Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

GaveKal Capital present some great sector-based insights and noted that:

'A remarkable 79% (99 out 125 stocks) of health care stocks have outperformed the MSCI World Index over the past 252-trading days (one year). Meanwhile, only 11% (12 out 113 stocks) of energy stocks have managed to outperform the MSCI World Index over the past 252-trading days. You have been about 9x more likely to pick a winner in health care over the past year than you are picking a winner in energy'.  

Contrarian or momentum players take your positions for 2015!

Talking about 2015...as per normal optimism abounds at an index forecast level: 

A pretty good discussion of some of the key issues that may impact the fixed income market in 2015. I was particularly struck by this line:

'...we fully expect the search for yield to resume in early 2015 and that is why we think some increased exposure to HY and EM debt should be considered early next year'

More on this specific point tomorrow (Monday) morning on financialorbit.com...

Obligatory weekly oil related link here with this interesting thought/forecast:

'...shale-cost economics and OPEC budget math should result in prices moving back toward $80 per barrel by the end of 2015'

(h/t @MarkBrant1KM)

Meanwhile I see that the rig count numbers continue to push down...

Linked to oil this is a fascinating piece about renewable energy technologies which muses:

'Today, renewable sources of electricity and, to a lesser extent, transport fuels are more nimble and cost-effective, both technologically and commercially speaking, making them less vulnerable to the oil market's ups and downs. The low oil price could also make it easier for politicians around the world, if there is enough willpower, to impose a carbon price, increase energy consumption taxes, or continue to cut fossil fuel subsidies. Furthermore, the falling oil price has dragged down the price of natural gas in some regions, which could help slash the power sector's overall carbon footprint'.

Still 'head in the sand' a bit by ECB Vice President Vitor Constancio who despite seeing negative Eurozone inflation is not worried (link here):

"You'd need negative inflation rates over a longer period for that. If it's just a temporary phenomenon, I don't see a danger."

I am sure that Japanese policy makers made similar comments a couple of decades ago...

Good posting on age and risk with the worthy concluding observation that:

'My advice to new investors is to have reasonable expectations and learn, learn, learn.  Till this day, I am still picking up books and learning something new.  Do not let your ego get in the way because the market will always make a fool of those that think they are invincible'.

What a silver chart: 

Talking about silver, this is a brilliant infographic (far too large/detailed to try and show however!)

Cuba has been in the financial news a lot over the past few days following noise about a potential thawing in relations with the US.  I was surprised to see the extent of recent growth (albeit after a big contraction a generation ago - and clearly the country remains poor given such fluctuations/compressed growth compounding):

This cartoon is probably quite close to the truth!

Stuck for a late finance-related book for a Christmas present?  Here's a good short list by Ben at www.awealthofcommonsense.com

And the markets around Christmas?  Here's what history suggests:

Company-related observations:

Interesting from the Financial Times:

'This year has been the worst for profit warnings from the UK’s largest listed companies since the depths of the financial crisis...Research from EY, the professional services firm, shows that in the year to mid-December, FTSE 350 companies have issued 87 profit warnings — a higher total than in any year of the past decade except the 90 issued in 2008'

What a fascinating interview with the founder of Amazon Jeff Bezos.  This line is great:

'Many of the traits that make Amazon unusual are now deeply ingrained in the culture. In fact, if I wanted to change them, I couldn’t. The cultures are self-reinforcing, and that’s a good thing. We sometimes have people come to the company and they find Amazon very boring, because we don’t have enough competitive zeal. With annual planning processes, some companies literally start with, "Who are our three biggest enemies? Here’s how we’re going to hold them at bay or defeat them." We don’t have such a list at Amazon. It’s not how our annual planning process works'.

Interesting article on BMW and China with the observation that 'However much the company ends up revising down its hopes for China’s growth potential, you can be pretty sure BMW won’t be the last company adapting to the new reality in China'.  Talking about the auto industry I liked this article which highlighted the growing competition from online.

I totally agree with this optimistic posting on Google (and as my weekly dealing report showed yesterday I did buy stock in the last week below US$500).

Seeking Alpha notes that 'Bought for ~$1B by Facebook in 2012, Citi thinks Instagram is now worth 35x as much, and even calls this estimate "conservative."

I also see that an interview with the AstraZeneca CEO in the Swedish business daily Dagens Industri includes a quote of 'I consider it unlikely that Pfizer will return with a bid...I can't say it will never happen, but the probability that Pfizer returns is much less'.  

And finally...

As it is a reflective as well as planning ahead time of year I thought this posting titled '10 Financial And Helpful Moves To Make Every Year' by Sam at Financial Samurai really got me thinking.

Have a good week...and Merry Christmas/Happy Holidays!