Not too hot, not too cold, just right.... Chicken Little is headed straight to KFC... where the sky is NOT falling.
- US GDP growth of 3.5%+ - Retail investor returning to equities - Low to slightly rising interest rates - Low consumer inflation - China and India underpinning global demand - Healthy growth throughout Asia and Lat Am - Some producer inflation due to firm/rising commodity prices - Healthy corporate profits - Reasonable stock market valuations - Dollar firm at historically low levels, good for exports - Financials in recovery, consumer and enterprise technology in good shape, cyclicals in a sweet-spot - Apart from problems with the Euro, the biggest risks are geo-political: Arabs and Israelis, North and South Korea, Iran vs. The World, Pakistan vs. Pakistan, Nuclear proliferation among rogue states and their neighbors...
All in all a good environment for stocks. What is not to like... unless you are Chicken Little?
1. My results do not color my perception. I have never touted my investment results because they are not that exceptional, except that I meet or beat the averages while maintaining a significant proportion of relatively *safe* income investments. I have bragged about being whole post crisis... but so are the averages. My main source of information on the economy is TV news and the internet, just like everybody else. So, yeah, I am a victim of the world-wide conspiracy to delude us onto thinking things are getting better, when for some people they are not.
2. The US economy is quite globalized so, of course, any exposure is international exposure. Sure, I have traded Chinese stocks and held Brazilian stocks, but my biggest holdings, the core of my portfolio, are mid-stream MLPs; Not really that international. But more to your point, retail and consumer stocks significantly outperformed last year... while China lagged. In any case, I am not soooo bullish on the US economy or US stocks -- I am realistic: 3.5% GDP growth next year and 10-20% gains in the S&P 500. The market is doing well; Economic trends across the board are positive including employment data... Fact, not perception. If you need data, Google it.
3. California: What a great place. I would gladly move back, but it is a bit too expensive for me now. The State has many problems, but I would not say that Keynesian economics is one of them, lol... Californians do not want to pay for the services they demand. Long-time property owners get subsidized services courtesy of everyone else. Not fair. No interest in Illinois... too cold. The Texas economy is underpinned by the energy industry -- great for the residents... Real estate in Texas is a steal... $300,000 for a really great house in Austin, Houston or Dallas... Why move to Cali... or Brazil!
GOL should be fine. GGB should be very fine (check also SID). Short Cali Munis?... there are much better and more productive ways to use your capital and get better returns. (Disclosure: I am short Treasuries via TBT... just a small position b/c it is a no-brainer.)
I have been in and out FRO. I have been in and out DRYS and only lost money --- the CEO is a crook. My only shipping play at this time is TOO -- which is really a deep-water oil services play with a very high divvy... an income investment. My feeling is that shipping has far to go before capacity and pricing tightens... there are much better and safer places to invest now. Financials, Material, just about everything.... Small and mid-cap tech is going nuts today... STEC, AKAM, ASYS, BRCM, FNSR... I think you brought ISRG to my attention... doing great today.
I love this market. Chicken Little can fry! Thank you, Ben Bernanke, you are the man! There is just no doubt that Obama is the greatest President since Bill Clinton. Except for Wall Street bonuses, impunity for crooked CEOs and tax breaks for the rich, the USA is the best country in the world, even better than Brazil (LOL). Winnie, you can go live in China tell us what it is like... but I bet you will be leaving your money in the USA.