Thursday, May 26, 2011

Is There A Lemming Trade? The Ira Sohn Conference Effect

 I am crossposting here and on Davian, the technology and marketing partner for my inflation-focused product for retail investors.

The Ira Sohn charitable conference took place in NYC today, and a large number of well-known and successful fund managers presented their best idea/s in rapid succession (each has ~15 minutes). The effect on the stocks in questions only confirms that stocks can be "branded" by being associated with the right manager on the right platform. It was fascinating to see the jumps in prices in real time during the afternoon. Did people do it just for a trade? Is this a buy first, think next situation? I don't know and I stayed out: no one is infallible, including these very smart guys who were actively talking their book.

Here are a few charts:









Tuesday, May 10, 2011

Real Median Incomes vs. Supermarket Stocks?

I am crossposting here and on Davian, the technology and marketing partner for my inflation-focused product for retail investors.

I had a very interesting conversation yesterday with a top-ranked analyst at a financial institution. Among the topics we discussed was the state of the average/middle-class consumer. My views, expressed here and on twitter, have been that healthcare costs are a significant and growing tax on the middle class (both directly and indirectly, by making US labor more expensive), and that US median incomes in real terms will trend towards global median incomes due to globalization. Structurally weak labor market keeps the growth nominal down, while inflation reduces the real growth.

The analyst's insight was regarding supermarkets. Supermarkets have been a challenging area to invest in over the last decade (some high-profile bankruptcies there are Winn-Dixie and the A&P parent). He overlaid a real median income chart over the stock charts of some of the big names, and the charts look very similar. I am including WMT here as the argument has been that the supercenters are responsible in part.
I find this very interesting because I have the sense that the migration to new formats (i.e. COST) cannot be wholly responsible for the stagnation in the stocks: with flat real incomes, price has become a bigger factor, and the traditional supermarket channel might not be the most competitive.

Charts via Safeheaven and Big Charts.