Long fun, short asteroids.....

Kids, sometimes it pays to enjoy time.....

Previous posts have already noted what 2014 could look like for stock markets.

Previous posts have looked at Fed changing stance and risk free rate of return. 

Previous posts have also detailed how to stay on a bull market, even though it's nearly impossible to do, I've been thrown off twice and bought back at higher levels!!

This post is more about your state of mind as the world turns.

Over the past few years, you kids have grown and Mum and I have worried endlessly about everything imaginable! Whether that worry was justified ( sometimes it was), or not is a mute point, parents do that. However, this year is different. Why?

Let me list some reasons:

1) stock markets can go up or down, but I'm pretty sure we aren't repeating 2008-2011.

2) watching, researching and trying to predict financial asteroids is time and effort consuming. The world isn't ending.

3) worrying over living isn't an excuse to not look around and enjoy life as it is being led.

4) having fun is so much more important than not!

5) I continue to see great and talented people trying new avenues for business and enjoying the unpredictability of the road they travel.

Asteroid watching and why you don't have to....

1) as long as you understand asteroids exist, you can more often than not discount them.

2) asteroids aren't actually the problem, it's the unseen bumps that cause your balance to be lost.

3) loss of balance feels like a tidal wave

4) tidal waves are not asteroids

5) sometimes there just isn't an issue. Sometimes you made the issue yourself!

Yep, that's right, if you are looking for an issue, you can see something that actually isn't there! Trying to minimize these fears is what will make time so much more productive and fun. Many people throughout history have called for complete disasters that haven't appeared and yet for every 1000 of those predictions, people remember the 1 that actually happened. Even a broken clock is right twice a day...

I've recently been enamored with "experts" arguing amongst themselves about the past. Why has this interested me? Well, that sort of points out that the risks that were so evident in previous years aren't there now or are hidden in a different place where these "experts" aren't looking, hence the arguments over history. 

My telescope is watching the following:

Emerging markets, in particular currencies......not an issue 

Commodity spikes, in particular......not an issue

Bond market.....2s anchored, 10s a source of liquidity......not an issue

There is every chance I'm missing something, but from what I can see, read and anticipate, it sure looks like "long fun, short asteroids" is the right stance.

As you continue to put your work in, that work actually becomes easier and less time consuming (think homework!). Now think about the effort to ski, the more effort, the easier! Simples really, but it takes a step back sometimes to smile an recognize the process. Don't underestimate the ability of chaos and the unpredictability of life. As the world turns though there are times to embrace the "here and now", this is one of those times.....

While you are it, give Mum a kiss, she deserves it.

Queen takes pawn

No crystal ball but a 2014 roadmap

Kids, we learned a lot in 2013, what about 2014?

It once again gives me great pleasure to put pen to paper (more for my benefit than anything else) for 2014 predictions, with a suitable amount of tongue-in-cheek.

2013 predictions weren’t bad at all. Europe, US, buying panic to sell complacency, Yellen, IPO comebacks, Housing, demise of correlation trading, Arsenal even spent money on players (black swan event)! All attached….

Now for some 2014….

*2014 bull market continues
*Bernstein stock target prices for next 12 months (within coverage) points to SPX 1900. Remember we don’t value growth particularly well!
*Blue-sky trading of breakouts the most rewarding vs the mean to reversion value strategy.
*ZeroHedge articles via email continue to be buy signal of choice
*Taper happens causing bonds to re-price and the mkt discounts taper to ZERO quickly
*Interest rate plays dominate, CME, SCHW
*Consecutive down days in combination with panic tick levels remain terrific long entry points: Nick rule #1
*Dollar strength continues
*China growth not an issue of at least 7%. Lets face it, who can argue with the sitting Government?
*Growth over value
*House price increases in the suburbs
*Stocks that do not show leadership and disappoint on earnings, do not reward capital: *Underperformance from Funds in a bull market continues, but the gap gets plugged with an IPO market on fire
*SPX +15%
*IWM outperforms SPY by 8%
*Utilities still the ugly step-child of equities:
*US GDP accelerates to 4%
*Navigating Yellen commentary and actions is the banana-skin
*Fund flows become a very important marker for underlying bid for equities regardless of “valuation”
*Action over price continues to win

SPX looks like this for 2014!!!! With the giant swings caused by FED moves and talk….

Off the reservation calls:
*Arsenal win the league
*Obama cover of Time magazine with Headline “The Loved one I lost”
*Argentina win World Cup

*England retain the Ashes
*Wall Street confidence climbs again
*Philanthropy thrives
*US tax code goes 20% flat tax
*US Government signs off on $2trillion infrastructure spending bill
*Nobody sells their Bitcoins in the assumption it prices at $100,000, making it the currency for the privelaged
*TSLA gets a LOI from Toyota
*Jeter retires with guard of honour
Just for some context here were the 2013 predictions:US.....
*Another bull market move higher in SPX, 1560 acheivable with a following wind
*M&A pick-up, at some point the use of cash is better deployed than just
dividends, however it might be muted from the "special divi" craze of late.
*FED...well that's just boring now with QE infinity *Single stock moves do
better than SPX, correlations continue to decline.
*Buying panic and then selling into complacency works wonders for performance
*Value names continue to be value traps *Housing works.
*Wall Street makes a resounding comeback as Washington focus on growth
allowing funds to invest appropriately and the IPO market to regain a footing.
*3/4/5 Consecutive down days for SPX in conjunction with TICK index continues
to work as a buying of panic opportunity.
*Short squeezes become normal practice
*US BONDS give ground all year, without showing a danger of a yield spike.
*We seriously start to talk about inflation expectations again.
*Correlation trading continues to be a disastrous strategy, single stocks win
Some Macro....
*EURO/Dollar reverts to stronger dollar and weaker Euro, but this time is
deemed a POSITIVE for the markets as resolutions take hold!
*Europe slowly sees signs of strength as the weaker EUR benefits *Silver/Gold
ratio hints at going back to 20 given SILVER STRENGTH *China reverts to better
growth *Commodities remain well bid and defy the inevitable "topping out"
predictions.
*Japan. The stimulus vs monetisation debate continues to thrive with no
outcome.
General.....
*Obama getes "Man of the Year" award, for doing not very much at all!
*Geithner replaced by Corzine after evading all Court processes from MF Global
*Bernanke calls it a day. Yellen in line to the thrown, gets blown off course
by a Petraeus email scandal.
*BOE employs a NON-Brit as BOE Governor....oops, that's happened!
*The average Hedge Fund complains about liquidity when chasing stocks +5% on
the day!
*Arsenal spend some money on players
*Mets fall at first hurdle, whichever hurdle you deem is the first!
*Yankees sell A-Rod, win World Series with Jeter retiring in Game 7

Queen takes Pawn