2014 - Themes Shaping My Investments (pt 1)

I want to capture the themes that I believe are shaping the world in 2014 and for the foreseeable future.  Game changing events shape people first, then entrepreneurs react, and finally investment dollars follow.  This is important for many people to remember in my opinion when looking back and asking why is the world changing right before my eyes and how can I participate. I've heard the phrase when life gives you lemonade...and changed it to when you and the world are buying or using a quality product think about investing in it.  I have a good friend that constantly talks to me about Whatsapp and if anyone close to me knows Apps are not my thing but I find out they were bragging about what would be a 19 Billion Dollar company I was just being introduced to.

Theme 1: E-Commerce

I write about this theme often and the verdict is in, many people prefer the comfort of buying things online. I know I do and a number of entrepreneurs have responded to become mega online retailers for everything imaginable.  Continue to think about the ways our buying patterns change on the Internet and take advantage of the companies that will capitalize on it first OR do it better. This will be a combination of new and old companies changing the way we shop. Remember last year, there was a reason why so many packages were delayed during the Christmas holiday by UPS and that theme is the comfort of buying things online.

- Amazon, Ebay (Paypal), Yahoo, Google, Walmart, Home Depot, UPS, Fedex

Theme 2: Mobile /APPS

The mobile wars are heating up. Finally, most of the world is warming up to a concept I've been using for quite a while: "No Debt/No Contract".  The mobile companies have used contracts to their advantage for quite some time and this has led many people to enter into never ending contracts that change usually on the companies terms. My philosophy is don't sign it until to read it. If you don't like what you read...call the company and see if you can change the terms...or don't sign it. I buy my phones myself and never enter into a contract. Many people have not paid attention to the fine print so AT&T, Verizon, and Sprint have dominated the US market. The public is tired of this model and now enters T-Mobile and their "no contract" and "cheaper packages".  And now the big companies like AT&T must follow suit with lower prices or lose customers.

Then enter the world of Apps...I can't explain the love affair for all things FLAPPY but Apps are the favorite hobby of the world.  I personally don't use very many apps but I can't deny their staying power. 

- Verizon, AT&T, Sprint, T-Mobile, Apple, Samsung, HTC, Nokia, Blackberry, Facebook, Whatsapp, Snapchat, Zynga, Candy Crush

...the remaining themes are to be continued

Federal Reserve Announces Taper / World Improving? / Stocks on My Mind

FED ANNOUNCES a $10 BILLION DOLLAR TAPER
The Federal Reserve has been pumping billions and billions of dollars into the US economy. Today was the first step by the Fed to say that the US economy, their patient, appears to be in steady recovery mode.  The recovery appears to be steady enough that they are starting to reduce the amount of medicine they have been giving to the patient...in the form of the stimulus they have been pumping into the economy.  This was a pivotal moment in the market and the reaction so far is very positive.  Investors believe that the Fed's view that the US is in recovery mode because stocks have catapulted higher. Stay tuned and let's look back in the next 3 to 12 months from now and see if we feel more jobs being created, houses being bought, and you and your friends spending more.

http://www.cnbc.com/id/101279385

ARE ECONOMIES IMPROVING AROUND THE WORLD?
I am consistently the naysayer, as I am always looking for risks that impact the markets. But I must admit the news that I have seen recently is VERY positive.  The unemployment rates are coming down in both the US and I saw a story today about the rate in the UK and this is very positive for growth around the world.  More people working means companies are hiring and people have more money to spend in the future.


STOCKS/THEMES ON MY MIND
Lululemon (LULU)- This company continues to stumble and has recently fired it's CEO for some very insensitive comments towards women.  Not the brightest move considering women are their core target group. But I also know that the YOGA and health movement is serious and people want to look the part when they get fit. I believe they are trading around roughly $59 dollars.

Caterpillar (CAT) - A company that had been in the stuck in the mud and the stock price hasn't been doing well. But they are very much impacted by global growth and with things improving this stock may make a nice move up.  Stock price has ranged from $84 to $87. I believe it trades at roughly $87 today.

Stocks Which Support Online Businesses: International Paper (IP), FedEx (FDX), UPS (UPS)
I realize that more than 75% of my purchase habits happen online. I now buy my home goods online and have had dish soap, laundry detergent, door handles, and a host of other products delivered to my house. They always come in a brown corrugated box (International Paper) and are delivered primarily by UPS when I purchase items from Amazon.  I've recently heard that groceries can be bought online very soon...see Amazon "PANTRY".  I think more boxes and deliveries are coming to both your house and mine.

Health Care: I listened to a very interesting story on National Public Radio the other day.  For the first time, health care insurers are taking major steps to advertise their products in response to the Affordable Care Act.  I don't know many things but I do know 1 thing...when companies are spending billions of dollars to advertise it's because they see an opportunity to grow and gain market share.  Insurance is a business that seems to experience very little turnover once they've signed up a customer.  If I am an example, I have had the same auto and health care provider for as long as I can think. There will be a number of winners due to the expansion of the Affordable Care Act. Investors have already realized this a number of these stocks are up significantly this year...but the biggest change to the health care sections in decades will cause some serious gains for years to come.

My Dougie

Said she likes My Dougie, I'm Fresh!

If I just lost you then you need to check out this track by artist Lil Wil...in honor of the legendary Dougie Fresh (http://www.youtube.com/watch?v=TqeGZpHCURo). Down in Dallas, they have given this legend a new life with the younger generation as "My Dougie" is used to describe someone's style...Fresh. I hope the readers here at Urbanomics appreciate our blogging and hopefully you like our Dougie. And the reason why we think our style is fresh is because we hope to bring a difficult subject, INVESTING, and try to explain it to you in a very simple way.

To invest I've learned that you must have a certain style or swagger. The reason I say this is because with so much going on with the markets and in the news, you must remain calm and make informed and logical decisions. As we have written here before, to assist in that process I recommend that you take notes of things that you read and hear. Then perform additional research to assist you in deciding what to do. If you were following the news you would have heard about some of the following stories:

Lehman Brothers - One of the largest investment banks is struggling to raise capital as losses from investments continue to pile up.
Apple/Steve Jobs - Apple is unveiling a new iPOD touch, but all that is on the mind of investors is Steve Jobs and whether he is healthy.
Oil - Oil has dropped to levels of roughly 100$, and will OPEC allow it to drop any lower.
Fannie/Freddie - I love Alan Greenspan's (former Federal Reserve chief) comment that these entities were structurally flawed because they socialize losses and privatize gains! This is so true, when they are struggling the government bails them out, but when they were profitting the only people gaining were the private investors owning the stock.

Lastly, I have often talked about price points and how important they are when investing and getting your stock selections at a great price. My Dougie has helped me patiently wait and here are some of the stocks that I liked but I had to wait for great price points.

Electro Scientific (ESIO) - I have been patiently waiting for levels of 13.80s

Big Lots (BIG) - Big Lots has benefitted from the hard times as more people turn to discount retailers. This stock is not a result of my screening, just a informed decision that makes sense. They hit a 52 week high at 34.88 and I think they will decline from those lofty levels. With stimulus checks running out and higher costs hitting most retailers they appear to be a great short opportunity. I believe Walmart, Target and most recently 99 Cents (http://www.cnbc.com/id/26622876) are being affected by this. Big Lots is a great short above levels of 33.50$.

CSX Corp (CSX) & Fedex (FDX) - I have been saying for awhile I like the transportation sectors as oil prices continue to decline. Now I haven't identified a solid price point but this may need to be done as FDX is already raising their guidance which is causing the stock to rise. I am hoping to see the effect of declining oil prices to benefit these sectors.

I'm out, Get your URB on!