3D Printing and Oil Bets Soar as Global Markets Stay Steady

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.
It was a quiet week in global stock markets, with the Dow Jones up 0.24% and the S&P 500 ending the week 0.66% higher. The MCSI Emerging Markets Index (EEM) ended the week pretty much where it started.
 
The big gainer in your Alpha Investor Letter portfolio was again 3D printing sensation Stratasys (SSYS) which rose another 5.72%. Norway’s Statoil (STO) continued its recovery, rising 1.72%. Your bet on the U.S. retail recovery The TJ Maxx companies (TJX) also rose 1.67% on better than expected earnings numbers.
 
This week I want to highlight a couple of things in your Alpha Investor Letter portfolio.
 
You’ll note that the size of your portfolio has expanded considerably — and perhaps unexpectedly — over the past few weeks. If you are a long time subscriber, you’ll already know that this is because many of your watch list positions traded above the 50-day moving average — my “rule of thumb” or technical trigger for re-entering a position from a watch list.
 
How does a position get on the “watch list” in the first place? Well, if a position hits its stop, but I feel it still has strong fundamental prospects, rather the getting rid of the position completely, I’ll put it on the watch list to keep an eye on it.
 
How does this strategy look in practice?
 
Some former positions like YUM! Brands (YUM) or Las Vegas Sands (LVS) don’t make the cut, as they are too vulnerable to a hard landing in China. So I dropped them altogether. Others, like the PowerShares Global Listed Private Equity Portfolio ETF (PSP) or the iShares Singapore Index ETF (EWS) I have kept on the watch list as the fundamentals are intact. That’s why I have re-entered both of those positions as they have recovered above their 50-day moving averages.
 
On a personal note, I will be traveling at the end of this week to the Republican National Convention in Tampa, Florida. I’ll also be looking at some real estate investment opportunities in the area, accompanied by some European private investors. We all think U.S. real estate is one of the best investment opportunities on the planet today.
 
I am particularly excited as the Republican Convention is the closest that I am getting to the U.S. political process since moving to Europe over 20 years ago.
 
As the Harvard Law School classmate of President Barack Obama, I had a chance to meet with several of my classmates at my 20th reunion at Harvard back in October who worked the Obama administration, and I wrote about my thoughts at the time in The Global Guru.
 
Like any university, Harvard is very proud of the impact its graduates are having on the world. That’s why it is so curious that with two Harvard Law School grads vying for the presidency (Mitt Romney was HLS class of 1975), I have not seen Mitt Romney’s name a single time in the latest Harvard Law School alumni magazine. And this is in a state where Romney was governor for four years.
 
Clearly, Harvard hasn’t changed a bit in the last 20 years…
 
Portfolio Update
MSCI Malaysia Index (EWM) finished the week flat. EWM is up nearly 7% over the past three months, and is pays a 3.75% dividend as a nice bonus. EWM is a BUY.
 
iShares JPMorgan USD Emerg Markets Bond (EMB) was also flat for the week, losing just 0.22%. Wells Fargo Advisors prefers U.S. dollar-denominated emerging-market debt funds due to the continuing European and euro crisis, and currently recommends EMB as one of their top investments. EMB is a BUY.
 
Berkshire Hathaway (BRK-B) gained 0.33%. BRK-B hit its 52-week high again last week, stopping just short of the $86 level as it did two weeks ago. Expect BRK-B to continue testing this level and likely move upwards. BRK-B is a BUY.
 
Visa Inc. (V) lost 1.82% during the past five trading days. Visa announced a new payment-data encryption service yesterday, Aug. 21, for its merchants and processors. This service will encrypt customer information and protect against interception. The new technology will be available in early 2013 and is expected to greatly reduce fraud. V is a BUY.
 
The TJX Companies (TJX) added 1.67% since your last update. TJX issued forward-looking guidance of $0.56-$0.59/share after reporting a Q2 profit of $0.56/share in its recent earnings report. UBS also reaffirmed its “Buy” rating and set a price target of $50.00 — 9.25% above Tuesday’s closing price. TJX is a BUY.
 
Stratasys, Inc. (SSYS) continued its mad dash upwards, gaining another 5.72%. Investor’s Business Daily added SSYS to the 25th position on its “IBD 50” listing of top-rated stocks, as Stratasys pushed to a new 52-week high. SSYS is a BUY.
 
iShares Nasdaq Biotechnology (IBB) dipped 0.64%. IBB traded sideways last week as it continued to rest and consolidate recent gains. IBB is up 28.5% year-to-date. IBB is a BUY.
 
WisdomTree Japan SmallCap Dividend ETF (DFJ) added 0.40% over the past five trading days. DFJ’s holdings are in industry, technology, basic materials, and consumer cyclicals. These sectors remain “sweet spots” in the effort to capitalize on a still-recovering Japan. DFJ is a BUY.
 
Market Vectors Indonesia Index ETF (IDX) was flat. Indonesia is the fourth largest country in the world, when measured by population, and is the largest economy within the Southeast Asian emerging markets sector. Indonesia is also sports a gross domestic product more than double that of Malaysia’s, and greater than that of technology bellwether Taiwan. One of my top bets on Asia, IDX is a BUY.
 
PowerShares Global Listed Private Equity Portfolio ETF (PSP) rose 0.98% last week. Over $42 billion dollars poured into private equity funds during Q2 2012 alone. This is double the $20 billion Q1 figure. Not bad for a sector that the Obama campaign is trying so desperately to demonize in an attempt to hurt presidential hopeful Mitt Romney. PSP is a BUY.
 
iShares Singapore Index ETF (EWS) gave back 1.35%. Recent 2nd quarter figures show Singapore’s manufacturing sector expanded 4.5%. The Singapore government also expects its gross domestic product to rise 1.5% — 2% for the remainder of 2012. EWS is a BUY.
 
Statoil ASA (STO) gained 1.72% over the past five trading days. STO has traded sideways under its 200-day moving average for the past two weeks and finally managed to break above on Tuesday. This action occurred right after RBC Capital upgraded Statoil from “Sector Perform” to “Top Pick” on Monday. STO is a BUY.
 
Lennar Corp (LEN) dipped just 0.32% after Lennar surging to a new 52-week high last Friday as the Commerce Department reported demand for residential construction permits hit a four-year high last month. LEN is a BUY.
 
iShares MSCI South Korea Index Fund ETF (EWY) gave back 0.81%. A one-year EWY chart reveals the importance of its $57.00 price level – a level EWY recently reached. After spending nearly all of the first five months of 2012 above this level, EWY has struggled below it over recent months. Now, after two weeks of trading sideways near $57.00, EWY finally appears ready to make another run at the $60.00 level – essentially, its 52-week high. EWY is a BUY.
 
iShares MSCI Mexico Investable Market Index (EWW) was flat for the week. The market I’ve branded the “Other China”, Mexico’s gross domestic product (GDP) in 2011 grew at a faster clip than both tech giants Taiwan and South Korea’s 2011. EWW is a BUY.
 
  

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Weakness with giant technology company Apple Inc. (AAPL) today helped to pull the Dow Jones Industrial Average down this afternoon from a morning rise to finish trading at 13203.58. That dip kept the Dow from hitting its highest closing in the past five years. Earlier today, investors were speculating that the Dow Jones might close above its May 1 end-of-the-day high of 13279.32, which would have produced the highest closing price since December 2007. The S&P 500 fell, as well, dropping 0

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