Email – #304
Dear Reader,
We are closing a strong trading year on an upswing. Our current positions, none of which is older than three months, are up 29% on average. Our latest addition, Corning (NYSE:GLW), is up 7% in a couple of weeks.
Including the prior batch of three conservative mid-year positions, which yielded almost 9% on average, and the earlier 19 positions, which we closed around late April and May for an average 21% return, our performance year-to-date adds up to a nice 70% approximately.
So pat yourself on the back for having stood firm buying all those stocks. And get ready for an active 2010.
The Euro area will continue originating trading opportunities in currencies as the Greek and Spanish situations unfold. In fact, bad news in those countries put in question the Euro strength, limiting the ability of the European Central Bank to hike rates. Earlier this year, we saw Dubai giving us a nice entry opportunity.
In the meantime, emerging markets will keep accelerating, providing for good trading opportunities, as well.
China, for example, has already become the largest IPO market, and India has become the largest manufacturer of low-end cars, surpassing Japan. In the U.S., many sectors and specific companies will benefit from the deployment of the stimulus package and the acceleration in certain specific demand themes. An example of this is cybersecurity. This theme was evident with the outage in the Blackberry platform.
Europe and Japan will likely remain with slow growth, eclipsed by the U.S. recovery. And the debate between the double-dip camp and the sustained recovery camp in the U.S. will also keep providing for volatility to enhance returns. Here, we are focused on the high unemployment, high delinquencies in mortgages and the end of the mortgage stimuli on both the fiscal and monetary sides. Let’s see what the government and the Fed’s responses are, if any, to these two phenomena.
One of the preferred themes in the U.S. will likely continue to be technology. Companies in this sector enjoy cash-rich balance sheets and an up-tick in demand for their products and services. That means their stocks should keep climbing, as well.
Happy New Year!
Horacio Marquez
