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Thursday, January 26, 2012

George Soros 2012 Market Outlook

George Soros Market Outlook for 2012.  Soros says there is the POTENTIAL for a total meltdown greater than the 2008 financial crisis.
"I am not here to cheer you up. The situation is about as serious and difficult as I've experienced in my career... The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system... At times like these, survival is the most important thing."
-George Soros January 25, 2012 on CNBC
From Davos Switzerland to Maria Bartiromo.

More quotes:

About the possible Greek default:
"It did not solve the problem of the heavily indebted countries that now are in a position of a Third World country that it is too heavily indebted in a foreign currency"
Without intervention, Soros continued
"It actually could eventually prepare the ground for a breakdown of the euro, if the financial system of each country becomes much more self-contained. But that's not really where they want to go...  Gradually it's bringing down the interest rates. However, I don't think it's a strong enough 'ring fence' if and when Greece defaulted. And there is a real danger of that happening, a possibility... You'll either have disintegration and the euro falling apart, which would have catastrophic consequences, and really a potential meltdown, worse than you had in 2008, a real disintegration. Or, you have more integration"
About the US, Soros said it is on the mend
"The economy actually is showing considerable strength... the glut of cheap natural gas, for shale gas, is making a big difference in making American manufacturing more competitive. You see strength in manufacturing, which is really a reversal of the trend of last 20 years."
Long Term Results that Speak for Themselves
Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11
(More Info, Testimonials & Portfolio Returns)
Latest 2012 Update:  Up 8.0% YTD  as of 1/26/12

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(Your 1 year, 12 issue subscription will start with next month's issue.)

Saturday, January 07, 2012

Ed Hyman & Bob Doll's Market Outlook for 2012

This is a summary of a video interview by Consuelo Mack with Ed Hyman and Bob Doll. Ed Hyman has been rated the #1 economist by Institutional Investor for 32 years running and recently named to "All American Research Team Hall of Fame." Bob Doll is the Chief Equity Strategist at Blackrock.

Highlights of 2011:
  • Worst Market Volatility in decades
  • Corporate profits and cash levels are record highs
Video: Summary of Video:
Ed Hyman:
  • Small chance the economy could do a lot better in 2012 than in 2011. Thinks surprises could be to the upside. Says in late 2011 the economy did much better than he thought it could.
  • Thinks the economy will do "somewhat" better in 2012 than in 2011.
  • Is worried we have higher taxes and spending cuts that cycle the economy lower and lower.
  • With slowing inflation, expects more easing in Europe and China which will help.
  • Sees a "dark picture" on Europe but not on China. 
  • Believes Europe will have a severe recession. 
  • Believes rates in Europe will go to zero.
  • Bonds were the best winner last year but if Ed is right, he thinks bond yields will go up and cheered by everyone except those who own them.
  • Hyman likes the emerging market consumer so Ralph Lauren (RL) and in the US dividend paying stocks that are buying back shares such as Home Depot (HD).
  • Doesn't think Obama will be defeated.  Says the market usually likes a change of president so we could get more upside surprise with a new president.

Bob Doll
  • Thinks the US will muddle through while the rest of the world slows.
  • Average GDP growth for 2012 will be 2.0% to 2.5% with quarterly lows maybe 1% and a high of 3%.
  • Thinks US stocks will have a better year aided by money coming from foreign markets to our markets.
  • Thinks recession in Europe will be "mild" and not drag the US down as we "muddle through" unless there are significant "financial busts."
  • China, India and US growth could offset recessions in Europe.
  • Will take a pretty bad world for US 10-year treasury to go from 2.0% to 1.5% for additional capital appreciation. 
  • Thinks if the Euro goes bust, then you don't even want to own stocks.
  • Because earnings growth is in the US, small and mid cap stocks with more business in the US vs Europe will do better than his specialty, large cap stocks.
  • Top investment choice is US S&P500 with accelerating cash flow and earnings.

Both agree stocks are the asset of choice on their own merit and relative to other asset choices including cash and US Treasuries.

Long Term Results that Speak for Themselves
Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11
(More Info, Testimonials & Portfolio Returns)
Latest 2012 Update:  Up 7.2% YTD as of 1/21/12
  • Subscribe to my service NOW and get the January 2012 Issue for FREE!  
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  • "Auto Buy" and "Auto Sell" levels set ahead of time for target buy and sell levels for my securities.  This allows you to place "limit orders" with your broker in advance so you can go about your business.
  • All questions about what I write answered by Email.  If what I write is not clear to you, just ask!
Your 1 year, 12 issue subscription will start with next month's issue.

Thursday, January 05, 2012

Byron Wien's 14 Bullish Predictions for 2012

Yesterday Byron R. Wien, Vice Chairman, Blackstone Advisory Partners, issued his list of Surprises for 2012 in this press release as well as an appearance on CNBC.
This is the 27th year Byron has given his views on a number of economic, financial market and political Surprises for the coming year. Byron defines a “Surprise” as an event which the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable”, having a better than 50% likelihood of happening.
The Surprises of 2012
1. The extraction of oil and gas from shale and rock begins to be a game changer. The price of oil drifts back to $85 a barrel and the United States becomes less dependent on Middle East supply. Deposits in Poland, Ukraine and elsewhere prove promising as well. Increased production from Libya and Iraq and reduced demand resulting from the slowdown in world-wide economic activity contribute to the price decline.
2. Earnings for American corporations continue to move higher driving the Standard & Poor’s 500 above 1400. Raw material prices continue soft and business leaders successfully adjust to slower economic growth by using technology to reduce the labor and logistical component of goods and services sold; profit margins stay high.
3. The U.S. economy gets its second wind. Real growth exceeds 3% and the unemployment rate drops below 8%. Recession fears and even “the new normal” view of prolonged slow growth are called into question. Capital spending, exports and the consumer drive the economy, overcoming fiscal drag. The drop in the price of oil and the rise in the stock market improve both consumer confidence and spending patterns.
4. The recovering economy and the declining unemployment rate help President Obama convince the voters that he didn’t do such a bad job in his first term after all. He is viewed as a good speaker but a poor leader who is running against Mitt Romney, viewed as uninspired and whose positions on many issues are unclear. Democrats take back the House of Representatives but lose the Senate in an anti-incumbent wave.
5. Europe finally develops a broad plan to deal with its sovereign debt problem and moves closer to fiscal cohesion. The European Central Bank, the International Monetary Fund, the European Financial Stability Facility and the European Union band together to keep all the countries within the Union and to continue the euro as the Continent’s currency. Greece has a major restructuring of its debt; Spain and Ireland strengthen their finances during the year, but Italy suffers a “voluntary” restructuring. A meltdown of the banks is avoided, but imposed austerity causes Europe to suffer a recession.
6. The computer replaces conventional armaments as the principal weapon of terrorists and geopolitical adversaries. Eastern European and Asian hackers invade the data banks of major international financial institutions causing temporary bank closures. An alarmed G-20 meets to address the problem.
7. Concerned over rapid money supply growth in the developed world, investors buy the currencies of countries that seem to be managing their economies sensibly. Scandinavian currencies, the Australian and Singapore dollar and the Korean won benefit.
8. Congress decides its dysfunctionality is harmful to both parties and acts before the November election to deal with the failure of the Super Committee to develop a program to reduce the U.S. budget deficit by $1.2 trillion over ten years. Both defense and Medicare are cut significantly; subsidies for agriculture are reduced and tax deductions for oil, gas and real estate partnerships are modified. Obama pledges to let some aspects of the Bush tax cut program continue if he is reelected.
9. The Arab Spring finally overcomes Bashar al-Assad and his family’s rule over Syria ends. While Assad’s fall might have been inevitable, it has important ripple effects throughout the region weakening Hamas, Hezbollah and further isolating Iran.
10. After two years of poor stock market performance while their economies came through with high single-digit real growth the emerging markets finally have a good year. Growth slows somewhat but favorable valuations enable China, India and Brazil indexes to appreciate 15-20%.
Below are several “also rans” which did not make the Ten Surprises list because (a) I did not think they had a more than 50% probability of happening and/or (b) they were not as important to investors as the ten I ultimately chose.
“Also Rans”
11. Housing starts to pick up significantly. The strength in the economy coupled with record affordability encourages the consumer to come back into the market and make long term commitments. The overhang of vacant homes begins to be absorbed.
12. The yield on the 10-year U.S. Treasury note rises to 4% as China continues to invest heavily in hard assets and raw materials and pulls back from putting reserves into the bonds of developed nations. 
13. After correcting sharply toward the end of 2011 gold rebounds to $1800 during the year. Accommodative monetary policies throughout the developed world cause a renewed migration to hard assets by individual investors and sovereign wealth funds. Silver benefits also, rising to $40.
14. Fiscal discipline at the state and local level allows the drop in yields for municipal bonds to continue.
What do you think?

Long Term Results that Speak for Themselves
Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11
(More Info, Testimonials & Portfolio Returns)
Latest 2012 Update:  Up 7.2% YTD as of 1/21/12
  • Subscribe to my service NOW and get the January 2012 Issue for FREE!  
  • Get email alerts when I buy or sell securities for my explore portfolio
  • "Auto Buy" and "Auto Sell" levels set ahead of time for target buy and sell levels for my securities.  This allows you to place "limit orders" with your broker in advance so you can go about your business.
  • All questions about what I write answered by Email.  If what I write is not clear to you, just ask!
Your 1 year, 12 issue subscription will start with next month's issue.

IMPRESSIVE Long Term Results


Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390%
vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11)
(More Info, Testimonials & Portfolio Returns)
Q1 2012 Update: Up 11.3% YTD as of 3/31/12
(remember this 2012 performance is with 1/3 in fixed income!)



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