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Bear, I-Phone, Brazillian stocks and timber
By Rob | March 17, 2008
The Fed just arranged for Bear Sterns to be saved at bargain-price levels by JP Morgan. In the role of a price-fixer, the Fed is starting to look like a communist era central tool for the rich, acting out to save the greedy I-banks and traders from going over their heads. Guess what, if tomorrow you loose your job or mortgage, noone is going to save you. The Fed should be abolished and Bush should stop talking about the economy, because everytime he opens his mouth - the market tanks another 100 points. And please, not another 71- year old candidate for a president. No exceptions, McCain. If you are starting a business, would you choose a 71-year old CEO? Yes, if you wanted to fail, no, if you want to be competitive.
Now I am starting to sound like Jim Rogers ( ex-Soros) who recently sold his emerging market holdings with one exception: China. In order to distinguish myself further from the legendary investor I recently ventured on a feel-good shopping spree. I bought myself an Apple I-phone. I think everyone should own one, it is totally awesome. There is still room for improvement, but the touch screen is worth the entire $300 price.
That below is the VIX chart from Trader Mark, which is approaching the levels where one should consider the market oversold. Time to buy say some.
This is a chart of the Yen and yes, the Yen has been rising since mid-Summer. The last time the Yen was that strong was in 1995. You know what they say: Strong currency, strong economy. Here in the States, weak currency, weak economy. However, these relationships are rather vague.
This below is a monthly chart of XHB from Mr. Rhodes who believes now is the time to buy the Homebuilders. The circled key reversal bar is the spotted bottom. I actually agree with him.
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There is no guarantee that Brazil will decouple if economic growth stops here in the U.S. However, the country seems stable and here are my favorite picks. The telecommunication industry remains interesting, particularly Telemar (TNE), Brasil Telecom (BRP) and Vivo (VIV). Electric utilities are also undervalued — CPFL (CPL). The Brazilian real estate/construction business seems good here, mainly considering lower interest rates and the emergency of a growing mortgage business. In this sense, Gafisa (GFA) is a great alternative. Amongst the commodity stocks Vale do Rio Doce (RIO) is one of the most interesting stocks in Latin America nowadays.
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That said, Lehman research has been adjusting down estimates on FedEx (FDX) and Goldman (GS). I don’t like the sound of it.
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I had a conversation with a friend who believes that timberland companies will rebound before the homebuilders do. Lehman put out an interesting piece which backs this point, considering that there is only so much timber land to go around.
Rayonier (RYN): RYN Acquires Washington Land
Price: US$ 40.68, Price Target: US$ 53.00, Market Cap: US$ 3226 (m)
“On the surface, we believe investors may react negatively to Rayonier’s plans to acquire Pacific Northwest timberlands at 112% of our NAV estimate while the company’s shares trade at only 53% of NAV. Ultimately, we believe the transaction is likely to create value due to a) cost of capital accretion, b) cash accretion, and c) tax benefits. Rayonier announced plans to acquire 56.3K acres of timberlands in Southwest Washington from Sierra Pacific for $215 MM or $3,819 per acre. The transaction is expected to close early in 2Q. The value is 12% higher than our estimate of the prevailing valuations in Western Washington. We believe investors may underestimate the tax benefits RYN may realize from an expected 1031 exchange of land triggered by this transaction. With 60% of Weyerhaeuser’s timberlands in the Pacific Northwest, we expect shares of WY and other timberrich companies to be positive lateral beneficiaries of the strong timberland valuation.”
THE NEWEST INVESTMENT BOOKS TO BUY IN 2008
- Trader Vic on Commodities: What’s Unknown, Misunderstood, and Too Good to Be True (Wiley Trading) (Hardcover)
- Hedge Fund Due Diligence: Professional Tools to Investigate Hedge Fund Managers (Wiley Finance) (Hardcover)
- Secrets of Swiss Banking: An Owner’s Manual to Quietly Building a Fortune (Hardcover)
- Beating the Market, 3 Months at a Time: A Proven Investing Plan Everyone Can Use (Hardcover)
- Equity Valuation, Risk and Investment: A Practitioner’s Roadmap (Wiley Finance)
- Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy for Private Wealth Management (Wiley Finance) (Hardcover)
- Hedge Funds Of Funds: A Guide for Investors (The Wiley Finance Series) (Hardcover)
- Invest Like a Dealmaker: Secrets from a Former Banking Insider
- Winning With Options: The Smart Way to Manage Portfolio Risk and Maximize Profit
- My Life as a Quant: Reflections on Physics and Finance
- Mastering Trading Stress: Strategies for Maximizing Performance (Wiley Trading)
- Foundation and Endowment Investing: Philosophies and Strategies of Top Investors and Institutions (Wiley Finance)
- The Armchair Real Estate Investor: Put the Internet to Work for You and Reap Property Profits
DATING BOOKS AND THE ART OF SEDUCTION
- How to Succeed with Women by Ron Louis
- The Art of Seduction
- Never Be Lied to Again: How to Get the Truth In 5 Minutes Or Less In Any Conversation Or Situation
- Sex Matters
- Taoist Yoga and Sexual Energy; Internal Alchemy and Chi Kung
- The Definitive Book of Body Language
- The Layguide: How to Seduce Women More Beautiful Than You Ever Dreamed Possible No Matter What You Look Like or How Much You Make
- The Professional Bachelor Dating Guide - How to Exploit Her Inner Psycho
- How to Become an Alpha Male
- NLP: The New Technology of Achievement
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