trade, Geopolitics, and Society, 01/2024.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Heavy outflows from active OEFs continued while active ETFs had inflows. Notable new active stock ETFs were DFSV (a cousin of DFSVX) and CGGR (a cousin of AGTHX); other notables were muni SCMB, equity AVGE, SC equity AVSC. The worst ETF introductions were short-crypto BITI, leveraged-long Tesla TSL (flip side was leveraged-short Tesla TSLI). The ETF industry has been offering products that most investors don’t need or those that may not survive.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).