built by advisors for advisors in a world dominated by smarter and smarter gadgets, one of the...
TRANSCRIPT
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Built By Advisors For Advisors
In a world dominated by smarter and smarter gadgets, one of the dumbest machines on earth is making a quiet comeback.
THE USELESS MACHINE TURN IT ON AND A SWITCH POPS OUT TO TURN IT OFF??
YIKES! ONLY$29.95
Source: Wall Street Journal 3/12/2013
TRUE STORY??!!
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Built By Advisors For Advisors
BIGFOOT INVESTMENTS OPEN FORUM
Mar 14th, 2013
WELCOME!
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Built By Advisors For Advisors
AGENDA WELCOME! ADMIN NOTESQUOTE OF THE DAYOPTIMISM GAUGECHARTS OF INTERESTSO WHAT’S UP WITH: INTEREST RATESA CLOSER LOOK AT: ALK DAVID’S CORNERSWAPS AND SPREADSLEE’S COMMENTS QUESTIONS/COMMENTS
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Built By Advisors For Advisors
IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TOHAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT.
WE’LL UN-MUTE YOU ON OUR END SO YOU CAN ASK QUESTIONS.
PLEASE MUTE AUDIO FROM THE MENU ON YOUR SCREEN SO WE DO NOT GET FEEDBACK.
THANK YOU!
“NOTES”
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Built By Advisors For Advisors
BigFoot Investments is now on Twitter, LinkedIn!
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Built By Advisors For Advisors
BigFoot On LinkedIn!
Don’t Forget To Join Our “Group”
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Built By Advisors For Advisors
Notifying You!
SMS Alert System
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Built By Advisors For Advisors
NOTES!
WE WILL NOW POST THE WEBINAR SLIDES AND RECORDINGS TO THE BLOG
ALSO - WE WILL CONTINUE TO SEND OUT THE SLIDES
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Built By Advisors For Advisors
QUOTE OF THE DAY:The two most powerful things in existence:…
Ken Langone – Founder Home Depot
…….A kind word and thoughtful gesture!
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Built By Advisors For Advisors
Optimism Gauge
As of: 3/14/2013
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Indicator Current Value Prior/Metric Value Current Value
St Louis Fed Financial Stress Index -.549 -0.597(Revised) +1.0
Chicago Fed National Act Index (3 Mon Mov Av) 0.30 0.23(Revised) +.50
Unemployment 7.7 7.9 (Revised) +.50
Weekly Jobless Claims (4Wk Mov Av) 346,750 349,500(Revised) +.50
ECRI Weekly Index 6.2 6.8 +.50
Conf Board Leading Indicators (NEW) 94.1 93.9 +1.0
University of Michigan Sentiment - Final 77.6(Final – Feb 2013) 73.8(Final-Jan 2012) -.25
Monthly Retail Sales (Adjusted) 416,990 416,070 +.50
NFIB Small Business Sentiment 90.8 88.9 -.50
ISM Manufacturing 54.2(Expansion Line = 50) 53.1 +.50
Economic Capacity Utilization 79.1 79.3(Revised) +.50
Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A
+.50
S&P Case-Shiller 20 City Comp Index 145.95 145.82 (Revised) +.50
Total +5.75Last Update: 3/14/2013
Measuring Our Economy
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NOTES/COMMENTS
CURRENT READING: 76.3%
PRIOR READING: 72.0%
BIAS: BULLISH
11 OF 13 INDICATORS POSITIVE
TREND - POSITIVE
EconomicOptimism
Index
15
25
35
45 65
75
85
95
76.3%
READING AS OF: 3/14/2013
POSITIVE AS OF: 8/17/2012
Current Reading Prior Reading
Measuring Our Economy
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Built By Advisors For Advisors
Charts of Interest!
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Built By Advisors For Advisors
BEFORE AND AFTER – HOW ARE WE DOING?2007 to NOW
Source: Wall Street Journal
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Built By Advisors For Advisors
5 REASONS THE ECONOMY IS NOT EXPANDING
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Built By Advisors For Advisors
REASON #1 – THE MONEY IS JUST SITTING!
EXCESS RESERVES GROWING
MONEY VELOCITY
DECREASING
MONEY SUPPLY
GROWING
Source: Federal Reserve Bank of St Louis
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Built By Advisors For Advisors
REASON #2 – SMALL BUSINESSES OUTLOOK: POOR
Source: Calculated Risk
Below 95% of Pre-Recession
Level
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Built By Advisors For Advisors
REASON #3 – LABOR FORCE METRICS MASK A PROBLEM
Source: Federal Reserve Bank of St Louis
FEB 201363.5%
Feb 200766.3%
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Built By Advisors For Advisors
Business Investment – Down 25%
Source: Bureau of Economic Analysis
17.4% of GDP 13.1% of GDP
REASON #4 – GDP NOT GROWING FAST ENOUGH
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Built By Advisors For Advisors
REASON #5 – THE JOBS GAP
Source: The Hamilton Project
Getting back to“normal” will be tough
Most Likely Path
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Built By Advisors For AdvisorsSource: ICI
MONEY FLOWS
NO “ROTATION” YET!Flows into bond funds
actually increased
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Built By Advisors For AdvisorsSource: Political Calculations
CHANGES CAN HAVE CONSEQUENCES
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Built By Advisors For Advisors
BigFoot News The “Portfolio” Tab
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Built By Advisors For Advisors
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Built By Advisors For Advisors
4 Sections
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
Trade Log Excel file
To Override BigFoot System
Trade Date Breakout/Edit
To Remove Position
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Built By Advisors For Advisors
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Built By Advisors For Advisors
Monthly Returns
- Current Data- Historical Stats- Strategy Stats- Comparison to the Market
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Built By Advisors For Advisors
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Built By Advisors For Advisors
SO WHAT’S UP WITH:
INTEREST RATES – BERNANKE “SPEAK”
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Built By Advisors For Advisors
Recently (3/1/2013) Chairman Bernanke made a speech to the Annual Monetary/Macroeconomics Conference in San Francisco:
“LONG-TERM INTEREST RATES”
DISECTING THE SPEECH (AGREE OR NOT) WILL TELL YOU HOWTHE FED VIEWS RATES AND WHY. WE SHOULD LISTEN!
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Built By Advisors For Advisors
WHY ARE RATES SO LOW? Central Banks pursuing accommodative policy
Boost Growth Reduce slack in economy
Broader economic environment (world-view) Constraints that environment places on policy
→ The first one is obvious→ The last two are also “policy drivers”
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Built By Advisors For Advisors
BROADER ECONOMIC PICTURE
Global Yields “Conform”
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Built By Advisors For Advisors
BASIS FOR 10 YEAR U.S. RATES (CONSTRAINTS)
THREE FACTORS*:1. Expected Inflation2. Expected path of “real” rates3. Residual rate or Term Premium
*COMPONENTS OF YIELD
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Built By Advisors For Advisors
Note decline in Term Premium
If inflation is close to NOMINAL rate – the other two components make slightly “negative” contributions
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Built By Advisors For Advisors
FACTORS AT WORK: Ten year yield is an expectation Fed effects changes in “nominal” rates If inflation moves slowly, real rates are “controlled” In the longer term (real world) rates are determined
primarily by NON-MONETARY FACTORS The 10-year rate is “predictive” of expectations of a
slow cyclical recovery and slow long-term growth rates
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Built By Advisors For Advisors
MOVING FORWARD (THE DYNAMIC)
…”Move toward more normal rates over the next several years”
“Normalization of Term Premium might also contribute “(to the rise)
“Next chart illustrates (4) possible paths….” “…the basic message is clear—long-term interest rates are
expected to rise gradually over the next few years”
Source: Bernanke quotes in speech
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Built By Advisors For Advisors
RATE ESTIMATES MOVING FORWARD
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Built By Advisors For Advisors
RANGE COMPUTATIONS
Note: Up/Down ranges are quite equalized
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Built By Advisors For Advisors
RISKS FROM THE FED PERSPECTIVE
RATES WILL REMAIN LOWTHEY WILL NOT
“I hope my discussion this evening has convinced you that, at least in economic circumstances of the sort that prevail today, such an approach [increasing rates] could be quite costly and
might well be counterproductive from the standpoint of promoting financial stability.”
FED POSITION
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Built By Advisors For Advisors
A CLOSER LOOK AT: ALK
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Alaska Air Group, Inc (ALK)Alaska Air Group, Inc., through its subsidiaries, provides scheduled air
transportation for passengers and cargo. It offers extensive north/south service within the western United States, Canada, and Mexico; passenger and cargo services to and within the state of Alaska; and long-haul east/west service to
Hawaii and 13 cities in the mid-continental and eastern United States. The company offers passenger air services to approximately 24 million passengers and fly to approximately 100 destinations. As of December 31, 2011, its fleet consisted
of 117 Boeing 737 jet aircraft and 48 Bombardier Q400 turboprop aircraft. The company was founded in 1932 and is based in Seattle, Washington.
Source: FinViz.com, March 2013
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Sources: Value Line, March 2013
POSITIVES: Alaska Air offered new flights which helped add to their 8% increase over 2011 numbers. Passenger revenue per available seat mile also increased nearly 3%. Lower fuel expenses offset higher maintenance and ancillary costs. All told, earnings grew 21% year over year.
Possible concerns: If fuel prices spike or the global economy fails to gain sufficient traction, it would surely weigh on results of the forthcoming fleet modernization program.
Alaska Air Group, Inc (ALK)
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Built By Advisors For Advisors
Enters Portfolio
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Built By Advisors For Advisors
ENTERS PORTFOLIO 3/1/2013 – BUY SIGNALPurchase at $54.11
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Built By Advisors For Advisors
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March 2013 Stock Picks
As of February 28, 2013 - Subject to change.
3
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Built By Advisors For Advisors
Barclays Upgrade 3/4/2013Target $63.00
FINVIZ SUMMARY
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Built By Advisors For Advisors
FEB 2013 DATAImproving Steadily In All Metrics
February Year-to-Date
2013 2012 Change 2013 2012 Change
Revenue passengers (in thousands) 1,376 1,341 2.6% 2,854 2,695 5.9%
Revenue passenger miles RPM (in millions) 1,870 1,761 6.2% 3,902 3,577 9.1%
Available seat miles ASM (in millions) 2,198 2,085 5.4% 4,632 4,256 8.8%
Passenger load factor 85.1% 84.5% 0.6 bps 84.2% 84.0% 0.2 bps
On-time arrivals as reported to U.S. DOT 90.6% 89.5% 1.1 bps 88.6% 84.1% 4.5 bps
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Built By Advisors For Advisors
Dow Transportation Index
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Built By Advisors For Advisors
Dow U.S. Airline Index
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Built By Advisors For Advisors
VALUE LINE
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Built By Advisors For Advisors
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Built By Advisors For Advisors
8-K Filed 3/13/2013 – Stock Up Over 4%
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Built By Advisors For Advisors
8-K Filed 3/13/2013 – Stock Up Over 4%
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Built By Advisors For Advisors
ALASKA AIR, OTHER AIRLINES SOAR AS PROSPECTS IMPROVE
The Transportation-Airlines industry group posted the largest gain in the past eight weeks among the 197 industries tracked by IBD.
The top advances in the industry include Spirit Airlines (SAVE), up 31% year to date, Alaska Air Group (ALK), up 29% and SkyWest (SKY), up 19%.
Another boost came Feb. 22 from the Department of Transportation, which reported passenger traffic increased 0.8%, year over year, in November. Domestic travelers inched up 0.4%
while international passengers jumped 4.3%.
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
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Built By Advisors For Advisors
THE CHARTS PLEASE!
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Built By Advisors For Advisors
DAVID’S CORNER
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Built By Advisors For Advisors
SWAPS & “SPREADS”
IGNORE AT YOUR PERIL
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Built By Advisors For Advisors
SWAPS AND SPREADSRATE PRIOR CURRENT STATUS
Libor/OIS 13.86 14.51
Euribor/Eonia .130 .135
DTCC RepoIndex
Agency .200 .120
MBS .222 .126Treas .189 .111
High Yield 4.88 4.76
Federal ReserveCurrency Swaps
(ECB)USD million
7 Day 0 380
Open 4,192 7,963
Note: Status = No impact Status = Negative Impact
As Of: 3/13/2013
CREDIT ANTICIPATES – EQUITY CONFIMS
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Built By Advisors For Advisors
Lee’s Comments!
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Built By Advisors For Advisors
QUESTIONS & COMMENTS
THANKS FOR JOINING US!
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Built By Advisors For Advisors
IMPORTANT DISCLOSURE INFORMATION
Content is intended for investment professional use/review only. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future
performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot Investments.com), or any non-investment related content, made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), be suitable for any investment professional’s clients portfolio or individual situation, or prove successful. The investment professional retains
all decision making authority as to whether or not to follow and/or implement any of the presentation content. BigFoot has absolutely no responsibly for any suitability determination pertaining to any of the investment professional’s clients, such
obligation being exclusively the initial and ongoing responsibility of the investment professional. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.
Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot Investments.com. BigFoot Investments.com. is neither a law
firm nor a certified public accounting firm and no portion of the content should be construed as legal or accounting advice. Investment Professional acknowledges that to the extent required to do so, it is his/her/its exclusively responsibility to advise
his/her/its employer/broker-dealer of its BigFoot subscription. BigFoot Investments.com is a service of Lee Johnson Capital Management, an SEC registered investment adviser located in Fort Worth, Texas. A copy of the Lee Johnson Capital Management
LLC’ current written disclosure statement discussing our advisory services and fees is available for review upon request.
No Sharing of Content: You acknowledge that the presentation content is for investment professional use only. You warrant and represent not to share any portion of the presentation content with any non-subscriber, including but not limited to your
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