Barchart.com's Chart of the Day - Power Solutions International (PSIX) for Nov 12, 20

[Thierry Martin]

The Chart of the Day is Power Solutions International (PSIX). The stock was right near the top of the New High List when I sorted for its 346.20+ Weighted Alpha. Since the last Trend Spotter buy signal on 10/29 the stock has gained 18.41%.

They are engaged in producing and distributing power solutions for original equipment manufacturers of off-highway industrial equipment in the United States. The Company sells engines for stationary generators, oil and gas equipment, forklifts, aerial work platforms, industrial sweepers, arbor equipment, agricultural and turf equipment. They also offer low-emission standard fuel and hybrid power solutions, and diesel power systems.

[Thierry Martin]

Stuff I?m Reading this Morning?

Investing advice for the average investor from one of history?s most above-average investors ? here?s what Ray Dalio thinks you should do: (TheTell)

Everybody?s re-doing their ladders to get shorter: ?Investors yanked $61.8 billion from intermediate-maturity debt funds in the first nine months of the year,while pouring $46.2 billion into bonds maturing in less than three years? (Bloomberg)

The S&P 500 has now spent a full year above its 200-day moving average. Hope you didn?t spend all this time trying to short it. (CrossingWallStreet)

?buying IPO shares on the open market when they start trading ? represents the worst of both worlds, simultaneously paying the maximum price for the shares, and investing in a company that doesn?t even get the full benefit of its own IPO value.? (NerdsEyeView)

Barry: The recovery?s great if you were rich already. (Bloomberg)

Is Netflix?s new user interface really the future of TV? (Wired)

Is stock market efficiency actually hurting the economy? (Fortune)

When I hear ?Hedge Fund Trading Coach?, why do I think of Will Ferrell and Andy Dick doing an MTV Awards skit? (DealBook)

Will institutions ever starve the hedge fund beast? (FT)

This is like an Onion article ? economists just now realize that the poor behave differently than the rich in the real world. (BusinessWeek)

Dougie?s 10 Laws of Stock Market Bubbles is a great read. (TheStreet)

Cullen Roche: To detect bubbles, focus on fundamentals relative to people?s behavior. (PragCap)

Steve Ballmer has earned a cool $1.7 billion since firing himself. I may try this? (Quartz)

How?s this for a social experiment ? Switzerland is going to start paying every citizen a salary just for being alive. (NYT)

Evoking online trust. (SethsBlog)

These are the five best steakhouses in New York City. Let the riots commence as we all fight over this list ? to the death. (NYP)

[Thierry Martin]

My former employer, The Economist, once the ever tolerant editor of my flabby, disjointed, and juvenile prose (Thanks Peter and Marjorie), has released its ?Big Mac? index of international currency valuations.

Although initially launched by an imaginative journalist as a joke three decades ago, I have followed it religiously and found it an amazingly accurate predictor of future economic success.

The index counts the cost of McDonald?s (MCD) premium sandwich around the world, ranging from $7.20 in Norway to $1.78 in Argentina, and comes up with a measure of currency under and over valuation.

What are its conclusions today? The Swiss franc (FXF), the Brazilian real, and the Euro (FXE) are overvalued, while the Hong Kong dollar, the Chinese Yuan (CYB), and the Thai Baht are cheap. I couldn?t agree more with many of these conclusions. It?s as if the august weekly publication was tapping The Diary of the Mad Hedge Fund Trader for ideas.

I am no longer the frequent consumer of Big Macs that I once was, as my metabolism has slowed to such an extent that in eating one, you might as well tape it to my ass. Better to use it as an economic forecasting tool, than a speedy lunch.

[Thierry Martin]

?It always sounds smarter to be bearish than bullish,? said Ron Baron, CEO of Baron Capital Group.

[Thierry Martin]

As the market continues to flirt with all-time highs, a considerable amount of churn is taking place beneath the surface. Investors are increasingly flocking to companies that are seemingly big and safe, while shedding exposure to smaller and riskier names.

It's a logical move, considering the current bull market is getting along in years. Indeed, I extolled the virtues of mega-cap stocks back in August, and you can still find some great bargains among America's largest companies.

Yet if the market is going in this direction, it also means that smaller stocks are falling to levels that hold real appeal. And in no sector is this divergence more apparent than in biotechs. The biggest biotech stocks appear fully priced -- while their smaller brethren are now far from their 52-week highs.

[Thierry Martin]

One of the most underappreciated areas of health care is also instrumental for human development. Baby formula isn't exactly a market that many investors would consider a growth industry -- but that could be about to change.

The United Nations estimates that the world's population could hit 11 billion by 2100, up from a current 7 billion. That's many more mouths to feed. One of the biggest markets for baby formula is China: With 1.3 billion people and a birth rate of 1.2%, that's 15.6 million babies a year.

The baby formula market is huge and growing -- so what's the best way to invest in it?

Mead Johnson Nutrition (NYSE: MJN) is the only pure-play pediatric nutrition company, and one that has a strong presence in China, to boot.

Mead covers all stages of pediatric development, from newborns to 5-year-olds. It generates over 75% of its revenue from outside the U.S., most notably from China, which accounts for over 25% of its revenue. Infant formula makes up around 60% of revenues, with children's nutrition accounting for the other 40%. Mead's major products are sold under the Enfa brand.

Mead was spun off from Bristol-Myers Squibb (NYSE: BMY) in 2009. It hasn't been easy for Mead investors over the past couple of years, but things may be about to change: A cycling out of bad news could lead to a relief rally, while a rising middle class in China is driving long-term growth.

MJN has been on a roller-coaster ride over the past few years, with the latest pressure coming from a U.S. inquiry into Mead's China business.