Dave Landry's Market in a Minute - Monday, 12/2/13

[Thierry Martin]

Random Thoughts


You hate to read too much into a holiday shortened session but you certainly can't ignore the action. So with that said....

Friday was a little mixed.

The Quack plowed ahead to close at multi-year highs, gaining over 1/3%.

The Ps tried to rally but came back in to close slightly in the minus column.

The Rusty put in a similar performance but managed to finish in the black, albeit barely. Nevertheless, this is enough to keep it at all-time highs. Better-than-a-poke-in-the-eye is what I say.

With the broad based Rusty hovering around new highs, it is no big shocker that internally things are still looking pretty good.

Drugs, led by Biotech, managed to bang out all-time highs.

The Semis, which have been trading mostly sideways as of late, ended slightly higher. This action has them probing the top of their trading range.

Defense, Regional Banks, Conglomerates, Computer Hardware, and Health Services to name a few remain in uptrends and at or near new highs.

[Thierry Martin]

The Chart of the Day is MDC Partners (MDCA). I found the stock by sorting today's New High List for frequency then used the flipchart feature to review the charts. The stock was also the Chart of the Day back on 7/31. Since the Trend Spotter signaled a buy on 9/11 the stock is up 42.90%.

It is a marketing communications firm providing marketing communication and consulting services throughout the United States, Canada, and the United Kingdom. Its services includes advertising and media, interactive marketing, direct marketing, public relations, corporate communications, market research, corporate identity and branding, and sales promotion. The Company also provides mobile marketing, and database and customer relationship management services.

[Thierry Martin]

Not too long ago, I hit a big milestone.

I officially received my 50,000th dollar in dividend income from my Daily Paycheck portfolio.

I'm not trying to brag. Instead, I want to show you how I did it, and how you could possibly too.

A little less than four years ago, StreetAuthority co-founder Paul Tracy challenged me to build a portfolio of dividend stocks that would pay out more than 30 dividend checks a month -- one for every day of the year. He even gave me $200,000 and a dedicated brokerage account to get started.

I collected the very first dividend from my real-money portfolio on December 24, 2009 -- just a few weeks after launching The Daily Paycheck advisory. It was issued by Invesco Value Municipal Income Fund (NYSE: IIM).

My first dividend was for $18.13, or 7 1/4 cents per share for my initial holding of 250 shares.

It doesn't sound like the most promising start. After all, $18.13 won't get you very far toward retirement -- that is unless you reinvest dividends and have a bit of time. As of today, I've received 46 dividends from IIM for a total of $953.02. My latest dividend was for $23.37 -- 28.9% more than my very first dividend. IIM did raise its monthly dividend to 7 1/2 cents per share back in August 2011. But most of the dividend growth is by way of dividend reinvestment.

You see, I reinvested my very first dividend back into IIM. The following month, I had incrementally more shares generating incrementally more income.

[Thierry Martin]

361 Capital portfolio manager, Blaine Rollins, CFA, previously manager of the Janus Fund, writes a weekly update looking back on major moves, macro-trends and economic data points. The 361 Capital Weekly Research Briefing summarizes the latest market news along with some interesting facts and a touch of humor. 361 Capital is a provider of alternative investment mutual funds, separate accounts, and limited partnerships to institutions, financial intermediaries, and high-net-worth investors.

361 Capital Weekly Research Briefing
December 2, 2013
Timely perspectives from the 361 Capital research & portfolio management team
Written by Blaine Rollins, CFA





It was another unhappy week for the bears as the slow markets again posted new record highs?
For the most part, equity markets in the U.S. and Europe continued to glide higher as the U.S. celebrated the Thanksgiving holiday which also kicks off the peak shopping season. Early indications are that Thursday and Black Friday retail sales got off to a good start ? online sales on Thanksgiving Day were up 20% overall, and Walmart announced it had processed over 10M transactions at its stores on Thursday night. Despite some concerns being raised about equity markets starting to get ?bubbly,? stocks continued to march higher, with the Nasdaq breaking above 4,000 this week for the first time since the internet bubble popped. For the week, the DJIA gained 0.1%, the S&P500 rose 0.1%, and the Nasdaq added 1.7%. November saw the S&P rise 2.8% and the Nasdaq up 3.6%.
(TradeTheNews)

[Thierry Martin]

Market tops and bottoms are always a popular topic of conversation. There are a number of theories about how to forecast key turning points in advance, but, in reality, those theories rarely work.

While it does seem like an exercise in futility to forecast the day and price of tops and bottoms, there is valuable information to learn from studying the general nature of market turning points. This knowledge will help us understand what to look for and how to react to the market as it develops rather than provide a false sense of comfort about what we should see.

In the stock market, we tend to see tops build slowly and bottoms appear unexpectedly. This can be seen in the chart below, which shows the 2007 market top on the left and the March 2009 bottom on the right.

[Thierry Martin]

It's no secret that there's a horizontal oil boom happening in the United States today. What is less appreciated is how unique this boom is to the United States.

There are lots of places in the world that have oil in the ground that horizontal drilling and multi-stage fracturing could exploit. But more is required than just having the oil. The U.S. is unique in that it provides the perfect combination of the ingredients necessary to allow for the horizontal revolution to take off.

Let's tick the boxes on these ingredients. First, the U.S. has the oil in the ground trapped in large quantities in tight/shale oil rocks that horizontal wells and multi-stage fracturing can exploit.

Second, the U.S. already has in place a network of thousands of miles of pipelines that were originally used to develop conventional oil plays.

Third, the U.S. has the thousands of drilling rigs required that are needed to drill these unconventional fields that have low rate wells and require constant drilling.

Fourth, the U.S. has the thousands of skilled energy workers required to accomplish the massive amount of drilling, fracturing and completion work that is required.

Fifth and perhaps most importantly, the United States has a system of land ownership that financially incentivizes landowners to have their land developed.

All of those ingredients coming together have allowed the United States to move quickly and exploit the opportunity created by horizontal drilling and multi-stage fracturing.

Other parts of the world may have the actual oil in the ground, but the lack of the other four ingredients means that reaching that oil is many years away. The pipelines, drilling rigs and staffing will require billions of dollars of investment and years. The complications of not having a system of land ownership similar to the United States may present a permanent problem.

All that being said, there is one other country that also has all of the necessary ingredients. And that is America's neighbor to the north.

If you are interested in investing in tight/shale oil producers, you might want to take a look at some of the Canadian producers. The reason for that is that the Canadian producers offer the same opportunities as their U.S. counterparts, but many of them sell for half the valuation in the market today. One of the best examples of this is Bellatrix Exploration (NYSE: BXE).

Bellatrix offers exposure to three horizontal oil and gas plays. The gas plays are of the "liquids-rich" variety, which means that the economics of the plays are excellent, even in the current world of depressed natural gas prices.