Todd Sullivan | TalkMarkets | Page 39
Hedge Fund Manager, Owner of ValuePlays and Angel Investor
Contributor's Links: ValuePlays Rand Strategic Partners
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. ...more

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S&P 500 Intrinsic Value Update
With signs of a rise in government spending, I suspect we are likely to see a rise in inflation. The typical investor response has been to sell Fixed Income and buy Equities. I do not see anything which is likely to be different this time.
Private GDP Running At 3% Growth, Chemical Activity Revised Higher
US Gross Domestic Product was reported higher than expected and past numbers were revised higher. With new data the trends can be calculated a little more accurately.
Retail Sales Continue Uptrend
Retail Sales continue in a strong uptrend and have a good correlation to Single-Family Housing activity.
Housing Continues To Trend Higher
Housing Market Index for Nov 2015 was reported at 62 with Oct 2015 revised higher to 65. It is always important to take into account the past revisions which color any current report.
The Employment Picture Is Strong
People who claim the employment situation is bad simply just aren’t looking at the data. When we worry about the 300k level of 1st time claims it is odd.
The Inflation & Deflation Mystery…
Inflation has always seemed a mystery to many. Milton Friedman said it is always too much money chasing too few goods. At all times, he said, inflation is a monetary phenomena.
Crude Oil & Inflation
It has long been assumed that commodity prices and in particular the price of crude oil drove inflation historically.
Does The Fed “Set Rates”?
Historically it has not been the Fed who sets rates. Historically rates have been set by the market as investors adjusted their preferences for Fixed Income vs. Equities.
Employment Continues To Rise
The flurry of forecasts of the Dow Jones plunging from 18,000 to 5,000, a dire economic calamity, from 6wks ago have faded rapidly in investor memory as the march of economic data continues higher
S&P 500 Intrinsic Value Index Update
Equity markets tend in the long term to rise in value with investor perception of the strength of the economy.
“Davidson” On Oil
In my experience the best way to judge current energy markets and oil (OIL​) (USO) price trends is to look long term using the XOI Index, an energy industry company index with a long history.
Housing Expansion Continues
The pace of Single-Family Home Sales activity as reflected in the HMI and Monthly Supply is really a reflection of the general employment trend and the financial health of individuals in the economy.
Production Cuts Keep Coming
So, we know US production keeps falling and now its seems the major offshore oil plays are due for a sharp production pullback also. I am of the opinion this is putting a floor on oil prices and part of the reason I chose to short the DTO.
Mortgage Credit Availability Increasing...Still A Small Fraction Of Peak Years
Mortgage credit continues to improve, albeit painfully slowly. This is the reason I’ve been saying for some time now higher rates are needed.
Jobs Hysteria
The refrain seems to be that because we had set a record for consecutive 200k+ monthly jobs gains, anything less than this immediately means we are sliding into recession.
Excessive Concern Not Warranted
Investors are concerned about China, concerned about consumer confidence, concerned about why in the US the Federal Reserve did not raise rates, concerned about the falling specific country PMI indicators.
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