Profiting From Past

I know that we are well into this year already but Happy New Year!

Best and Worst of 2013

In 2013, we had a few that make the list of best and work performing stocks. In the following weeks, we will highlight in detail the lessons learned from these picks.

Best: Genworth Financial (GNW) – This stock was a top performer and bottomed out in the low single digits. It rebounded into the double digits and is still pushing higher.

Worst: Aveo Pharmaceuticals (AVEO) – This stock was a roller coaster. Up sharply on promising news of drugs that treat cancer, and then it came crashing down the when the FDA didn’t approve the drug after clinical trials.

Do We Learn from the Past

I often hear people say “We will learn from our mistakes and not repeat them”.  It is a great notion but how often does this really happen in society.  My few years as an amateur investor question how often this really happens.  I find it interesting how often technical investors look at charts and patterns because they have seen similar events in the past and look to benefit from it.  The government mainly uses models based on past events to address current markets, however; the ever revolving cycles of market excess and then subsequent crashes still continue.  You wonder why very few investors identify crashes before they occur and if we all are too happy to enjoy the good time to do “what is right” to prevent or cushion the crashes that are inevitably coming.  A few key subjects shine light on this very topic:

-          Income Equality

-          Immigration

-          Civil Rights

-          Public Schools

-          Stock Market Crashes

-          Regulation

-          Mass Shootings

-          Pollution

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.

Easier Said Than Done...

“It’s been a long time, shouldn’t have left you without a dope beat to step too…”  As you know I have a love for music, especially hip-hop, so when I am thinking a song will often pop into my head.  Here, I am thinking of how long it’s been since I’ve written something to the readers out there.  I admit work, life, and stuff happens but I shouldn’t have left you without a nice article to think about.

I would like to start off by simply just being honest!  One of the primary reasons I have not written anything is that in REALITY there is not that much going on in the investment world.  Maybe I should say it different, the markets have been steadily going UP and there hasn’t been much else.  If you remember, there have been a few moments in the last year or so where I wrote that the stock market indicators lead me to believe that stocks and the overall market were headed higher for the foreseeable future.  If I were a TV personality, I can say “We Predicted This Would Happen!” but the reality is it took months and months of reading, researching, and keeping my eyes and ears open to rationalize where things were logically headed.  The goal while investing is to navigate through ALL of the NOISE (family, friends, and TV people telling you how to invest) and for you to logically conclude about where things like are headed.  Once you get a good idea about that then you can determine what and how much to invest in.  I am here to simply share my thoughts on how I navigate through the noise so that I can share those with you and I can learn from the past by coming back and reading my own writings.  This is helpful in life, because you must navigate through the noise (when choosing a house, car, job, etc.) and really get down to making a sound decision.

Here I am always looking to make a sound investment and I’m going to present 1 topic to assist you on your investment journey:

Easier Said Than Done…

Running With the Bulls...

One day I anticipate visiting Spain and on my bucket list would be "Running With the Bulls".  But then I saw pictures from a recent run through the city and let's say getting gored in the upper thigh is not my idea of fun.  I have not written a post in awhile because sometimes you have to just sit back and watch a story unfold.  If you've read any of my recent posts its been pretty clear. I remain as constant as the North Star...as long as their is no tapering and the Federal Reserve is pumping money into the economy stocks will do well. I've written about that all year and believe that will continue to be the case.  I will try to use as few words as possible and the first things that come to mind about these hot topics:

Debt Ceiling - Dumb Politicians, Wasted News Cycle, Pay Your Bills
Obamacare - Tech Bugs Happen, Why All at Once, Insurance is Complicated
Apple - Gold...Really?
Twitter - IPO Coming Soon
Netflix - New Version of TV, Shares On Fire
Tesla - Car on Fire, Cool Ride
NSA - If President's cell phones are tapped...good luck everyone else :)

Stay tuned for more posts...

Reading With A Purpose - Summary of Recent Posts

I wanted to put together a quick summary of the last few URBANOMICS blog posts that were written.  A question that I got recently was, “You Must Put A Lot of Time…” and they were referencing the amount of research that I might do when investing.  At first this took me by surprise because I have a full time job. However, I had to remember that I do take time out to research and focus on the markets and this may be more that the “average” person does.  However, I would ask someone do they take time to “Workout” and while that might seem demanding to someone else others might consider it necessary for a well-balanced life.  So I am here to assist you with getting your Financial Footing on.

The first and most basic lesson is “Read With a Purpose”. I write with one so in turn you should read with one. Let’s summarize the last few posts and what the takeaways might be:

Please Don’t Kill My Investing Vibe

 Link to Post

This post takes the confusing world of economics and policy and breaks it down for you.  It simply asks do you think “The World Around You Is Improving”.  While there are some secrets to investing, there isn’t one to thinking and whether you own a few or a lot of stocks you should get comfortable using your senses to gauge when the world around you is improving.

• More stores opening /Stores trying new foods, flavors, etc
•  Friends changing jobs / Jobs hard to fill at work
• Construction popping up
• Co-Workers vacationing more / Summer Homes purchases
• Homes Being Built, Friends being out-bid

Believe it or not these are all things that you, the person on the street, can SEE, HEAR, SMELL, TOUCH, or FEEL.  The more or less confident you are about these things happening the more they signal that the economy is doing great or poorly, respectively.  Update your retirement account and investments when you get stronger or negative feelings about these things going on around you.  For me, I am seeing condos going up, the development down the street sold out quickly, a new Hotel is being completed, friends are switching jobs, and the seats on my vacation to the Caribbeans is almost full. I think the economy is chugging along.

Same Companies New Tricks

 Link To Post

I wanted to share with you my sensory investing.

• McDonald’s – I see the lines even during their late night hours. (I even jump in line...bad habit)
• Best Buy – I recently asked them to match a competitor’s pricing and they didn’t…I left. (There loss)
• Groupon – I wanted to buy a product and oddly enough Groupon was selling this item for the lowest price…not a daily deal but at their online store. (My first time wanting to shop there...will other feel the same way)

 These all help to shape my investment ideas and notice Groupon’s big rise recently their store concept may be taking hold. Example of a starting point for an investment.

Interest Rates May Be Rising

 Link to Post

This article was timely because soon after what happened…Interest Rates went on a tear and rose at the fastest rate since 1987.  This might cause buyers to get in while rates are low or this may cause a short-term slow down as buyers get nervous when rates spike.  The key thing is use this as a starting point and go from there.

Fatest Rise Since '87

 Markets are Going Higher

Link to Post

This post analyzed what direction the markets might head.  We “LISTENED” to smart investors like David Tepper who said the next leg is higher. We’ve tuned into his cues since 2010 and they are interesting. Do we make our whole decision based on his thoughts…No but it’s a starting point. Then the Dow was at 14000, since then we’ve shot to 15,500

Please Don't Kill My Investing Vibe...

Thanks to Kendrick Lamar for producing one of my favorite tracks out there and describing my approach right now to life and investments.  Plainly said, I don't want anyone messing up my vibe of working hard, making quick and thoughtful decisions and reflecting on it all to ensure that I'm focusing on things that will make me better.  My investing vibe right now is to sit back and ride out this amazing economic and stock market recovery.  I remember how bad both were years back and we must take a moment to give props to resilient people (workers), companies, and yes even 'some' of our politicians that promoted a pro-growth environment.  I firmly believe if we had engaged in less stimulus and more cost cutting we would've been in BIG trouble.  This is what makes the field of economics and behavioral analysis so interesting to me. But before I put you to sleep...follow my vibe:

The Verdict Is In...

I have been stir crazy for the last 24 hours once the verdict was reached in the State of Florida vs George Zimmerman. This is a very sad time because we see what fear continues to do to our country. It allows us to create laws that allow us to take matters into our own hands and not be accountable. I know many people want to debate the merits of "the case" but what about debating the merits of "life". Trayvon Martin, a young boy was shot.  When did we all forget that was the most basic element of this tragedy. A young boy was shot because he was profiled and then pursued. What if this was your young son?? STOP, please fill in your son's name ___________  What if this was your son or daughter... would you be outraged??  And yes, let us be happy for what we have and hug our sons / daughters / cousins / nephew / nieces closer but let's also remember that with senseless laws and acts like this some people won't be able to hug their children anymore. And if that precious right was taken away from you...how would you feel. If you truly are personalizing this case, then push for change at all levels...not for it all to go away.