Mr. Sensitive

January 11, 2014

FSX Friday Update

Filed under: Uncategorized — lbej @ 13:24

This first FSX update of 2014 covers the first seven trading days of the year, a period over which the major U.S. equity indices—Dow Industrials, S&P 500, Nasdaq Composite—were all lower.  I know, right?  I can’t decide what to make of it, either.  Historically, the year tends to go as the first five days go—the correlation is strong and positive.  The last time the market was in the red after seven days of trading was 2009, the year in which the last bear bottomed out and the Fed-driven bull market (now in its fifth year) began.  Does that mean we’re in for a down year?  The short answer—my short answer—is yes.  That said, I’m sticking with my prediction of a few months back: we’re about to see a replay of 2000.  The great, tech-fueled bull market of the late 1990s ended after a final spasm of capitulation buying in February and March of 2000, and that spasm came after (1) a powerful, multi-year uptrend carried stocks to all-time highs at the end of the previous year, and (2) a sharp January correction set the stage for the bull market to become a bubble.  If history repeats itself, stocks could have 20% upside…and then 40% downside.  But history never repeats itself, right?

The Family Stock Index puttered along with the broader market over the first seven days of 2014, settling out 0.5% lower at 17,225.  Breadth was marginally negative (11 advancers to 14 decliners), but this seeming placidity masked several large (but offsetting) moves within the index, as investors rebalanced their portfolios to account for the unprecedented 20% quarter-over-quarter turnover in the FSX.  I threw the market an additional curveball by opting—at the last minute, almost literally—to put Jenny into a different stock than I’d initially announced.  Instead of the curiously-high-yielding and vexingly-Canadian Just Energy (JE), I selected Genie Energy (GNE), a New Jersey-based utility with a shale-oil kicker.  This is because Reagan and I both pronounce Jenny’s name like it’s spelled Geenee more often than we don’t.  I don’t know why that is or which of us started it, but Katie’s started doing it, too, and when I happened upon the ticker accidently, I knew at once that I had to make the switch.  Jenny herself doesn’t care one way or the other, reflecting her water-off-a-duck’s-back approach to most things.  I added GNE to the FSX as of January 2, and the stock promptly tanked—along with three of the other four new components.  You’ll never guess which of the four was higher (except that it’ll be easy to guess which one it was since I said you’ll never guess it).

And don’t pretend like you don’t just happen upon tickers accidentally.  I was getting a price on Genworth (GNW) and I hit ‘E’ instead of ‘W’—you know how it goes. Accidental-ticker-discovery happens to everyone, so don’t act like I’m some weirdo.

Advancers

  • Zero (Z) +10%.  Z was the only one of the five new additions to end in the green, and it did so in a week when most 2013 momentum stocks were flat to down.  Could Zero’s streak of infinity times at the bottom of the yearly FSX performance rankings come to an end in 2014?  He has plenty of time left to work his entropic magic, but he’ll be fighting a potentially overwhelming secular trend.
  • Nami & Lita (NL) +2.5%.  The same trend that drove Zero higher in the early days of 2014 gave a lift to the kitties as well.  The theme is Charlotte, and Charlotte is the theme.  My sister is back in school and kicking butt, and investors piled into ICE last year as it became increasingly clear that she’s not messing around.  There are no signs that Charlotte’s underlying fundamentals are deteriorating, but it’s still reasonable to wonder how much upside ICE has left after an 82% gain in 2013.  As a result, investors are looking for stocks that stand to benefit from Charlotte’s success.  Z and NL are the two most obvious Charlotte plays, and it’s no surprise that they’re being bid up as a result.  Zero, of course, has the potential to kick some butt of his own, so there’s embedded optionality being priced into his stock.  Nami and Lita, in contrast, are cats.
  • Wilson (WILC) +7.8%.  Zero and the kitties badly lagged the broader market in 2013; Wilson, on the other hand, was the fifth-best performer in the FSX last year, rising by 72 percent and notching a series of multi-year highs along the way.  Then on Friday he did something even more astounding, surging past his all-time, pre-crisis high set in July 2007.  It flat-out didn’t make sense.  Then Katie pointed out that this week marked eight years since we rescued poor Wilson from a shelter.  I did some quick math, and—considering that he was at least 30 years old when we got him—determined that Wilson is probably the oldest dog of all time.  That’s quite an achievement by itself; add to it the fact that he’s coming close to achieving cold fusion with his breath, and I can easily see a $10 handle on WILC in the next couple months.
  • Lee (TGI) +3.4%.  This week vertigo got added to the coterie of nuisance ailments trailing me through life.  I was switching from jumping jacks to sit-ups in my exercise routine when my balance went out and I went down.  I decided I had a brain tumor (because that’s how I think) but the doctor was able to replicate the total loss of balance I experienced by having me lean my head down off the end of the examining table, and that was that—vertigo.  So there’s one more ailment that I secretly didn’t believe in before I got it.  First gout, now vertigo?  Was I an 18th Century minor German prince in a past life?  What’s next?  Dropsy?  Rickets?  If the doctor recommended bloodletting I don’t think I’d bat an eye.  I am the owner of the world’s oldest dog, though—that’s got to be worth something.

Decliners (with assists from Jenny and Katie)

  • Lisa (LNCE) -4.2%. Jenny: Aunt Lisa is down because she didn’t get to spend New Year’s Eve with Lucas. Katie: I think it’s because it’s been SO cold.
  • Justin (XOXO) -4.3%. Jenny: Justy’s down… Katie: He’s in Europe. Jenny: Ohhhh…okay. He’s down because they don’t have hamburgers there. Katie: Why would that make him down? Jenny: Oh, I don’t know. He’s down because maybe they don’t have veggie burgers there.
  • Lucas (CTG) -4.6%. Jenny: Lucas is down because he was being all stubborn and wouldn’t come down for New Year’s and I had to drag him downstairs sort of. I took his iPad and made him come downstairs.
  • Jodi Ann (JOY) -4.6%. Jenny: Jodi Ann is down because maybe they got snowed in in New York and weren’t allowed to go anywhere. Did they?
  • Zondro (ZQK) -5.2%. Jenny: Zondy was down because we didn’t let him out of his crate until like 11:00 this morning. And it was all Reagan’s fault.
  • Jenny (GNE) -5.9%. Jenny: Okay. I am down because I got an F on a math test, and now I have a B average and it’s too low of a B. And I’m going to have straight A’s and one B, which is terrible. Oh, and I jammed my finger. Katie: So your sports career is over? Jenny: I never had one.
Name Ticker 1/10/2014 Change
Brinkley BCO $34.82 +0.68
Charlotte ICE $225.33 +0.41
Dustin DST $91.13 +0.39
Icarus FAST $47.70 +0.19
Jenny GNE $9.61 -0.60
Jodi Ann JOY $55.79 -2.70
Josie Ann JCOM $49.15 -0.86
Justin XOXO $14.22 -0.64
Katie CATY $26.20 -0.53
Lee TGI $78.63 +2.56
Lisa LNCE $27.45 -1.21
Lucas CTG $17.97 -0.86
Lulu LULU $59.60 +0.57
Marcus MCS $13.10 -0.34
Mario T.E. MGEE $56.25 -1.46
Mario T.Y. MAR $49.28 -0.07
Namilita NL $11.46 +0.28
Nicole E. NICE $39.76 -1.20
Nicole M. COLM $79.88 +1.13
Reagan REGN $274.38 -0.86
Ruby RJET $10.79 +0.10
Wilson WILC $8.83 +0.64
Winston ED $54.33 -0.95
Zero Z $89.82 +8.09
Zondro ZQK $8.31 -0.46
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1 Comment »

  1. I forgot to tell you this weekend that your Wilson comments this week actually made me bust out laughing.

    Comment by Katie E — January 14, 2014 @ 14:18 | Reply


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