PTFI

December 20, 2017
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Summarizing an investment mantra into an acronym is a common practice, and generally, a lazy short cut to sum things up. The investment themes for 2017 oscillated from technology/growth, to financials, to Trump tax trade, to retail, and now, to just being long whatever makes sense irrespective of the theme the idea falls under. It’s a good time to be long whatever you are long.

This tactic, practically applied, is working, provided you are long enough different “stuff”. One could be doing very well in the second half of this year, owning anything in the Russell 2000, any bank, any domestically oriented industrial company, any retailer with a high tax rate, any collection of stocks you amassed from randomly throwing darts at letters and coming up with tickers, most any EM market, bitcoin, and even the the b-c level varieties of alternative bitcoins. Being long any/all of the above worked out really well. It was just that simple this year. Most real people simply weren’t “long enough” or held doubts on it all working out so easily at various times this year.

In thinking of an acronym to sum up today, a review of the recently popular:

ZIRP (Zero Interest Rate Policy)
BTFD (Buy the effing dip)
BRIC (Brazil, Russia, India, China)
TINA (There is no alternative)
BREXIT (British EU exit)
QUITALY (Italy EU exit)
FANG (Facebook, Amazon, Netflix, Google)
FAANG (Facebook, Apple, Amazon, Netflix, Google)
FAAMG (Facebook , Apple, Amazon, Microsoft, Google)
CANDIES (Chipotle, Apple, Netflix, Deckers, Intuitive Surgical, Express Scripts, Salesforce)
NOSH (Nike, O’Reilly Automotive, Starbucks, Home Depot)

For today’s monetary policy (Fed) and fiscal policy (tax plan) driven financial markets an appropriate market acronym is:

PTFI (Pile the f—k in)

This is the investment dynamic we are in and the strategy that is “working”. The perfect storm creating a relentless market melt-up:

*several month lead-up to a dramatically lower corporate tax rate which is all but culminated
*smooth Fed chair hand off from Yellen (Bernanke 2.0) to Powell (Yellen 2.0/Bernanke 3.0)
*lower for longer long term interest rates – for another year (US rates can’t go much higher with European/Japanese rates where they are)
*strong synchronized global growth
*EM recovery and best market environment in several years
*December seasonals

CJF’s investment strategy is to buy/remain long securities that make sense over time, regardless of the daily rotations:
-Lots of value stock opportunity in financials, energy, and even select retailers
-Growth opportunity in technology abounds: AAPL, GOOGL, AMZN, semis
-A potential telecom renaissance driven by net-neutrality, and better pricing power, after a challenging couple decades: VZ, T
-Dividend opportunities in out of favor REIT’s and special situations
-Industrial opportunities based on stimulus and “Make America Great Again” fiscal policy focus

 
Santa Clause brings something for all investors into year-end. Will be focusing on the opportunities, sub-sets, and specific ideas heading into the new year.

Happy Holidays!
CJF

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