Information is like food. If you overindulge on information then your mind will become filled with a million words that you’ll never have the time or energy to fully digest. Recently I went through an information diet. I have cut half my intake of reading (from both books and internet) and now read quality content vs. junk information.
That said, here are – in no particular order – my 4 favorite pieces of what is left of my RSS feed this week.
EVERYBODY REALIZES THEY ARE LUCKY RIGHT?
Sam, from Financial Samurai offers provoking thoughts on personal finance related topics.
In one of his posts from this past week he shares with his community some takeaways from a chart published by the Economist (here on the left).
Math and charts mean nothing without a critical eye and the ability to connect them with our own experience. Sam offers several takeaways from this chart (that you can find here).
Here is one short paragraph that I particularly enjoyed from the whole post. Referring to Americans and habitants from other english speaking countries:
There is so much opportunity out there. Imagine if we tried a little bit harder than the standard 40 hours a week, saved more money until it begins to hurt every month, and invested smartly. Surely we could reach $1 million in gross earnings before 19.3 years no problem!
BCA RESEARCH U.S. EQUITY STRATEGY 2015 HIGH CONVICTION CALLS
Fundamentals matter. I do not trade on fundamentals, but I keep in high regard calls from trusted sources – BCA Research is one of them.
If you are a position trader, in those occurrences where the fundamentals support the technical factors you have a powerful cocktail, especially when it comes to hold on to a position for several weeks and months.
Each year in January, our U.S. Equity Strategy publishes a list of their top ten high conviction calls for the year ahead. The objective is to highlight calls with staying power, rather than simply chasing short-term momentum.
Here follows a bullet point list of BCA 2015 overweight/underweight list. To find more about these calls go to their blog here.
- Health Care Facilities – Overweight
- Hypermarkets – Overweight
- Financial – Overweight
- Home building – Overweight
- Software – Overweight
- Construction & Engineering – Overweight
- Semiconductors – Underweight
- Industrial Machinery – Underweight
- Auto Components – Underweight
- Small Caps Vs. Large Caps
Next week I will look into some equity charts (in 2015 I’m going to talk more and more about equities in this blog) starting from the ideas provided by BCA.
Let’s see if there are technical setups that reflect the weights given by BCA Research US equity Strategies. For the time being, I’ll keep you posted.
THERE WAS A PLACE FOR DREAMERS
In the imagination of traders like me that never had the opportunity to trade from the pit, the floor has represented a kind of special place – a parallel world to remind us that markets are made by humans.
The floor was the place for dreamers. It was the place for entrepreneurs, because that’s what independent traders really were. It was a place where a guy that never graduated from high school, but had his wits about him, and a high appetite for risk could make a living. Some even got rich.
The floor was a place for everyone and anyone. It was like America, democratic. All walks of life. All you needed was enough money to rent a seat and you were a trader. No special qualification or certification. No degree. Sure, there were cliques. It was clubby. Not everyone was ethical. Not everyone liked everyone else. There were fights. But, the floor reminds me of startup companies today.
From The End of The Pits
INVESTING INVOLVES BUYING, SELLING AND ALSO HOLDING CASH FOR TIMES OF LOW MARKET SENTIMENT
Chris, founder of Financial Orbit is one of the most prolific investment bloggers on the web that I know. Recently he has become also Yahoo Finance contributor. Here is one of his posts from this past week that makes me reconsider my short and medium term bias in US equities.
No indicator is flawless, but a collapse in the bull-bear spread shows that some of the realities I see in the global economy are starting to impact the opinions and investment sentiment of US investors who – quite rightly – may initially ignore developments ‘over there’ in the Eurozone given America’s far superior growth over recent years.
From my perspective 2015 is going to see a volatile market, which offers far more compelling conditions to the average stock picker or active manager. A fall in market sentiment can only be good news for this view.