Sunday, February 16, 2014

Consumer Spending

I could not help but notice the restaurant and shopping mall parking lots were full this week. It has been a long time since I have seen this. I don’t know if consumer spending is up, but they are sure out in force.

I take this as good sign. I know that not everyone is back to work yet, but many companies are hiring so hopefully full employment will arrive soon. This of course means the Fed will stop the presses, but that is well understood, so no surprises.

Baskets of stocks have work well for me so this week I decide it was time to get some momentum players and I took initial positions is AMZN and TSLA. I wanted PCLN in the worst way to complete the trio, was hoping for a nice entry point but it was just not offered.

The largest basket of stocks I have ever pursued is the Cramer picks. For reference:
Cramer’s list of stock to own: GOOG,  GE, JCI, BAC, CIEN,  XLNX, AAPL, CAT, BA, JNJ, TJX
Cramer’s list of companies that he considered to be well managed: MMM, WFM, HON

I may not own the whole basket, having bought some poorly and getting stopped out during the recent stumble, but I have been left with a group of strong performers that I am fairly content with .

Continuing the review of Cramer picks, it is time to take a look at Apple, a company I should know well, having owned it, traded it and held it when I should have sold it. When the loss got out of control, I put it away, content to hold it until a comeback. Fortunately it has been recovering, but I still have a loss. Perhaps I will bring it out of hiding when I am back to even.

Apple is a California company was founded in 1977 by Steve Jobs, Steve Wozniak and Ronald Wayne. Its beginning was for the development of a different and easy-to-use personal computer. Apple had some success, developed a following then went through a decline that was almost fatal. It could have disappeared but it was resurrected. Their success has always been credited to Steve Jobs, whose passing has been a concern, but he placed the company in the hands of the capable Tim Cook. No doubt Tim Cook was a great choice, perhaps the best possible choice, but it has to be recognized that the visionary leadership is gone. This leadership brought forth personal computers that many are willing to pay a premium to own, the various iPods, iPads, iPhones, iTunes, iCloud and the successful full-service Apple Stores.
They now have a great lead and the products are still formable. I like to think it’s all about the apps which makes it hard not to favor their devices. They could stumble or be left in the dust if someone offers a better mousetrap, but with a huge amount of cash and capable business leadership they should at least be stable.

The period of trailblazing innovation by this company may be unrepeatable and it may never be a momentum stock again, but the near-term future of the stock should be solid as they focus on shareholder value, paying a reasonable dividend, buying back stock and not making mistakes.

What did I see in my weekend review?

The 10-yr Treasury yield
is 2.65 %
IBD (Investor Business Daily) is now Confirm Up Trend

Copernicus Systems: Long IMHO

Moneys Flows:  all portfolios positive and finally one now trending upward….markedly so.

HAIN -2.10 %

Momentum Stocks:
AMZN +1.93%

TSLA +1.45%

QQQ +1.96%
IWM -1.20%

Cramer Picks:
BAC -.18%

CAT +5.57%
CIEN +11.37% nice pop this week

GOOG +3.70%
XLNX +4.40% very nice turn this week

HON +5.03%

BA +4.64%

What will I do?
For ETF’s I’m ready for more IBB, QQQ, and IWM, perhaps a position in XLV and the good old SPY. I could also take a flier in the QLD.

Some stocks or ETF’s to benefit from my perception of increases consumer spending would be appropriate…but not yet.

I hope you have a great week.

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