Brad McFadden of the Daily Trading Report manages a global macro proprietary fund that’s essentially “looking for beta rather than alpha.” They’re looking to ride primary trends of major asset classes with about half of their capital, and look for deep value or overvalued situations in global sectors or themes (not individual stocks) with the other half – with exposure gained primarily through ETFs and LEAPS options.
Without third-party investors, he says, “we’re not bound by the unspoken requirement to produce positive returns on a quarterly or even semiannual basis. Perhaps this is why we are not scared to look to sectors/markets that are completely out of favor.”
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Third Party Feed:
Media Tech Analyst submits:
While Google (GOOG) is having a rough year, AOL had a rough day after reporting 1Q10 earnings that missed consensus expectations. The shares declined 15% on the day of the report.
Display is down 13% y/y vs. the 20% y/y growth at Yahoo (YHOO), and was blamed on a salesforece reorganization disruption and a reduction of ads on the web pages to improve the user experience.
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George Fisher submits:
There is a subtle economic shift going on in China that most investors are unaware of. While many investors are focused on Chinese high tech, medical, and financial opportunities, most overlook one basic commodity. This basic commodity is in short supply domestically and over 50% of domestic demand is imported, historically 80% of imports came from one country, and the imported price has tripled in the past 3 years. The China market is seriously transitioning to alternative North American suppliers. For example, shipments from just the province of British Columbia increased 4 fold in the month of Jan ’10 over Jan ’09, and annual shipments have tripled since 2007 to $365 million. The product is: Timber.
China is, and will be for some time, a net importer of timber and logs. Although the government has a stated goal of being self-sufficient by 2015, the current supply deficit, along with organic demand growth of 10% annually, makes achieving the goal extremely difficult. China is developing a timber plantation industry focused on cultivating faster growing trees, but many are in the early stages of maturity. In addition, the easiest method to increase forest carbon sequestration is to reduce domestic timber harvest levels, thereby maintaining the forest cover. These factors will ensure a robust timber import market for the foreseeable future.
As a low cost raw material, logs are used in various manufactured forest products, such as 2 x 4 lumber, plywood, furniture, and the various pulp products. Countries with timber assets seek the value-added jobs that manufacturing forest products bring, and there is a trade-off between exporting the raw logs or the finished 2 x 4s.
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Neil Carvin submits:
BP (NYSE: BP) earned $1.92 per diluted ADS in the first quarter of 2010, which ended 31 March. The profit attributable to BP’s shareholders more than doubled the $0.81 earned in 2009′s first quarter.
This post examines BP’s Income Statement for the latest quarter and compares the entries on each line to our "look-ahead" estimates. Reported earnings exceeded the $1.58 per share we had forecast by $0.34, about 22 percent.
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VFC submits:
Titan Pharmaceuticals (TTNP.PK) announced on Tuesday that the SEC has completed the review of the company’s "Form 10 for the re-registration of the company’s securities and resumption of its reporting obligations under the Securities Exchange Act of 1934."
Titan intends to remain a reporting company from this point forward, according to recent releases from the company.
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Joseph L. Shaefer submits:
I discovered the great chart below at Chart of the Day. It basically tracks the median price of a single-family home in the United States and divides it by the price of one ounce of gold. The result tells you, in a store of value that pre-dates all paper currency and will no doubt outlive any single paper currency, what the value of US housing is today and what it has been for the past 40 years.
There are those who will protest that “gold fluctuates too wildly” to provide a worthwhile indicator of value. I would disagree. While gold may fluctuate in dollar terms, or euro terms, or yen terms, it is often the value of those currencies that fluctuate around the price of gold. The long-term trend, of course, is that all paper currencies are inflated – slowly, for the most part, but inexorably. That’s why eggs that cost 61 cents a dozen, bread that cost 25 cents for a pound loaf, milk that cost 65 cents a half gallon, and gas that cost 36 cents a gallon in 1970 are, um, well, rather a bit higher today! But it can well be argued that the same ounce of gold that would have bought x quantity of all those items in 1970 will still buy roughly the same x quantity today. (Yes, even after the costs of extracting oil and natural gas have risen, even in real terms.)
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Third Party Feed:
Media Tech Analyst submits:
Google (GOOG) is having a rough time. Earlier this week Goldman Sachs removed it from the conviction Buy list. The Wall Street Journal writer Martin Peers wrote off Google’s cell phone plans as a failure after Google stated it would not offer the Nexus One to Verizon’s (VZ) more than 90 million customers. Research firm Analysys International stated that Google’s market share in China dropped to 30.9% in 1Q10 from 35.6% while Baidu’s (BIDU) share increased to 64% from 58.4%. Both Yahoo (YHOO) and Microsoft’s (MSFT) Bing’s search engines are taking share from Google in the U.S. according to data from comScore and Hitwise.
A weekend Barron’s article listed Google stock as overvalued. Microsoft and Facebook have partnered to create Docs for Facebook, a competitor to Google Docs. Yahoo’s display business grew 20% y/y, while Google’s nascent display business outside of DoubleClick is struggling to gain traction. Microsoft filed a patent infringement case against Google’s Android operating system and tops it off by signing a patent agreement with HTC Corp that provides broad coverage under Microsoft’s patent portfolio for HTC’s mobile phones running the Android mobile platform. Talk about hitting him where it hurts. And one more to the chin, Apple’s (AAPL) acquisition of Siri (SIRI) begs the question – did Apple enter the mobile search business to directly compete with Google?
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Joe Eqcome submits:
Conclusion: Over the next 18-to-24 months, iShares Dow Jones Select Dividend Index Fund (DVY), has the potential of generating an attractive total return for investors as the corporate dividend cycle appears to have turned positive (see chart below).
A cyclical increase in corporate dividends would likely be reflected in increased dividends of DVY as its investment objective is to own the highest dividend yielding securities in the Dow Jones U.S. Index. A trend of increased dividends would likely be reflected in a higher stock price. DVY’s current yield is 3.6%.
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Chris Damas submits:
There is a lot of Panic over the euro contagion out there. It reminds me of early March 2009. You should buy stocks in a panic but not the ones at ground zero when it is a little country like Greece. Buy good stuff that will benefit from the other guys’ problems.
Here is some of the commentary I have read today:
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Dividends4Life submits:
Fair value is really a simple concept. Given some select information such as dividends, dividend growth, holding period, discount rate and a few other inputs, one can easily calculate the fair value of a stock. As with most simple things, the devil is in the details – the inputs must be correct to calculate a reasonable fair value, otherwise, garbage in, garbage out.
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IndexUniverse submits:
By Matt Hougan
Greece is probably going to default. What’s the best way for ETF investors to play it? Buy the euro.
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Michael Johnston submits:
In the wake of unprecedented injections of liquidity into the global financial system, many investors have become concerned about the potential impact of inflation on asset values. But to anyone who sells sugar for a living, any concerns about inflation might incite rage.
Sugar prices recently fell to their lowest price in more than ten months on speculation that favorable growing conditions in Brazil, the world’s largest sugar producer, will yield a record crop. Prices have fallen by more than 40% so far in 2010, a welcome windfall for the food and beverage industry, but a troublesome development for those who grow and sell the “soft” commodity.
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At the time I write this post I’m 55% cash, with everything but my position in True Religion (TRLG) being in either materials or energy. The market has a foul smell to it, it’s not acting right. After testing the 20 day moving average on the SPX twice we dropped below it on large volume yesterday. Today we came back up to test it from below and we summarily rejected. The market will chop around into the FOMC rate announcement at 2:15 today, and likely for the remainder of the session and through tomorrow. I believe Friday will give us an idea of whether this is a shakeout or we are headed lower, my educated guess is lower. The 50 day moving average on the SPX is found at 1,168, I believe we are headed there in short order.
While I batten down the hatches and play defense, there are plenty of stocks showing good setups that I will be ready to pounce on if the market gets healthy again. Here’s what I’m looking at.
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Jim Van Meerten submits:
Financial Tides picks Cummins Inc. (CMI) (see earnings call transcript here) one of the leading worldwide designers and manufacturers of diesel engines. The company also produces natural gas engines and engine components and subsystems. Cummins provides power and components for a wide variety of equipment in its key businesses: engine, power generation, and filtration.
Recent changes in emissions regulations at the EPA have given the company’s new high efficiency engines a sales advantage. New sales agreements in Brazil, China and especially with Tata (TTM) in India will give the company an opportunity for new sales growth for at least the next 5 years.
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Value Expectations submits:
By Grey Owl Capital Management (Guest Contributor)
“It’s not the return on my money I’m worried about. It’s the return of my money.”
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Investing, Long Term Investment, stock market | admin April 29, 2010 | 
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