March Madness Market (64)

March Madness (Tournament)

Sometimes you just gotta do something “mindless” and holding a return-based elimination tournament of stocks over the next few weeks of March Madness seemed to fit the bill.

The (64) qualifiers are based on the highest 1-year total return forecasts according to the analyst consensus (ACE) with a minimum stock price of $9. In the first round, #1 plays #64, #2 plays #63, #3 plays #62, etc. There are some community and recently featured favorites such as Stifel Financial (SF), Vertex Pharma (VRTX), Michigan’s own Steelcase (SCS) and Inteliquent (IQNT). There are also “villains” like Valeant Pharma (VRX).  David Einhorn and Greenlight Capital (GLRE) have been red hot — can they extend the trend into the tournament?

The tracking dashboard for Week One is: https://www.manifestinvesting.com/dashboards/public/march-madness-64

March madness 64

Annual Super Bowl Poll (2016)

It’s time for our annual Super Bowl survey. Hit REPLY and tell us who you know is going to win Super Bowl 50.

Once again, there’s not a clear “old NFL” team again this year. A victory by the nearly undefeated National Conference champion Carolina Panthers (17-1) would be “most like” an OLD NFL victory … so investors across this nation probably ought to be in the Panther camp. The Broncos are clearly on old AFL team and the stock market is vulnerable to a Super correction at some point.

So sorry, Peyton Manning fans — a Denver victory would not be good according to the Super Bowl stock market indicator

We’re 6-for-10 having mistakenly selected the Seahawks (77%) over the Patriots (23%) last year.

Our Selections

XLIX: Seattle Seahawks (Super Bowl won by New England Patriots)
XLVIII: Denver Broncos (Super Bowl won by Seattle Seahawks)
XLVII: San Francisco 49ers (Super Bowl won by Baltimore Ravens)
XLVI: New York Giants (defeated the New England Patriots)
XLV: Green Bay Packers (defeated the Pittsburgh Steelers)
XLIV: New Orleans Saints (defeated the Indianapolis Colts)
XLIII: Pittsburgh Steelers (defeated the Arizona Cardinals)
XLII: New England Patriots (Super Bowl won by New York Giants)
XLI: Indianapolis Colts (defeated the Chicago Bears)
XL: Pittsburgh Steelers (defeated the Seattle Seahawks)

Lottery Lunacy

The government of the United States does a lot of things right. We,
The People, are always the reason. Miracles materialize simply
because a gifted leader has the courage to stand before millions and
say things like, “We WILL stand on the moon before the end of this
decade.” Other such statements which come to mind might be “Mr.
Gorbachev – TEAR DOWN this wall!” “I have a dream.”

Some ideas, like Social Security, have a magical promise.
Good idea, lousy execution. There are sparse few programs
which are LOUSY ideas. Uncle Sam actually does very few
things wrong. Embracing the lunacy of lotteries is near the
top of a fairly short list. A local billboard proclaimed,
“Hundreds of Millionaires Created!” The images were silent
about real damage inflicted on real people who can scarcely
afford to parlay a lottery ticket. The reality weighs heavy.

Brunching and Browsing Beyond the Basics

My wife and I had ventured into one of our favorite restaurants
for a relaxing brunch. This eatery is located in a local
mall. As I took my last sip of java, Wendy announced that
she had some quick shopping to do – and that she’d be able
to “save me” several dollars over the next few minutes.
This is one of the mysteries of life that shall remain a mystery.

I needed an escape pod, because I certainly didn’t want to be
an accomplice in this unfolding “saving” conspiracy.
Sweat forming on my brow, I desperately sought refuge. Bed,
Bath & Beyond? Zales Jewelry? Fat chance. Ah. I sighted a
Barnes & Noble. I needed a copy of Mary Farrell’s latest
book, Beyond the Basics, for a feature that we were planning for
Better Investing. My ticket to salvation. I was launched. “Gee,
honey, I’d really like to watch you try on fourteen pairs of
shoes, but I really need a certain book for work.” (It was more
than a half truth – the second half, anyway.)

I was in luck. Mary Farrell’s book was on display in the
entrance. It takes far less time to swipe a credit card than it
does to try on eighteen pairs of shoes. I needed to absorb
some time. Spending it with Mary’s words of wisdom is a
very worthy way to invest a few minutes.

I found a bench and settled in. Across the hallway, I noticed
a wooden Indian guarding the entrance to a cigar shop. The
neon sign in the window proclaimed that this establishment
also sold lottery tickets.

I glanced up from my pages to watch an elderly couple
meander around our Indian guide, gingerly approaching the
counter to buy a stack of Lotto tickets. They sauntered out
and were seated at a nearby table. “Today may be the day!”
“No winners for the last two weeks. We’re due. Hard to
believe that we’ve been striking out so much lately, huh?”
I tried to focus on Farrell’s fantastic feature, but it wasn’t
easy. These two were scratching in a frenzy, dumping their
barren losers in the waste receptacle next to their table.
Eavesdropping isn’t polite, but their groans made it a real
challenge. Suddenly, “YEE-HAH!” filled the corridors. She’d
scratched and exposed a $50 Instant Winner. She scrambled
to her feet and dashed back to the counter.

She returned with $50 worth of more potential Instant
Winners! The frenzy continued and the scratching continued,
but alas, no more screeching followed.

The return to an “investor” in the average lottery ticket is negative
99.4 percent, or something like that. In this case, it was clear
that the return was minus 100 percent. This couple would have
been far better off buying stock in that shoe company. A sure
thing? My spouse had just spent the last few minutes “saving us
money” and providing an impact that was probably enough to
make a visible difference on the company’s income statement.

A Few Moments to Dream

My thinking is wishful. My hope is that our nation of gifted educators
will focus on delivering a certain wisdom to our young people.

It’s time for our national and state legislators to tear down lottery
roadside signs and cease the television commercials. Allocate
those resources to teaching our time-honored practice of investing
small amounts – regularly. Prepare our citizens to access a lifetime
of successful investing well before the day they become eligible to
purchase lottery tickets.

Lotteries are a national disgrace. In this case, the intellectual
advantage belongs to my wooden Indian friend.

Hot Links & Fractured Fairy Tales

Hot Links & Fractured Fairy Tales

I’m often asked about the utility of Twitter and similar “newsfeed” type services. I have to admit that I was extremely skeptical about 140 character blasts and an endless stream back when I first started exploring but I rapidly discovered that Twitter can be a path to discovering and sharing information.

Favorite “Follows” by @ManifestInvest

At Twitter you “follow” people that you’d like to hear from. For me, this includes a number of friends, and it also includes investing-related thought leaders and information providers. I also subscribe to (follow) sources like the various Fed research departments (Minneapolis & St. Louis rock) and companies that I follow. Some of my favorites:

  • @ritholtz — http://www.ritholtz.com/blog/
  • @eddyelfenbein — http://www.crossingwallstreet.com
  • @StovallSPCAPIQ — Sam Stovall (Standard & Poor’s)
  • @BobBrinker
  • @SelenaMaranjian — writer for www.fool.com (also Brothers Gardner via @TomGardnerFool & @DavidGFool)
  • @lecreative — Amy Buttell, colleague and Better Investing alum, writes on “all things financial.”
  • @TMFHousel — not just another Fool
  • @NateSilver538
  • @ReformedBroker — Joshua Brown

As an example, let’s take a look at a recent reading list shared by Josh. I generally find 2-3 things to scan whether it’s Eddy, Barry or Josh laying out the smorgasbord.

Here’s the link: http://thereformedbroker.com/2015/11/17/hot-links-fairy-tales/

What I’m reading this morning:

  • US dollar screams to a 7 year high (Bloomberg)
  • Stocks: Top 10 High-Conviction and New-Money Purchases (Morningstar)
  • Soros lightens up his bet against the S&P 500 (MoneyBeat)
    …and he joins Icahn in a bet on PayPal (Business Insider) — [… one for Kim Butcher and Round Table followers]
  • Alphabet, Amazon Lead A.I. Charge as Machines Take Over, Says UBS (Barron’s)
  • CEO of Alerian Index admits that MLPs are sensitive to oil prices. So much for the “toll collector” fairy tale (ETF.com)
  • Investment banks’ revenue set to decline again in 2015 (Reuters) — probably explains down draft in stock prices of asset managers
  • Home Depot continues to crush it. Another flawless quarter. (Business Insider)
  • Cliff Asness: Good investing is not about genius, it’s about fortitude (Business Insider)
  • Retailers hate those new credit card chips (New York Times)
  • Children born today will most likely live on average to their late 80’s (Upshot) — … one of our favorite themes

Annual Super Bowl Poll (2014)

It’s time for our annual Super Bowl survey.

There’s not a clear “old NFL” team again this year. But, the Denver Broncos are clearly an “old AFL” team, so for investing purposes and in homage to the Super Bowl indicator, we’d have to lean on those upstart Seattle Seahawks despite Peyton Manning and his “Omaha-rich” assault on the record books this year.

It’s time to get out there and BUY SOME STOCKS. 🙂

We’re 6-for-8 having mistakenly selected the 49ers over the Ravens last year.

XLVII: San Francisco 49ers (Super Bowl won by Baltimore Ravens)
XLVI: New York Giants (defeated the New England Patriots)
XLV: Green Bay Packers (defeated the Pittsburgh Steelers)
XLIV: New Orleans Saints (defeated the Indianapolis Colts)
XLIII: Pittsburgh Steelers (defeated the Arizona Cardinals)
XLII: New England Patriots (Super Bowl won by New York Giants)
XLI: Indianapolis Colts (defeated the Chicago Bears)
XL: Pittsburgh Steelers (defeated the Seattle Seahawks)

Rose Bowl Memories

 

This year’s Rose Bowl features a couple of teams from geographies chock full of Manifest Investing participants. And in our house, a special place for a Michigan State grad creates more than a little bias.

If you’ve ever been to the pageant and gala, you know what I mean. It’s a wonderful day and when the weather cooperates, it’s spectacular.

But my favorite memory involves the Fighting Illini and the USC Trojans. My friend, Kelly Mace, and I spent several hours meandering the grounds before the game. There are party tents, tail gates, sponsor and alumni gatherings … all blended on the grounds of park and golf course surrounding the stadium.

But the moment is priceless. A group of Trojan fans dumped a cooler of beverages and ice as they made their way to their celebration location. After a prolonged moment of standing there gnashing teeth, etc. a couple of University of Illinois students approached them.

“Step back.” “We got this.” “We have a whole lot more experience handling this icy stuff than any of you do.”

“You’re welcome.” “Enjoy the game.” “The probability that you will enjoy the game more than us is not something we’re all that comfortable with …”

Kelly and I smiled as we watched these good Samaritans save the moment, restoring the beverages and coolant — and heading off to their own celebration.

“We never had a chance to thank them … and they were gone.”

And they were right about the game … for Illinois fans.