Review of Barron's -- Dated 22 April 2013

Barron's, for the second time in the past several months, has a bullish Cover Story that is almost begging to be shown as a huge contrary indicator...  Photo from Zero Hedge (http://www.zerohedge.com/news/2013-04-21/yet-another-market-top-indicator) just this afternoon:

For the Dow to make it to 16,000 that would mean a jump of about 10% from here, it could happen.  The previous (in)famous bullish cover was published in October 2012, and stocks are up some 10%.  So, the Big Money Poll was actually correct at least in the six months from October until now.

I pay attention to their Big Money Poll ever since I read in September 2007 they predicted (BEFORE the primaries and caucuses) that Barack Obama would be the next president, at the time it seemed that Hillary Clinton had the lock for the Democrat nomination.

Author Jack Willoughby writes up the results of Barron's "Big Money Poll", their every six months tabulations of predictions of professional money managers (135 of them this time).  He notes that only ONE THIRD of these money managers have the Dow at at over 16,000 by mid-2014, so, uh, the title is just a wee bit deceptive...

Willoughby notes that 73% of these money managers are Bullish now, very high (previous percentages cited by Willoughby range from 45% - 55%), and that 73% might be the contrary indicator (1% are "Very Bullish").  Only 19% are Neutral and just 7% Bearish (27% were Bearish in October 2012).

Barron's asked the money managers to put the stock rally (since March 2009) into baseball terms, 61% of them put the rally in the fifth through seventh innings...

They are an astonishing 94% optimistic on stocks for the next five years!

Here are the most loved and the most hated stocks, I put the names in blue that are hated AND loved:

Favorite Stocks:

Apple, Ford, Intel, Gilead Sciences, eBay, Google, National Oilwell Varco, Uni-Pixel

Most Overvalued:

Amazon.com, Facebook, Apple, Salesforce.com, Netflix, Best Buy, Google, Groupon, J C Penney, Progressive

I can note that some of the unpopular stocks have all gotten very bad press from CNBC, etc.

Which will be the best performing asset class in the next six to 12 months?:

Equities                      70%
Real Estate                 16%
Gold                           11%

(Gold was at $1550 or so when the poll was conducted)

Many of the money managers see a drop in the Dow to 13,500 or so, some 7%.

***

Am I going to have to stop calling "Up & Down Wall Street" Alan Abelson's column, and now call it Randall W. Forsyth's?  Forsyth once again writes this one up, titled "A Deflationary Wave".

"Keep calm and carry on" he writes, this phrase invoked as a kind of magic charm that some are pushing re last week's declines in stocks (and gold).  Forsyth goes into more detail than is normal for Barron's in discussing gold.  While gold is down sharply, he notes that so is Apple (ticker: AAPL), gold is down 15% over the past 12 months, Apple is down 42%...

The other commodities are down too.  Hence the title about deflation.  He notes that Treasuries, and especially "TIPS" (the Treasuries that are "inflation protected") are throwing off signs of deflation as well.  The Fed notes this, and there is backpedaling on talk about ending QE...  QE does not seem to be working...

Finally, Forsyth passes along the views of Paul Desmond (Lowry Research) who is bullish.  Desmond is bullish indicator No. 2 this week.

***

"Streetwise" author Kopin Tan pitches a mixed picture re stocks and certain sectors.  I have noted before than Mr. Tan is sometimes not easy for me to summarize, but it looks like he is passing along a view here that maybe the correction is over, or nearly so, and that cyclicals are worth looking at.  He quotes ever-popular Stephanie Pomboy as saying the Fed is nowhere near done buying up US debt either (which parallels this afternoon's Zero Hedge story: http://www.zerohedge.com/news/2013-04-21/unprecedented-660-billion-excess-debt-demand-and-what-it-means-bond-yields

***

"He Said":

"Our fidelity to our way of life, for a free and open society, will only grow stronger...inthe face of evil, Americans will lift up what is good."

President Obama after the Boston bombings

***

Kopin Tan writes a piece in "Follow-Up" about Apple.  It has gone down over $100 since the original piece appeared in mid November 2012.  Arch-rival Samsung is up.  And Exxon-Mobil (XOM) is once again the world's largest company (market value).

***

Andrew Bary writes up a bullish piece on the gold miners.  He notes that the three stocks and the four ETFs he lists are down between 17% - 49%, Barrick Gold (ABX) down the most (49%) and the junior gold stocks ETF (GDXJ) is down 41%.

[Ed. comment: Uhm, well maybe so.  But the miners are MUCH riskier than physical gold.]

Gold stocks would best be left to traders...

***

Jack Hough writes of a class of companies that I did not know even existed (as traded stocks): "business-development companies" (BDCs).  BDCs typically loan money out to smaller companies who cannot arrange for bank loans.

The four BDCs profiled by Hough yield an average of 8.8%!  Well above typical junk bonds yielding +/- 5.7%.  The four of them are:

Ares Capital (ARCC) yielding 9.0%
Golub Capital (GBDC) yielding 8.0%
Hercules Tech Growth (HTGC) yielding 8.4%
New Mountain Fin (NMFC) yielding 9.8%

All four of the above have 75% or more of their yields covered by loan interest alone, which Hough says is probably the best way to judge relative safety of these guys...  Please note that these seem RISKY to me, but, I feel obliged to point out income opportunities when available, as it is hard to make passive income now.

***

David Englander writes a bullish piece on Chiquita (CQB), famous for bananas.  They are lost money in 2012, but he says they will make money in 2013, and that their shares could rise 20% or more.

***

Michael Kahn joins the parade of analysts looking at "the technicals" of gold, hey, I did that too a week ago!  LOL...  He draws a chart with lines and everything, and goes on to note that maybe the technicals are showing some signs of a bottom, but that there is momentum to the downside.  He mentions a survey by Jack Bernstein (trade-futures.com) that most traders are bearish, as are the miners who hedge.

He draws to two lines, parallel, but very close to each other on his chart: $1300.  Hmm.

***

Tiernan Ray ("Technology Week") writes of a battle going on re Dish Network (DISH) trying to take over Sprint-Nextel (S).  I did not know this was even going on.

FWIW, I could care less, neither company is of interest to me.

***

Vito J. Racanelli writes about poorly-performing REIT CommonWealth REIT (CWH).  It looks like their management has performed poorly, and there are activist shareholders pushing for changes.

Yawn.

***

Jim McTague writes about "The Number".  Hey!  Another thing I knew nothing about.  The Number is being calculated by the GAO and is, in simple language, the amount of the subsidy that the TBTF banks get to keep their status of "TBTF"...  Meaning that they can pay less for deposits.

Senators Sherrod Brown and David Vitter want to impose higher capital cushions on those banks.  Both Senators (as well as many other Senators) are still angry about the banks in the wake of 2008.

No one knows when The Number is due out, but McTague says it will "surely emit shock waves".  well, we'll be watching.

***

Lawrence C. Strauss interviews Scott Minerd (Guggenheim Partners).  Minerd discusses gold's price plunge and how that will affect other assets in the short-term.  He feels "a fairly healthy correction" of around 10% is likely [I concur].  But, he is bullish further out.  Minerd believes that low interest rates (he uses the words "financial repression", a term I like very much) will be the norm for many years (at least through 2017, likely 2019).

After short-term issues, however, he likes the USA, vs. Europe and Japan.  Here's what else he likes:

-- US financials (not me!)
-- US housing (not me!)  <-- US housing is at risk IMO: bad demographic trends
-- technology stocks (hey, could be OK)
-- he likes somewhat the BRICs
-- he likes even more the MIPS (Malaysia, Indonesia, the Philippines & Singapore)

***

Dyan Machan interviews Francois-Henri Pinault ("CEO Spotlight"), CEO of French luxury company PPR.  He is a rival of LVMH's Bernard Arnault.

For me this biography was not of interest, usually I find "CEO Spotlight" to be more interesting.

[Am I being overly negative today?]

***

Editor Thomas Donlan writes that the USA is edging into a tax revolt with companies leading the way.  Currently the underground economy here in the USA is about 10% of GDP (vs. some 30% in at least parts of Europe).  And yet the problems of the Baby Boomers will cost money, big money, and that will be financed (as long as possible) with debt (which Americans accept) rather than taxes (which they do not like).

He notes two important trends among companies: leaving states like California (high taxes) and keeping income offshore (when companies are big enough and structured correctly to be able to do it).

Donlan writes that companies will be a vanguard for popular tax revolts in the future.

***

In the Market Week section we find that banks fell because of bad earnings last week...

"European Trader" Jonathan Buck writes that Adidas (ADDYY) of Germany will "outrun the pack".  I have no confidence in my ability to judge the market prospects for sneaker maunfacturers, so I will decline further comment.

"Asian Trader" author Leslie P. Norton writes of Chinese online status retailer VIPshop Holdings.  It seems that this company HAS been selling FAKE goods though...  Enough said for me.

"Emerging Markets" columnist Ben Levison notes that when China released worse than expected growth figures, the equities markets in Brazil and China dropped sharply along with commodities.  Commodities may stay under pressure if China continues being weak.  On the other hand, countries that are NOT big in the commodity export realm (eg Turkey, India, Malaysia, the Philippines, Taiwan, etc.) may do relatively well with lower oil and other commodity costs.

"Current Yield" writer Michael Aneiro writes that bond investors have less fear of inflation now.  [Ed. note: I am seeing LOTS of analysts who see less inflation coming...]  Aneiro notes that the bond markets have been behaving oddly as well (like almost everything?), particularly corporate bonds (they have gotten gotten stronger with lowered inflation expectation, apparently the opposite of their normal behavior).  The 10-Year yield fell to 1.703%.

"Commodities Corner" authors Owen Fletcher write about bearish prospects for soybeans (lots of sybeans in South America and a big crop anticipated for the USA) and Tatyana Shumway about possible bearish prospects for gold (technical levels at $1300, then $1100...).

Insider sold some $42 million worth of popularly reviled Monsanto and $36 million in Verisk shares recently.

The Mighty Peruvian Sol weakened almost exactly 1% last week, perhaps due to worries about commodity exports to China.

***

Verdict:  Well, this issue was a bit less interesting than normal, but I will be watching to see how the Big Money guys do re their predictions...

Review of Barron's -- Dated April 15, 2013

I am going to review Barron's now, but my heart is really more interested in what is going to happen to gold this Sunday evening...  In a concession to my heart, I will keep this review relatively brief.  Some may smile...  :)

The Cover Story ("End of the Line for Priceline?") warns that Priceline (PCLN) is at risk of price wars with competitors Expedia (EXPE), Orbitz (OWW) and privately held Travelocity.  Author Salzman provides a graph showing Priceline is up some 450% from April 2007.  This looks like an industry that is too competitive for my taste...  Four competitors doing the same thing -- internet travel?  No thanks to any of the bunch.

***

Randall W. Forsyth again writes for Alan Abelson.  This week he covers two issues that Zero Hedge covered in rather good detail last week: Bitcoins and gold.  Forsyth mentions that Barron's writer Ben Levison (who covers emerging markets and is their Bitcoin observer) noted that the Bitcoin price crash resembled that of silver in 1979-1980.  Yet, the governments and central banks of the world are still merrily spending (and printing) money...  Which should be good for gold (and the other PMs).  Recall that Japan is debasing its currency at a near frenzy.  Forsyth, finishing his analysis of gold (perhaps he should have written a "if physical gold is actually available" condition in there...):

"For now, gold no longer is loved, which, to an independent-minded contrarian investor, only adds to its allure."

Forsyth then finishes his column by noting that low volatility ETFs have just come out...

***

"Review & Preview" had a short note on something I missed, that the Treasury sold some $621 million in GM stock, GM's CEO said he expects the rest to be sold by early 2014.

"He Said":

"We received regulatory orders requiring improved performance in multiple areas... Unfortunately we expect [to] have more of these."

JPMorgan Chase CEO Jamie Dimon

Hmm...

***

In "Follow-Up", writer Kopin Tan re-iterates their bullish case for Korea, whose stock market performance has not been good recently (with Kim Jong-Un memacing them to the north and Japan's depreciating Yen).  But the Korean Won is down some 7% vs. the dollar (which I did not know), and there are a couple of analysts who believe Korea is a good buy.  Hey, I hope so, a healthy Korea is important to our business!

***

Tiernan Ray writes a kind-of bullish piece on Yahoo (YHOO).  He notes that Yahoo is expanding into mobile internet and knows how to deal with large numbers of data requests.  They are talking with many segments of mobile, including Apple.  They have hired a technologist from Nokia and are thinking of IPO-ing Alibaba Group, the Chinese commercial search engine.

***

Andrew Bary (perhaps channeling Kyle Bass?), writes the alarmingly titled "Does Japan Face a Debt Apocalypse?"  The short answer is "Yes".  He quotes Kyle Bass himself: "Japanese industry has been hollowed out,".

Well maybe to an extent, but Japan's rolling bearing makers (while having plants worldwide, as do Timken and SKF) are still making LOTS of bearings there.

***

Jim McTague ("D. C. Current") does not think much of Obama's new budget...  It "has a pulse" though, in that the R and D Teams are at least talking it over.  But there is plenty of garbage within this proposed budget, much which may not get enacted and much that should not get enacted.

***

Alexander Eule ("Technology Week") wonders if Best Buy (BBY) will get shoppers coming in as much as Wall Street seems to love the stock...  Amazon sells some 72% of the same products as Best Buy, and the average discount is 17% less at Amazon vs. Best Buy.

***

"Speaking of Dividends" author Shirley A. Lazo writes that many of the Dow 65 stocks (inc. the transports and utilities), about 20, have raised dividends recently.

***

Jack Hough notes that food and consumer staple stocks are getting expensive!  They have dividends that have not been going up as much...  He suggests getting out of them and looking at buying:

Boeing (BA)
L-3 Comm. Holdings (LLL)
Occidental Petroleum (OXY)
Stanley Black & Decker (SWK)
Travelers (TRV)

All five have P/E ratios at a relatively restrained 10 - 15 and all pay dividends of over 2%.

***

Bill Alpert interviews Adam Parker, US Equity Strategist at Morgan Stanley.  Mr. Parker has his own niche as both a quantitative researcher and fundamentals analysis.  A fusion.  He claims that stocks that passed both analyses (quantitative and fundamental) OK did better than when whichever stocks only passed one test...  He likes Symantec (SYMC, lowering costs and integrating recent acquisitions), Philip Morris Int'l (PM, no US exposure to softer tobacco sales) and LyondellBasell Industries (LYB, lower feedstock (NatGas) costs will oboost returns).

***

"Economic Beat" author Gene Epstein wrote an article making my eyes blur..., about various tricks to cut entitlement costs. At the end of his column, he goes along with budget reformer Peter Peterson in being for a means test so that the wealthy do not get entitlements they don't need.

Um, but, but...  We'll look at this another time...

***

Editor Thomas Donlan notes that Margaret Thatcher really did change Great Britain for the better.  even though she encountered much resistance and mockery, she brought the UK back from an ugly brink caused by too much faith in central planning...  Donlan reminds us that her legacy is being forgotten on both sides of the Atlantic.

***

In teh Market Week section Vito J. Racanelli looks first at the stock market (the Dow did well last week) and then goes on to write about First Solar (FSLR) may not have a rosy future ahead of itself, despite what FSLR bulls are thinking...

"Asian Trader" author Assif Shameen suggest looking at HSBC (005.Hong Kong) and Standard Chartered (2888.Hong Kong) as ways to play Asia.  Banks?  I have kind of a mental allergy to investing in ANY banks...

Jonathan Buck ("European Trader") writes that Audrey Kaplan (a portfolio manager at Federated Investors' InterContinental fund) picks three German companies with good prospects (she thinks anyway): Siemens (SI), Bayer (BAYRY) and Rheinmetall (RHM.Germany).  Well, I would not invest anything in Europe, including Germany, right now, but that's just me!

"Emerging Markets" author Ben Levison suggests caution putting money to work in the Chinese stock market.  He suggests looking for companies that can thrive whether China's economy goes up or not.  Well, I will continue to buy Chinese bearings, but no thanks on Chinese stocks.

"Commodities Corner" author this week is Dan Strumpf.  He writes that oil may be facing "Peak Demand", a controversial notion to be sure.  Various agencies, here and abroad, suggest that upcoming economic weakness may cause oil to drop...  Strumpf: "Oil bulls, take note: fears of peak oil are starting to look overblown."  Well, maybe so.  But at some point it really seems we have to solve this oil conundrum (higher usage vs. lower production in the future).

Michale Aneiro ("Current Yield") writes that buyers of corporate bonds maybe should just be happy enough to be getting their coupons, as he and others think that corporate bond prices may go nowhere for a while...

Insiders sold some $30 million (or so) in LinkedIn (LNKD), Urban Outfitters (URBN) and Netapp (NTAP).

And the Mighty Peruvian Sol was unchanged for the week!  Zip, zero, nada!

***

So let's wrap it up: gold went off the cliff, but stocks did pretty well.

Verdict: I give this issue a very common remark: if any of the above is of interest to you, then buy it!

Review of Barron's -- Dated 1 April 2013

I was sorely tempted to try and pull an April Fool's here, but I sobered up...

Barron's S. Florida distribution may have gotten itself back on track again, as for the last three weekends Barron's has actually arrived on the weekends.  The Cover Story this weekend is about how Michael Dell, and his plot to take back Dell (ticker: DELL) at a cheap price.  Author Andrew Bary notes that this little drama has been going on for a while now, and that many observers have noted that Mr. Dell is trying to get the company for too cheap...  He has two competitors in trying to buy the company:

Carl Icahn (who has long prowled for cheap companies)

and

Blackstone (Stephen Schwartzman)

Bary thinks that DELL will fetch some $15.00 or more, Michael Dell's offer has been $13.65 per share and it is trading at about $14.33, hinting that Mr. Dell will not get his old company back for ridiculously cheap.

***

Randall W. Forsyth pitches in again for Alan Abelson.  Forsyth starts off by noting that despite what would appear to be scary stuff (Fiscal Cliff, Sequestration, Cyprus, etc.) the stock market was able to go up to new all-time highs (both the S&P 500 and the Dow Jones up approx. 11% in the first quarter of 2013, on top of about 13% for all of 2012).  The USA did better than most of the rest of the world (and that may help explain US$ strength lately).

Forsyth goes on to write about many other things we do NOT have to worry about:

-- the takeaway of the 2% payroll tax cut
-- Sequestration
-- disintegration in the Eurozone
-- the futility of fighting the Fed

NOTHING to worry about, "Clearly we can print our way to prosperity."

Next sentence: "Happy April 1."

Still for me, his best line on the article (while discussing why Europe id nothing to worry about):  "As for Italy not having a functional government, what else is new?"

***

Kopin Tan ("Streetwise") writes that some think we are likely to take a pause in the bull market.  Others think perhaps not.

I agree!

***

"He said":

"We intend to hold a significant investment in Goldman Sachs, a firm I did my first transaction with more than 50 years ago."

Warren Buffett

Hey, who says that we have an American Oligarchy?

***

Sandra Ward writes a bullish piece on capital goods manufacturer Eaton (ETN).  Eaton bought Cooper Industries recently, and so has diversified itself a bit from the cyclical automotive industry.  ETN now has but 18% of its business in the automotive sectore, its businesses now are more electrical equipment and energy-saving equipment.

***

Jonathan Buck writes a bullish piece on STMicroelectronics, Europe's largest semiconductor manufacturer.  Apparently the company is narrowing its focus on the faster-growing sectors (sensors and car-entertainment systems) while exiting its wireless chip joint venture with Ericsson (where it lost money).

***

Jack Hough picks four companies that have bought back stock in a way he approves of (not paying too much, not leaving the company with little cash, yet still allowing each company to pay a good dividend, etc.).  All four have a decent dividend yield.  Here they are:

-- AT&T (T), dividend yield of 4.9%
-- Seagate (STX), 4.2%
-- WellPoint (WLP, the country's largest health insurer by enrollment), 2.3%
-- Western Union (WU). 3.3%

***

Barron's breaks stories on occasion.  While many may see them as Wall Street's poodle, they do sometimes do break stuff even before Zero Hedge, and they are a weekly paper.

Bill Alpert writes that sleazy Russian operator Vassili Oxenuk has been playing a lot of bogus games with US (and investors from Kazakhstan...) investors...

Las Vegas!  Russian/US reverse mergers!  Guns and death threats!  Offshore hideaways!  Read all about it...

My take?  Too easy...: "Lie down with dogs, you get fleas."

***

Tiernan Ray ("Technology Week") writes that Google (GOOG) and Facebook (FB) are shaking up the server market.  Servers tend to be simpler than most PCs and can be built with commodity products, which is what Google and Facebook are doing, contracting out the servers they need with Asian manufacturers.

This is likely not good for Dell (DELL) and Hewlett-Packard (HPQ)...

He also writes that Blackberry (BBRY) has an uncertain future..., yes, with Apple (AAPL) and Samsung Electronics (0015930.Korea) dominating the smartphone business.

***

"Economic Beat" author Gene Epstein notes that both the R-Team and the D-Team have made budget proposals.  In his opinion (and IMO) neither proposal goes far enough.  Epstein suggests that instead of cutting the amounts of money for the various programs, that we ELIMINATE programs all together.

I believe President Reagan suggested killing off programs as well, a long time ago...

***

Lawrence C. Strauss interviews Carl Weinberg (Chief Economist at High Frequency Economics).  Weinberg believes that Cyprus IS very significant, he believes the contagion will spread and not even Germany is safe.  He is very negative on Europe and Japan (both entering depressions).

He thinks the USA will muddle along at 2% - 3% growth, that Latin America (as a whole) will do a little better, but that Asia (ex. Japan) is the place to be.  He likes China, but concedes there will always be bumps along the way.

***

PENTA editor Richard Morais writes that many wealthy families are leveraging up...

***

Editor Thomas Donlan finds problems with both the R-Team and D-Team budget proposals.  He writes that the Democrats are making all of the usual promises that cannot be financed (like they have for the past 80 years), while the Republicans are making assumptions that are unrealistic...

[Ed. Note:  Have I said today that we are freaking doomed?]

***

In the Market Week section, "Mr. Barron" on the front page observes that the S&P 500 is indeed at a new all-time high, and that these companies have half the debt, pay a higher dividend and have 13% hgiher profits than vs. 2007.  It could be QE...

Jonathan Buck ("European Trader") wonders if anyone's deposits in European banks are safe now.  In particular he notes that Mr. Dijsselbloem (affectionately know as "Diesel-Boom" at Zero Hedge) has advised us that depositors funds ARE at risk in future bank rescues.  Further, the capital controls imposed on the people of Cyprus are very troubling, the European Union was not supposed to be like this...

Assif Shameen ("Asian Trader") writes that Singapore is changing to a slower growth era.  Be selective in your investments there.

Shanthy Nambiar ("Emerging Markets") writes that the macro trends in the Persian (Arabian) Gulf countries are pretty favorable.  While Saudi Arabia is pretty closed, there are mutual funds and ETFs that can give you exposure to Kuwait, the UAE and Qatar (the countries he seems to like the best).  He gives us two ETFs to look at (tickers): GULF and MES.

Michael Aneiro ("Current Yield") writes that LOANS are doing better than bonds.  I believe he is referring to collateralized loan obligations (CDOs), in which loans are pooled, and investors can then buy in.  Ahh, haven't we had enough derivatives?  Taking on extra risk for a very small yield increase?  The adjacent "Bond Center" had one interesting graph this week: that global long-term rates are going down again, close to the Dec 2012 lows.

David Winning ("Commodities Corner")writes an interesting column on mineral sands, sands with zircon and rutile (zircon for ceramics and rutile for TiO2 for making paints more opaque and brighter).  He names two companies that can be had here in the USA: Tronox (TROX, often mentioned by Meryl Witmer) and Australia's Iluka Resources (IKLAF).

Need a job?  Attrico Company is looking for a Corporate Postman (Classifieds)!  $30/task, email Gerg: greg@attrico.com.  Looks like th position is in Delaware.

Three companies had insider sales of stock over $30 million: SSNC, TRLA and AMTD (last is TD Ameritrade).

My reader "Nobody" keeps me honest re the Mighty Peruvian Sol, which barely eked out a gain vs. the US$ last week.

Verdict:  I covered most of the basics, if you want to learn more, buy it!

Review Of Barron's -- Dated 25 March 2013

Perhaps Barron's heard me (and others in my city) about the poor distribution I had noted in recent weeks past.  It still took until today for me to get my copy (it was not at the airport last night either), but it arrived, and, there is a lot of ground to cover this weekend, so let's get on it!

Note:  Cyprus is not mentioned ANYWHERE on the cover...

The Cover Story (World's Best CEOs) is in a special section.  I was expecting this to be boring, but reading the mini-bios of most of these CEOs turned out to be interesting.  While, of course, there would controversy and disagreement about WHICH CEOs should make this list (30 of them), the list seemed reasonable.

I pick a few names that for me are the most compelling:

Bernard Arnault (LVMH), the French billionaire who reacted to French President Hollande's idea of greatly increasing taxes on the wealthy by threatening to move to Belgium.  LVMH is one of the few kings of luxury brands, and Arnault has been adept at making sure LVMH went along for the ride.  Annualized total return while CEO: 11.3%

Warren Buffett (Berkshire-Hathaway), while much-reviled in some quarters, has delivered out-sized returns to shareholders for decades, including a 50% increase in the value of the Burlington Northern railroad (arguably the best managed railroad) he bought a few years ago.

Morris Chang (Taiwan Semiconductor) built the first semiconductor foundry (that is, a manufacturer of chips for companies too small to make them on their own, these smaller players contract out the manufacturing to a foundry).  Annualized total return while CEO: 17.7%

Larry Ellison (Oracle), a shaker in Silicon Valley for decades is playing catch-up in cloud computing.  Even with Oracle's stock down last week on a profit miss, it is probably a big mistake to bet against mighty Oracle  (the most profitable company in the software industry).  Oracle has awesome data analysis software...  Annualized total return while CEO: 25.7%

Hugh Grant (Monsanto), even though Monsanto is also hated in many quarters, Grant has delivered the seeds that farmers want.  Annualized total return while CEO: 28.4%

Nick Hayek (Swatch) has built another Swiss giant in luxury brands, not just cheap Swiss watches.  Annualized total return while CEO: 22.6%

Carol Meyrowitz (TJX) built a multi-branded retail empire of women's clothes, she refreshes her stores' items and his thinking ahead.  Annualized total return while CEO: 21.7%

Alan Mulally (Ford) has done well for Ford, refusing the bailout and leading Ford back from the brink (although there are still plenty of challenges ahead).  Annualized total return while CEO: 7.6%

Larry Page (Google) is focusing Google's efforts a bit more after big acquisitions.  Don't bet against Google!  Annualized total return while CEO: 23.4%

Howard Schultz (Starbucks) has added Teavana and Square (a mobile-payments platform)...  Annualized total return while CEO: 24.4%

Tadashi Yanai (Fast Retailing (of Japan), "Uniqlo" brand stores), his company makes "fastidiously minimalist basics in multiple hues", meaning basic well-made clothing.  Annualized total return while CEO: 19.0%

There are 19 others in the Special Section I did not mention...

***

Randal W. Forsyth writes Alan Abelson's column this week, and he DOES discuss Cyprus and how Cyprus resembles past small dominoes that fell over to unleash recent financial crises (Thailand, Iceland and Greece).  He pretty well chronicles the past week of Cyprus and Europe, nothing that Zero Hedge readers don't already know, but he does a good job of putting Cyprus into context as well.

Maybe it is only in Abelson's column where the bears are allowed to growl at Barron's...

***

Kopin Tan ("Streetwise") writes of earnings misses...  He then goes on to write about water companies, especially those involved in "fracking" and shale hydrocarbon exploration.  One of those companies is Xylem (ticker: XYL) that was spun-off from ITT in 2011, XYL is a company involved in various facets of water.  XYL is a company I am looking at, one of the few I would consider buying now...

***

At "Review and Preview" William Waitzman has written both short pieces, one on a complaint that Budweiser has been watering their beer (probably NOT true) and a nice piece on whether or not it is smart for the EU to be messing with Russia over Cyprus...

"He Said:"

"Those who adhere to the ideology of rejecting Israel's right to exist might as well reject the earth beneath them and the sky above, because Israel is not going anywhere."

President Obama

***

At "Follow-Up", we find that there is a rumor that Pepsi (PEP) might buy Mondelez (MDLZ).  The potential merger would make sense writes Andrew Bary.

***

Andrew Bary also writes about Sarepta Therapeutics (SRPT), and how if they can get the FDA to move faster on its new drug (eteplirsen) for muscular dystrophy (fatal), that might be good for sufferers of that awful disease and shareholders as well...

***

Jack Hough writes that five companies are increasing R & D spending, and he approves!

Gilead Sciences (GILD): HIV, cancer and hepatitis C treatments
Google (GOOG): more money coming in, and in, and in....
Forest Labs (FRX): Lexmpro's patent expired, but six more drugs poised to launch
Intel (INTC): inked a deal to make chips for Altera, becoming a high-end chip foundry
EMC (EMC): expanding its data analytics unit and developed a public cloud service

***

Christopher C. Williams writes a bullish piece on Seacor Holdings (CKH) a provider of offshore work-boats for the oil & gas drilling industry.  He writes that CEO Charles Fabrikant has sold off some units and done well with his fellow shareholders.

***

"Technology Week" author Tiernan Ray writes that although Meg Whitman seems to have done well at Hewlett-Packard (HPQ), the shares are up and morale at least in part restored (despite a LARGE number of planned layoffs: 29,000 people), well, there is still a lot more to do.  But, so far so good is this widely watched story of HP...

***

Gene Epstein ("Economic Beat") writes that, at least for now, the economy has not yet suffered under the "Sequester".

(In fact, I have asked a number of people (not scientifically of course) for their observations on whether teh Sequester has meant anything, so far only ONE person said she KNEW someone who MIGHT suffer...)

***

Lawrence C. Strauss interviews David Winters (Wintergreen Fund, WGRNX).  Winters searches the world for undervalued jewels and offers the follwoing picks:

Swatch Group (UHR.Switzerland), they own Harry Winston (big diamonds...)
Richemont (CFR.Switzerland), they own various luxury brands
Canadian Natural Resources (CNQ), Winters believes this is an undervalued player in O & G
Wynn Macau (1128.Hong Kong), Macau is bigger and more exciting than Las Vegas now...

***

Jim McTague ("D. C. Current") informs us that it looks like a Sales Tax for internet purchases is coming, apparently there is bipartisan support for this.

***

Editor Thomas Donlan writes that we should give priority to highly-skilled and similar immigrants.  This is controversial (many tekkies here complain how hard it is now to get jobs...), but I am with Donlan here.  Highly skilled immigrants have helped our country grow and prosper...

***

The Market Week section's COVER features "Old Mr. Barron" pondering Bitcoins...  It seems that some bookmakers are saying that a Bitcoin may reach $500 by year end.

Assif Shameen ("Asian Trader") writes that Chinese battery and electric car maker BYD (1211.Hong Kong) may be in a bubble, even though Warren Buffett's (guy is everywhere, no?) Berkshire-Hathway owns 9.9% of it...

Ben Levisohn ("Emerging Markets") writes that it is harder to find good picks in developing markets (?), one easy way, he suggests, is low cost ETFs in the emerging markets sector.

"European Trader" author Digby Larner writes of Cyprus...  Monday is the big day, we'll be watching!

Michael Aneiro ("Current Yield") writes that events seem like they will keep the 10-Year Treasury around 2.0% or so for a while.  Low rates because so many are nervous about Europe and stocks, yet at some point the Federal Reserve will likely have to stop purchasing the $85 billion in Treasuries each month...  Sometime...

Simon Constable ("Commodities Corner") writes that oil and LNG shippers will do well, at least in part due to shut down refineries as well as the NatGas boom here in the USA.

Insiders sold some $66 million in LinkedIn (LNKD) and some $48 million in Fleetcor Technologies (FLT, who?) recently.

Gold finally moved up (for the week, $1606 / oz) even as the other precious metals moved down...

Now that the Federal Reserve has finally had to some clean with its holdings, I will resume watching (with occasional reporting) on increases in it Balance Sheet, now at 3.226 trillion dollars (recall only weeks ago it finally broke the $3 trillion mark), up $56.4 billion last week.

And finally, the Mighty Peruvian Sol lost a bit vs. the dollar, of course after I am back from Peru where I paid a scandalous $6.00 for my haircut...  Alert reader "Nobody" has been keeping me informed of central bank actions of the Sol, and recently mentioned to me that I might ought to "STFU" about expensive haircuts (he lately paid $30.00, which is about what I have to pay here)...

Review of Barron's -- Dated 25 February 2013

Once again I had to go all the way to the airport, Barron's Guys, to get this weekend's edition, and even THEY did not have it as of Saturday afternoon.  Seriously fellas at Barron's, you will LOSE some of your readership here in S. Fla. and a blogger who reviews your magazine, which would be a darn shame.  So, SOMEONE tell the maricones to get the distribution in order down here!

***

The Cover Story is very timely and most excellent: "How to Get 6%", it is special report on MLPs (Master Limited Partnerships).  Author Dimitra DeFotis writes about a topic that I HAD thought was interesting but fairly simple.  I HAD thought that the energy MLPs were all pretty much alike, geared for high dividend payouts and structured more-or-less the same.

No!  The MLP landscape is changing.  These MLPs look to be a class of investments worth more careful examination.

Because of time constraints (it is late here in the eastern USA...), I am going to save the MLP discussion for a day or two to better understand the article so I can better comment.

***

Randall W. Forsyth writes Alan Anelson's column this week (I call it Abelson's column for a reason, but its real name is "Up & Down Wall Street).  Forsyth starts out his comments on Chinese cyber-spying and proceeds on to company leaks about takeovers and insider trading.  He returns to the theme of Chinese spying on us even as we run up our debts to them...  And that our trillion-dollar deficits (federal government) are becoming ever more of a geopolitical as well as an economic threat.

Forsyth then goes on to write about the upcoming "Sequestration" that may start as soon as Friday (March 1).  He brings in Charles Dumas (Lombard Street Research in London) to comment that there are real risks that consumer sentiment (and businesses dependent on consumer spending -- see Wal-Mart Stores (WMT) may be damaged by the recent tax hikes as well as further uncertainty (more great stuff happens re the budget processes by March 27 and more debt ceiling (remember that?  It's coming back...) by May).

Yet, Forsyth finishes, Bernanke assured Treasury debt-dealers that we are NOT in a Traesury bubble, whew, I feel better.  But then Bernanke said in 2008 subprime mortgage problems were well-contained...  Bernanke also goes before Congress this week, I wonder if anyone will ask him anything worthwhile.

***

Kopin Tan ("Streetwise") discussed some Midwest refiners (HollyFrontier (ticker HFC), Marathon Petroleum (MPC -- remember Marathon split into two companies not long ago), Alon USA Energy (ALJ, who?) and Western Refining (WNR)) with favorable remarks.  He also believes that Devon Energy may be a good bet, it has slumped recently but announced it wants to switch more production to crude oil rather than beaten-down NatGas.

***

"He Said":

"There is nothing wrong with cutting spending that much...but the sequester is an ugly and dangerous way to do it."

House Speaker John Boehner in an op-ed with the Wall Street Journal.

[Ed. note:  There appears to be no other way to cut spending, so just do it.]

***

There is an interesting ad (Page 20, my edition) on a new ETF: it "Generates variable cash flow from selling covered calls which limits upside participation."  I take this to mean that you can buy this (ticker: GLDI, it is NOT tied to gold or other physical commodities) as a substitute for manual buying of stock and selling covered calls to gain income.  More information at:

credit-suisse.com/etn

***

Andrew Bary writes a bullish piece on Canadian oil producers Suncor Energy (SU) and Canadian Natural Resources (CNQ).

Suncor gets 60% of its energy output from the Alberta oil sands and is vertically integrated (has refineries) and is quite profitable now.  CNQ is having a little rougher time (no refineries), but apparently has a well regarded management team.

My comment:  Both of these are worth a look.

***

I skip Christopher C. Williams' bullish piece (Dick's Sporting Goods, DKS) and Jack Willoughby's bullish piece on ADT (ADT) because I have no feel and little interest on either company.

That does not mean YOU might want to read those pieces though...

Similarly, I skip Jack Hough's piece (Coach, COH and Michael Kors (KORS) as it is about women's handbags...  FYI, he thinks Coach might be a better play as it is a better value...

***

"Economic Beat" author Gene Epstein comes out beating up (sorry...) the entitlements and why no one can seem to rein them in...  He calls this one of the costliest Ponzi schemes ever.  Yes, he is right.  And just for fun he writes the below about dearly beloved, Nobel-Pize-winning Dr. Paul Krugman:

"Krugman's own views on the deficit seem to depend on which party is in power.  As recently as Feb. 1, 2005, when the deficit was running at 2.6% of GDP, he declared in a New York Times column that "the deficit is indeed a major problem."  In 2013, the deficit is expected to run at 5.3% of GDP, and according to Krugman, it's no longer much of a worry."

Epstein does not cite the source of the last clause above, but I would be pretty sure it is true.

Krugman talks out of both sides of his mouth...

***

Tiernan Ray ("Technology Week") writes a smart piece about the winners and losers in the "Next Smartphone War".

In the short-to-medium term he likes Qualcomm (who designed all the chips, with new but weak competition coming from Broadcom (BRCM), Nvidia (NVDA and Intel (INTC)) as well as Samsung Electronics (005930.Korea <-- it seems I mention Samsung every time I review Barron's) and Apple (AAPL).

He notes that among the handset makers, Apple and Samsung made 101% of the profits in the industry between them... (The others all lost money)

***

Jim McTague (D. C. Current) writes a fun piece on the hypocrisy of the Obama administration.  Obama says that he is for cutting spending, but is not.  He then goes on to paint a dystopian future (hitting soon!) if the Sequester happens, and that it is all the R-Team's fault!  The R-Team, you may recall, allowed Obama's taxes on the rich to go up in the recent Fiscal Cliff deal.  The Rs say no more taxes, but Obama will not even consider spending without more tax hikes...

Why should Obama change?  He has gotten his way with the R-Team to date.  Yet, sentiment may be shifting..., even many D-Teamers now favor some spending cuts.  <--- I'll believe THAT when I see it.

***

Steven M. Sears (in the second piece of "Weekday Trader") writes that traders are amassing options positions by betting against the price of GLD (that is, many think that the price of the gold ETF "GLD" will go down).  He also says that this is getting to be a popular trade, with sentiment rising on GLD going down...

My recommendation: stay away unless you know what you are doing!

***

David Englander writes a bullish piece on Global Power Equipment Group, which has two main divisions: a nuclear power plant service division (they help do maintenance on reactors) and  their Braden division, which supplies natural gas turbine components (to GE, and it looks like to Siemens as well).  This stock has moved from roughly $7.00 (2009) to $30 (2011) and is down to $16.49 now because of recent disappointments.

But, he writes that things are actually looking good for GPLW.  Maybe so.

***

Alexander Eule writes this weekend's "CEO Spotlight", he discusses the career (and current prospects of VFCorp. (VFC)) under CEO Eric Wiseman.

As is typical of the column, the CEO (Wiseman in this case) has an interesting story.   He also has expanded VF from a mostly jeans company to a company with many other brands, and the stock price has more than tripled off its 2009 lows.

***

"Other Voices" is written by Michael Taube, who writes that Canadian model is not the panacea for the USA.  WHile Canada can teach us some good things about fiscal prudence and good governance (yes and yes), they fall short of us because they do not properly utilize the free markets we have here, and they ought to remove various barriers to trade.  Plus, they are more Socialist than we are...

***

Editor Thomas Donlan writes of the dangers of central banks, over-leveraging and high levels of debt in general.  Most of his column analyzes a recent book (A. Admati and M. Hellwig, The Bankers' New Clothes, Princeton University Press) in which the authors describe in great detail these various perils.

Yes, of course our high levels of debt are dangerous.  But, Donlan is doing us all a favor by showing that even the academics are worried about it.

Donlan finishes by bring in William Shakespeare by noting that Polonius told his son (and we used to be taught that in English class) "Neither a borrower nor a lender be."  But no one seems to care about such and old notion...  Polonius then went on: "loan oft losess both itself and friend, and borrowing dulls the edge of husbandry."

Bravo, Mr. Donlan!

***

The cover of the market week section had two nice little gems: 

"Mr. Barron" driving his Barronsmobile is quoted, "You can call it the sequester, or call it 'chicken.'  Either way, I'm buckled up for Friday.", and a note saying that higher gasoline prices are approaching the levels where a stock market wobble has happened in the past...

Vito J, Racanelli notes stocks were little changed last week (as was the week before: little changed), but offered up a nice remark: "Hedge-fund managers, for example, continue to underperform, up only 3% this year, according to Goldman Sachs..."  Hah!  Racanelli also tells the story of Titan International's CEO Maurice Taylor's war of words with France, already described in great detail at Zero Hedge last week.

"Asian Trader" author (this week) David Winning writes that Australia's natural gas producers have a nice future ahead, BIG deposits, BIG infrastructure being built to serve China and of course the near-certainty that China will buy big in coming years.  All of his picks are Australian companies though...

Jonathan Buck ("European Trader") writes that despite the UK's downgrade by Moody's does not mean that there are not good stocks there (as many of them export so are not as exposed to the UK pound's recent weakness).  He likes defense giant BAE Systems (BAESY) and ad company WPP (WPPGY).

"Emerging Markets" author Ben Levisohn writes that there has been a decline of investor interest in emerging market debt, and some losses as well.  While I am interested in making income, emerging market debt is not for me...

"Commodities Corner" is by Alexandra Wexler this week and is about cotton and China.  She brings in two experts who say a combination of increased Chinese importing (despite large inventories... of low quality cotton!) and less planting this year of cotton in the US could make a nice trade.  I do not follow cotton, so I would have no idea...

Michael Aneiro ("Current Yield") writes about the Federal Reserve's new openness...  Yes, Bernanke talks to us more, but there is more dissent that comes out from various Fed members.  Aneiro believes that this may be deliberate, that the Fed is telling us that they are listening, that everything is OK, but you may want to start planning ahead...  No imminent changes though.  Still, you might want to think ahead...

The Classifieds this week offer up the Wyoming oil well again (www.2bpd.net) as well as an ad offering to take your company public in Europe (contact brad@ipoeu.com).

Insider trading continues this week with Tns Inc (TNS), Precision Cast Parts (PCP), Stanley Black & Decker (SWK), American Express (AXP), Mattel (MAT) all having insider sales of over $30 million (my arbitrary level indicating large insider trading).

Gold fell last week, but the miners (Barron's Gold Mining Index) are down even more.  At some point, some gold miners may be a great little play.  But not for me, at least not now.

JUST in the nick of time, the Mighty Peruvian Sol is down about 0.75% (3/4ths of a percent).  We leave for Peru on the 27th, so I will get my haircut for slightly cheaper than before, but that also means no Barron's reviews for a couple of weeks...

Verdict: Yes, even though my review might be late for many of you, this is a good issue!  Remember that I will try to review the important income-related MLP Cover Story in the next day or two.
***

On the other hand, I have a couple of ideas for stories from Peru while I am there...

Review of Barron's -- Dated 18 February 2013

For the second time in a month, the blogosphere has prominently featured the cover of Barron's, this week Zero Hedge put up an article noting that Barron's Cover Story features a picture of President Obama with the title "Follow Me: We Can be Like Greece".  Most of my readers are from Zero Hedge and do not need the link, but this may very well serve some of you:

http://www.zerohedge.com/news/2013-02-17/all-hope-and-change-roads-lead-greece

I still had not been able to procure Barron's (as of 2:00 PM Sunday) as their distribution here in Miami is now very poor, I live in a wealthy suburb, and NO ONE here in town carries it anymore.  I had to drive to MIA (the airport), and yet I still had to search for it only to find it at the 3rd newsstand I went to (hint: you won't find it at NewsLink, try Hudson News instead).

Nonetheless, with such a promising looking story on the cover, I felt the need to go and fetch it, read it (as almost every issue has interesting gems in there somewhere) and write up my review.

Please recall that I only read and write about things that interest me, or occasionally of interest (perhaps) to the larger community if it IS boring for me...

***

Yes We Can!  And probably will at some point be like Greece...  Author and economist Gene Epstein, who has tended to be a font of common sense (even though he is a self-admitted economist) writes the Cover Story.  It is alarming and damn ought to be!  I am pleased that Barron's and Epstein decided to ring the bell on this urgent issue that the overwhelming majority of people in our country choose to ignore, it is to their great credit, and I applaud.

Epstein starts his article:

"In his State of the Union speech last Tuesday, President Obama concluded that "the State of the Union is stronger."  The big question is: stronger than what?  Federal debt is a record $12.2 trillion [Ed. Note: ?, the debt calculator at the top of my blog says $16.4 trillion, but he may be using different numbers], or 76% of the nation's output of goods and services.  While that's still well below Greece's 153%, we're steadily headed in the wrong direction."

He then immediately goes on to note that our debt could reach that 153% by 2035...  [Why do I feel that he is optimistic?]  And the REAL problems would then start: depression and an unemployment rate of 20%.  The CBO (and many, many, many, many others) have been warning for many years of this problem, high deficits leading to an unsustainable debt.

More Epstein, writing more common sense:

"This problem can't be solved by asking the rich to pay a little more, despite what the president says.  In fact, Barron's calculates that immediately increasing the marginal rate to 50% on the top 1% of the country's earners would bring in $500 billion over the next 10 years.  This would barely dent the country's debt load, which would then be $20 trillion, and do little to forestall a financial crisis."

There is a handy graph (Barron's is pretty good at providing handy graphs when they are most needed) that shows two vertical scales (right is percentage of retired people (gray shading, taking us from some 13% now to about 21% by 2043) and left scale is Debt/GDP, rising from some 40% now to 200% in 2043).  For me,  drawing graphs that far into the future (2043?) is very speculative -- except for the demographics, I am OK with the graph there: "demographics is destiny" said someone.  There are three "curves", the CBO estimate shows our Debt/GDP at some 215% (2043), another curve assumes a 50% tax rate on the wealthy (top 1%), that ration declines to 210%.  The third curve even adds in rolls in taking away the Bush tax cuts (to everyone else NOT in the top 1%), taking that Debt/GDP to about 200%.  Big f***ing deal!  Epstein is right in his comment quoted above, raising taxes on the rich essentially does nothing!

It's the spending, stupid!

(The above is directed at our "esteemed" elected officials in Washington, DC as well as their handlers the banksters and lobbyists...)

Epstein concludes (although these are my words not his) that we will have to drastically cut spending now or renege on our entitlement promises to the elderly in the future (and both are likely IMO).

***

Jim McTague follows Epstein's article with one of his own.  McTague is an expert on the machinations of what goes on re Congress and the Administration.  His piece "A Dangerous Game of Chicken?" examines the likelihood of "sequestration" (automatic spending cuts) versus various proposals going around Congress.  He discusses the three main players: ("The Loathsome") Sen. Harry Reid, Speaker John Boehner and (Republican) Minority Leader Sen. Mitch McConnell.  There is at least one proposal going around (like a contagious disease) put out by Sen. Reid, but it apparently is disliked by both the R-Team as well as the D-Team, and so has little chance of passage...

McTague concludes: "The markets seem to favor sequestration because it would mean some spending cuts.  At least it's a start."

Yes, it is a start.  And at this point, I would agree with the markets.  Our leaders have failed us (duh), again.  An automatic across-the-board set of cuts (exempting the entitlements however) is better than anything else likely to come from DC.

***

Randall W. Forsyth is again in Alan Abelson's "briar patch" and first informs us that Swedish researchers have found oxazepam (a benzodiazepine closely related to Valium and in the same family as Xanax) in the water near Uppsala, Sweden!  The researchers then went on to find out that perch (a small fish) swimming in those waters there are "much greedier and more efficient feeders" and were more likely to go off on their own (leaving their fellow schoolmates behind).  He draws a parallel with Wall Streeters...

But, it is liquidity (not anti-anxiety drugs), in extra-large helpings, he believes that help explain the brash behavior in the deal-making sector last week: Heinz being acquired by Berkshire Hathaway (tickers BRKA and BRKB), Comcast's (CMCSA) takeover of the "other 49%" of NBC it does not own (from GE), Dell's (DELL) proposed leveraged buyout by Michael Dell (see my notes on Ben Stein's negative view of insiders making money at shareholder expense further down), the airline merger between American ((AAMRQ) and US Air, and the merger of Liberty Global (LBTYA) and Virgin Media (VMED), the last one I had missed on CNBS somehow during the week...  The above total: approximately $95.7 billion last week alone (and $160 billion in M & A for 2013 so far, a very fast start).

Forsyth goes on to write that the disconnect between Wall Street and Main Street is as wide, or wider than ever.  From falling sales alarming WalMart (WMT) to the sequestration cuts (estimated at $85 billion), there is a lot to be concerned about...

***

Kopin Tan ("Streetwise") lets us in on a couple of other deals.  Nasdaq OMX GRoup (NDAQ) is apparently in play.  And IPOs have raised some $6.03 billion (35% better than the average since 2001) so far this year.

[Ed. Note:  This will not end well.]

***

In "Review and Preview" there is a short piece of the dangers in investing in hedge funds.  Like we do not know that?  Things to look out for: lack of transparency, an inadequate track record, poor risk management, lack of due diligence, hard-to-understand strategies, and many more.  My advice?  Only risk your "play money" (money you can lose 100% of and not worry about it) with hedge funds.

"He Said":

"[When] anyone in the investment community calls something a certainty...[he's] extremely arrogant or sanctimonious.  Or..., once in a while, he's right."

William Ackman, on his short position in Herbalife.

William Waitzman writes a short piece on there being PLENTY more money for deal making than we have seen so far...

***

Andrew Bary writes a BEARISH piece on Linn Energy (LINE).  LINE has a big yield (equivalent) of 8%, but because of derivatives, he thinks cash flow may be overstated...  He mentions LINE peers (but does not say to buy them) Apache (APA), Devon Energy (DVN) and Suncor Energy (SU).  I think his tone re LINE and its peers is clear enough though...

***

Jack Hough is back at his pattern of picking four companies to consider buying, this week these would be companies in the smartphone sector.  NOT Apple (AAPL) though!  He believes that Apple's margins may come down and he suggests Samsung Electronics (005930.Korea -- hey, I have this one memorized now!), Broadcom (BRCM), Vodafone (VOD) and OmniVision Technologies (OVTI, they make camera chips for the smartphones) as better bets.

***

"Technology Week" author Tiernan Ray writes that technology REITs have not been doing well lately and that companies that are viewed similarly (Rackspace Hosting (RAX) and Equinix (EQIX)) are unloved and overvalued.

***

OK..., it had to happen sometime...  Author J. R. Brandstrader writes up a piece on "Goldman Sachs Small/Mid Cap Growth Fund".  The fund's managers seek out small companies overlooked by the market's rally (really, no one else does that?).  One of their Top 10 holdings is the above just-mentioned Rackspace Holdings (RAX)!  LOL!  If it's Goldman Sachs, well they may be the smartest guys in the room, but I would not trust them with any of my money...

***

"Weekday Trader" author Teresa Rivas writes a bullish note on Parker-Hannifin (PH), a company I have known and liked for many years.  They make various nitty-gritty items like hoses, connectors, valves, etc.  In may cases they have little competition and they have excellent distribution (unlike Barron's...).

Disclosure: we have a small position in Parker-Hannifin.

***

Here's a Classified from this week:

www.2bpd.net, which is the website for an oilwell in Wyoming that is for sale, and produces, yes, two barrels per day...  Interested?  Lauranunes@cox.net or 619-985-5657.  I went to take a look, I do NOT know how to assess these opportunities, but it is an interesting peak at getting into the oil biz for $105,000.

***

Typically, when Barron's does an Interview, it is interesting especially if it involves interviewees in foreign places like Switzerland...  But, for me, ZZZZZ.  Sorry, Mr. Strauss.  Not much meat...

***

PENTA (their column oriented for rich people doing things other than investing) says they may dump the Charitable Tax Deduction...

***

Ben Stein, smart investment commentator and actor, writes ("Other Voices", Barron's column by non-Barron's people) that Michael Dell (and more generally other insiders) make money at shareholder expense when there are leveraged buy-outs and similar.  Thank you, Mr. Stein.  Too true.  Ben Stein:

     "One of the smartest businessmen I know, a former high executive of a publicly held entertainment company, once asked me: "What is the first duty of a corporate CEO?"
     "Well, to maximize the utility of the shareholders," I naively answered.
     "You poor child," he said.  "no, the CEO's first duty is to make himself as rich as he can, as fast as he can, with the shareholders' money."  I'm sad to say that decades of observation have confirmed that his conclusion is correct all too often."

Well, there it is.  A confirmed observation that there are LOTS of sleazy CEOs out there, we may have thought we KNEW that, but here is Ben Stein, a connected and apparently decent man (AFAIK), tells us.

***

Editor Thomas Donlan writes that the new proposal by our president to raise the minimum wage to $9.00 per hour is "A Step in the Wrong Direction".

Yes, I thought that this was settled decades ago, that raising the minimum wage will discourage entry-level employment for job-seekers...  Silly me!

***

Barron's has a Special Section this weekend on America's top 1000 financial advisors (as in persons), they are ranked by state, not nationally.  I mention two, kind of at random.

Ric Edelman is No. One (Virginia), his company accepts small customers and apparently will accept even smaller customers (just $5000) when his Edelman Online starts up.

Bud King is No. One (Missouri).  Bud King: "There is a significant disconnect between the way business owners see the economy and the way market analysts do.  Market analysts appear to be particularly more optimistic at this point in time."

***

In the Market Week Section, on the cover, is ol' "Mr. Barron" himself, peering through a telescope into the night-time sky...  "You can't fool me, that's no meteor falling.  It's the price of gold."

Since very little happened in the stock market last week (on very low volume), I skip Mr. Racanelli's column.

Assif Shameen ("Asian Trader") writes that Indonesia's market has hit an all time high.  He brings ina couple of experts to tell us why Indonesia is a buy.  Interested?  There are two easy ETFs: Market Vectors Indonesia (IDX) and Market Vectors Indonesia Small Cap (IDXJ).

India's stock market has done very well lately as well, Ben Levisohn ("Emerging Markets") writes.  Even with bad economic data...  Two of his contacts say (in essence) to be careful...

"European Trader" author Jonathan Buck writes about Italy's upcoming elections later this month.  He says that a Belusconi ("rightist", my word) win might be destabilizing to their stock market.  A big win by left-leaning Mr. Bersani would be better.  Buck does not say WHY Berlusconi would be bad for Italian stocks (perhaps because he does not support Mario Monti's reforms, as Mr. Bersani does?).

Owen Fletcher ("Commodities Corner") writes that corn may go down in price, due to (at least the view so far) a likely big crop as well as lower ethanol and export demand.  [Ed. Note: A quick review of the DJ-UBS Grains Index (Page M46, my edition) shows grain prices are off some 20% of their recent (since late 2012) highs]

"Current Yield" author Michael Aneiro writes of Yet Another Risk in the bond markets...  This week's edition is "Buyout Risk", in which bonds from a company with them already issued may then issue a LOT MORE of them after the company gets bought out, merges, whatever.  More debt on more debt.  Good catch, Mr. Aneiro!

There have been some insiders selling lately.  Five Below Inc (who?, FIVE) had $107 million dollars worth of stock sold by insiders...  Other companies having $30 million or more sold off include American Express (AXP), Kellogg (K), Nexstar Broadcasting (who?, NXST), Rockwell Automation (ROK), Fiserv Inc.(FISV), and Gilead Sciences (GILD).

On the second last "real page" (as the back cover is always an advertisement) gold is always mentioned.  I usually do not refer to it, as I (and MANY others) cover gold elsewhere.  This weekend, however, we learn that the Odious (I used the term Loathsome re Senator Reid above) George Soros sold $100 million of gold (paper gold?) last week, as gold sank briefly below $1600.

The Mighty Peruvian Sol, unstoppable this weekend, rose some 0.46% (small) against the US$.  Of course it is now going up again, as I head to Peru again soon.  But a $5.00 haircut in Peru is better than a $25 one here...

***

My verdict?  If you can get your hands on a copy easier than I could, sure, buy it!  The Cover Story alone is worth it.

Review of Barron's -- Dated 4 February 2013

Here in the town where I live, it is often not possible to get Barron's at the only store in town which carries it (a local distribution matter I believe).  So while the new edition did not come until today (last week's never came at all), well I can now pass along my remarks.

First, "Mish" already beat to one important thing!  See below this week's cover, the second link is to Mish's new blog piece about how this bullish piece is disturbing...

(link to above picture)

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNLsUPwctJ0XNN_ChbVavpAWY9GQU8LjnnZs2QNPX0W7nQgwANEN9OgIFG0m1LgXhpr_pqRwkhRP13LMBj4SedrOB5XrE93xMpPZyk3oK1JYX3BD83saxwhrckfzhV22PgkfeUJe5pNBXK/s400/Barrons+Cover.png

Link to Mish's piece of today:

http://globaleconomicanalysis.blogspot.com/2013/02/extreme-sentiment-barrons-cover-get.html

In the just above link, Mish quotes Cover Story author Andrew Bary:

The party is far from over. The early-year rally that on Friday took the Dow Jones Industrial Average to within 1% of its record high, set in 2007, could have a lot further to run. For starters, stocks aren't expensive. The Standard & Poor's 500 index is valued at about 14 times estimated 2013 profits and the Dow fetches less than 13 times projected 2013 earnings. At the market peak in 2007, the Dow traded for 16 times forward earnings. Given ultralow interest rates, the market multiple has room to expand even if earnings growth remains modest. 

There's a huge amount of money that could shift into stocks because individuals until recently have favored bonds over equities, based on mutual-fund flow data. "If there is a great rotation going on from bonds to stocks, we may be only in the top of the first inning," says Jason Trennert, chief investment strategist at Strategas Research Partners in New York. Trennert cites the TINA -- or "there is no alternative" -- factor, as yield-starved investors move into stocks.  

Read more at http://globaleconomicanalysis.blogspot.com/2013/02/extreme-sentiment-barrons-cover-get.html#KW5yYXH6yZ6ucQ6f.99 

Mish has an excellent blog, he cranks out 2 - 3 pieces per day.  I read almost everything he writes, and he is clearly knowledgeable.  I highly recommend his blog to everyone.

Mish is now calling a top in stocks, we are at least "close enough" so that he sees this as "the top".  He has a record (see his article) for calling the top in housing as well.

***

But, let me examine some more of Andrew Bary's piece on my own.  Bary brings in experts to cite that because of the low yields in bonds, caution by burned investors (2008 - 2009) and the popularity of alternative investments (private equity, real estate, commodities) that stocks have been neglected.  He cites some interesting examples, such as Yale University (and other big university endowments) and pension funds are light on stocks, Yale has only 6% of its portfolio in US stocks (14% total equities, including foreign stocks).

Bary notes that hedge fund managers UNDERPERFORMED the S&P 500 by some 10% (ha ha ha!) in 2012.  Are hedge fund managers worth that 2% + 20%?  And after 2012, the S&P 500 is up over 6% THIS YEAR.

He brings in professional investor commentators (Jim Paulsen, Jason Trennert and Stephen Auth) who make the case for a rising stock market.  Bary also presents table that shows while this bull run from 2009 HAS been pretty good, there have been OTHER bull markets that have beaten this in the past 50 years.  Well, yes there have been other bull markets that have beaten this one on the past 50 years, THREE of them.

Bary writes "bullishly" (not specifically recommending the following, but coming pretty close) about ExxonMobil (ticker XOM), Chevron (CVX), JPMorgan Chase (JPM), Citigroup (C), MetLife (MET), Wells Fargo (WFC), Microsoft (MSFT), Cisco Systems (CSCO) and Intel (INTC) among large cap companies.  He likes the two oil companies based on prospects for higher oil prices, and he likes the others based low P/Es.

My take?  Although my holdings of stocks are way down from 15 - 20 years ago, I think I will take some profits from this run.  Who will I most consider selling?  Parts of my holdings of:

Caterpillar (CAT, up 19% since October 2007, with a 2.1% yield)
IBM (IBM, up 71% since October 2007, 1.7% yield)

Others too...  "Bulls make money, bears make money, pigs get slaughtered."

***

Before I go with this weekend's Barron's, please allow me a comment or two on LAST WEEK'S.  The Cover Story last week was Kopin Tan's piece "Made in America".  He makes the case that manufacturing is coming back to America big time.  US companies Caterpillar, Apple (AAPL), Ford (F), General Electric (GE) and Whirlpool (WHR) are making more here in the USA.  And that foreign companies Toyota (TM), Airbus SAS and Samsung Electronics (005930.Korea) will be building plants here in the US.  Samsung will spend $4 billion for a semiconductor plant in Texas.

"Barron's" identified eight companies that should prosper here according to Tan.  I would guess that since he chose these eight from eight different industries, that this list is just "representative", and if he is right about a manufacturing renaissance in the USA, then there are many others that could be just as good.

Southwestern Energy (SWN, low cost NatGas producer)
LyondellBasel (LYB, chemical company with low cost NatGas as feedstock)
Nucor (NUE, cheap energy means cheap recycled steel)
Dover (DOV, makes lots of equipment for manufacturers)
Calpine (CPN, large independent electricity producer using NatGas)
CF Industries (CF, fertilizer, NatGas is again the feedstock)
Williams (WMB, owns energy product pipelines)
Union Pacific (UNP, big railroad exposed to manufacturing)

The theme Mr. Tan pushes is that abundant and cheap NatGas will bring us lots of jobs and lots of manufacturing.

***

Alan Abelson notes that Super Bowl tickets in the aftermarket now run some $3398 for the same seat that sold for some $2990 last year (up 13.6%, roughly the same as the S&P 500!) and that hotels and rental cars are 400% + higher than normal there in New Orleans...  (Disclosure: the Super Bowl is about to start, I have the TV on a low rumble in the background as I write...).  Abelson:

"So the next time you hear an economist bellyaching that there's no inflation, ask with proper incredulity if he ever bothered to glance at the trajectory of the price of a Super Bowl ticket."

Abelson goes on to finish with an extended look at recent numbers.  In short, there seems to be slow, very slow, growth in economic indicators.  Very disappointing vs. past recoveries.

***

"Streetwise" author Kopin Tan mentions Jim Paulsen again (what, did he by Barron's offices last week?) who says that cyclical stock beta has come down a bit while defensive stock beta has gone up.  Paulsen:

"You might say risk isn't as risky, and safe isn't as safe."

If stocks are heading up, in other words, cyclical may be the way to go.

***

Reshma Kapadia writes a bullish piece on Tata Motors, the owner of Jaguar and Land Rover.  Tata is perhaps also well known as the Indian car maker that makes the Nano, the world's cheapest car (of, Reshma, you did not mention its cost!).

Jaguar and Land Rover were owned by Ford, but were both losing money.  Tata has apparently turned them around, cutting costs and selling more cars.  While Tata's stock may not rise much this year (she writes), many are convinced that there is good value in this company.  They are selling more luxury cars in China...

***

Alexander Eule writes an interesting (and bullish) article on SanDisk (SNDK).  SNDK's flash drives are now being bought in larger quantity by Apple (who wants to lessen their dependence on arch-rival Samsung).  Flash drive technology ("NAND") has been coming down in cost for years, but it llooks like SNDK and their rivals Samsung, Micron (U) and SK Hynix (0660.Korea). SNDK is the ONLY pure play though.

Flash drives are becoming bigger (higher capacity), I now own one with a 128 gigabyte capacity, and they are becoming more popular more popular in ultrabooks (very light laptops) as they are light and more energy-efficient than hard drives.  Here is the current market share in the flash drive market share of the leaders:

Samsung: 40%
SanDisk and SanDisk/Toshiba: 28%
Micron: 20%
SK Hynix: 12%

(Some of my thumb drives come from CHINA, I wonder if China makes the "NAND" technology, or do they just buy the chips from the above four and assemble the rest there in China...).

***

David Englander writes a bullish piece on GulfMark Offshore (GLF), a provider of boats needed by offshore drillers.  Offshore drillers have a large need for such "work boats" -- I briefly worked in the oilfield services businesses and had the "pleasure" of riding work boats to and from offshore rigs --, and GLF provides a lot of various specialized boats, and has the youngest and highest quality fleet.  GLF has fleets in the North Sea and Southeast Asia as well as the Americas.

Hey, maybe so!  These boats ARE vital to getting the work (offshore drilling) done.

***

Tiernan Ray ("Technology Week") writes about Amazon.com (AMZN).  The stock has performed very well, through thick and thin (for example, it has not gotten beaten lately like Apple when missing a number...).  Amazon does not make much money (lost money in 2012), but its future looks good as they are becoming more of an "infrastructure retailer" ought to serve them well in the future.  Amazon appears to be not followed as much as companies like Google, Apple, Facebook, and Microsoft...

***

Jim McTague ("D. C. Current") writes about "the smartest guy in American politics,"...  And who IS this "smartest guy"?  Governor Jerry Brown!  And who called him the smartest guy?  Vice President Joe Biden!

It seems that Gov. Brown is worried about the costs of Obamacare, more regulations, and cutbacks in federal government spending...

Well, California...  You got what you asked for!  President Obama and Governor Brown!

***

Gene Epstein ("Economic Beat") writes that there has been confusion in spending on defense.  There were reports that defense would be cut 22%, that it was already cut, etc.  Well, no.  The actual cut seems to have been 3.1%, and that helped push GDP into that -0.1% last quarter.

The article is a bit confusing because what the government publishes is confusing.  But, Epstein points to some small, more recent gains in the private sector and a cut in government employment.

All of this fits two memes I have long noted: that government spending is a huge yet slippery concept and that our recovery since the Great Recession has been very slow compared to most recoveries in the past from recessions.

***

PENTA ("Trusted advice  for families with $5 million or more") editor Richard C. Morais writes about Cartier watches.  They will be releasing 113 new models this year.  Price range: $4400 - $1.8 Million.  Actually, the article is interesting, particularly if you like watches or want to see how the 1% in NYC shop...

***

"Other Voices" (Barron's occasional column written by people not employed by them) is written by Milton Ezrati.  The author hopes to show that the Fed can help prevent booms & busts by "sterilizing" excess inflows and outflows of liquidity from overseas.  I am oversimplifying..., but it is the nature of my Reviews to simplify.

The Fed ought to involve itself EVEN MORE in economic policy?  Ahh...  Ahh, no, IMO.

***

Editor Thomas Donlan writes about immigration.  He notes that Republicans lost big in the Hispanic vote last November, and that the R-Team is trying to figure out a policy that will work for them.  Bipartisan policy in the decades to date has been something of a blend pf benign neglect and hypocrisy...  We talk tough but do nothing serious.  Onyango Obama (the president's uncle) received deportation orders in 1986 and 1989, and lost an appeal in 1992, yet is still here...

Donlan thinks we should let in only those who would benefit the USA as a whole.  Well, yes, OK.  But he offers few specifics...

Immigration reform is a tough and difficult issue, but at some point we have to resolve this in a positive manner, that is, HAVE an explicit policy and stick to it.

***

Barron's has been running their "Roundtable" in three parts.  I covered Part I two weeks ago.  Since I was unable to review Barron's last week, I will look at the comments and stock picks of the investment pros for both weeks now.

Last week featured Abby Joseph Cohen, Scott Black, Oscar Schafer and Brian Rogers.  As I do not want to be writing forever while lsitening to the Super Bowl, I will just list their picks and then move on to this week's participants:

Abby Joseph Cohen

Bristol-Myers Squibb (BMY)
Mosaic Co. (MOS)
Expeditors Int'l of Washington (EXPD)
Hankook Tire Worldwide (000240.Korea)  <---  !
Noble Energy (NBL)

Hankook makes me feel good that we are working with KOREAN auto parts companies...

Brian Rogers

PNC Financial Servs (PNC)
Kohl's (KSS)
Apache (APA)
Avon Products (AVP)
Legg Mason (LM)
General Electric (GE)

Hey!  It's Half Time at the Super Bowl, and HALF of the Superdome just lost power!  Call GE!

Oscar Schafer

Hertz Global Holdings (HTZ)
Lazard (LAZ)
Western Union (WU)
Owens Corning (OC)
Quiksilver (ZQK)
Verint Systems (VRNT)

Scott Black

Qualcomm (QCOM)
McKesson (MCK)
Ensco (ESV)
Medical Properties Trust (MPW)
Titan Int'l (TWI)

THIS weekend's pros and picks (remember, the conference was held about three weeks ago in ONE DAY):

Bill Gross (who says long-term bonds are overpriced, but sees no bubble in short-term bonds)

SPDR Gold Trust (GLD)  <--- I would stick with the real physical gold
Pimco Total Return (BOND)  <--- talking his book?  Bonds?
BlackRock Build America Bond Trust (BBN)
Pimco Corporate and Income Opportunity (PTY) <--- talking his book?

Meryl Witmer

Spectrum Brands (SPB)
Chicago Bridge & Iron (CBI)
Tribune Co. (TRBAA)

(Where's Tronox?)

***

In the Market Week section, Vito J. Racanelli let us know that stocks are up 6% in January...

Assif Shameen ("Asian Trader") notes that Tokyo's Nikkei is up 20% (in Yen) while the Yen has fallen 14% vs. the dollar (since late November).  There is an ETF that buys Japanese stocks yet hedges out the Yen exposure (the problem is that I could not find the ticker just now on Google, but it is advertised all the time on CNBC...).  He is bullish on Japan.

Ben Levisohn ("Emerging Markets") writes that although Brazil gained 101% last year (less than the S&P 500) that he expects this year to underperform as well.  Why?  Government meddling.  Again.  Example?  Petrobras (PBR, which ought to be a great stock, I know someone who sells capital goods to PBR, he tells me that the company itself is excellent with good engineers) is being meddled with, again.

"European Trader" author Jonathan Buck writes about the two flavors of Heineken...  The holding company is at a larger than normal 17% vs. Heineken itself.

Alexandra Wexler ("Commodities Corner") writes that sugar may be affected by changes in the Brazilian and US markets for ethanol.  Our EPA just mandated that more "advanced" ethanol must be used in gasoline/ethanol blends.  And US corn ethanol does not count as "advanced", perhaps because ethanol from sugar burns more cleanly.

Michael Aneiro ("Current Yield") writes that even bond gurus are having trouble finding worthwhile bond investments.  One sector that seems to be gaining traction is the corporate bonds sector, this would include junk bonds.  Bonds from companies in the housing and energy sectors are getting a bid.  Aneiro notes that for the first time in a while the yield on the 10-Year note is (a hair over) 2%.

Multiple insiders sold shares in several companies, but only the NINE insiders at American Express (AXP) sold a TOTAL of over $30 million.

The Mighty Peruvian Sol finally has declined vs. the US dollar due (I presume) to the Peruvian Central Bank weakening its currency, last week it lost 1.0%.

***

Verdict: I am really curious to see if Mish is right about the Barron's cover being a contrary indicator!