Todd Sullivan | TalkMarkets | Page 41
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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Rising Rates Increasing Home Sales
The housing market is really the last part of the economy to fully recover from the recession. The main reason is artificially low rates that have restricted credit across the credit spectrum.
Copper Predicts, Um... Nothing
Copper prices have long held the position in some investor’s minds as a viable economic indicator. So strong is this belief that many call it 'Dr. Copper' .
Houston’s Housing Market Continues To Set Records
The Houston real estate market’s see-saw ride continued following May’s sales dip, with June sales volume up 4.1 percent and home prices setting new record highs.
Where Are The 'Save Our Seaport' Folks Now?
Wondering why a larger property is being approved in the same area - maybe it is because Fortis is HQ’d in Brooklyn and Howard Hughes is from Texas?
754,000 Vs 657,000
There are ~100,000 fewer individuals building houses today than there were in April 1988 yet the US population at 320 million in 2015 is 31% larger than the 244.5 million in April 1988.
Employment, Interest Rates And Housing
Total Non-Farm and the Gallup Job Creation Index show labor demand at all time highs. Economic expansion continues.
China & Emerging Markets
FXI soared more than 60% from lows of 32 to a high over 52 (the Shenzhen Stock Exchange Composite Index rose from 1,000 to over 3,200 over the same period).
“Surprising” Asset Quality?
Let's not forget Credit Suisse has been the most vocal Sears (SHLD) bear the past few years. Credit Suisse’s Balter has said SHLD is worth only $20/share (~$2.1B) and the the real estate case for the company is bunk.
S&P Intrinsic Value Update - June 26, 2015
Dallas Fed reports 12mo Trimmed Mean PCE(inflation) at 1.6% which has been roughly the same for the past 18mos. Inflation is the only input to the SP500 Intrinsic Value Index which does not trend smoothly.
Housing Supply Remains In Expansion Territory
That housing prices have been rising is a reflection of the fact that we still have a higher than normal portion of cash-only buyers. In other words it is those with existing wealth who dominate home buying at the moment.
Chemical Activity Indicates More Growth & The Fed Follows Market Rates
The Chemical Activity Barometer (CAB) reaches a new high for the current economic cycle at 100.6. The previous high was 101.1 in May 2007.
Ignore The "Buffett Indicator"
If we get a SP500 over $5,000 at its peak due to current Fed action to keep rates low, the correction will likely be more painful than any since 1990.
“Consensus Opinion”
Rising rates are and have always been a signal that investors are selling fixed income to buy equity as they seek higher returns.
Economic Trends Are Not Short Term
For generations nearly everyone viewed every security and market move as being related to economics. Even today if a security shifts in price, there will likely be someone, somewhere who says the 'market knows' something or other as an explanation.
“Davidson” On Shiller
Market P/Es tend to expand later in the economic cycle and severely contract during economic contractions. Why? Most would agree that this is due to changes in market psychology.
Economic Data Continues To Indicate Higher Markets
The data keeps supporting a rate hike sooner rather than later. Like the end of QE, this will be viewed as “bad for the markets” when the reality will be it is only ending because higher rates are in fact needed at this point.
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