I know its a little late but it is about that time to download thoughts that have been swirling in my head (usually typed into my phone) for the month of APRIL. As I mentioned in the past, I've noticed a not so subtle shift in my investing habits and it has been a huge thirst for data! I think that in periods like this where the direction of the economy, country and the world are not so clear cut, everyone saturates the internet, tv, and newspapers with there different view points of how it will all play out. For me this amounts to a lot of noise. And noise for a MACROVALUEQUANT (not sure what this means, run a quick search for previous posts) can be good and bad, but mainly its time consuming. Its time consuming because I think investing and being wrong about these events may be worse than not investing at all. This gets us back to that VALUE concept and my need to want to have conviction that I am entering into an investment at a point where there is significant value to be gained.
But enough of my ramblings and onto the themes and concepts that I've dialed into the most this month, starting with the oldest dated notes:
Anything to Short? - Early in the month, I listened a little closer to someone mentioning it may be time to short Consumer Stocks and Retailers and the best way may be through the ETF, RTH. This may have been Doug Kass and it sounds good but boy I have to admit I am a little nervous about shorting stocks in this environment. I think this call has its merits as we continue to find out that the economy is weaker that most people would like us to believe. The economic numbers have been mixed and while I wanna be in front of this trade...I'm not signing up for it just yet until I see key indicators like GDP and unemployment turn. Further, the discussion from the most recent Federal Reserve meeting didn't leave me to believe the 'punch bowl' is being pulled away...all they've confirmed is they don't see the need for ordering up more punch (i.e., QE3)
I'm All In (We're Moving) - I also noticed that during turbulent times everyone plays a mean game of poker. Listening to Corporate America is like watching a good round of Texas Hold'em. I find it interesting that companies have raised the idea of going all in on the idea of moving their corporate headquarters from one state to another...AND even changing where they are domiciled in response to State, Federal, or Country tax laws. Here in Chicago, there were initial gripes from Catepillar about the state taxes and how it would consider moving because of them. How funny, it was all over the news until a few days or weeks later the media finally focused on other relevant facts. One that I found interesting, was all the states (Wisconsin, Indiana) wooing Chicago/Illinois companies actually have higher corporate tax rates even after Illinois most recent hike. Next is Barclays claim that it may move from London to the good ole USA and possibly domicile in New York in response to UK's tax changes. How funny, all the politicians here were complaining about how anti-competitive the US will be due its corporate tax rates, but its odd that companies think they may fare better by moving here. Finally, there were John Chambers strong remarks on 60 Minutes about how high the US tax rates are and that is why he and many he and many other technology companies have significant portions of their businesses in countries like Ireland. How funny, I wonder if anyone needs to remind John that Ireland, his model example, is the letter "I" in the acronym PIGS as in Portugal, Ireland, Greece, and Spain. With the exception of Spain all other countries have needed a bailout from the European Union...so again tell me again John if Ireland has their tax structure so right, why has their economy and government got everything else so wrong. Could it be the lax regulatory system there that allowed all of the banks to incur serious debt and implode the economy...I guess the grass is greener.
These two points were taken from one day's worth of notes, but this helps conceptualize whether I truly think its time to start shorting stocks or certain sectors. I personally need to see more data, and trends that show the economy is regressing. I've listed my two keep data points I am tuning into above and I am also focusing in on language from the Fed. The last is what to make of things people debate, like taxes. I won't get into the politics of things but when you hear everyone speak it kinda sounds like the grass is always greener...so that you can get your way...I"M ALL IN.
This way part I. Stay tuned for more
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