Monday, December 27, 2010

Looking Ahead 2011

Winding down 2010 and looking ahead to 2011
Im sort of mixed in my feelings and almost i should say BLANK about 2011, Every body around is predicting good retail sales over holidays, more momentum in industrial output, growing emerging markets, rate hikes in china, higher oil prices all indicate we are looking towards growth
Its a good story to beleive in
Im although as i said BLANK, i will stay on side lines for the first couple of weeks in January and wait and watch how things shape up.
My top sectors to watch for 2011 with good growth prospects are
XLF - Financials / FAS for risk takers
XLV - Financials
XRT - retail
FAA - Airline stocks after Oil plateaus
XLK - Tech is cheap and is really cheap
Combine this with Internationals which you are comfortable and knowledgeable about
May it be
Brazil, Turkey, India, China, Austria, Singapore, Malaysia,South Africa, New Zealand, Australia, Canada
whichever is your most favorite country play some exposure there would complement a US domestic.
For 2011, i do expect the internationals to look at US domestic and feel US is cheap and good area to invest, i expect may Emerging and Soverign funds flowing money into US which could help drive US equities up
Shorting TLT , buying TBT will be good trade
Buying metals such as SLV and PALL could be good trades, some gold will be ok , i prefer silver and palladium
What are some of your thoughts ?

Tuesday, December 7, 2010

Finally Obama Pulls Through - Cave in is some times nice

Thanks Mr. President, Finally caving in does feel sweet

Extension of Bush tax cuts for 2 more years
Preserving capital gains and dividends tax rate
Estate inheritance upto 5M no tax
Support for small business
Last but not least - reducing FICA to 4.2% - a 2 %r reduction
Is this too good to be true,
If parts of this passes before the congress breaks off i would be extremely happy -
This is a good sign and a setup for a STRONG JANUARY in 2011
2010 has been a blessed year with the volatility and corrections in February, June/July and Late August yet at a YTD double digit returns its been a good ride,
I would take a 10% year like 2010 with the bumps in the road any day over a 2009 or 2008
Hopefully the market keeps healthy volatility in 2011 and provides opportunities for all segments of investors
I still honestly feel the broader Equity market is undervalued with the Tech bell weathers still trading at 10-20 P/E, tons of cash on books, strong cash flow, earnings growth, certainly feel there are under valued segments in the market vs over heated segments such as Cloud, virtualization, boutique niche product providers in consumer space may it be a Burrito, Ugg Boots, Streaming video inverstors are cheering these segments shying away from companies like CSCO or INTC

The three domestic US sectors i would like to research for the next year

Financials - XLF
Health Care - XLV
Tech - XLK