Today, Larry Berman CFA, CMT, CTA and Brandon Osten commented about whether CRD.A-N, HGR-N, MOVE-Q, CSCO-Q, WM-N, SC-T, CHR-T, INTC-Q, WMT-N, GM-N, BBD.B-T, BXE-T, SPB-T, SHOS-Q, PM-N, D.UN-T, MSFT-Q, T-N, IDG-T, IAG-T, ECA-T, TECK.B-T, HEP-T, FIE-T are stocks to buy or sell.
Educational Segment. Two weeks ago he launched a Sleep at Night Portfolio. The covered call ETF (ZWB) on the banks did very well but banks are overbought so we could trade it out at this point. Overall, he had a yield of 0.06% and beta of 0.48. So he replaces the banks with preferred stocks. He added PFF-N and GLD-N. By reducing financials and increasing preferreds he reduced beta. Results over last two weeks:
Ticker, Yield |
Beta |
Total Return |
ZWU, 6.64% |
0.47 |
0.35% |
ZWB, 5.61% |
0.72 |
2.26% |
ZRE, 5.41% |
0.35 |
-0.58% |
ZMU, 1.69% |
0.13 |
-0.38% |
ZHY, 6.79% |
0.42 |
-0.74% |
ZEF, 5.23% |
0.37 |
-1.24% |
ZCM, 4.49% |
-0.06 |
-0.55% |
SDIV, 8.13% |
1.19 |
-0.39 |
HVPW, 4.4% |
0.1 |
1.64% |
DLS, 4.36% |
1.14 |
0.07 |
Markets. Non-Financial and Non-Resource N.A. equities are today’s topic. We had a very large run in the US since 2009. A lot has been a lack of alternatives. The Fed squeezed you out of bonds, so money flowed back to equities. After 2008's experience, people may move back to bonds for only 3%. He thinks the money flows into equities are gone and now companies are on their own. He always does bottom up. He is worried that the economy may not be as strong as people think based on fast earnings in big blue chips.
Fairly non-cyclical. You will always get good pockets of growth. But this one is stagnant. Nokia was not a good idea. He is concerned with the 10s of thousands of employees they just picked up. They are challenged and it is well known they are. Sees a low level of growth. 3% dividend. Be prepared to hold it for 3 years after the new CEO turns things around.
4% dividend is good, but not great. A few acquisitions were put together. But he does not like the cigarette business. Too many laws working against you and getting worse. There is a trend toward people getting healthier. It has a beta of 1 so it may not be that defensive. Not a lot of growth potential.
(Top Pick Jan 24/13, Down 8.99%) He got out somewhere in the mid $40s. Same store sales were not coming in where he wanted them to come in. There is some question as to how the CEO can pull strings to get one company to help another. Likes it over the long term but he stays on the sidelines for now.
Markets. There is a lot of focus on emerging markets. He looks at the foreign currency indexes. He is starting to see a bit of stability after a sell off. He is still looking for a modest correction over the next month or so. DXJ-N is an ETF in US$ to play Japan. PEK-N is a proxy for the mainland China market. VWO is a way to play emerging markets also. EWY is a great way to play South Korea, but normally when Japan does well, Korea does not.