|Written by Rob Goldman|
Ugly market, a major bellwether losing fans, indices breaching death crosses, 6 straight down days for the Dow Jones Industrial Average, and we are nearing a corrective phase for small caps.
I love this market! Well, within reason. See why all these and other factors foretell good tidings ahead and cement the fact that we are in a stock picker’s market which is good for you and in our wheelhouse as we head into the fall.
With the current circus political atmosphere and jittery investment environment I think we all would like to see something different. So this week’s Guide offers a change of pace with “12 Things I’d Like to See” in popular culture and politics. It is sure to give you a chuckle or ten. Think of it also as a series of “What If’s?”
Interested in viewing a free webinar on “How to Build Wealth”?
We just uploaded the video to YouTube which is based on a recent presentation we gave to a large group of novice investors. They loved the down to earth personal finance style and prompted us to offer more services on this front! You can find the free webinar on our website here along with info on new, premium “How to Invest” webinars launching this week.
THE REAL MISSION IMPOSSIBLEYes, the latest installment of the Mission Impossible move series (Rogue Nation) took the top spot again at the box office. The real mission impossible is trying to film a bull charging at you and getting out of harm’s way. Or so some schmuck in Toledo, Spain learned as he was gored to death.
Of course with the lousy market last week, some investors may feel that it is impossible to properly gauge the market direction or sentiment. While equally frustrated I think too many pros are missing the forest for the trees. Here’s why:
12 Things I’d Like to See
Clearly all of the current negativity bodes well for the fall. Barron’s is now recommending investors buy gold and oil Me? I think it is too early. We were early a few months ago and it seems that until prices stabilize, particularly oil (Iran deal, anyone?) spending will not be strong. From the stock perspective, it is a hard pill to swallow when the darling (NASDAQ—AAPL) is taking it up the gas pipe while we near correction territory in small caps. All that means is that it is truly a stock picker’s market and valuations will start to look very nice sooner than you think. We just have to grin and bear it until some of the nervousness shakes itself out. To help out in that regard, here are 12 Things I’d Like to See while we wait for the things to turn.
⇒ Tim Tebow and Arian Foster on the same team
⇒ Elon Musk and Richard Branson collaborate on a new transportation project
⇒ Sean Hannity and Jon Stewart stuck in a car together for an hour
⇒ A DNA test on James Holmes and John Lydon
⇒ More righteous indignation about the country’s direction from the other Republican candidates and some substantive ideas from Donald Trump
⇒ Lois Lerner and Hillary Clinton share email practices
⇒ Nationwide mandate for mounted body cameras on cops
⇒ The IQs of WEtv reality programming viewers
⇒ If Bill Belichick and Tom Brady can resist the urge to cross a line in their path
After last week’s rough market, Republican Presidential candidates debates and other news, it is time to look at news that is at the top of the food chain and under the radar.
Wall Street Journal
Just the Stats!
AAII Sentiment Survey (courtesy of AAII.com, figures rounded)
Unlike last week which saw a big swing for Bears, the Neutral category rose while Bears declined. Look for more volatility this week as Apple and other bulls find excuses to prop up the stocks after the selloff of late. The poll below shows increases in Bulls and Bears but reduction in Neutral. Huh? Shows the paralysis and lack of convictions.
Just the Stats, II!
How ugly is it out there? Well, the Russell 2000 Index is down 6.9% from its high, nearing the 10% corrective territory. Only 1 out of the four major indices we track is above its 200 DMA. That is the NASDAQ and any hits to it would drop it below that mark.
Conversely, it really won’t take a whole lot to change the fortunes of these indices. By the way, the Russell 2000 forward 12 month P/E is 19.3, below the NASDAQ 100 while the S&P 500
P/E, at 17.8x, is reasonable but not table-pound worthy.
4.8: The weekly percentage decline in Apple. At $115, it is 5 points below the $120 DMA-200 and at its lowest point since early 2015. I think you can get $20 in it in the next few months with bulls getting behind the stock. It trades 11.8x FY16 EPS.
6: The number of days in a row the DJIA has declined.
10: Biotech and health care funds have enjoyed 10 straight weeks of fund inflows though you would not know it judging by recent trading. Are retail investors crossing out institutional ones with more carnage in the cards?
1498 Reisterstown Road, Suite 286 Baltimore Maryland 21208 Phone: 410.609.7100
[email protected] www.goldmanresearch.com
Launched in May 2010, The Goldman Guide is a free weekly publication of Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. No companies mentioned in this newsletter are current sponsored research clients of the Company or its parent, unless noted, With some exceptions, all companies or investment ideas mentioned in this publication are publicly traded stocks listed either on the NYSE or the NASDAQ. Goldman Small Cap Research members and contributors’ bios, certifications, and experience can be found on our website: www.goldmanresearch.com
This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
The Firm’s non-sponsored research publications category, Select Research, reflects the Firm’s internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report. Goldman Small Cap Research analysts are neither long nor short stocks mentioned in this newsletter.
Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored microcap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles.
Goldman Small Cap Research has not been compensated for any content in this issue.
All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data and information are derived from Yahoo! Finance and other websites or sources, as noted. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority. Statements herein may contain forward-looking statements and are subject to significant risks and uncertainties affecting results.
Separate from the factual content of our articles about the company featured in this newsletter, we may from time to time include our own opinions about the companies profiled herein, their businesses, markets and opportunities. Any opinions we may offer about the companies are solely our own, and are made in reliance upon our rights under the First Amendment to the U.S. Constitution, and are provided solely for the general opinionated discussion of our readers. Our opinions should not be considered to be complete, precise, accurate, or current investment advice. Such information and the opinions expressed are subject to change without notice.
ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com.