Picks for 2012

[Grieve]

Since this year is almost wrapped up (and looks to be pretty flat), already thinking about 2012. Doug Kass listed his "2012 surprises" at TheStreet.com today, and he's predicting that the market will exclipse it's 2000 highs this year, led by the financials:

http://www.thestreet.com/story/11357403/...-2012.html

He's worth paying attention to, because his list from last year nailed the flat finish for the S&P500 dead on, against what most other commentators were saying.

Anyway, I'm hoping he's right. My picks for next year are:

1) Apple. This year it didn't release anything "new" (iPhone was a refresh in the same body, iPad was also a minor upgrade), and the stock is still up 25% YTD. Next year they release a totally new iPhone, a totally new iPad (with retina display), and a new product line, the iTV. I think we see at least $500, but more likely $600.

2) JP Morgan (JPM). I like Kass's call on the financials, and this is the best quality one of the lot. I also have a bullish C call spread, though.

3) Netflix. This is my speculative play. They cost me a lot of money this year, but I think they can come back. Won't put much money into it, though.

4) Oracle. They just had a shocking miss that brought down the whole tech sector. But I'm betting it was a blip and they come back strong.

5) F5 Networks (FFIV). I bought in January in the low $100s, rode it all the way up to $130, then all the way back down to $69. It's back up to $106, now, and I think it should have a strong 2012.

Also, if the economy continues to recover, I like Ford, Cat, and FedEx (go Vllad!). Outside the US, I like Brazil (EWZ). Hell, just to show I'm not the Apple fanboy my rep suggests, let's pick Google as well.

[Vanraw]

1) Apple.

Im still not going to bet against you but...... I did make a little money on Apple. But I think the growth road from here on out is going to be much harder. We will see.



2) JP Morgan (JPM).

If you have to go to a specific financial company I agree these guys seem to be a great choice. Buying an ETF might be a better choice.




3) Netflix. This is my speculative play. They cost me a lot of money this year, but I think they can come back. Won't put much money into it, though.

To me this is high risk / reward. They might be a $300 stock by the end of the year. They might be bought by someone, they might be a $2 stock.



4) Oracle.

I work with Oracle to often and all can say is they provide the worse support I've ever seen in a company. They also dont get the concept of real-time call processing applications and the need to have a fail-over mechanism in a database that is is both geographically diverse and real-time availability. I hate this company. Of course I'm not really sure what kind of company they are going to become. Buying Sun was a strange move to me. And Sun hardware is getting its asses kicked by Intel based systems. So, Im not sure what these guys are going to be in a year or 2. Could be good, but I just don't know. As a side note I will say that large companies are embracing the open source movement more and more, and that will hurt Oracle in the long run.



5) F5 Networks (FFIV).

I will say at work that we are buying f5 equipment aggressively, They have a good notch market for application layer diversity.

[Vanraw]

For my picks I have to say that I dont have any for 2012. In my secure / retirement investments, I'm well balanced through index funds mostly thorugh fidelity and some nice funds that my company has that are not available to the average investor.

For my other investments, I'm of the opinion that buy and hold in any fashion is dead. At least for now. There are 2 many uncertainties yet in Euro, and the American and China economies. Great investments can lose too much money because of how much influence the ETF, Mutual funds, and large hedge funds have over the market. My strategy is going to continue to be to buy into leveraged ETF's on up and down swings.

I will say that I am over all bullish. Meaning I will be much more likely to bet on the market during dips then peaks.

I predict the dow will close above 13k but will be bouncing back and forth all year.

[Grieve]

3) Netflix. This is my speculative play. They cost me a lot of money this year, but I think they can come back. Won't put much money into it, though.

To me this is high risk / reward. They might be a $300 stock by the end of the year. They might be bought by someone, they might be a $2 stock.

Chatter that Yahoo will buy it - up 16% this year already. Which means it's probably due for another fall...

[Grieve]

Blimey, I didn't know how good that call on Netflix would be - it's up almost 42% for the year already! I bought a $95-$100 call spread for January 2013, thinking there was an outside change it would get there by the end of the year, and it's almost at $100 a week later - crazy stuff!

AAPL, ORCL, FFIV, and JPM are all up 4-6% for the year as well. Hope it lasts - earnings season starts tonight, so that's probably going to decide if the run continues or fizzles.

I'm getting more and more bullish on AAPL. The news just keeps getting better and better - they are making crazy inroads in the enterprise, which is expected to account for $19b in sales this year and $28b next year. Factor in China growth and new products this year, and everything is looking really really rosy. I know I'm a lone Apple fan around here, but I really think you could make some money with some calls or call spreads. Just have to time it right (might be some profit taking after hitting the new high today). I'm buying February call spreads, so I capitalize earnings on the 23rd.

[Jakensama]

1) Apple.

Shocking

3) Netflix. This is my speculative play. They cost me a lot of money this year, but I think they can come back. Won't put much money into it, though.

I'm on the fence with this one too, their recent debacle has shown truly inept leadership, but on the other hand everyone I know since I moved back still uses it to stream shit...

I had a bit on it already and its been a nice gain since I picked it up when it was bottom of the barrel, but not sure about long term validity...

[Vllad]

JP Morgan is interesting. Is their any history to back up that choice?


I wouldn't do any transportation stocks until March or April. The first quarter always has a slight dip so April is always a good time to buy trans stock.

[Grieve]

Vllad, it's a recovery bet. In the article I linked, I think Doug Kass makes a good argument that the financials will recover from the pits this year, and JPM is the best of breed right now (GS just isn't what it used to be). The rebound in the financials is already playing out, but we'll have to see what happens when earnings come in. I have a June JPM call spread, so I'm not thinking very short term.

I actually have a LOT of call spreads on the go right now, most not expiring until January 2013. Names include AMZM. BAC, CAT, CSCO, CRUS, FFIV, NFLX, NUAN, ORCL, and SNDK. Oh, and those AAPL guys.

I should add, except for AAPL, I haven't done a lot of research on any of these. The financial are a beaten-down recovery bet. Same for CAT. For NFLX and ORCL, I think the sell off was way overdone. CRUS and NUAN are Apple-related plays. FFIV is a cloud bet (I work for a company in the cloud space), and you could say also an Apple play. Amazon is based on the fact that these guys are going to drive every other retailer (except Apple) into the ground.

Since I'm using call spreads, my exposure is fairly small to everything except AAPL.

[Breand]

I jumped back in to TZA today at 23.90. We'll see!

[Vanraw]

I jumped back in to TZA today at 23.90. We'll see!

I'm really temped as well. I'm just not sure what bad news is on the horizon. The euro trash are disappointing me by acting in a mature and organized fashion.....

I guess Iran could be the next puke....

Or some bad earnings (doesn't seem likely),

Or some correction on the positive unemployment numbers. So if the next unemployment numbers raised it back to 8.7 or close to 9, the market would puke.

[Breand]

Or some correction on the positive unemployment numbers. So if the next unemployment numbers raised it back to 8.7 or close to 9, the market would puke.

Which is likely as the drop was largely attributed to temporary holiday positions.

[Vanraw]

Some more thoughts moving around in my head.

The market (dow) right now is close to the post 2008 crash highs of 12,800ish (currently hitting above the 12,500 mark. Prior to 2008 the high (and this is a all time high) was slightly above the 14,000 mark.

I believe that the market will not hit anywhere close to the 14k level in the near future. Meaning that I would be very surprised if we saw 14k in 2012. However, if you look at the economy (which isn't great), its hard for me to justify the current levels of the market. Comparing 2007 economy where the market hit 14k (only 1500 points below what it is now) to the economy today, doesn't make sense.

So imagine if you will, the unemployment level dipps to 4 or 5%, and the corporate earnings / revenue numbers look great, housiong starts return to some level of normalcy and even tax revenues are looking good so that America restores its AAA rating. How high would the market go up from here? Surely a hell of allot more then 1500 points.

Now I dont think the unemployment or tax revenues are going to turn on a dime. The main point or perception I have is that that if a 14000 DOW is the correct level of a 2007 economy, then 12,500 or even 12,800 is way to high priced today. Something does not make sense.

More Ramblings. I think 14k in 2007 was a peak and over priced as well. Which proved correct as 2008 crash showed.

I guess I'm slowly talking myself into a bear stance?????

One other rambling. Its earnings season again. From a financials perspective, JPMorgan Chase is on Friday, with Bank of America, Citigroup and Wells Fargo to follow next week. My gut is that JPMorgan will be good, but BoA and Citi will not.

I think I may jump into a TZA or even FAZ (The triple bear TZA of financials) in the coming day's.

[Grieve]

Corporate earnings are significantly higher than in 2008. I think the market can hit and exceed 14k this year.

[Vanraw]

Corporate earnings are significantly higher than in 2008. I think the market can hit and exceed 14k this year.

Really? Over its highest level ever? Im thinking when / if this hits 13000, the shorters are going to go wild.

While earnings might be higher, if the global economy doesnt pick up, this is all a dead cat bounce.

[Vanraw]

More musing about the short term pic. The Spain and Italy bond auctions went well, and were priced at a level that did not freak anyone out. This is a really good ssing for the Euro trash stuff that has been crushing the markets. Perhaps the Euro issue is finally on the mend, and we wont see the huge drops because of it???

That leaves Iran as the next market driver..... That an earnings...

JP Morgan reports tomorrow. The reading / prediction is low. Meaning high profit but low over qall health. Here is a good read.

<!-- m --><a class="postlink" href="http://www.latimes.com/business/money/la-fi-mo-jpmorgan-earnings-20120112,0,3343593.story">http://www.latimes.com/business/money/l ... 3593.story</a><!-- m -->

Paints a bit of a dismal short term picture for Finance in general....

[Vanraw]

I jumped back in to TZA today at 23.90. We'll see!

I just jumped into FAZ (Triple leveraged financial Bear ETF) for 31.16.

Lets see.

[Vanraw]

Jp Morgan disappointed. I actually thought most of the news was already priced in, but revenue growth miss wasn't expected. They still have a solid balance sheet.

Also just heard that S&P will be downgrading the euro trash....

More donuts for the short term bear.

[Breand]

Greece just broke off debt talks with creditors too..

[Grieve]

Yep, you guys picked a good time to go short. Although the market is shrugging it off remarkedly well - may end on highs of day. The downgrades should be announced after hours...once that news is no longer hanging over us, I wonder if there will be a rally on Monday?

[Grieve]

France, Spain and Austria downgraded so far...

[Vanraw]

Germany and Finland kept aaa. That's good news.

I hope wells Fargo and citi miss next week. Hard to say. Reading up on wells Fargo though, I have to say they are on pretty solid ground.

[Grieve]

WFC beat. Citi missed. Guess which one I'm in... :roll:

Looks like the markets as a whole are up nicely, though. Go China!

[Vanraw]

Im actually very surprised the market handeled things. CITI and JPmorgan missing, as well as Greece steping away from the table, and possible approaching default.... Yet the market didnt puke. Im surprised, and a little concerned about my short term bear stance.

Right now Im up on my FAZ but being that the bad news I thought we would hear came and went, I feel like there might be a bull bump coming, leaving me with the bear chewing my butt.

The main question being, what is the new low and new high? Is 12.4k dow / 1300 s&p the new low of the band?

[Grieve]

Bank of America (which I'm also in) announce on Thursday, I think, so a bad number might send FAZ up some more. Of course they could shock everyone and beat. Google and Microsoft on Thursday too... GS is tomorrow.

Next week is a pretty big week for me. Apple and EMC on Tuesday, Netflix on Wednesday, CRUS on Thursday, and POT on Friday

[Grieve]

Goldman beat, and is up a little.

Thursday is actually going to be a bit crazy for tech - Google, Intel, Microsoft and IBM all report after hours! Wow, just imagine if they all dissapoint or all beat? That's going to drive the market the next day for sure. Friday is option expiry day, so there is going to a lot of volatility anyway.

I'm not sure I have the balls to hold my call spreads to expiry...might have to sell them today.