From Barron’s, February 12, 2024 (Part 2)

[yogibearbull]

Pg 11. PREVIEW & REVIEW (consolidated). How soon the fortunes have turned? Toyota/TM now has better potential than GM or F. The EV rush has passed, and GM and F are slashing their EV budgets and operations. Toyota looks like a winner with its continuing bets on ICE and hybrids; it’s working on EVs, but isn’t ignoring its traditionally strong businesses.

DATA THIS WEEK. CPI (+2.9% yoy, core +3.7%) on TUESDAY; Treasury budget on WEDNESDAY; retail sales, capacity utilization, industrial production, business inventory on THURSDAY; housing starts, PPI, UM sentiment on FRIDAY.

www.barrons.com/magazine?mod=BOL_TOPNAV

Data This Week Link,

www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate



BULLISH. Mondelez (MDLZ; yield 2.3%; fwd P/E 21.4; good FCF; 75% non-US sales, 40% in EMs; new obesity drugs are hurting the US business a little, but not elsewhere; brands include Oreo, Chips Ahoy, Ciff Bar, Cadbury, etc; pg 12);

European Airport Operators (Aena-Spain /ANYYY, ADP-Paris /ARRPY, FRA-Germany /FPRUY; play on strong air travel growth, but they are not as volatile as airlines; all hold stakes in other airport operators; pg 15).



BEARISH. Super Micro Computer (SMCI; doubled YTD (!) on AI hype and good earnings report; 12/2023 recommendation by Barron’s; take profit – an example of good company with very overvalued stock; pg 14).



Pg 13, FUNDS. Cash/cash-equivalents won’t be attractive for long. Consider extending maturities with ultra-, short- and intermediate- term bond funds (ICSH, MINT, JAAA; BSV; BND). Multisector bond funds (OSTIX, TSIAX), and dividend-stock funds (VYM, XLV).



Pg 23, FUNDS. Thematic AI-ETFs are hot now, but those may include all sorts of related techs: BOTZ, AIQ, TECB, IGPT, CHAT, etc. Be aware that tech ETFs QQQ, XLK, etc have related tech exposures; SP500 (IVV, VOO, SPY) is also heavy in techs.



Pg 24, INCOME. Several TECH stocks offer dividends: AAPL, MSFT, IBM, CSCO, ORCL; KLAC, LRCX; ETF TDV. META just started paying dividends.



Pg 24, ECONOMY. The US and UK economies are in good shape, but both have election uncertainties. The Incumbents may not benefit as the public feels the pressures from high prices (lower inflation doesn’t mean lower prices) and high taxes. In fact, polls show that the public sees the economy as worse than the respective official data show.



Pg 25, TECH TRADER. This piece is harsher than Streetwise. It says that the new SPORTS streaming bundle by ESPN/DIS, FOX, Warner Br Discovery/WBD may finally kill TV, TV affiliates business and cable TV. This would be a pure sports bundle, so without the news, entertainment shows, etc. It will accelerate cord-cutting. Many TV and cable bundlers now use sports as lures for their bloated bundles of lots of useless stuff. With sports caved out, who will buy those bundles? But stay tuned – TV and cable may approach the FTC or DOJ to block this move.



Pg 26, Q&A/Interview. Alesia HAAS, Coinbase/COIN CFO. The US-based Coinbase has been very volatile. It ran up on the excitement related to the SEC approval of several physical/spot-Bitcoin ETFs (iShares IBIT, Fidelity FBTC, Grayscale GBTC, etc), but then sold off when investors became concerned that its new Bitcoin ETF custody business was a low-margin business that may hurt its retail business. COIN has diverse businesses – exchange, broker-dealer, custody; recent rate hikes helped with higher interest income. It has also increased its global presence. The legal fight with the SEC continues. These new Bitcoin ETFs will appeal to institutions, pension funds, RIAs. This will be a long-term positive for the industry, and for COIN, despite some short-term concerns. Congress needs to pass new crypto legislations, but it has been bogged down with other pressing matters.



Pg 54, OTHER VOICES. Charles LIEBERMAN, Advisors Capital Management; formerly at the NY Fed and Chase. Holdout home sellers sitting on low-rate mortgages aren’t as big a factor as people think. HOUSING prices are strong because the SUPPLY is low – from new construction (the low point was 2009) and existing home turnover. The source of the problem goes back to the GFC 2008; the new construction is still well below the 2006 peak. House flippers have disappeared. It is difficult to get mortgages. Pandemic created additional supply-demand issues. Note that every home seller is a buyer or renter somewhere else, so the net demand effect of the move is zero. The net demand is from family formations, divorces, 2nd or vacation homes. Strong job market and lower rates will drive new home construction.



Pg 55, RETIREMENT. Homeowners may tap home-equity loans (HELOCs). Typical rates are variable, now around 9.27%. Beware of teaser rates and conditions that may trigger credit line reduction or cancellation. Of course, it’s a loan that has to be repaid, so discipline is required.



Supplement GUIDE TO WEALTH



Pg S2: In this expensive market, consider DIVIDEND-paying stocks. Only funds are mentioned below, but several stocks are also included in the article.

US: VYM, SCHD

Consumer-Staples: XLP

Financials: XLF

MLPs: SMAPX

Real Estate: VNQ, XLRE

Utilities: XLU, UTG

Foreign: IEFA, IEMG

Cash-Equivalents: in limited amounts.



Pg S4: HOUSING market stinks, but buyers and sellers shouldn’t wait. Hold your nose and jump in. Mortgage rates have eased a bit but aren’t expected to move much. One can re-fi later if rates fall. Rates today are far from historical highs. All real estate is local, so be careful with regional moves.



Pg S5: Variations of BENGEN’s (1994) 4% initial withdrawal with COLA are discussed. Bengen himself says that 4.7% w/COLA is fine now; some advisors say that 6% w/COLA but annual monitoring may work. Others say to skip COLA in down years. Another variation is to just take 4% of the yearend balances – it removes the SOR risk, but annual withdrawals may vary widely. Immediate-annuities transfer longevity risks to insurance companies for fees. Keep in mind that increasing RMDs are also required from T-IRA and 401k/403b; Roth Conversions will reduce the RMDs.



After these features, there are listings of Top Advisors by states, Top RIA firms, Top Advisory Teams.



NOTE. It’s very irritating that Barron’s has stopped mentioning TICKERS for most companies mentioned. I now have to look them up. Sometimes this takes time as there are similar names, especially for banks.



LINK

[Deleted]

"BULLISH. Mondelez (MDLZ; yield 2.3%; fwd P/E 21.4; good FCF; 75% non-US sales, 40% in EMs; new obesity drugs are hurting the US business a little, but not elsewhere; brands include Oreo, Chips Ahoy, Ciff Bar, Cadbury, etc; pg 12);"

Whether its McDonald's, Pepsi, or Mondelez; price increases are impacting sales. My guess is inflation is far more impactful than weight loss drugs on junk food companies. Hopefully, consumers on a budget are making healthier food choices.

[FD1000]

Toyota has been a winner for decades with the best prices for what you get. It's amazing how this giant can make great reliable vehicles that can do most things at the top and their upper management earns much less than the US vulture management.  I have been saying for years that the Hybrid has been a great make sense, cheap transition without building expensive infrastructure.

YouTube TV already killed the cable and ahead of these individual offers.  All made possible by a big Tech Google. Netflix is another killer. The old guard needs to disappear. I hope to see ala cart channels and kill hundreds of useless channels. 

[liftlock]

Feb 10, 2024 18:27:59 GMT FD1000 said:

Toyota has been a winner for decades with the best prices for what you get. It's amazing how this giant can make great reliable vehicles that can do most things at the top and their upper management earns much less than the US vulture management.  I have been saying for years that the Hybrid has been a great make sense, cheap transition without building expensive infrastructure.

YouTube TV already killed the cable and ahead of these individual offers.  All made possible by a big Tech Google. Netflix is another killer. The old guard needs to disappear. I hope to see ala cart channels and kill hundreds of useless channels. 

I got almost 200,000 miles out of my Toyoto Avalon and I liked the quality and comfort of the car. .  In recent years I have found Toyota designs to be sorely lacking.   The vehicles have gotten smaller and the egress for someone tall is very poor. I can no longer consider their cars. 

[FD1000]

The Avalon was a nice big luxury car. The "replacement" = Crown length is 196 inches = Avalon. The Camry got bigger over the years, now at 192-3 inches.
My last 2 vehicles in 2022-3 were Hyundai + Kia.  They were a lot cheaper with great warranty, I added 10 years manufacture warranty for everything at $1400 for 10 years which in my book worth it ($140 annually for piece of mind). I know that after 10 years the Toyotas will cost less, but I prefer now the comfort, quietness, and features close to luxury vehicles and less about money. No matter what, I sell after 10 years, I can't take the money with me.

I used to have Hondas and Toyotas, by far the Camry was the most reliable, zero problems for 10 years...and then my wife totaled it. It was her first ever accident, it actually was very mild, she hit an SUV at 10 MPH and the damage was too high, the SUV had almost nothing because it's higher.