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What is Your Outlook for US Equities for 2012?
01-13-2012, 05:07 PM
For the financial G's on here, what do you think?
Good place to be?
Get out now?
Hold on till May?
Hold on till Election?
All in?
Buying with both hands?
F*ck it. I am Gold, Guns and a Getaway plan, you aren't?
Give some reasoning behind your theory.
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What is Your Outlook for US Equities for 2012?
01-13-2012, 05:55 PM
risk/reward at this point favors that short side in my humble opinion
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What is Your Outlook for US Equities for 2012?
01-14-2012, 12:45 AM
I believe in certain areas the US has a competitive advantage vis-a-vi the rest of the world. Mostly high tech equipment, software/computing/internet, medical equipment and financial services. Last of which is getting horribly pounded.
For me, if I were to limit myself to only US equities, I would be looking for US firms that are selling those hard to copy products/services mentioned above to the BRIC's and high growth developing countries which have much better debt to gdp ratios. Between the dollar's expected long-term decline, (lower prices) and the hand over foot growth of the developing countries (increasing demand). I expect those areas to do well in the mid to long term. I recommended about a 1/3rd in.
For short term, uhhhhhhhh, buy yen, gold or bonds?
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What is Your Outlook for US Equities for 2012?
01-14-2012, 01:18 AM
If there is QE3, I am very bullish on equities. No QE3, stay the fuck out.
QE3 = higher equities, higher gold/silver, higher oil, weaker dollar.
No QE3 = lower equities, lower gold/silver, lower oil (unless war breaks out), stronger dollar.
We've seen the patterns from QE1 and QE2, so QE3 should be more or less the same.
Especially with the recent eurozone crisis; there's plenty of room for the dollar to fall and prop up international markets.
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What is Your Outlook for US Equities for 2012?
01-14-2012, 10:57 AM
I'm staying out. The market clearly wants to go higher. It has still trended up over the last week even with the bad US employment data, the European downgrades and the break-up of the Greece talks. So I don't think there is enough downside potential to justify going short. With all the bad news and the huge run-up in equity prices since 2011 4Q, I also don't think there is enough upside potential to justify the risk of going long. In the short-term, I see equity prices stabilizing as greed fails to force up prices in the face of bad news.
Longer term, I'll look for chances to go short as the bulls run out of steam and data comes out to confirm declining growth in the US and China and a recession and renewed debt pressures in Europe. I don't think QE3 or easing in China or Europe will do more than create a short-lived and modest upward blip in equity prices.
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What is Your Outlook for US Equities for 2012?
01-19-2012, 03:01 PM
I don't think you can just look at US Equities as a whole. It would be at least appropriate to look at sectors if not industries.
I think US Companies in general are far better off than the rest of the world. Firstly, we already had our market meltdown and our banking system, while not healthy by any stretch is not levered to the hilt. Secondly, ECB debt issues will likely cause a flight to safety if the whole thing collapses, which means investors will put their money into US markets.
However, to the extent that ECB debt lingers, volatility will continue to persist. I personally believe that the Greeks are going to try and receive as much austerity as possible, until they are able to leave the ECB and re-introduce the drachma. I'm not sure how long this will take, but if it does happen there will be a huge sucking sound in all the financial markets. If this happens the ECB will have a huge problem because European banks will face tremendous debt obligations they are not able to handle. Either the ECB can bail them out, which sets a very dangerous precedent, or they let them fail which will send European Markets tumbling. I think these reasons (and general European demeanor) are why this whole issue is taking so long to figure out. I imagine no long term solution will be completed by June. So US Equity Markets in my opinion will likely be rangebound and volatile through then.
That means a lot of in and out/daytrading/technical analysis will enable you to turn a profit. If you're looking for long term plays, Consumer Discretionaries look to be a bit overpriced and I would suggest shorting them now before earnings season really picks up in the next couple of weeks. The reason for this thought is that the holiday shopping season was propped up on massive discounts sparking demand. Margins were much thinner. Just stay away from high end stuff like COH or HRM etc... as income disparity in the US is growing and the rich can still afford $500 dress shirts and $3000 handbags.
I would stay the hell away from Real Estate and Financials. Financials are hard to gauge and legislation has really tied their hands. Real Estate has fared poorly since the recession and even if the fed were to impose QE3, I don't see how the minimal changes in rates are going to help spark demand... We're already at ~4% home loans anyhow... How much lower are things going to go? People might refi, if their not still underwater and are qualified, but nobody wants to sell their house at 75 cents on the dollar, especially when they rolled all kinds of extra bullshit like home entertainment systems and appliances into the mortgage.
Anyhow, sorry for the wall of text. I have more thoughts aned feel as though this is incomplete, but I think it's a good overview of my thoughts at the moment. I will revisit some Long ideas later since I know most folks can't take short positions.
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What is Your Outlook for US Equities for 2012?
01-20-2012, 03:56 AM
I expect the dollar might surge 20% vs. the euro this year, so simply by owning dollars you're making money - that's basically concurring with what CGS expects. That said I know nothing about US equities - I can only handle information on our local stock exchange, but I need to figure a way to start investing from abroad rather than locally because taxes on capital gains are 43%.
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What is Your Outlook for US Equities for 2012?
01-20-2012, 04:00 AM
I've withdrawn everything into a bank account in a solid Swe bank right now. I'm going to wait until the hammer falls on Greece and see what happens.
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What is Your Outlook for US Equities for 2012?
01-20-2012, 07:28 PM
Four Primary Issues to consider in 2012-
1. After months of deliberation, no consensus has been reached on the Euro issue. Greece looks like its continuing to cook the books, a good chunk of the EU recently had its credit rating downrated and Germany is outright refusing to foot the bill for the PIIGs lack of fiscal discipline longterm. Signs point to at least a partial dissolution of the Euro with the resulting disorder causing a recession in Europe.
2. The Chinese over-investment heavy industry/construction appears to be near a correcting point. Worldwide recession, cheaper labor options, overbuilding of infrastructure are all stressing the internal Chinese economy- growth is decreasing and the real estate bubble appears to be near the breaking point. Already people, who looked at real-estated as a safe investedment, are rioting when prices are decreased for unfilled overpriced condos.
3. Its an election year- and Obama and incumbinents want to stay in. The fact that the debt ceiling once again needs to be increased is evidence to me that they're trying to pump up the economy through indirect "quantitative easing". I'd expect this, and outright "jobs" programs this year to make the economic situation seem hunky dory so Obama can win re-election.
4. Many powerful groups seem to be itching for a war with Iran. The sheer quantity of propaganda (which matches what occured before the Iraq invasion), and the fact that the Republican candidates (with the exception of Ron Paul) are tripping over each other to show how fast they would press the red button, tells me that war with Iran is almost inevitable- the question is when will it occur. My prediction- Obama will avoid starting a war this year so he can campaign on being a "peace president' who got us out of Iraq. Regardless of who wins I expect a false flag after the election, probably in early 2013, to kick off the war. The only way I can see the war starting this year is if the economy goes to the shitter or if it looks like Ron Paul will win the election.
So- what would I do given all of this? I would go with a breadbasket of stocks for the first 6-8 months of the year. After which I would switch to a combination of Gold and Oil. If Ron Paul wins the nomination, (or if it it looks like he'll beat Obama at the very least) or if the economy tanks, I would immediately switch to Gold and Oil.
Why?
Because of the election, The US will continue printing money for that time period, to pump up the economy during this election year; the Chinese will pay for this by continuing to buy our bonds- the bleak economic picture of Europe (either breakup of the Euro or severe austerity limiting consumption) means they need a strong US economy to prevent a hard landing of their own Industrial/Construction bubble. With the continued printing of money, via deficiet spening, the wealthier classes of the country will have excess liquid assets- a good chunk of the excess liquidity will end up in the market driving up prices in the Averages Indexes. This will not last.
I think war with Iran will start within 6 months of the end of the election. Iran will close the Straits of Hormuz and attack the oil facilities of neighboring countries. Oil prices will skyrocket; the economy will tank, stocks will plummit. China and Russia have both warned the US not to attack Iran; WW III may occur.
The only thing I can see changing this is Ron Paul being selected as the Republican candidate- in which case the time table will be moved up to insure that the war WILL happen.
So- in short.
1. Go short on the DOW/Nadaq, sell near the election or if RP is selected as the Republican Nominee
2. Go Long on Gold and Oil
3. Go Long on Defense Industry stocks
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What is Your Outlook for US Equities for 2012?
01-20-2012, 07:37 PM
4. Go long on stocks with significant holdings in Domestic Oilfields/Tar Sands/Fracking technology
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What is Your Outlook for US Equities for 2012?
01-20-2012, 11:03 PM
My outlook is simple: It's all fucked up. Preserve wealth and live to fight another day (or year).