Post by Admin/YBB on Jan 21, 2023 8:22:58 GMT -6
Pg 10-11.
REVIEW.
PREVIEW. NUCLEAR POWER is being looked at again. There are rallies in nuclear fuel producers CCJ, LEU; reactor builder SMR; uranium miner BHP. Oliver STONE just screened his documentary Nuclear Now! at the WEF, Davos. Current nuclear power production is France 70.6%, US 19.7%. By 2030, S Korea plans for 32% nuclear power and China may have the most nuclear reactors.
DATA THIS WEEK. LEI on MONDAY; manufacturing PMI, services PMI on TUESDAY; durable goods report, wholesale inventories, new home sales, Q4 GDP (+1.5% to +2.5%) on THURSDAY; UM consumer sentiment, personal income and consumption (core PCE +4.4%) on FRIDAY.
CLOSED. China for the week for the New Year of the Rabbit.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Ferrari (RACE; fwd P/E 36, high but comparable to luxury goods; high profit margins; new SUV, hybrid and EV models; production is limited to keep demand high and waitlists long; pg 14)
BEARISH.
Pg 15: Rules for $7,500 tax credit for EVs will be modified in March 2023 with new requirements for EV prices, EV assembly in the US, sourcing of EV battery materials and parts, personal income. Used EVs will also get some tax credits. One loophole is that the rules won’t apply to leasing companies and that may make leasing more attractive IF those credits are mostly passed on to lessees (unlikely in view of the tight EV market and greedy dealers).
Pg 24, FUNDS. Target-date funds (TDFs) have disappointed. They are popular in retirement plans as default or simple choices. But they vary all over in allocations for the same target dates; some are passive, others active or active-passive mixes; as fund of funds, some may have 2 layers of fees; their glide-paths may not be suitable for many investors. In 2022, they performed poorly (as did most hybrid funds) because both stocks and bonds did poorly. A better choice may be 3-4 separate funds to fit personal/customized accumulation and decumulation strategies. If the 401k/403b plan has very limited choices, make appropriate adjustments in the IRAs.
Pg 25, INCOME INVESTING. Don’t expect Disney/DIS to restore its dividend. Its balance sheet is more stressed now, burdened by many acquisitions in recent years; it has the option to buy 33% Hulu stake held by CMCSA. The free cash flow (FCF) was hurt significantly by the pandemic. Streaming is losing money. Activist Nelson PELTZ (Trian) wants DIS to restructure and restore dividend by 2025; but first CHAPEK, now IGER, is on a war path with Peltz.
Pg 26, ECONOMY. The FED and the MARKETS have different views on INFLATION and WAGES. Markets see inflation moderating but the Fed says that it’s too high compared to +2% average target. The Fed wants wage growth to moderate noticeably but the markets think that will happen eventually, so why rush? Markets are going to test the old saying, “Don’t fight the Fed”.
Pg 27, TECH TRADER. Orlando BRAVO of private-equity firm Thoma Bravo (AUM $120 billion) may be the last tech bull. The Firm raised $32.4 billion in new funds to invest in depressed techs. For tech buyouts, it shifts emphasis to EBITDA from fast, unprofitable growth with a turnaround of about 3.3 years. 2022/Q4 wasn’t too bad. Recently, it had passed on Twitter but got burned by FTX ($100 million); it won’t be making any more crypto investments.
Pg 54, OTHER VOICES. Edward ALDEN, Council of Foreign Relations (CFR; a think tank in NYC). Modifications of NAFTA 1994, and subsequent USMCA 2018, may help in relieving tight LABOR markets in the US and Canada, but those countries aren’t interested. These treaties only allow temporary visas in some professional areas and a simple solution would be to expand the eligible occupations to critical areas of labor needs. But these are political hot potatoes. For now, NAFTA/USMCA provide for free movement of GOODS but are hampered by restrictions on necessary movements of LABOR. Upcoming book, When the World Closed Its Doors: The Covid Pandemic and the Future of Border Control.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Consider MULTIFACTOR funds as 7 of the 9 factors are now undervalued, says Robert ARNOTT (Research Affiliates). Critics argue that investors may do better with better performing sectors. Beware that multifactor funds may be closer to total market indexes.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW.
PREVIEW. NUCLEAR POWER is being looked at again. There are rallies in nuclear fuel producers CCJ, LEU; reactor builder SMR; uranium miner BHP. Oliver STONE just screened his documentary Nuclear Now! at the WEF, Davos. Current nuclear power production is France 70.6%, US 19.7%. By 2030, S Korea plans for 32% nuclear power and China may have the most nuclear reactors.
DATA THIS WEEK. LEI on MONDAY; manufacturing PMI, services PMI on TUESDAY; durable goods report, wholesale inventories, new home sales, Q4 GDP (+1.5% to +2.5%) on THURSDAY; UM consumer sentiment, personal income and consumption (core PCE +4.4%) on FRIDAY.
CLOSED. China for the week for the New Year of the Rabbit.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Ferrari (RACE; fwd P/E 36, high but comparable to luxury goods; high profit margins; new SUV, hybrid and EV models; production is limited to keep demand high and waitlists long; pg 14)
BEARISH.
Pg 15: Rules for $7,500 tax credit for EVs will be modified in March 2023 with new requirements for EV prices, EV assembly in the US, sourcing of EV battery materials and parts, personal income. Used EVs will also get some tax credits. One loophole is that the rules won’t apply to leasing companies and that may make leasing more attractive IF those credits are mostly passed on to lessees (unlikely in view of the tight EV market and greedy dealers).
Pg 24, FUNDS. Target-date funds (TDFs) have disappointed. They are popular in retirement plans as default or simple choices. But they vary all over in allocations for the same target dates; some are passive, others active or active-passive mixes; as fund of funds, some may have 2 layers of fees; their glide-paths may not be suitable for many investors. In 2022, they performed poorly (as did most hybrid funds) because both stocks and bonds did poorly. A better choice may be 3-4 separate funds to fit personal/customized accumulation and decumulation strategies. If the 401k/403b plan has very limited choices, make appropriate adjustments in the IRAs.
Pg 25, INCOME INVESTING. Don’t expect Disney/DIS to restore its dividend. Its balance sheet is more stressed now, burdened by many acquisitions in recent years; it has the option to buy 33% Hulu stake held by CMCSA. The free cash flow (FCF) was hurt significantly by the pandemic. Streaming is losing money. Activist Nelson PELTZ (Trian) wants DIS to restructure and restore dividend by 2025; but first CHAPEK, now IGER, is on a war path with Peltz.
Pg 26, ECONOMY. The FED and the MARKETS have different views on INFLATION and WAGES. Markets see inflation moderating but the Fed says that it’s too high compared to +2% average target. The Fed wants wage growth to moderate noticeably but the markets think that will happen eventually, so why rush? Markets are going to test the old saying, “Don’t fight the Fed”.
Pg 27, TECH TRADER. Orlando BRAVO of private-equity firm Thoma Bravo (AUM $120 billion) may be the last tech bull. The Firm raised $32.4 billion in new funds to invest in depressed techs. For tech buyouts, it shifts emphasis to EBITDA from fast, unprofitable growth with a turnaround of about 3.3 years. 2022/Q4 wasn’t too bad. Recently, it had passed on Twitter but got burned by FTX ($100 million); it won’t be making any more crypto investments.
Pg 54, OTHER VOICES. Edward ALDEN, Council of Foreign Relations (CFR; a think tank in NYC). Modifications of NAFTA 1994, and subsequent USMCA 2018, may help in relieving tight LABOR markets in the US and Canada, but those countries aren’t interested. These treaties only allow temporary visas in some professional areas and a simple solution would be to expand the eligible occupations to critical areas of labor needs. But these are political hot potatoes. For now, NAFTA/USMCA provide for free movement of GOODS but are hampered by restrictions on necessary movements of LABOR. Upcoming book, When the World Closed Its Doors: The Covid Pandemic and the Future of Border Control.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Consider MULTIFACTOR funds as 7 of the 9 factors are now undervalued, says Robert ARNOTT (Research Affiliates). Critics argue that investors may do better with better performing sectors. Beware that multifactor funds may be closer to total market indexes.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).