Dividend Stocks Could Be Dangerous in 2015, Ketterer Says – Bloomberg 12-31-15

Salient to Investors:

Sarah Ketterer at at Causeway Capital Mgmt said:

  • Buying energy stocks very incrementally as oil prices eventually reach a floor and rise again but no idea when. Looks for companies with tremendous financial strength that can continue to pay dividends. Smart companies will use  their balance sheet strength to buy distressed company assets.
  • Do not be passive and just buy the S&P 500 or a world index in an ETF because markets are fully priced and the largest weighted stocks are the most fully priced.
  • Active management fees pay to identify stocks left behind and avoid those that won’t blow up the portfolio.
  • Owns some Russian stocks but not aggressively. If crude oil stays at current prices or slightly higher, there will be further economic strains in Russia over the next several quarters.
  • Underweight US-listed stocks in global funds at 45 percent versus the almost 60 percent benchmark. Some of the best-managed oil and gas companies are US-domiciled.
  • Outside the US there are few tech stocks and no managed care. Some of the best opportunities in financials are abroad.
  • Consumer staples, utilities and health care globally are overpriced so it will be hard for them to meet expectations.
  • Likes industrial stocks in Europe that have fallen because of concerns about growth in China and Europe because they will end up outlasting their competitors, taking market share and becoming even more efficient. If businesses are doing their job and constantly evolving they can succeed even in a stagnant environment.
  • Investors worst mistake is short-term thinking, by selling at just the wrong time.

Read the full article at http://www.bloomberg.com/news/2014-12-31/dividend-stocks-could-be-dangerous-in-2015-ketterer-says.html

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European Stocks Rise as Actelion, Swedbank Earnings Beat – Bloomberg 10-21-14

Salient to Investors:

Justin Haque at Hobart Capital Markets said the ECB was slow to start and it is still not US-style QE, but they are trying to talk up the market – the appetite to short is now sated, so why not run long with the ECB?

Read the full article at http://www.bloomberg.com/news/2014-10-21/european-stock-index-futures-decline-as-companies-report.html

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European Stocks Tumble to One-Year Low on Crisis Concern – Bloomberg 10-16-14

Salient to Investors:

  • Steen Jakobsen at Saxo Bank said we have reached the part of the cycle where bad news is bad news – for years we have been trading on monetary policy and now we have to deal with real economic problems.
  • James Bullard at FRB St. Louis said the Fed should consider delaying the end of its bond purchases to halt a decline in inflation expectations.
  • Jeremy Batstone-Carr at Charles Stanley cites concerns over global growth and inflation in the wake of a slew of negative data, and the likelihood that earnings expectations, already lowered for Q3, will have to be lowered again for Q4.

Read the full article at http://www.bloomberg.com/news/2014-10-16/european-stock-index-futures-rise-after-equities-rout.html

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World’s Biggest Wealth Fund Slows Emerging Market Investment – Bloomberg 08-21-14

Salient to Investors:

Yngve Slyngstad at Norges Bank Investment Management, Norway’s sovereign wealth fund, said:

  • They are gradually picking up some new markets but at a less rapid pace than at the beginning of 2014. At the end of June, 9.9% of the fund’s stocks and 13.4% of its bonds were in emerging markets.
  • They neither buys nor sells markets that exhibit the kind of turbulence and geopolitical risk that Russia is enduring.
  • They expanded into stocks in 1998, emerging markets in 2000, and real estate in 2011.
  • Invest in countries roughly in proportion to the size of the underlying economy. Will move to correct being hugely under-invested in China, currently 2.4% of all equities and largest emerging market position,
  • They will reduce the share of European stocks to 40% from the current 46%.

Harald Magnus Andreassen at Swedbank said growth markets are prone to more volatile developments because people get too fascinated with the growth story and forget the long-term balance in the market that does not yield that high a return on those investments.

Read the full article at  http://www.bloomberg.com/news/2014-08-20/world-s-biggest-wealth-fund-slows-investment-in-emerging-markets.html

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European Stocks Fall as Investors Consider U.S. Budget – Bloomberg 12-11-13

Salient to Investors:

Nicola Marinelli at Glendevon King said there is nothing new scaring the market, but most people have been long after the summer and that has paid well and having had a very good year they do not want to risk that performance in the last few weeks when there is usually less liquidity approaching Christmas and there might be a bearish announcement by the Fed regarding tapering.

Alexander Friedman at UBS said the budget deal itself is at best a signal that we won’t shut the government down at the start of the new year – it is a low base that we are declaring victory from. Friedman said the key message for 2014 is the real economy is getting better but for investors it is not going to be the same sugar high we have seen for the last 5 years.

 12 of 35 polled economists predict Fed tapering at the December meeting, 9 predict January and 14 predict March.

Read the full article at http://www.bloomberg.com/news/2013-12-11/europe-stock-index-futures-decline-amid-u-s-budget-deal.html

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Ken Fisher Warns: RIA World Gone in 10 Years – ThinkAdvisor 11-21-13

Salient to Investors:

Ken Fisher at Fisher Investments said:

  • Ending QE would be the most bullish thing we can do because it is not a stimulus – it flattens the yield curve and slows things down. We are doing well despite QE, not because of it. Historically, a steeper yield curve is more bullish for the economy.
  • Bernanke’s goal has been not to increase the quantity of money but to build bank balance sheets, which he has done very successfully. QE does not increase the quantity of money, which has gone up less in this expansion than in any economic expansion in our lifetime.
  • The Fed lies a lot. It has never been incumbent on central bankers to be open, transparent and tell the truth. If they did, somebody would trade ahead of them and profit.
  • The economy is in a slow but steady recovery. Markets move in advance of the economy – the stock market is one of the strongest leading economic indicators, which always predict the economy 6 months out. We have never, ever had a recession while LEI was high and rising.
  • The market looks at health care and doesn’t care.
  • If and when QE ends, long rates will rise and short rates remain low because the Fed keeps them there. The steeper the yield curve, the more eager banks become to lend.
  • Since 2008, the Fed has been using demand-side monetary policy which does not work. No bank will ever lend a penny when both short and long rates at zero.
  • Bonds will be flat or slightly negative in total return.
  • Fed chairs’ prior activities have not been predictive of what they will do.
  • Sam Peltzman at University of Chicago said people risk more when there are rules in place that make them think they are safer, and risk less when those rules are taken away.
  • Congress passes bills and worries about their details later: but the details end up getting honed to benefit those who are the most successful at lobbying.
  • During the whole shutdown the market did fine. Markets move in advance of such events.
  • We are slowly entering the back half of the bull market. John Templeton said bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. We have one foot in skepticism and one in optimism.
  • Everything takes a long time in bull markets. We are 5 years into this one and have not reached optimism so we have years to get to euphoria.
  • Twitter had a spectacularly successful IPO but most of the other IPOs that same week did badly, a sign there is no real optimism and euphoria.
  • Earnings are at all-time highs and progressing at a moderate rate, while revenues are growing at a respectful rate. Q4 will be slightly stronger than people expect, with 70% of earnings exceeding expectations.
  • The chance of a market crash in 2014 is remote – 2014 will be a good year. The biggest threat to the market in 2014 is unknown, and would most likely be caused by stupid government policy.
  • We are in a long bull market, so large, high quality stocks will reward. Pharma, tech, some energy, consumer staples. Midsize banks and non-European foreign banks take in deposits and make loans are attractive.
  • US stocks have outperformed the world but that will begin to equalize as emerging market stocks rebound and European stocks play catch-up.
  • Implementation of Dodd-Frank would result in RIAs being absorbed by broker-dealers within a decade.
  • The big broker-dealers have seen huge increases in concentration of market share – 20 firms have all the money and will keep getting more because they have all the lobbying power.
  • Many broker-dealers claim to be fee-only advisors when in fact they are not.

Read the full article at http://www.thinkadvisor.com/2013/11/21/ken-fisher-warns-ria-world-gone-in-10-years?ref=hp&utm_source=Triggermail&utm_medium=email&utm_term=Financial+Advisor+Insights&utm_campaign=Post+Blast+%28wealthadvisor%29%3A+FINANCIAL+ADVISOR+INSIGHTS%3A+Ken+Fisher+%E2%80%94+The+%27Naive%27+RIA+World+Is+At+Risk+Of+Being+Taken+Over+By+Broker-Dealers&page_all=1

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European Stocks Little Changed as Sulzer Lowers Forecast – Bloomberg 10-17-13

Salient to Investors:

Claire Chaves D’Oliveira at Groupama Asset Mgmt sees a risk of a mismatch between investor optimism and company earnings, and says companies have surprised today on the downside on very well-known macro situations, like an emerging-market slowdown, but analysts have not kept up.

Dagong Global Credit Rating downgraded US debt to A- from A and reiterated its negative outlook on the US government, saying it will struggle to avoid repeating the recent impasse over the debt limit.

Read the full article at http://www.bloomberg.com/news/2013-10-17/european-stock-index-futures-little-changed-amid-earnings.html

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Here’s Why You May Want to Invest Overseas – Bloomberg 10-01-13

Salient to Investors:

Jay Peloski at Itau said global equity market leadership is shifting from the US to the non-US developed markets.

Guillermo Felices at Barclays said European and Japanese equities have more room for earnings improvement.

Based on forward estimates, earnings growth in Europe is 46%, in Japan is 32%, and in the US is 6%, yet US stocks are up 40% over past 5 years versus Europe and Japan up 10%.

Watch the video at  http://www.bloomberg.com/video/here-s-why-you-may-want-to-invest-overseas-Rwfcml0nQNeD0p6Bwss0Rw.html

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European Stocks Rise for Third Week on Fed Taper Surprise – Bloomberg 09-20-13

Salient to Investors:

Philip Dicken at Threadneedle Asset Mgmt said the lack of tapering was a real surprise and signals that if the Fed is worried about growth it will not taper, and that is another net positive for European equities, where life is getting incrementally better. Dicken said whereas the news was always getting worse, now it is getting a little better, and that sort of turning point makes a critical difference to equities.

The Stoxx Europe 600 Index is up 12 percent in 2013.

Read the full article at  http://www.bloomberg.com/news/2013-09-20/european-stocks-rise-for-third-week-on-fed-taper-surprise.html

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Europe Gaining Confidence Among Investors in Global Poll – Bloomberg 09-11-13

Salient to Investors:

A Bloomberg poll of investors, analysts and traders showed:

  • 40% see the euro-area economy as improving, more than 4 times the number in May
  • 40% see the world economy as strengthening, the most since January 2011.
  • 52% expect stocks to produce the best return over the next year versus 16% for real estate, 4% for bonds. 48% expect bonds to perform the worst.
  • 19% are bearish on gold, with 44% expecting it to fall in 6 months.
  • 26% see political gridlock over fiscal policy as the greatest risk to the global economy, followed by a weakening Chinese economy. 17% see Europe as the greatest risk to the global economy, versus 33% 4 months ago.
  • 34% said the EU offers one of the best investment opportunities, up from 18% in May, while 18% said the EU offers the worst prospects, down from 45% in May.
  • 53% said the Euro Stoxx 50 Index will be higher in 6 months.
  • 75% said Spain and Italy will avoid bankruptcy.
  • Almost 33% said Greece will avoid bankruptcy, with 54% saying its position in the euro area will be weaker after Germany’s elections this month.
  • 12% plan to buy euros and 9% intend to buy more euro-area government debt.
  • 64% said the US economy is improving.
  • Just over 50% said Europe’s markets are a best bet for the coming year, and 58% expect the S&P 500 to rise into early 2014.
  • 59% said Japan’s economy is improving. 58% expect the Nikkei 225 Stock Average to sustain its rise this year, but only 26% see Japan as a top investment opportunity in the next 12 months.
  • 52% plan to increase their exposure to equities over the next 6 months versus 63% in January, a third are looking to real estate, and 37% like the U.S. dollar. Over 50% are reducing their investments in US Treasury bonds and 38% are fleeing corporate bonds.
  • 15% plan to increase their gold reserves versus 30% a year ago. 25% are reducing their exposure to commodities.
  • 27% are buying emerging-market equities, 27% are selling them. 6% plan to increase their yen exposure, and 3% like Japanese government bonds.
  • 41% are optimistic on Obama’s policies toward the investment climate, while 50% regard him favorably, both the lowest levels in a year.
  • 65% like Angela Merkel’s policies. 50% like David Cameron’s policies. 70% like Abe’s policies. 47% like Xi Jinping’s policies. 13% like Francois Hollande’s policies.

Peter Kinsella at Commerzbank said the structural issues facing the euro and monetary union are being addressed, and the acid test is whether they will lead to job growth.

Andreas Domke at Allianz Global Investors Europe said a surprising broad recovery seems to be under way.

Marie Owens Thomsen Credit Agricole Private Banking said global risk is the lowest in the post-crisis period as investors see little risk of a systemic threat, so there is ample scope for risky assets to climb.

Read the full article at http://www.bloomberg.com/news/2013-09-11/europe-gaining-confidence-among-investors-in-global-poll.html

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