Must Read

Please read the article corresponding to the link below. It is a very interesting research piece done by Harry Dent.

Who is Harry Dent? "
Dent received his B.A. from the University of South Carolina, where he graduated #1 in his class. He earned an MBA from the Harvard Business School as a Baker Scholar.^{[citation needed]}

Dent is the Founder of HS Dent Investment Management, an investment firm based in Tampa, Florida that advises the Dent Strategic Portfolio Fund mutual fund. Dent is also the president and founder of the H.S. Dent Foundation and H.S. Dent Publishing.

Dent writes an economic newsletter that reviews the economy in the US and around the world through demographic trends focusing on predictable consumer spending patterns, as well as financial markets, and has written seven books, of which two recent ones have been bestsellers"-wikipedia

http://seekingalpha.com/article/223886-harry-dent-s-outlook-on-demographics-debt-and-deflation

I really think you should check out the article. It will help you build your repertoire of investment strategies and will give you another way to view the current macroeconomic situation.

Enjoy.

Cheers,
EZ

Virtual Portfolio Update

The Virtual Portfolio is now up 14.1%. Check the Virtual Portfolio Tab on top of the blog to get more detail on that.

Apple

Ladies and Gentlemen,

These are the times when being in stocks vs. funds or broad market indices pays off. These are the fruits of our labor; when a company with strong fundamentals like Apple, destroys earnings forecasts and surges 7% after hours. I recall blogging after Apple's 4Q earnings report, when they reported a loss, and told you all to stay the course with Apple, as short term issues wouldn't affect the long term story with Apple.

Apple reported 1Q results today with EPS of $13.87 vs estimates of $10.08. The year ago EPS number for this quarter was just $6.43. Overall, Apple sold 37 million iPhones and 15.4 million iPads during the quarter.

I look forward to updating the progress on the virtual portfolio tomorrow, taking into account Apple's rally tomorrow and Coach's (COH) impressive 6% gain today.

Cheers,
EZ

Stick around for valuation part 2: Precedent Transactions Analysis, now that I am done with recruiting for internships.

Tomorrow: Economic Data!

Hello everyone! Tomorrow there are 4 pieces of "market moving" economic data coming out. As I've mentioned before, this information can be found here.

The 4 bits of data are as follows:

1. Consumer Price Index
2. Housing Starts
3. Jobless Claims
4. Philadelphia Fed Survey

If the market moves higher (or lower) tomorrow, these could be part of the reason why.

On another note, tomorrow many large companies are reporting quarterly earnings. Some of them include: Bank of America, American Express, IBM, and Morgan Stanley. For information regarding earnings reports check out this link.

These earnings announcements may also move the markets. That's it for now, as I'm swamped with interviews and homework throughout this week and into next.

Look for me to pick back up in another week or so when things slow down.

Cheers,
EZ

Sorry...

Hello everyone! Sorry I've been MIA the past week. I have been studying and preparing for interviews which have consumed my life since Wednesday of last week. I will be back on the blogosphere as soon as this recruiting process is over. I hope you all are well and I look forward to constructing the next part in my Valuation series, Part 2: Precedent Transactions Analysis.

As of today, the virtual portfolio (VP) is up 7.7%. The S&P is up 6.4% in the same time period. The Dow is up 5.2% The Nasdaq is up 7.36%.

That's it for today. Stick with the BFB! (That's my take on being Jim Cramer)

But maybe I shouldn't try and emulate Cramer. Check this out: http://www.youtube.com/watch?v=gUkbdjetlY8

But really, he is a very smart guy. Everyone makes mistakes.

Cheers,
EZ

Earnings Season

Get ready for earnings season! Earnings season is when all of the companies begin to announce their quarterly earnings. Most people are expecting good corporate earnings for this most recent quarter. If this comes true, we should expect to see the market "pop" a little bit on the news.

I think that in the next few weeks/month, while earnings are being announced, good corporate earnings could easily overshadow the news in Europe (unless, of course, there is a meltdown). So always be on the lookout for when any companies in your portfolio are announcing their earnings, as you will want to know how your investments are doing.

Below is the link for the Bloomberg earnings calendar. Use this to monitor which companies report when, paying special attention to large companies whose earnings could move the markets.

http://www.bloomberg.com/apps/ecal?c=US

For example, JP Morgan Chase reports on Friday, the 13th. This earnings release could foreshadow how banks are doing, and has the power to influence how the stock market trades on Friday and in the following week(s).

I'm currently studying for finance interviews, so I must leave you all with this only. Before I do, though, I'd like to share this chart:

It shows the historic and current P/E ratio of the S&P 500. Is it undervalued? Overvalued? I'm not really sure. Have a look and see what you think.

Cheers,
BFB

Make Sure To...

Make sure to have a look at Valuation Part 1: Comparable Companies Analysis. It's on the sidebar under January. Cheers!

-BFB

Virtual Portfolio Update

Today, I got rid of the ProShares Ultra Short S&P 500 ETF (SDS) from the virtual portfolio. I sold 500 shares at $18.59. I took a loss on this, but I expect the market to perform well in the next 1 1/2 - 2 months, so I wanted to cut my loss and transition that cash into something that will give me a nice return.

With the cash from the sale of SDS, I purchased UPRO. It is ProShares UltraPro S&P 500. It is a bullish 3x leverage ETF. So, if the S&P 500 is up 1%, then UPRO will be up 3%. Basically the inverse of SDS, except SDS was not 3x leveraged. Contrarily, if the S&P 500 is down 1%, UPRO will be down 3%.

 I like this chart. It is trading above its 50 day MA, and looks like it will make the 50/200 bullish cross soon. We see that it is in a nice uptrend, which we will be looking to take advantage of for the VP.

 -----------------------------------------------------------------------------------------------------------------

Here is the chart for SDS. Notice how ugly it is. Just had the 50/200 bearish cross, is now below its 50 day MA, and is clearly in a downtrend. Speaking strictly from a technical standpoint, I should not have bought it back when I started the VP. However, I was not looking at technicals, and wanted to show my readers how one could hedge a portfolio with an inverse ETF.



Glad SDS is gone!

-BFB