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

[Thierry Martin]

Stuff I'm Reading this Morning...

Credit Suisse: These are the four things that could most likely cause a market correction. (BusinessInsider)

Barry: Welcome to my first Bloomberg View column! (Bloomberg)

Andy Kessler: Is Twitter about to revolutionize advertising? (WSJ)

Stock market sector performance relative to the S&P 500 this year. (BusinessInsider)

John Rekenthaler is not letting go of the managed futures funds are broken meme. (Morningstar)

OakTree's Howard Marks is now buying Chinese stocks as US markets grow more expensive. (Bloomberg)

Are bank loan funds, MLPs or long-short strategies really adding diversification to your portfolio? (Morningstar)

A new book with simple techniques to change investor behavior for the better. (NerdsEyeView)

Early critics of Abenomics predicted a Wall of Money" coming out of Japan to flood foreign assets markets. OK, where is it? (NYFed)

Unrepentant for beingwrongearly about nearly everything is a great asset gathering strategy. (Bloomberg)


Even after six years of recession, 69% of Greeks still want to stick with the euro. (WSJ)

Yves Smith goes hard at Jamie Dimon, calls him "the Lance Armstrong of Finance." (NakedCapitalism)

Chrystia Freeland: I don't know if you've noticed, but populists are starting to defeat plutocrats. (NYT)

This season's hot color combo for men is brown + blue. (GQ)

REMINDER: Backstage Wall Street is now on Kindle!

[Thierry Martin]

Stuff I'm Reading this Morning...

Credit Suisse: These are the four things that could most likely cause a market correction. (BusinessInsider)

Barry: Welcome to my first Bloomberg View column! (Bloomberg)

Andy Kessler: Is Twitter about to revolutionize advertising? (WSJ)

Stock market sector performance relative to the S&P 500 this year. (BusinessInsider)

John Rekenthaler is not letting go of the managed futures funds are broken meme. (Morningstar)

OakTree's Howard Marks is now buying Chinese stocks as US markets grow more expensive. (Bloomberg)

Are bank loan funds, MLPs or long-short strategies really adding diversification to your portfolio? (Morningstar)

[Thierry Martin]

Quote of the day

Eddy Elfenbein, ?A bubble is a bull market in which you don?t have a position.? (Twitter)

Chart of the day



Small cap stocks are no longer leading the rally. (StockCharts Blog, MoneyBeat)

Markets

Is the median S&P 500 stock overvalued? (Mebane Faber)

The term bubble is way overused. (Dragonfly Capital)

Jeff Miller, ?When a market theme hits USA Today, it is too late for action.? (A Dash of Insight)

Wet corn fields=high propane prices: the link. (WSJ)

Why interest rates look like they are headed higher once again. (StockCharts Blog)

Covenants? We don?t need no stinkin? covenants! (Sober Look)

Strategy

Why investors continue to underperform their funds: poor timing. (Jason Zweig)

Now is the time to start thinking about profiting from year-end tax selling. (Mark Hulbert)

John Rekenthaler, ?Managed-futures funds are a mess. ? (Morningstar)

Meet some mangers hanging out in cash. (Barron?s)

[Thierry Martin]

Thanks for checking in with us this weekend. Here are the items our readers clicked most frequently on Abnormal Returns for the week ended Saturday,
November 2nd, 2013. The description reads as it does in the relevant linkfest:


Warren Buffett?s favorite market indicator shows the US stock market is overvalued. (FT Alphaville)
Five signs of market froth. (Brett Arends)
What the stock market has historically done in the last 20 days of a bull market. (Avondale Asset)
7 market lessons, relearned in 2013. (Ivanhoff Capital)
In the long run valuation matters. (Mebane Faber)
When high momentum stocks crack, pay attention. (Minyanville)
Where married couples met. (Priceonomics Blog)
The case for value stocks. (Institutional Investor)
The opportunity in bonds. (Humble Student)
James Altucher, ?Everyone is wrong almost all of the time and it makes zero sense to argue with them.? (Altucher Confidential)


What else you may have missed on the site this week:

What books Abnormal Returns readers purchased in October 2013. (Abnormal Returns)


Thanks for checking in with Abnormal Returns. You can follow us on StockTwits and Twitter.



The post Top clicks this week on Abnormal Returns appeared first on Abnormal Returns.


Abnormal Returns

[Thierry Martin]

Thanks for checking in with us this weekend. Here are the items our readers clicked most frequently on Abnormal Returns for the week ended Saturday,
November 2nd, 2013. The description reads as it does in the relevant linkfest:


Warren Buffett?s favorite market indicator shows the US stock market is overvalued. (FT Alphaville)
Five signs of market froth. (Brett Arends)
What the stock market has historically done in the last 20 days of a bull market. (Avondale Asset)
7 market lessons, relearned in 2013. (Ivanhoff Capital)
In the long run valuation matters. (Mebane Faber)
When high momentum stocks crack, pay attention. (Minyanville)
Where married couples met. (Priceonomics Blog)
The case for value stocks. (Institutional Investor)
The opportunity in bonds. (Humble Student)
James Altucher, ?Everyone is wrong almost all of the time and it makes zero sense to argue with them.? (Altucher Confidential)


What else you may have missed on the site this week:

What books Abnormal Returns readers purchased in October 2013. (Abnormal Returns)


Thanks for checking in with Abnormal Returns. You can follow us on StockTwits and Twitter.

[Thierry Martin]

The weekend is a great time to catch up on some long form items that we passed up on during the week. Thanks for checking in.

Investing

Reduce the noise levels in your investment process. (Barry Ritholtz)

How social interaction drives active (vs. passive) investing. (Cleveland Fed via FT Alphaville)

Investment research is going to get transformed by big data. (Institutional Investor)

Is the conventional wisdom on equity allocations in retirement all wrong? (Monevator)

Is it time for financial planning to move towards a monthly retainer model? (Nerd?s Eye View)

Lists

A dozen things learned from Philip Fisher and Walter Schloss. (25iq)

Five lessons on management from Sir Alex Ferguson. (Above the Market)

Finance

Some good advice for anyone considering a career in finance. (Aleph Blog)

A profile of controversial hedge fund manager Dan Loeb. (Vanity Fair)

The man who helped shine a light on the scandal of corporate tax avoidance. (Wonkblog)

Dave Ramsey

A profile of Dave Ramsey the ?most important personal finance guru in America.? (Pacific Standard)

Why Ramsey?s advice works for many people. (smithy Salmon)

Economics

Three important lessons learned from the financial crisis. (Justin Fox)

The rise of the pass-through structure is changing American business. (Economist)

Amazon

Why Amazon ($AMZN) is not yet running a profit. (Remains of the Day)

Can Amazon compete in groceries? (Bloomberg)

Health

Relax, it?s probably not a spider bite. (Slate)

Sitting will kill you. (NPR, Well via @davepell)

Why do so many middle-aged actresses purvey unscientific health nonsense? (Salon)

Psychology

What happens when an amateur rebuts a ?celebrated psychological finding?? (Narrative.ly via @longreads)

Why selfish people cooperate. (Priceonomics Blog)

Kissing serves a number of purposes. (Well)

How anxiety can lead your decisions astray. (HBR)

Education

[Thierry Martin]

I believe in China.

I have no doubt that this nation of 1.35 billion consumers will continue to lead the global growth boom over the next several decades. In addition, I want to share with you an underserved Chinese market that will likely explode over the next several years. There are several companies poised to capture this consumer wave that has swept over the Western world but is in its infancy in China.

Although China might not see a double-digit economic growth rate again, its current growth in the mid-single digits appears sustainable with continued government support. In the most recent quarter, growth sank a two-decade low of 7.5% -- but compared with any other economy, this remains a very impressive rate. China's leading economic figure, Premier Li Keqiang, has vowed to keep growth at 7.5% or higher, though it's important to note that other Chinese officials have forecast lower growth over the next several years.

The truth is, the actual growth rate doesn't really matter much for investors. In fact, the International Monetary Fund (IMF) recently indicated that slowing growth will actually lead to a higher quality of growth, which in turn will boost employment, income and consumption. The IMF goes further by projecting that the higher quality of growth will lead to China surpassing the United States as the world's largest economy by 2030.

The most exciting and potentially profitable forecast I found in the IMF's data is that with successful reforms, per-capita income in China could climb to 40% of the U.S. level by 2030. Think about this for a minute: a huge population with spending money in its pockets. It seems to me that this potential could not help but lead to a bull market the size of which has never been experienced in the history of mankind.

What I learned from a recent Business Insider Intelligence report is truly eye-opening in terms of scope and investment opportunity. The report shows that while the Chinese cellphone market is mature with slowing growth, the smartphone niche is rapidly expanding. This leads to growth in 3G subscriptions.

While China Mobile (NYSE: CHL) is the lead player in overall mobile subscriptions, it is lagging in smartphone subscriptions. Only 25% of China Mobile's clients are smartphone users. The reason for this is very interesting. It is because China Mobile's market is rural China, where people simply don't have the disposable income for smartphone data plans or 3G service. In addition, China Mobile's 3G network is substantially slower than the other major carriers' networks.

Two lesser-known companies are leading the smartphone data carrier revolution: China Unicom (NYSE: CHU) and China Telecom (NYSE: CHA). The Business Insider report forecasts that within the next year, smartphone sales in China will overtake sales of regular cellular handsets. Both China Unicom and China Telecom have a huge lead on China Mobile, with 45% of their subscribers being smartphone users.

[Thierry Martin]

Some quick afternoon links to take you into the weekend...

Warren Buffett was dead right about stocks five years ago, but oh how he was mocked. (WSJ)

Morgan Housel: Don't worry to much about being more intelligent, focus instead on being less stupid. (MotleyFool)

All of a sudden Oracle shareholders give a shit about Larry Ellison's pay package... (DealBook)

Joe Terranova gives you the 30,000 foot view of the markets heading into November. (Virtus)

Sean Darby (Jefferies) isn't terribly worried about the market's CAPE ratio (BusinessInsider) contra: (WorldBeta)

The flows into stocks and out of bonds are verging on a sell signal - BAML (TheTell)

Brazil is being colonized by China - and they're not thrilled about it. (Quartz)


The Reformed Broker

[Thierry Martin]

Quote of the day

Morgan Housel, ?Most financial advice tries to make people better investors. I?ve come to the conclusion that it?s more helpful to focus on how to become a less-bad investor.? (Motley Fool)

Chart of the day



The New High-New Low indicator is diverging from the broader market. (Charts etc.)

Markets

A look at major asset class performance for October. (Capital Spectator)

Why investors should hope that 2013 ends like 1995. (Market Anthropology)

Making the case that the stock market isn?t overvalued. (Business Insider)

Comparing the value of the S&P 500 to corporate credit. (Avondale Asset)

[Thierry Martin]

Stock futures crept up slightly higher on Friday morning, which indicates that the market could be in store for a rebound after two straight days of losses. The recent downturn has followed concerns of the Federal Reserve?s policy statement made on Wednesday that lead some investors to believe they might begin pulling in the reins on their stimulus program. The stimulus program, which totals $85 billion per month in bond purchases, has contributed to the 23% advance of the S&P 500 this year. Some are more skeptical of the Fed?s statement. Todd Schoenberger, managing partner at LandColt Capital, said, ?It seems the Fed is recycling its statements because the status quo remains, without a single clue as to when it will taper its current bond buying program. However, considering the macro data released since the previous meeting has been moderately weak and expected to improve over the next couple of quarters, it?s appropriate to predict the Fed will stay with the current $85 billion per month bond purchase program.?

Nissan Motor Co. announced that they were cutting their earnings forecast and planning on moving around leadership roles in efforts to deal with quality issues and more trying conditions in certain markets than originally expected. In the most recent July through September quarter, the company posted profits of $1.1 billion in net profit. This was a 2% increase over last year. Quarterly sales were up 16% to $25.4 billion. Nissan President and Chief Executive, Carlos Ghosn, said that they attribute the weaker-than-expected performance on many troubles. One of the strongest was a weakness in sales in emerging markets and extremely expensive recalls. Ghosn, said, ?Our slow performance required immediate action to be taken.? This was in reference to the immediate shuffle of top executives. Their chief operating officer, Toshiyuki Shiga, will be moved to a vice chairman position and they will appoint three new executives as COOs. ?I can tell you nobody is taking this as a kind of punishment. Everybody recognizes there is a need to rejuvenate. This is a good chance to start,? Ghosn said when speaking of the executive moves.

Wal-Mart (WMT) is hoping to get a leg up on other holiday retail businesses by pushing holiday shopping nearly a month early than usual. WMT is going to allow shoppers to purchase items online at special holiday prices starting today, shortly after midnight. There will be nearly 300 items available at special holiday pricing on Wal-Mart?s website, according to the company. Joel Anderson, president and CEO of Wal-Mart.com, said, ?It?s been a tough year for the average American family. It?s our job to be able to help our customers.?

That?s all for the day. Have a great weekend, loyal readers!

All the best,
Jack Aubrey, Oakshire Financial

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