HI Financial Services Mid-week 12-17-2013

HI Financial Services Mid-week 12-17-2013

HI Financial Services
Mid-Week 12-17-2013

One of the best teachers is experience and the other
is mistakes. – Kevin Hurley

      

What has been
happening so far this week?

Not a whole lot
as we wait for the Fed Decision on Tapering 2:15 PM ET Wednesday.

Europe had much
better than expected PMI numbers in Manufacturing 52.7 vs 51.9 est.

So is Europe
coming back strong? Probably not but everyone buys for Christmas !!

The US had
Better than expected Productivity, Unit Labor Costs, Capacity Utilization and
Industrial Production.  I can write them
off as a Christmas phenomenon and not too impressed.

NAHB Housing Mkt
Index was at 58 vs 55 consensus.  This is
considered really good news to see the wealth of the middle class coming back
in the housing market.  It also is a tip
off to a continued rally into next year

 

 

Where will our
market end this week?

Taper talk
headlines are the risk for the rest of the week!!!!

I am looking to
see a spike after “NO Taper” is announced and we reclaim all that was lost the
last two weeks.  I guess this would be
the kick-off of the missing Christmas Rally. 
Historically we have a 1.5% increase in the market the last 10 days
before Christmas.  With no taper look to
see a 3% all in end of the year increase in our market. 

  

DJIA – On it’s
third test of 16,000 but definitely in a short term bearish trend


 SPX – On the
third test of 1800 and also in a short term bearish trend

 

COMP –  Bounced off of 4000 and continuing in the
bullish trend channel



Where Will the SPX end December 2013?

12-02-2013

1850 or higher –                    My vote is technically 1833.4 up 3% from
today   

1825 –                                   

1750 –                                    

1725 –                                     

1700 or lower –                     

 

What is on tap for the rest of the
week?=

Earnings:

Tues:

Wed:     FDX

Thur:   

Fri:      

  

Econ Reports

Tues:  CPI, Core CPI, Current Account Balance, NAHB
Housing Market Index,  

Wed:  MBA, Crude, Housing Starts (Sept), Housing
Starts (Oct), Housing Starts (Nov), FOMC Rate Decision

Thur: Initial Claims, Continuing
Claims, Existing Home Sales, Phil Fed

Fri:     GDP – 3rd Estimate, GDP Deflator

 

Int’l:

Tues –   GB: PMI

Wed –   JP:  All Industry Index

Thurs – JP: BOJ Announcement

Friday – FR: Business Climate

Sunday –  CN: PMI Flash Mfg Index

 

How I am looking to trade?

Based on past history for 2013 the
next couple weeks might be the last buying opportunity for the year!  Pullbacks have been buying opportunities this
year

YES, I am still trying to add
shares but I have moved to indexes to help put cash to work

ADDED shares of V, NVDA, F, FB, DIS,
SNDK and SPY over the last week

Added Long calls on V 200 Jan ,
SNDK 65 Jan and short puts on FB 50 Dec, TSLA 145 Dec (weekly)

Closed today long calls on V, SNDK,
with a great one week profit. 

 

 

Top of Form

Bottom of Form

Nvidia
Set To Grow

Dec 16 2013, 15:03  |  about: NVDA

Disclosure: I have no positions
in any stocks mentioned, and no plans to initiate any positions within the next
72 hours. (More…)

Nvidia (NVDA) has been introducing
innovative products regularly, which has put the company among the best in the
business. Recently, the company launched the Shield handheld gaming device
earlier this year, which has one of the most exciting features of streaming
games from a PC directly to the Shield. This allowed gamers to play their PC
games as well as Android games on the device, differentiating the Shield from
smartphones and tablets. Furthermore, the device has put Nvidia in the market
with a gadget of its own. However, the pipeline does not stop there – the company
is working on a number of new products, which I believe will have a big impact
on the future of the company.

GRID: A game changer?

Shield was quite
innovative on its own but Nvidia has now taken this technology a step further
by launching a beta test of a service called GRID. It allows the Shield to
stream PC games directly from an Nvidia data center over the Internet, thus
removing the requirement of owning a gaming PC in order to play PC games.

The stock price for Nvidia fell as
the company launched the product – investors were skeptical about the company
venturing into an unknown territory and believed it should stick to its core
business. However, the reviews for the product have been positive and keeping
in mind the lowdevelopment costs ($10
million) the company should be able to generate profits from Shield. The
company is definitely entering a new segment, but its extensive experience in
the gaming and hardware segment should allow it to compete well. With
PC-quality games, Shield could completely change the handheld market.

The impact of GRID
has also been negative on the stock price mainly due to investors being
skeptical about the company getting out of its core business. However, there is
potential available ($ billion market according to Nvidia) in the market for
such services and we will have to wait and see how GRID beta does. The biggest
risk can be the infrastructure – the cloud gaming segment is going to take
substantial investment to build data centers and other infrastructure.
Nonetheless, the company has early mover advantage and will likely reap
benefits of its position in the gaming industry.

Advanced Micro Devices (AMD) is also trying to
break into the cloud gaming market with its own line of graphics cards, the Sky
Series, aimed at that purpose. AMD has partnered with other cloud gaming
providers, such as CiiNow, but none of these services have reached any sort of
widespread adoption.

Additionally, the
handheld’s December update brings the ability to stream 1080p, 60 fps PC games
to your television using the device’s console mode and a wired Ethernet connection.
Previously the Shield could only stream PC games at 720p, and a number of big
titles already officially support the feature – you can play new releases like
Assassin’s Creed IV: Black Flag and Battlefield 4, as well as slightly older
titles like Bioshock Infinite and Borderlands 2, while Nvidia says that more
officially supported games will be added weekly.

Other pieces of the
puzzle

Logan, which would probably be
called Tegra 5, is expected to come out in January next year.
This one does not come with an integrated LTE modem. Just like Apple (AAPL), Nvidia makes a big
fast chip with impressive Kepler based GPU, but it won’t put an icera LTE
solution inside the same chip. Icera i500 is Tegra 5 compatible and it has
AT&T (T)
certification but the manufacturers will have to choose two chips instead of
one. It is expected to become compatible with other US and international LTE
carriers like Verizon (VZ) and
T-Mobile. However, Nvidia is likely going to be making bets on its Kepler based
GPU, expected to be the fastest graphics core ever integrated in a mobile that
will rock tablets and some phones around the world. The fact that Logan is
likely to pack very powerful graphics sans on-die LTE makes it a bit more
interesting for tablets than phones, which is exactly what we saw with the
Tegra 4.

Conclusion

The war between
Nvidia and AMD was lacking focus from Nvidia’s side lately. Plus it was not
really striving to get sponsorships from gaming companies. With AMD’s Mantle on
its way, Nvidia was looking a little stale in competitiveness. Now that it is
launching GRID, everything changes. This is a new arena for Nvidia and it would
be long before a competitor could jump in. Plus, with GRID in its hands, Nvidia
would be taking business directly from Xbox One and PS4 as it has a lot more to
offer. It is estimated that about 3.2 million people are waiting to buy gaming
consoles as the market is dry after it all sold out. Once it proves itself,
GRID can be a massive product for Nvidia. And let us not forget about the
upcoming Logan, the fastest graphics core ever integrated. In my opinion, the
long-term prospects of the company look strong, with GRID and Shield, it is
definitely going to grow.

Finally, looking at the fundamentals,
the stock is cheaper compared to the industry based on almost all the metrics –
its P/E ratio is 19.5, compared to 21.6 for the industry and P/B and P/S ratios
stand at 2.0 and 2.2, compared to industry averages of 2.7 and 2.6,
respectively. Furthermore, the company’s decision to increase dividends
indicates that the cash flows will be solid despite investing cash in Shield and
GRID. In fact, the decision to
return $1 billion to shareholders in 2015 shows that the company expects the
cash flows to be stronger.

 

Apple’s China Plans Could Provide Momentum Through $575, On
The Way To $900

Dec 16 2013, 08:14  | 54 comments  |  about: AAPL

Disclosure: I have no positions in any stocks mentioned, and no plans to
initiate any positions within the next 72 hours. (More…)

It’s no secret that Apple (AAPL) has been
gaining momentum in China. Coinciding with the launch of the 5c/5s, Apple’s
market share in China has jumped dramatically, and it’s looking more and more like the
company is not going to have any trouble monetizing the Chinese markets via its
deal with China Mobile.

(Source)



(Click
to enlarge)

And although neither company is openly admitting it, there
seems to bedemonstrable evidence that
Apple has reached a deal with China Mobile – with China Mobile going so far as
to show a picture of on iPhone on its website. Usually, that’s a dead giveaway.

A deal with China Mobile (CHL) would open
Apple up to hundreds of millions of potential iPhone buyers; more importantly,
a market that Apple hasn’t even begun to infiltrate. Fellow SA Contributor Trefis
argues that this could be a $45 billion opportunity for Apple – and I agree.

Which
leads me to how this could catalyze a stock run through $575 that could
eventually push towards $900 by 2015. Trefis notes in their article that this
could push Apple to as high as $650, but I believe that once the $575 mark is
broken, the next stop could be as high as $900 in the coming two years.

Apple
is one of the most highly covered stocks in the history of the stock market.
It’s followed and analyzed almost everywhere – on all blog sites, on all
financial TV networks, and across all other types of mediums – including
impromptu discussions at airport urinals amongst business types.

With
Apple’s coverage and popularity now, it’s likely that Apple is one of the
stocks most susceptible to the 21st century world of high speed trading.

In case
you’re not familiar with how things have changed over the last 20 years, the
days of traders running around on the market floor-executing trades have been
replaced by algorithmic programs written by MIT graduates that do the thinking,
trading, and executing automatically.

Now,
the guys you see running around on the NYSE and NASDAQ floor in the background
of CNBC, I assure you, are simply running to get their new computer overlords
more coffee (to be inserted via USB 2.0 port) when the computers demand it.
Otherwise, the computers might simultaneously discontinue the coffee-runner’s
health insurance, cancel their home heat, and make their Netflix only play
non-stop 15 hour chunks of CSPAN. The machines have taken over.

We can’t stop this evolution, as the sea change has
already taken place. However, we can be aware of the increased importance of
thinking like a machine, charting, and trying to profit from it. I’ve laid out
in a previous article exactly
how I feel about charting:

Charting, as I often state, is a love/hate relationship. I dislike
it because I don’t like the notion of trading a company based on the chart
without the fundamentals, but in the computerized algorithmic world of trading
that exists nowadays, it’s a necessary evil. You have to think like a machine
in order to make moves that will preempt computerized runs and raids of stocks
– and that’s why I think charting is a necessary evil.

It’s important to hammer home the sentiment that I use
charting as a supplemental tool, and you should do the same, too. Never base
decisions strictly on how a chart seems to look — RSIs can stay
oversold/bought, stochastics the same. There are no definites with
charting and technical analysis, don’t forget that.

Having
said that, with charting never being more popular than it is now, combined with
the major coverage on Apple and the amount of money that changes hands over
Apple stock on a daily basis, I think it needs to be taken into account here.

Long story short, I don’t often agree with chartists, but
in an article this morning on CNBC.com, I couldn’t agree more with Carolyn
Boroden ofFibonacciQueen.com:

That’s
because $575 is a key Fibonacci level representing the 61.8% retracement of the
swing from the September 2012 high to the April 2013 low.

Because
Apple already tested that $575 level last Thursday, and quickly pulled back 15
points, the next pass may be a make or break moment for shareholders.

That is, if Apple breaks above $575 on its next run
higher, the pattern would be considered bullish. However, if it fails, Apple
would make a double top at $575, and that would be bearish. Should that happen,
a correction may not be far behind.

Actually, all three chart mongers in the above mentioned article all have their own technical reasons
why Apple could be poised for an “epic” long-term run. Out of the
three, the $575 point was the one I had deduced on my own just yesterday before
reading it here – and I couldn’t agree more. What does this mean?

Here’s
how Apple looks today:



(Click
to enlarge)

$575
could very well be the key. There will be a double top established in the short
term if Apple cannot break through it. That would likely mean, at least in the
short term, a pullback.

But,
now onto the other scenario.

If Apple does break through $575, it’ll likely head to
$600, where if it forms a cup and handle pattern, it could mean something very
lucrative in the long term.



(Click
to enlarge)

If
Apple starts to get really bullish again, this multi-year chart shows you just,
exactly, how Apple could very well be on its way to $900 in the coming years.



(Click
to enlarge)

So,
there’s quite a bit to watch here with Apple over the coming weeks. Is there a
chance that $575 is going to be the key to unlock all of this? If Apple
continues to perform well as a company and grows in China as expected, then
yes. However, I’ll reaffirm all of my previous caveats about charting. I only
feel comfortable using it in this instance because I know that Apple is as
fundamentally sound as companies come. With the question of the fundamentals
securely behind me, I can then confidently move on to supplemental methods of
analysis, like charting.

Long
term, I remain bullish on Apple no matter what the chart outlook is. The
company remains a great long-term bet with its dividends and growth potential
in China – as well as its continued growth potential in items like Mac, where
it still has major market share to capture.

Best of
luck to all investors.

 

The 13
Most Popular Business Books Of 2013

MAX NISEN 

 
DEC. 17, 2013, 3:10 PM 12,556 

tephen Lam/Getty Images

Sheryl Sandberg’s “Lean In” is
among the top sellers.

Amazon’s annual list of the best-selling books on its platform signals which ideas
and trends have taken hold of the culture in a given year. 

Even in a world where technology is
taking over, books are an essential resource for people in business. DropBox CEO Drew Houston, for example, got a
crash course in business and management by reading bestsellers across different Amazon categories. 

We looked at this year’s list of
the 100 best-selling physical books on Amazon,
and pulled out those about business, productivity, and the psychology of
success. We ranked them by popularity and also included their overall ranking
on Amazon‘s
broader list. 

Along with newcomers like Sheryl
Sandberg’s book “Lean In,” some
older and still beloved titles continue to fly off shelves. 

Disclosure:
Jeff Bezos is an investor in Business Insider through his personal investment
company Bezos Expeditions.



13. “Crucial Conversations: Tools for Talking When the
Stakes Are High”

Author: Kerry Patterson, Joseph Grenny, Ron McMillan, and
Al Switzler

Overall ranking: 97

Year published: 2002

The book seeks to help people in
difficult and high-stress situations feel prepared, make other people feel
safe, and be “persuasive rather than abrasive.”

Find “Crucial Conversations” here »


12. “The Power of Habit”

Author: Charles Duhigg

Overall ranking: 82

Year published: 2012

From the Pulitzer Prize-winning New
York Times journalist comes an examination of how habits form, how they can be
changed, and the massive effect they have on businesses and our lives. 

Find “The Power of Habit” here »

 

11. “Strengths Based Leadership”

Author: Tom Rath

Overall ranking: 78

Year published: 2009

A wildly successful book from the team at Gallup,
“Strengths Based Leadership” is the result of an extremely broad
survey of both excellent leaders and the people who choose to follow
them. 

It was also the ninth most-searched book of the year on Google. 

Find “Strengths Based Leadership” here » 

 

10. “Mindset: The New Psychology of Success”

Author: Carol Dweck

Overall ranking: 76

Year published: 2006

Based on years of research from
Dweck, a Ph.D. and Stanford University professor, the book argues that it’s not ability or intelligence
that brings success, but whether you have a fixed mindset that doesn’t change
or a growth mindset that’s fluid and able to change.  

Find “Mindset” here »

9. “How to Win Friends and Influence People”

Author: Dale Carnegie

Overall ranking: 75

Year published: 1936

After more than 70 years, Carnegie’s book is still going extremely strong. His
advice and techniques change people’s lives to this day, and prominent fans include Berkshire Hathaway’s Warren Buffett. 

Find “How to Win Friends and Influence People”
here »

8. “Outliers”

Author: Malcolm Gladwell

Overall ranking: 59

Year published: 2008

Gladwell had a hit with
his 2008 look at success. The book argues that while talent, intelligence,
and hard work are all great, the real secret of successful people is often
luck, timing, and where they’re from.

Find “Outliers” here »

7. “Good to Great”

Author: Jim Collins

Overall ranking: 51

Year published: 2001 

Collins’ famous business book, which was
Amazon’s top seller in 2002 and 2006, argues that good companies become great
by confronting the brutal realities of their business, finding out what they’re
uniquely good at, creating a culture of discipline, and building and
maintaining momentum.

Find “Good to Great” here »


6. “David and Goliath”

Author: Malcolm Gladwell

Overall ranking: 42

Year published: 2013

Gladwell’s newest bestseller focuses on the hidden advantages that
underdogs have. The “Goliaths” of the world can be overconfident and
careless, he says, which often ends up costing them. 

Find “David and Goliath” here »

5. “The Five Dysfunctions of a Team”Amazon

Author: Patrick Lencioni

Overall ranking: 38

Year published: 2002

Through a fictional “leadership fable,” Lencioni demonstrates the
dysfunctional behaviors that can cause teams, even
those made up of the best people, to fail. 

Find “The Five Dysfunctions of a Team” here »

4. “Quiet: The Power of Introverts in a World That
Can’t Stop Talking”

Author: Susan Cain

Overall ranking: 28

Year published: 2012

Cain became a successful corporate
lawyer and negotiation consultant despite being an introvert. “Quiet” is a well-researched look at the advantages of being
an introvert.

Find “Quiet” here »

3. “The 7 Habits of Highly Effective People”Amazon

Author: Stephen R. Covey

Overall ranking: 27

Year published: 1990

One of the most successful self-help books of all time, “7 Habits”
teaches that with a change of viewpoint or perspective, it’s possible to be
dramatically more productive.

The book also saw a renewed surge
of interest after its author passed away last summer at age 79.

Find “The 7 Habits of Highly Effective People”
here »

2. “Lean In”

Author: Sheryl Sandberg

Overall ranking: 2

Year published: 2013 

The Facebook COO’s widely discussed book was the only one to appear on the top
100 list in both its physical form (at No. 2) and as an e-book (at No. 57). It
was also the most-searched-for book of 2013, according to Google’s annual
zeitgeist trend report.

She argues that women continue to
face career obstacles but can overcome them by speaking up, setting big goals,
working hard, and finding supporters.

Find “Lean In” here »

1. “Strengths Finder 2.0”Owen Thomas, Business Insider

Author: Tom Rath

Overall ranking: 1

Year published: 2007

This book was
a bestseller when it first came out and continues to sell extraordinarily well
today. It provides advice from the database of people who have taken Gallup’s
StrengthsFinder test, which is designed to advise people on what they’re best
at. 

Read more: http://www.businessinsider.com/most-popular-business-books-2013-12?op=1#ixzz2nly4m9Lh

 

Company Update: Apple Inc. (NASDAQ:AAPL) – Apple’s China
Plans Could Provide Momentum Through $575, On The Way To $900

By Analyst Consumer
Goods, on December 16th, 2013 in Consumer Goods

It’s no secret that Apple ( AAPL ) has been gaining momentum in
China. Coinciding with the launch of the 5C/5S, Apple’s market share in China
has jumped dramatically, and it’s looking more and more like …
Read more on this.

Apple Inc. (AAPL), with a current market cap of
$503.04B, opened at $555.02. 
  
Today’s price range has been between $555.01 and $559.47 per share and has
traded between $385.10 and $575.14 over the past 12 months. 
  
AAPL shares are currently
priced at 12.73x this year’s forecasted earnings, which makes them relatively
inexpensive compared to the industry’s 38.67x forward p/e ratio. 
  
And for passive income investors, the company pays shareholders $12.20 per
share annually in dividends, yielding 2.30%. 
  
Consensus earnings for the current quarter by the 47 sell-side analysts
covering the stock is an estimate of $14.01 per share, which would be $0.20
better than the year-ago quarter and a $0.49 sequential increase. In looking at
the bigger picture, the full-year EPS estimate of $43.55 would be a $3.80
improvement when compared to the previous year’s annual results. 
  
The quarterly earnings estimate is predicated on a consensus revenue forecast
of $57.30 Billion. If reported, that would be a 5.12% increase over the
year-ago quarter. 
  
Recently, UBS upgraded
AAPL from Neutral to Buy (Dec 3, 2013). Previously, Robert W. Baird upgraded
AAPL from Neutral to Outperform. 
  
When considering if perhaps the stock is under or overvalued, the average price
target is $589.29, which is 6.17% above where the stock opened this morning. 
  
Apple Inc. (NASDAQ:AAPL), together with subsidiaries, designs,
manufactures and markets mobile communication and media devices, personal
computing products and portable digital music players worldwide. Its products
and services include iPhone, iPod, iPad and much more.
 

 

Questions???

 

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