Archive for September, 2016

• Morning News: September 8, 2016
  Eddy Elfenbein, September 8th, 2016 at 7:10 am

  Kuroda Deputy Casts Doubt on Commitment to Inflation Time Frame

  For Yen Bulls, Kuroda-Yellen Double Bill Is No Show-Stopper

  China’s Trade Numbers- Imports Up, Exports Down, But Prices Or Volumes Changing?

  As Issues Swirl in Europe, E.C.B. Is Likely to Hold Fire

  Oil Rises on U.S. Inventory Data

  Slide in Food Prices Pressuring U.S. Grocers and Distributors

  Dell Gets Bigger and Hewlett Packard Gets Smaller in Separate Deals

  Super Mario’s iPhone Surprise Sends Nintendo Shares Soaring

  India’s Mahindra, Ola Team Up as Uber Looms

  Apple Updates Key iPhone Line to Try to Reignite Sales Growth

  In North Korea, China’s Xiaomi Gets the People’s Pulses Racing

  Downfall of ITT Technical Institutes Was a Long Time in the Making

  Suspect Sales at Fiat Chrysler Could Be Bad News for Its Rising Star

  Cullen Roche: Make Berkshire Hathaway Great Again

  Jeff Carter: Customer Retention is Also Everything

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• Sector Correlations This Year
  Eddy Elfenbein, September 7th, 2016 at 1:02 pm

  Here’s a look at sector correlations. I took the ten sector indexes for this year and divided each one by the S&P 500. (With REITS being spun off, there are now eleven.) I then took the results and calculated the correlation each one has to all the others.

  To reiterate, I only used the data for this year, and this is the correlation of the relative strength of the indexes, not the indexes themselves.

  Here are the results:

  Sector	Ener	Mats	Inds	Disc	Stpl	HC	Fins	Tech	Telco	Utes
  Energy		84.86%	59.31%	-52.78%	-29.28%	-44.88%	-20.05%	-45.87%	28.52%	28.81%
  Material	84.86%		78.57%	-52.96%	-44.63%	-59.59%	-19.92%	-21.30%	21.52%	17.90%
  Industrials	59.31%	78.57%		-30.00%	-9.43%	-74.42%	-42.92%	-15.15%	44.09%	34.45%
  Discretionar	-52.78%	-52.96%	-30.00%		23.85%	8.92%	32.06%	-9.25%	-28.91%	-23.76%
  Staples	-29.28%	-44.63%	-9.43%	23.85%		10.64%	-45.12%	-35.49%	57.72%	69.14%
  Health Care	-44.88%	-59.59%	-74.42%	8.92%	10.64%		21.50%	-13.29%	-25.29%	-19.02%
  Financials	-20.05%	-19.92%	-42.92%	32.06%	-45.12%	21.50%		-2.44%	-87.13%	-76.57%
  Tech	-45.87%	-21.30%	-15.15%	-9.25%	-35.49%	-13.29%	-2.44%		-27.22%	-44.49%
  Telecom	28.52%	21.52%	44.09%	-28.91%	57.72%	-25.29%	-87.13%	-27.22%		89.97%
  Utilities	28.81%	17.90%	34.45%	-23.76%	69.14%	-19.02%	-76.57%	-44.49%	89.97%

  I find this analysis fascinating. For example, you can see that Energy and Materials are closely related as are Utilities and Telecom. Industrials are a close cousin to the Energy/Materials family while Staples aren’t far from the Utes/Telecom family. But Financials are nearly the complete opposite of Utes/Telecom.

• Midcaps Hit All-Time High
  Eddy Elfenbein, September 7th, 2016 at 10:18 am

• That Crazy Amazon Stat
  Eddy Elfenbein, September 7th, 2016 at 10:16 am

  Yesterday, I told Brian Sullivan that Amazon.com has gained 1%, on average, every 11 days for the last 20 years.

  A lot of folks have asked me about that stat so I’ll share the details with you.

  The key detail is the word “average.”

  Amazon went public on May 15, 1997 at $18 per share. Adjusted for three stock splits, that comes to $1.50 per share.

  The stock closed yesterday at $788.87. That means Amazon gained 525.91-fold in 7,054 calendar days.

  Using a little math, that means Amazon gained an average 0.0889% every calendar day. That works out to 1% every 11.2 days.

• Morning News: September 7, 2016
  Eddy Elfenbein, September 7th, 2016 at 7:06 am

  August Job Data Muddles Fed Rate Hike Chance: ETFs To Buy

  ITT Tech Shutdown Could Cost Taxpayers Nearly $500 Million

  Goldman Sachs Bans Employees from Donating to Trump

  VW Is Exploring an Electric Car Venture With China’s JAC Motor

  Chipotle Options Include More Franchising, Prepping for Sale as Ackman Launches Campaign

  Apple, Show Us Your Taxes

  Why Lego Wanted People to Stop Buying Its Toys

  Can Allergan CEO Brent Saunders Lead Big Pharma To A Better Reputation?

  Enbridge May Have Just Touched Off a ‘Supermajor’ Race for Pipes

  Amazon Launches Restaurant Delivery for Prime Members in London

  EOG Resources – Market Pays For Quality In An Excellent Deal

  Samsung Says $38 Million of Goods On Board Two Hanjin Vessels

  Dell Posts Modest Revenue Growth on Eve of EMC Merger

  Roger Nusbaum: September Is Off The Table!

  Howard Lindzon: The Birth of ‘Cheddar’ ….More Death to CNBC

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• Amazon hits all-time high
  Eddy Elfenbein, September 6th, 2016 at 4:36 pm

  Three months ago, Brian Sullivan asked my opinion of Amazon.com (AMZN), and I said to stay away. The stock is up about 8% since then.

  Well…I still think it’s too high:

• The Ibbotson Yearbook Is Back
  Eddy Elfenbein, September 6th, 2016 at 11:21 am

  For many years, Ibbotson Associates has been known as the leading provider of long-term market data. If you’ve been anywhere near a brokerage office, you’ve probably seen their long-term charts showing how well the market has done.

  Every year, Ibbotson (now owned by Morningstar) has released its yearbook which updates all the important data. For some reason, Ibbotson said it was discontinuing its yearbook this year. This prompted mass mourning by us data fiends.

  I’m pleased to say that good sense prevailed and Ibbotson released its yearbook for 2015. I just got it in the mail. The data starts at year-end 1925 and runs through year-end 2015.

  Here’s what the chart looks like:

  

  This is what $1 looks like if it were invested in the stock market over the last 90 years. The graph is logarithmic.

  One dollar in December 1925 became $5,390 by December 2015. Annualized, that works out to 10.02%. That includes dividends.

  Over that time, inflation has run at an annualized rate of 2.91%.

  In real terms, the stock market has averaged a real return of 6.90%.

  That means the market has doubled, in real terms, on average, every 10.4 years.

• The Worst Part of the Investing Year
  Eddy Elfenbein, September 6th, 2016 at 10:59 am

  Today is September 6 which has historically been the worst time of the year to invest. Let me back up and say that this is based on 120 years of the Dow so using that advice for one particular year is not a good idea.

  The bad luck stretches from September 6 to October 29, a total of 53 days. Over that time period, the Dow has lost 2.31%. Of course, that’s not much of a move, but in 120-year averages, that’s a lot. The Dow’s average annual gain is 7.3% so you can see how that 53-day loss cuts into the long-term average.

  Why has this pattern existed? I think there’s probably a natural reaction to take back some of the gains accrued over the summer. The data has also been impacted by extreme years such as 1929 and 1987.

  Here’s what the Dow’s average year looks like. I smushed 120 years’ worth of data into one year and set it to 100 on January 1.

  

  To be clear, I don’t invest based on these seasonal effects. I merely think they’re interesting for their own sake.

• Morning News: September 6, 2016
  Eddy Elfenbein, September 6th, 2016 at 7:02 am

  Schaeuble Says German Budget Means Stability in Uncertain Times

  German Factory Orders Undershoot Forecast as Momentum Cools

  Saudi Arabia And Russia Oil Agreement Not Worth The Paper It’s Signed On

  Hong Kong Squares Up to Singapore, Australia With Fintech Hub

  Higher Rates Increase The Cost Of Carrying Commodity Inventories

  Hanjin Shipping’s Parent Steps In to Help Unload Stranded Cargo

  G.E. Offers $1.4 Billion for 3-D Printing Technology Companies

  Intel’s Latest Acquisition Is All About Giving Sight to Machines

  Bayer Sweetens Monsanto Bid as Talks Enter Final Stretch

  Lego Profit Slips as Toy Maker Ramps Up Investment

  General Motors Settles Last Bellwether Ignition-Switch Cases

  VietJet Buys $2.39 Billion in Airbus Planes

  Musk Confronts Wall Street Divided on Tesla in Plea to Workers

  Jeff Miller: Test Your Employment Report IQ

  Josh Brown: Amenomaniacs!

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• Morning News: September 5, 2016
  Eddy Elfenbein, September 5th, 2016 at 7:20 am

  Sterling Jumps as U.K. Services Data Allays Brexit Fears

  Bank of Japan’s Kuroda Sees the Other Side of Negative Rates

  Saudi, Russia Pledge Oil Cooperation Without Agreeing Freeze

  Oil Pares Gains After Saudi, Russia Sign Pact

  Obama Makes Trade Deal Top Priority in Remaining Months

  Hanjin Bankruptcy: What Does It Mean To The Global Containerized Shipping Industry?

  Telefonica Eyes Sale of Minority Stake in Britain’s O2

  Alphabet Ends Effort to Create Modular Smartphone

  Volkswagen Faces Brussels Push for Penalties in 20 EU Countries

  Smith & Wesson Is On Fire, But Is It Almost Out Of Bullets?

  UPS Is About to Get More Expensive

  Coca-Cola Says It ‘Replenished’ All The Water It Used to Make Its Soft Drinks

  Is Elon Musk Trying To Do Too Much Too Fast?

  Jeff Miller: Should We Expect September Mourning?

  Cullen Roche: Three Things I Think I Think – Unrealistic Expectations Edition

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