July 2015 Entry

Greetings to everyone,

Once again, I ignored the advice given by Goldman Sachs on TV and made money! In my May edition of this newsletter I mentioned that the Chinese market was in bubble territory so I shorted the Chinese market by buying put options (which goes up when the market goes down) on the ETF, “ASHR”. I did that right after I saw the Goldman Sachs man in charge for China on CNBC saying that the Chinese market was not ready to go down.  The put options I purchased are up by 25% and they have more to go on the upside. Since those remarks were made by Goldman Sachs, the Chinese market has gone down by 26% (bear market territory).  As I mentioned in my last edition, the Chinese market had gone up 50% in 6 months and 100% in one year.

At the Shenzhen exchange, famous for its many tech firms, half of stocks with analyst estimates have a forward PE above 50 (current DOW30 P/E is at 16.12). I prefer companies with a P/E below 25. Some compared their current market condition to our NASDAQ market around 1999 where Yahoo had a P/E of 1,000 (approx.). They were adding 3 million new retail clients every week and 75% of those people did not have college degrees-most of these people left the educational system when they reached 15 years of age. It is safe to assume that these people were treating the market as a casino and it is no secret that the gaming industry does a good job in ‘such’ markets. US gaming analysts state that casinos around China are losing business as most Chinese believe that the Chinese government will be able to keep their market from a major sell off. Also China got introduced to the free market economy only a few decades ago.  Margin financing in the Chinese market is around $600 Billion (Credit Suisse states that 9% of Market Cap is from margin bought stocks)! Just imagine all the margin calls!! I believe that this downturn has more legs but it might not go down a straight line.  After the 2007 crash, Chinese investors stayed away for 7 years. Our market started going up in 2009.  Most Chinese investors believe that their government will protect them from a major sell off so the market looks more attractive than   casinos. It would be impossible to stop a major downturn as it would be like JP Morgan who tried to stop the 1929 crash. It is like trying to stop an avalanche with sand bags! The ripple effects could be felt all over the world.

 The previous time I made money going against Goldman Sachs was when I purchased the ETF known as OIL that relates to the commodity oil (WTI). In March of 2015, when WTI was at $45, experts from Goldman Sachs were saying that WTI will fall to $25.  Please note that WTI was at $110 (approx.) in July of 2014. At that time investing in oil (commodity) was a ‘no brainer’. My strategy was to make an investment at that time and if the price of WTI dropped to $25 to increase my investment by about 10 times and thereby reduce the average cost of the investment. WTI did not go down from $45 and it went up to about $61. I sold at $61 with a profit close to 25% (in 3 months) and sine then WTI has been falling to about $57.  If it drops to $45 or so, I will re-enter the market again.  Hopefully then it will slither down to $25. Even if the world goes in to a depression (unlikely), it is almost impossible for WTI not to go upwards of $45 in the long run and experts such as T Boone Pickens expect WTI to go over $100 in 12 to 18 months. As Jim Cramer is fond of saying now, most good oil companies are still trading as if WTI price was still at $45 but he used to recommend good oil companies when WTI was at $45. Disregarding his advice, I went with the commodity oil through the ETF, “OIL” as when you do that you do not have to worry about the debt level held by companies and other negative factors that could have an impact on the underlying company.

 Now for the US market. For the past year or so I have been repeating over and over again that this market is over-valued and it is dangerous to invest in this market unless we see a 10%+ correction. IPOs coming to the market is at an all-time high; this is a very bad sign that the market is a near a top. On 6/24/15, Carl Icahn was on CNBC and he too stated that he was concerned about the market valuation. I have been admiring and following his moves since the 1980s. He is one of the best activist investors in the world!  I made the mistake of not buying Apple stocks or call options when Carl Icahn got in to Apple last year-which led to an almost quadrupling of the stock price. If I am not mistaken, his investment was around $1Billion. Yet, his company lost money in 2014 due to the severe decline in oil prices.  You win some, you lose some! According to Carl Icahn, this overheated stock market reminds him of the market in 2007-just before the dreadful fall.  As I have indicated in my previous newsletters, the high yield market is in bubble territory.  According to Carl Icahn, this is like the mortgage crisis in 2007 and he stated that some are putting out ‘fudged earnings’. On that day (6/24/15) when Carl Icahn came on CNBC, Netflix had a 1 to 7 split which made some people bullish but he who got in to Netflix long time ago, sold his holdings of Netflix with a profit of about $2 billion. In his mind, Netflix could face severe competition in the future. However Carl Icahn stated that he will not sell Apple and if it goes down, he will buy more. This is why I always ask readers to keep at least 50% of the portfolio in cash. Another point I have been making for years is that it is better to miss out on some gains to protect your capital. Being 100% invested in this market is dangerous.  Carl Icahn was saying that the yield on the high yield was only 2% more than a good corporate bond and the people who invest in high yield are risking 40% of their capital to get 2% more on the yield! As Greenspan stated, “Irrational Exuberance” (speaking of the stock market, decades ago).  According to Carl Icahn, he has other long position other than Apple and he is hedging these investments by shorting the high yield market as there is a link between the 2 markets. I too started shorting the high yield market by buying put options on the ETF, “HYG”.

 Carl Icahn gave this warning on 6/24/15 and on 6/29/15, Dow Jones Industrial Average dropped 350 points!! That evening I checked on Asian markets and I found that they were all down again for another 2% yet the US investors tried to rally the market on 6/30/15-even though the news was bad from Greece. This is another bad sign that the US market is over-heated.  The US Federal Reserve was determined to raise interest rates but due to what was going on in Europe and the warning they received from the IMF, they held back for now.  The Feds also admitted that we are close to full employment so pretty soon we should start seeing inflation rising.  Low oil prices have helped us to keep the rate of inflation low. The Feds also do not want to raise interest rates now as that would further increase the value of the dollar and become a problem to all US companies that do business outside the US.  My feeling is that when they get to increasing interest rates, they might have to be more aggressive than they are currently planning on doing as inflation is the biggest enemy of a good economy.

 Now for Greece, Europe and the Euro; as I indicated in my previous newsletters, a few months ago, and all professionals were bearish on Euro/Dollar. At that time I started shorting Dollar/Euro. Initially my investment increased but then came Greece. Initially my investment went up because the European economy was definitely getting stronger. Greece is small compared to the total EEC but if Greece leaves the Euro, Spain and Italy might follow that example. Initially that might bring down the Euro.

Greece has been living beyond its means with the aid of the EEC. Some say that it is in the interest of Germany to have Southern European countries in the Euro to keep the Euro low compared to the dollar; if not US companies will take market share from their own export market. In other words, without the Southern European countries, the Euro will be much stronger than the US dollar. Also Europeans are more concerned about inflation than the US. In the long run, I am still bullish on Euro/USD(Dollar).

Till we meet again, PEACE!

Fernando

Early Summer entry

Good Morning Everybody,

This bull market is moving forward without even a 10% correction and this is scary! In order to have a healthy long term bull market, we need a 10%+ correction.   After Greenspan made the comment on ‘irrational exuberance’, the market moved higher for 3 more years.  Shanghai Market has moved up 100% within the past 10 months and over 50% over the past 6 months while the fundamentals do not back up such a move. Shanghai is definitely in bubble territory.  I have purchased put options on ASHR (Deutsche X-trackers Harvest CSI 300 China A-Shares ETF) which acts as an ETF for the ‘Chinese market’. 

 The talk on Wall Street is that there is a liquidity problem in the international bond market and at times, even during one given day, there are rapid movements in yields. Sudden rise in interest rates could pose a big problem for all equity markets. Most people should maintain 50% (or more) of the portfolio in cash to make use of such an opportunity; and more so not to put all one’s capital at risk. Periodically I purchase put options on the overall market. Premiums are too pricey on the DIA (Dow Jones) but premiums on QQQ (Nasdq100) and the IWM (Russell200) are quite reasonable.

According to the ‘herd mentality’, the dollar is expected to rise over the Euro through 2015 and many have made investments making that assumption. I take the contrarian view and I started shorting the Dollar/Euro through various ETFs.  Even if I am not going to list this in the body of this newsletter, those who want to make money with the rise in the Euro, I suggest the ETF, FXE (CurrencyShares Euro Trust). For my personal account, I purchased call options on FXE. To make matters worse, call options on the volatility index (VIX) have been rising recently. Longer we go forward without a 10%+ correction, more of a risk we take with our investments.

 Till next time.

 Fernando

May 2015 Entry

Hello Again,

 A couple of weeks ago, we reached the 6th birthday of this current bull market.  Prior to the 1929 crash, that bull had a 71 month run.  It is impossible to say how long this bull will keep on running. Since I started writing this letter, I have been careful not to add new recommendations for the simple reason that in this over-valued market, it is very difficult to find good values and furthermore in a bear market, most stocks, including the ones listed here would see a significant decline. The best defense is to keep about 50% of assets in cash even though the interest rate is close to zero. Losing a little for inflation is better than losing a lot in a bear market. With 50% cash, we will have a great opportunity to make money when the market finally goes in to a major correction. 

 In this week’s Barron’s, Ed Yardeni states, “ Valuation remains too high. However it could still go higher. I still see a 30% probability of a global stock market melt up as investors welcome bad news as good news”. When the global central banks take the punch bowl away and start increasing interest rates, we could see a major decline in asset prices. These major trend reversals could come with no prior warnings.  For example, a sudden increase in economic activity might increase the likelihood of the European Central Bank moving away from their current negative interest rates which might end the rapid increase in the dollar. Now through stocks ETFs (i.e. ticker symbol UUP), you can bet on the dollar.

 Right now the put option premiums on the UUP are so cheap because all the pundits see the dollar going up and not down. When the flow of money is reversed, the dollar would go down. At times, it is better to bet against the ‘herd’. I would not be surprised to see wage pressures driving up inflation in the US which would make the US Federal Reserve to increase rates. It is a historical fact that they wait too long to increase so they end up increasing rates more than previously expected. Certain sectors have gone through corrections.

 With respect to oil, it is too risky to get in to oil stocks. The big players will do okay but they seem over-valued.  The expected dividend per share paid out by most of the big oil companies would be less than their expected earnings per share (EPS). Some companies such as Exxon Mobil might not lower or eliminate the dividend but investing in such companies is risky at this time. Even though I do not list it here as a recommendation, I am investing in the commodity itself through the ETF ticker ‘OIL’(on WTI).  I purchased some shares at $10.40 and I doubled by holding when it dropped to $10.10. As some predict, if the WTI drops to $25, then one share of this ETF(OIL) would be worth about $5. If the price of WTI oil remain at $25 for a long time that would only signal a severe global depression and that is very unlikely so if WTI falls to $25 and thereby by the ETF(OIL) drops to $5, I would quadruple my holdings. I might have to wait a couple of years (worst case scenario) but the probability of making a substantial gain is very high.

 Now that we are approaching summer when money managers go on vacation and some believe in ‘sell in May and return in November’, I won’t be surprised to see a correction within the next 2 months. I always keep a few put options on the overall market but the best way to be prepared is to keep 50%of the portfolio in cash.

 Good luck!

 Fernando

How long on this Bull?

Hello again folks,

A couple of weeks ago, we reached the 6th birthday of this current bull market.  Prior to the 1929 crash, that bull had a 71 month run.  It is impossible to say how long this bull will keep on running. Since I started writing this letter, I have been careful not to add new recommendations for the simple reason that in this over-valued market, it is very difficult to find good values and furthermore in a bear market, most stocks, including the ones listed here would see a significant decline.

The best defense is to keep about 50% of assets in cash even though the interest rate is close to zero. Losing a little for inflation is better than losing a lot in a bear market. With 50% cash, we will have a great opportunity to make money when the market finally goes in to a major correction.  In this week’s Barron’s, Ed Yardeni states, “ Valuation remains too high. However it could still go higher. I still see a 30% probability of a global stock market melt up as investors welcome bad news as good news”. When the global central banks take the punch bowl away and start increasing interest rates, we could see a major decline in asset prices. These major trend reversals could come with no prior warnings.  For example, a sudden increase in economic activity might increase the likelihood of the European Central Bank moving away from their current negative interest rates which might end the rapid increase in the dollar. Now through stocks ETFs (i.e. ticker symbol UUP), you can bet on the dollar. Right now the put option premiums on the UUP are so cheap because all the pundits see the dollar going up and not down. When the flow of money is reversed, the dollar would go down. At times, it is better to bet against the ‘herd’.

I would not be surprised to see wage pressures driving up inflation in the US which would make the US Federal Reserve to increase rates. It is a historical fact that they wait too long to increase so they end up increasing rates more than previously expected. Certain sectors have gone through corrections. With respect to oil, it is too risky to get in to oil stocks. The big players will do okay but they seem over-valued.  The expected dividend per share paid out by most of the big oil companies would be less than their expected earnings per share (EPS). Some companies such as Exxon Mobil might not lower or eliminate the dividend but investing in such companies is risky at this time. Even though I do not list it here as a recommendation, I am investing in the commodity itself through the ETF ticker ‘OIL’(on WTI).  I purchased some shares at $10.40 and I doubled by holding when it dropped to $10.10. As some predict, if the WTI drops to $25, then one share of this ETF(OIL) would be worth about $5. If the price of WTI oil remain at $25 for a long time that would only signal a severe global depression and that is very unlikely so if WTI falls to $25 and thereby by the ETF(OIL) drops to $5, I would quadruple my holdings. I might have to wait a couple of years (worst case scenario) but the probability of making a substantial gain is very high.

Have a great month!

Fernando

Spring Wishes

Hi All,

When a market is overvalued, it could remain that way for many years but that does not change the fact that it is a dangerous place to invest. This bull market is over 6 years old and has gone without a 10%+ correction for that long.

Most stocks of good companies have more than tripled over the past few years. In the market, it is easier to make money than recover from a big loss. In 2014, Intel was the Dow 30’s biggest gainer but if you purchased Intel in the year 2000, you are still looking at a 50% loss-even after 15 years!

The best strategy for now is to hold 50% cash and invest the rest wisely. If there is a big correction, using the 50% cash, we would be able to find good bargains. However over the past few years, there has been a sector rotation. Gold miner stocks  has been on a downward spiral since April 2011; even though no one knows for sure it could have hit a recent bottom.  In 2008, Gold miners ETF (GDX) hit a low of $17.80 which it did again ($17.20) in October 2014. When I wrote the last newsletter on 12/31/14, we had a loss of 65% on Barrick Gold (ABX) but as I expected gold started rallying at the end of 2014 and our losses are down to 27% at the current time. I believe that this is a long term bullish period for gold.

The price of gold itself might go from $1200 (approx.) to $1500 by 1/1/17. European Central Bank is following in the footsteps of the US Federal Reserve and getting in to quantitative easing to boost the European economy and therefore expecting the German Index to move up by 28% is quite reasonable. Recently there has been a lot of doubt about Greece but now it seems like that the status quo would remain. The euro weakening is good for European exports and another factor that would help Europe is cheap gasoline prices. For the past year, GE has been trading between 24 and 27 so if GE hits 24 again, it would be a great idea to purchase in the money call option. If the price drops below 24, then it would be a good idea to sell the option-even at a loss. I do not recommend trying to short at 27 as the long term potential is great for GE. Oil too could be bottoming out and even though I did not list it under the ‘watch for future purchases’ section, ETF with the symbol OIL (this is on oil and not on oil companies) would be a good place to bottom fish; hoping to add more if the price keeps falling. In this market, one needs to keep at least 50% cash and buy very selectively.

I wish you all the best!

Happy New Year to All

In 2014, The DJIA rose 8% (approx..).  This bull has been running for 6 years so the bull is getting tired and old. It is becoming harder and harder to find value. If we have a severe correction, most investors who have made a lot of money in the market could run to the exit by selling their portfolios to hold on to their profits.  It is very risky to get in to the market but at the same time, this trend could go on for a long time.

Technical/Chart analysis also shows that the market could decline in a very big way. However over the past few years, we have seen a sector by sector (Gold, Oil etc.) correction. Rapid decline of oil prices is a mixed blessing.  Lower oil prices are seen as a tax cut for consumers and a positive indicator for the economy.  Instead of looking at what lower oil prices could do for the economy, we should look at what lower process are signaling; the extreme low oil prices are not solely due to excess supplies; this is a signal that the demand in the global picture is falling and it is a prediction that we are looking at a global recession.

The European economy is still in a recession. Lower oil prices have forced Russia in to a recession. Canada, Mexico and oil producing countries are in deep trouble. Many years ago, the total debt of oil companies was around $100Billion and now it is at $3 Trillion. Most of the high yield corporate bonds were issued by the oil companies and most of those companies will have a problem meeting their obligations. A disruption in the bond market could easily spill over to the equity and foreign exchange market.  Right now, cash is king.

A severe correction in the equity market (20%+) would be good for the long run. Then the question is when to get in to the market if the market starts to decline; this is very tricky as getting in ‘too soon’ would be like catching a falling knife.  I rather doubt that the US economy would go back in to a recession. Falling oil prices as well as the rising dollar and economic trouble overseas would put pressure on the US Federal Reserve to hold back on increasing interest (which seemed inevitable in 2015). If the US market drops significantly, it would give an opportunity for intelligent investors to make long term investments.

Have a great year!

Autumn Post

Hello Everyone,

This is about falling oil prices and the oil industry.

The International Energy Agency has warned that the current slump in oil prices will hold back investment and could create shortages in the future as overall energy demand is forecast to grow by 37% in the next 25 years. Fatih Birol (chief economist, IEA), speaking at the IEA’s annual World Energy Outlook, said that there were already signs of a 10% cut in US spending by oil companies as a result of the slump in oil prices there to $80 per barrel (Slump in Oil Prices, Terry Macalister, 11/12/14).  On 11/14/14, Russian President Putin, asked if it was possible for the world to face a potential catastrophic drop in oil prices, he replied, “such a scenario is entirely possible and we admit it”. Brent crude, the grade traders look at the for pricing has collapsed in to a bear market as leading members of OPEC resisted calls to cut production and US output climbed to the highest level in 3 decades because of the shale boom. Brent is heading for its 8th weekly decline after sliding below $80 for the first time in 4 years. Futures were at $78.29 a barrel in London today (11/14/14), down 6.1% this week and 29% this year (Kravchenko & Meyers, “Russia braces for catastrophic drop in oil prices”, Bloomberg.com, 11/14/14).  Jim Cramer is not all that pessimistic as he stated, “Sometimes it is gut wrenching to watch and read the coverage of the oil patch now that oil is coming down. It is frustrating because the pundits commenting on it are new to the game and seem to have no idea of the gradations, the shales, the budgets, and the way these companies are run” (11/11/14). These companies have different strategies. The ‘majors’ (Like Exxon Mobil and Chevron) have drilling budgets that can’t be switched on a dime. They need to be thinking of production growth in 2019, at least a 5 year plan. On the other hand the major independents, the really lean, well-run companies that we know as EOG, Concho, Anadarko, Apache and Noble, are fabulously run by very smart people who really have their pulse on the huge shale in this country. They are nimble and for most part do not have worldwide ambitions (Jim Cramer, Trading Oil Stocks, 11/11/14). Recent earning calls show that oil companies who are in to hedging (commodity prices) are doing good job of managing their finances. Oil companies with high Debt/Equity ratios might have a problem in the future. Drop in oil prices is good for the general economy as it is seen as a tax cut and it is especially good for the freight side as well as the retailers.

Have a Great Day!

End of Summer entry

Hi All,

For the past few months, I had the German Market ETF (EWG) on the ‘watch list for future purchases’ and now it is time to get in to this ETF. If the price drops, it would give us an opportunity to add to our holdings.  I also had Home Depot (HD-up 14.68% in 5 months) and Disney (DIS-up 12.20% in 5 months) on the ‘watch list’; however now I wish I was able to give a buy recommendation in March 2014!

We went through a 4.5% correction during the past 30 days but we did not suffer any losses.  Ford (F) and Emerging Market ETF (EEM) up by 12%+ over the past 5 months and the others are up between 1.8% and 5.17%.  Current yield on the 10year Treasury Note is at 2.41%.

Summer is not usually a good time for the market as most fund managers go on vacation; which leads to low volume days.  Labor Day has come and gone! September/October are usually the worst months for the market but there is a possibility that we might see the averages going up during this September though.

Have an abundant Fall!

July 21, 2014 Entry

Hello Again,

 It is time for an update!

 As usual, the stock market is suffering from summer doldrums. Due to low volume, the few transactions that take place will have a bigger than normal impact on the market.  Usually September and October are bad months for the market. In my opinion, since we had a lackluster year, we might see the market move up during September. The high flyers for 2014 such as Apple, Tesla, Biotechs and so on might see a severe correction during August-November period as money moves out of these stocks in to stocks that were unappreciated during Q1 and Q2 of 2014. Investing in companies with a reasonable PE (price to earnings ratio) with good future prospects would be a prudent policy.  However, like a broken record, I have to repeat that this bull market is getting very old so keeping 25% to 50% in cash is always advised. Sophisticated investors should have 1% to 3% in put options as a hedge against a downturn of more than 20% (3400 in Dow points).

 About 2 months ago, Wells Fargo downgraded Johnson Controls (JCI); and ever since then JCI has been doing quite well. On 7/14/14, Barron’s had a very positive article on JCI:

Industrial conglomerate Johnson Controls is wheeling and dealing its way into a more profitable business.  The stock could jump 20% or more.  CEO Alex Molinaroli has accelerated the pace of buying and selling businesses, The deal with a unit of SAIC Motor (China’s enormous state owned car maker) gets JCI out of the day-to-day slough  of operating in a low margin, slow growth business and gives it with a 30% stake in a division of SAIC Motor. The joint venture will have about $7.5 billion in annual revenue, margins of roughly 6%, and top line growth of 8% once it gets underway in 2015.  Johnson Control’s earnings could top Street estimates within 12 to 18 months, taking share price to $61 or more from a recent $50.  Despite investors recent infatuation with corporate deal making Johnson Controls’ disposal of its auto-interiors business didn’t generate a lot of love.  Johnson’s stock didn’t move much in reaction, but it should have.  The transaction give added credibility to Johnson’s vow to manage it capital more aggressively, resulting in favorable long-term effect on its share price.  Currently Johnson stock is flat this year; it’s likely that earnings will jump sharply with in the next 12 to 18 months taking its stock up 20%, to $61.   With an uptick in global growth and the redeployment of about $5 billion in capital, earnings could jump to an annualized rate of $5 to $6 a share within 12 to 18 months as margins improve – great for stock price, the share could move well above $60 and closer to $70.

(Source: Barron’s Newspaper, page 20-21,  July 14, 2014)                               

I wish you all the best!

What’s New since the Last Edition

Hi folks, here is my latest entry, I hope you enjoy it. News media keeps repeating how the market is making new highs or how close the market is to reach the 17,000 level for the first time. Since 1/1/14, the Dow is up 4% but over the past 83 days, it has been only up by 2.95%.  Three of my recommendations, Ford (F), Johnson Controls (JCI) and Emerging Markets ETF (EEM) are up by 7.69%, 8.49% and 13.67% respectively during the past 83days. I recommended Ford against the actions of Warren Buffet and all auto analysts and came out a winner in 2014. Since the Wells Fargo downgrade, JCI share price has moved up by 8%+ proving that I was correct and Wells Fargo was incorrect! It is always good not to follow the herd or one might get slaughtered when the herd heads towards the slaughterhouse! I recommended selling DRYS when the loss reached 9%but since then it has risen by 13% to the level we initially purchased. It is better to stick to a discipline than go after every opportunity. I am still deeply concerned about some Wall Street analysts had say about the management at DRYS. This 13% increase took place when the company announced that it was getting in to some new business areas.

What will happen to the market in the future? No one knows for sure. In my case, I only hold 50% of my portfolio in cash, most call options and a small percentage in put options on the overall market as a hedge against a very big correction (15% to 25%). People get excited over a 500 point decline or an uptick but that is nothing. People should see things only on relative terms. 1600 drop is only 10% and that would be healthy. I would prefer a correction 3400 (20%) or more which would make the market healthy for a long time and open up many opportunities to invest for the future.  People ask if it is possible to have huge financial disaster as we had around 2007/2008. It is definitely possible. In my opinion, the next disaster will come from the equity investments made by the world’s 157 central banks.  Evidence of an increase in equity-buying by central banks and other public-sector investors has emerged from a survey of publicly owned or managed investments compiled by the Official Monetary and Financial Institutions Forum (OMFIF), a global research and advisory group. The OMFIF research publication, Global Public Investor (GPI) 2014, launched on June 17, is the first comprehensive survey of $29.1 trillion worth of investments held by 400 public-sector institutions in 162 countries. The report focuses on investments by 157 central banks, 156 public pension funds and 87 sovereign funds. It has long been recognized that sovereign wealth funds and public pension funds around the world have become large holders of company shares. The best-known example is the Norwegian sovereign fund, Norges Bank Investment Management (NBIM), with $880 billion under management, of which more than 60% is invested in equities. The fund owns on average 1.3% of every listed company globally, and 2.5% of listed companies in Europe. Rivaling NBIM is now the State Administration of Foreign Exchange (SAFE), part of the People’s Bank of China, the biggest overall public-sector investor, with $3.9 trillion under management, well ahead of the Bank of Japan and Japan’s Government Pension Investment Fund (GPIF), each with $1.3 trillion. Jens Weidmann, president of Germany’s Bundesbank — which retains a highly important, conservative role in the euro area in spite of the establishment of the supranational European Central Bank to run the continent’s single currency — spoke yearningly last week of the need for “central banks to shed their role as decision-makers of last resort and, thus, to return to their normal business.”

(David Marsh, “Market Watch”,6/16/14).

Thanks for reading it. I wish you all prosperity.

Sincerely,

L S Fernando.

June 5th Entry

Hello again!

Since the 6% correction and recovery in February 2014, the market has been sluggish. After having a very good year in 2013, this is not surprising. The best thing that could happen to the market would be to have a 15% to 20% correction over a 4 to 6 month period –which is broadly based. This kind of correction would give a new lease of life to this bull market. According to historical records, this market is getting old and tired but there is a difference this time; we barely got over the time period where Feds kept decreasing interest rates. In the past, this phase did not take this long. This gives me hope that this bull might run for a few more years. However I will not be surprised to see a sharp correction or an unexpected bear market. It is not a good thing to be fully invested at any given time and likewise it is not a good thing to be out of the market completely either. I have been keeping a close eye on the stock market since 1985. Most of the time, it is a very boring place where nothing much happens. It takes a lot of patience and discipline to make money in the market.

Entry for May 6, 2014

Hi!  On 4/30/14, I issued my second (April) edition of my stock newsletter. This bull market is getting old (over 5years old)! Most retail investors get in to the market during the latter part of the bull market.

If you want a free copy, send me an email to prosperitystocks@yahoo.com. Here are some excerpts:

WARNING: Please note that we might have a severe correction or a crash at any given time in the future. If we encounter such a correction/crash under ‘certain’ (very difficult to define) circumstances, it would be a buying opportunity.  This is why it is good to keep 25% to 50% of your funds in cash. Just like earthquakes are not predictable, these corrections and crashes are not predictable.

Ford Motor Co (Symbol: F)

Price, when initially recommended (March 2014): $15.48

Current Price: $16.15 (Gain: 4.33% within 32 days)

Trailing PE: 10.02

Forward PE: 8.50

Recommendation:  Buy (down from ‘very strong buy’)

Expected price on or before Jan 2016: $20 (24%)

General Electric (Symbol: GE)

Price, when initially recommended (March 2014):  $25.88

Current Price: $26.89 (Gain: 3.90% within 32 days)

Trailing PE: 22.11

Forward PE: 14.77

Recommendation: Strong Buy

Expected price on or before Jan 2016: $35 (30.16%)

Stay tuned!

Newsletter Update for April 28, 2014

Hello Again! Periodically I will update in the future, anyone can go back and see what I said in the past regarding the market, as well as some specific stocks. So here we go:

What I wrote on 4/20/14:

The cover story on Barrons this week was on Home Depot. They are expecting the share price to rise by 25%. It is at $85 now and I have a call option with a strike price of $100. It also had this to say," A Wall Street analyst says Home Depot's current management, led by CEO Frank Blake, is the best he has seen in 29 years of covering the retail industry". If it is a bullish day tomorrow, there is a high probability that HD will go up tomorrow.  I have been going in and out of HD for the past 2 years. Under "Market Watch", it also had an article titled 'Warning for small caps' as they have had a rough couple of weeks recently. For the first time in 17 months, the Russell 2000 touched its 200 day moving average-signaling a long term trend change. For the past few weeks I have been watching Alcoa (AA) even though they are losing money, it is expected to make good money in the future. It is already up 50% but it could go much higher. Last week, it was one of the heaviest traded stocks as it went up 1% in price with the volume rising by 8%; which is a good technical indicator. Ford used to be on this list every week for the past year or so but it was missing from this week’s list. I wonder why! GE is still there and it is very bullish. Barons is very bullish on emerging markets, too. I just placed a sell order on a call that has gone up by 60% and I also have another call that I bought recently. I love Barrons! About 25 to 30 years ago, a company called Halmi (a Hollywood production company) had its financials in Barrons. I studied it and was interested in buying the stock. At that time, it was trading at $1. When it got to $2, I got my dad to make a big purchase. I got my dad to sell his share when the price hit $20, a couple of months later. I googled and found that this 90 yr. old producer is still active!

http://www.hollywoodreporter.com/news/robert-halmi-exits-rhi-entertainment-286940.

 What I wrote on 4/27/14:

It is interesting that last Sunday I wrote to you about how Ford was missing from the week’s most active list in Barrons.  Ford missed the earnings estimate by $0.06 due to onetime ‘special items and charges’. The stock price finished 3.3% lower. As expected, Ford lost money in Latin America and they will close some productive truck plants in the summer to make their trucks from Aluminum. We had a solid quarter, and we are on track with our most aggressive product launch schedule in our history,” said Alan Mulally, president and CEO. Europe and Asia looked good. I had 3 call options on Ford and I sold one on Friday (4/25/14). Ford is back on Barron’s most active list again -price went down by 0.22% and volume too went down by 1.4%. If the volume increased the price going down, it would have been bad. Ford did not appear among the ‘largest changes’ on NYSE Short Interest Highlights. I am still bullish. If the price falls further I will buy more calls. It would be great if the price falls below $14. Under $10, it would be a steal. GE keeps slugging up. Slowly but surely it is getting closer to its 12-month high of $28.  At $28, my calls would be worth quite a bit and if it reached $40 as some analysts expect it to do, it would be fantastic! A few weeks back I said that JCI CEO expected China to surprise Wall Street on the upside; and now more and more CEOs are saying the same. Barron’s cover page was dedicated to a ‘tired bull’ so a 10%+ correction could come at us at any time. Periodically I buy puts on the total market as hedges. I have been watching Caterpillar for a long time and over the past 6 months; it rose from $85 to $105 (approx). The PE is at 18. Call options are very pricey and for that reason I did not buy any. Amazon with a 515 (!!) lost 9.88% on Friday when they reported another loss. Surprising short interest fell by 7% during last week. Most probably people are tired of getting caught in short squeezes. If anyone is interested, there is a way to play Amazon. Put option with a strike price of $160 for January 2016 is trading at $5 (or $500 per contract). This is insane! This should be going for $1 or so. Strike price $160 for January 2015 is trading at $1.40. How to make money on this? Write (sell) a ‘naked’ (not covered) January 2016, strike price $160 at $5 and reasonably expect to buy back in 8 months at $1.40. In other words, sell now at $5 and 8 months later buy at $1.40. After writing the option if the price drops below $160 (currently at $303), the owner might exercise the option and you will end up owning 100 shares at $160 for each contract you ‘wrote’. If Amazon drops to $160, it would be foolish not to buy. On the other hand, if you want to have a hedge against a huge disaster, while writing naked Jan 2016 options, you can buy some Jan 2015 puts-hoping to close the deal before 1/25/15. A no brainer!

Thank You for Reading. Stay tuned!

My Initial Entry

Hi. My name is L S Fernando.  I just published my first monthly stock newsletter. I also intend to write a newsletter on stock options in the near future. At this time, my focus is on establishing a following as well as being of assistance to others.  However in the future, I might decide to charge a fee for my newsletter(s).  I am writing this blog to give a brief history of my thoughts on the market and with time readers would be able to compare my writings to what actually took place in the market. If you are interested in subscribing to my newsletter (it is free at this time-as of 4/13/14), please send me an email to prosperitystocks@yahoo.com. I am not a certified financial advisor (I am issuing newsletters and other kinds of publications based on my experience); after reading my blogs, newsletters and other publications, consult your advisors and make a determination on how to make your investments or trades. Despite my recommendations, you must take responsibility for your actions.  You must invest or trade with money that you will not need for your daily needs for the next 2 years. Wall Street is not a casino. Whether you are new to the market or whether you are an experienced investor or trader, rest assured that you will be making mistakes and losing money in the future. Every mistake, every loss is a valuable lesson. Make sure you learn the right lesson and use it to your advantage in the future. I heard about a person who lost 80% of his 401K funds during the ‘crash’ of 2008/2009. He lost faith in the market so he withdrew the other 20% to go to Vegas and blow it in the casino. That is the wrong lesson! Most people get burnt so bad they do not return to the market for many years; and they return when the market is near another top. As it happened in 1987 (which I remember well), a few months prior to 2010, the market started climbing again. On 7/10/09, the ETF that tracks the Dow Jones (DIA) was at $81.44. On 4/2/14, DIA closed at $165.37. On the other hand if you purchased Disney (DIS) on 7/10/09, you would have tripled your money by now. If you are going to invest or trade for the first time, I hope you will make a lot of mistakes during the first year. Never be fully invested and never be completely out of the market. More than anything, it is mass psychology that drives the market up and down. If you can avoid the herd mentality and keep emotions in check and act with a balanced state of mind, you will do well in the market.  On the other hand, if you are at the mercy of your emotions, then stay away from the market.  Even if you lose all your money, if you learn how to have a balance between emotions and money, you will be laying the foundation to build a great future! Everyone should take the time to study how investments work and no one should completely trust another to take care of his or her finances.  I suggest everyone read “one up on wall street” by Peter Lynch (one of Wall Street’s greatest). The book is about $10. If others criticize your actions, know (the deep inner knowing that we call intuition) what to accept as a lesson and what to reject without letting that be a detriment to your self-confidence. Don’t let anyone destroy your self-confidence. Now for my ‘expertise’ Over the last 2 days (4/10/14 and 4/11/14) the Dow Jones 30 Index dropped 700 points  but during that time, it had only a minor impact on the stocks/ETFs I have been recommending in the past (see below), such as Ford, GE, EEM. Ford dropped from $15.9 to $15.6. GE moved from $26.1 to $25.4. In fact, if these stocks go down further in the days or weeks to come, I will be a buyer! Over the past 12 months, periodically I have been writing emails to my superiors on my thoughts on the market as well as my investments. Here are some excerpts:

Sent: Sunday, July 14, 2013 11:39 AM
Subject: Stock Options

 On Friday, the nightly business report had a segment on the Chicago Board Option Exchange was holding classes all over the country and many older folks were getting in to option trading. One of the instructors said that if one has a 60% ‘gains’ rate, it would be concerned a winning portfolio. I have sold 19 items already and I made gains on 16 items with a ‘gain’ rate of 82%. Average time held was 30 days the range was between 6 and 69 days. Average profit was 42.45%. On the 3 I lost money, the dollar amount was small and if I waited long enough I could have made money; but it was in my interest to sell and re-invest. So far, Ford(PE=11) has done wonders(sold 3 but I have 3 more open) and I believe that it would be a good play for the next year(at least). On the other hand, I am waiting Honda (PE =14). Right now I have 25% in cash and 20 open items which I am confident of making money on all of these items. One of my best finds was XLP(ETF for consumer staples) call January 2015, strike price $50 for $0.12 each. Now XLP is at $41 and my option is worth $0.29 each. If the XLP goes to $60 by January 2015(quite probable), I will turn my $250 investment in to $25,000!! As with work, I keep getting amazing ideas. I was looking at ultra-long financial ETFS but the options were too expensive

Sent: Sunday, July 21, 2013 2:38 PM                              Subject: RE: Stock Options

 Europe is in a recession and it might end within the next 12 months. Gold is at a 3-yr low. When Europe gets back on its feet, China and Asia will start to perform on ‘all 6 cyclinders’ again. It is a different story for the bond market. Interest rates might rise a little bit over the next couple of years which will be bad for the bond market. Thereafter Feds might increase interest rates aggressively. Since we have so many bears, it is very good for the bull. With respect to my job or with respect to investments, I keep getting amazing ideas all the time; and it is so rewarding to put them in to practice. Managing a portfolio of options is quite different from managing stocks. Time is of the essence. A very interesting thing happened over the past few weeks. A few weeks ago the volatility index rose so I knew that a correction is close at hand so I sold most of my profitable positions so as to increase my cash position to 30%. When the volatility index shot up in a big way (buy sign), I started purchasing options again and now I am at about 9% cash. Unfortunately the correction was only 6%; or else there could have been better buying opportunities. Prior to the correction, I sold my GE$25 Dec 2013 calls with a profit of 83.91% in 65 days. At the same time I kept increasing my GE$30Calls Jan 2015. After the correction, GE, Home Depot, Disney, XHB (Home Builders) etc. have been more or less ‘dead in the water’. Most probably investors took their gains and re-invested the profits in others stocks. However I have confidence that these stocks will outperform the Dow over the next 18 months. Last Friday (7/19/13) I woke up to a nice surprise. GE had their conference call and they announced that their profit margins are going to increase significantly in Q3 and Q4 -with the decline of GE Capital. On Friday (7/19/13), the stock reached a 4yr high of $25. The stock rose 5% on Friday and all analysts were surprised that such a big cap stock could go up 5% in one day. I bought a little bit of puts to cover profit taking by others. If GE goes down a bit, I would sell my straddle and buy in the money 2015 calls. On Thursday my options were showing as a potential loss of 25% but I broke even on Friday (if I sold-which I didn’t). If GE goes to $35 before Jan 2015(quite feasible), and if I keep my calls till then, I will make a 900% profit! I have been making a lot of money on Ford. Last week Morgan Stanley issued a downgrade for Ford asking investors to sell Ford and buy GM. Explaining their stand, the spokesman stated, “last year Ford was the winner of the super bowl of auto stocks but even though Ford will do well GM will outperform Ford as Ford has more exposure to Europe”. I disagree; Ford has done well due to its position in the US market.

Sent: Wednesday, July 24, 2013 7:49 AM                

Subject: FW: Stock Options

This morning Ford CEO had the Wall Street Conference Call. Even with the economic downtrend in China, their sales rose by 45% and having difficulty meeting the demand level. In Europe, there was no loss and expect a gain in 2014. The US market is very strong. They are hiring about 1,000 white collar employees in Michigan. So I guess my prediction is correct. Analysts also say that Ford has excellent financials. This morning Ford stock went up from $16.80 to $17.40.

Sent: Wednesday, November 27, 2013 8:54 AM

 Subject: J. C. Penney Company, Inc. (JCP)

This is interesting. Taking a contrarian view, due to the very high level of short interest, I was thinking of buying call options but the premiums were too high for my blood. Over the past 30 days, the share price rose by 50%!

Sent: Monday, December 09, 2013 11:53 AM
Subject: Contrarian opportunity

Most people assume that inflation is dead and  we might even face deflation in 2014. In my opinion, major changes in the economy take place when there is a wide gap between ‘reality’ and the ‘herd mentality’.  With economic growth accelerating all over the world, combined with all the liquidity pumped in by the central banks of the world, we should not be surprised if we see a rise in the inflation rate over the next 2 to 3 years.  Usually the price of gold rises when the financial markets lose confidence in our world’s central banks.

Despite what might happen to the price of gold in 2014, Barron’s is optimistic about Barrick as (1) their management is making some positive changes (2) Activists like Carl Icahn might buy in to the company to drive the share price higher. As you can see from the graph given below, on 1/1/13, the price of Barrick Gold was at $35 and it is currently trading at $16.  I am going to purchase January 2016 call options with a strike price of $35 at 65 cents (1 contract of 100 shares at $65). If the price drops in the future, I might add more to my holding.

 Analysis on Barrick:

 Operating loss of $834 M in 2012 due to a non-recurring item of $6.9B.

  Net Tangible Assets of $12.5B.

  Total Assets/Total Liabilities : 1.88

  Cash: $2B

  Inventory (Gold): $2.7B.

  Cash flow from Operations (2012): $5.4B.

Sent: Friday, December 20, 2013 12:51 PM

Subject: RE: Contrarian opportunity p/s(Barrick Gold)

 When I purchased these 2016 calls, I did not expect to see a gain for 6+ months (at a minimum).

I purchased the calls on 12/9/13 and today (in 11 days), my calls are up by 28.38%.

The interesting point is that during the same time period, the price of gold dropped from $1260 to $1200-due to more confidence in monetary and fiscal authorities.

Barrick Gold has a reputation for having a good management team. In my opinion, all they have to do is to stop mining, cut expenses to a bare minimum and hold on to their ‘inventory’ of gold ($2.7B). With all the liquidity the central banks created combined with the global economic recovery (US economy grew by 4%-see below), inflation is sure to raise its ugly head within the next 3 years.

Sent: Sunday, January 05, 2014 11:41 AM                                                                          

Subject: Win/Win Opportunity

 As I told you on Friday, I have been meaning to send you an email on my thoughts about the market but I could not find the time. As for the market, it is a very interesting time. I put a lot of faith in the contrarian point of view. At this point the put/call ratio in the stock market as well as in the CBOE is at an all-time low. If the trend continues, we could get a big surprise on the downside. On 1/1/14, the trend reversed a little bit. My current strategy is to keep a lot of cash, have some on the long side as well as some puts as hedges. On all items bought and sold, I made a 28% profit in 2013. Now I have to pay income taxes and not capital gains!  For a long time, my current open items were at a loss but now I am over the breakeven point with a lot of bright prospects for the future. During 2013, I made money several times over on Home Depot, Ford, Disney, GE and XHB(home builders ETF). I was waiting for 1/2/14 to sell my Disney calls at a profit; which I did. Now I am thinking of buying Disney 2016 calls. At a PE of 22, it is a little more than I like to pay for a company but with the unemployment rate going down in the US and expected economic growth in Europe and Asia, Disney should do very well. Today’s Barrons also had Disney as a buy. Ford has come down from a high of 17.5 to 15.5 due to lowering earning expectations in Europe and Latin America. In my opinion, i a buying opportunity. GE has been creeping up to $30(from a bottom of $10 in 2008 or so). Last week, an analyst downgraded GE from buy to hold and the price fell to $27.5. I disagree with that downgrade. GE is getting rid of their low margin finance sector and focus solely on the high margin industrial sector. Another good company is Delta Airlines. Even though it went from $10 to $30 in 2013, the PE is only 12 and the analysts are very optimistic about the airline as well as the industry. I suggest buying 2016 calls now and buying more during a correction. Now for the win/win opportunity. As I told you previously, on 12/9/13 (the day I sent you that email) I bought calls on Barrick Gold (ABX). As you can see from the screen shot given below, I was able to buy this call when ABX made a new low. Got lucky! Since then my call has gone up by 44%(in 26 days). A few days ago I spotted a great opportunity which might be of interest to you. The current price of ABX is $18.15. The April 2014 put option (strike:$17) is at $1 to $1.20(bid and ask). If you write a naked put option where the broker either freezes $1815 for every contract or allows you to do this due to the total margin allowance available to you, you will make 5.5% in 3 months!  If the price of ABX drops below $17 prior to the 3rd week of April, the buyer might execute the option and you will end up buying 100 share of ABX (at $17 or $1700 for 100 shares) for every contract you ‘wrote’. Probability is high that the price ABX will continue to go up and the price of the put will keep on declining and expire by the 3rd week of April. Another option is to sell the put when the price drops-prior to the 3rd week of April. If ABX goes to $20, the put could go down to $0.50(from $1). If I am managing a hedge fund I would like to utilize most of my funds in this manner to maintain a high level cash (for unexpected withdrawals).

 Sent: Monday, January 13, 2014 12:47 PM

 Subject: FleetCor Technologies, Inc. (FLT)

 This is very impressive! 50% to 100% rate of growth coupled with an Operating Margin of 49.8%.

However with a PE of 35, it is too expensive for me. In the future, if they come up with disappointing SEC filings, the share price could easily lose 50% of its value overnight.

I also prefer to invest through call options and on FLT, there are no long term options available (nothing beyond Aug 2014). At this time when I buy options, I prefer ones that expire Jan 2016.

Sent: Sunday, January 26, 2014 4:36 PM         

Subject: Market Update

 Finally we had a little bit of a correction on Thursday and Friday-2.75% in 2 days. It would be very nice if the trend continues and the Dow goes down by another 1,000 to 2,000 points.

Prior to Thursday, Delta (PE:12) was skyrocketing. My 2016 calls were up as much as 40%. Finally the airlines industry has turned around in to stable profitability. Delta is the front runner as well as the trail blazer. One thing I noticed was that Delta call option prices are relatively expensive. However this is a tool investors could use. There are 2 ways to go about exploiting this circumstance. First of all you could write naked call options. The best way to exploit this option is to buy the underlying stock of Delta and sell(write) covered calls. It is like renting the stock-however if the option is exercised then you have to sell the covered shares at the strike price. Also you can buy back the call you sold and re-write another option and keep the earning stream going. Let me explain; current price of DAL is at $31. The 35 (strike) call for Sept 2014 is at 2.12 while the March 2014 $35(strike) is at 0.48. This means that in a six month period what you initially sold for $212 could be purchased for $48- that 441.67% profit in a six month period! Sell now and buy later! This is while keeping your original underlying stocks of Delta intact. Now assume that after you purchases 100 shares of Delta at $31 for $3100 and wrote(sold) one call option contract with strike price of $35(expiry:Sept 2014) and you received $212 right away. You can do this on Monday if you want to. Whatever happens with the stock or the options that $212 is for yours to keep. Then in 6 months (assuming same market trends), the option you sold should be worth $48. At that time, you might want to purchase 1 contract at $48 and make the 441.67% profit while keeping the underlying 100 shares of Delta. On the other hand, let us say after your $3100 purchase and the $212 you obtain for writing the call, Delta share price to $38; then most probably the buyer of your option will exercise the option and you will have no choice but sell your 100 shares at $35(not $38; the person who purchased the option will make $300). You have already received $212 for writing the option so your total profit will be $612 ($400 from the underlying stock and $212 from the call). After you write the call, if the Delta price drops to $30 till October 2014, the option will expire worthless and you will pocket the $212 and hold the delta shares with a ‘paper loss’ on the stock for $100(Net profit still at $112). I have been watching option prices on and off for the past 20 years and I must say that it is very difficult to find good stocks with such high option prices. Another one of my stocks that was doing well up to Thursday was Barrick Gold. Unexpectedly it did not sky rocket during the severe correction on Friday. Another good opportunity this correction created was GE. It was at $28 around 1/1/14 and now it is at $25. Eventually when the world economy start humming again, GE should reach $40 in a couple of years. The call options are very nicely priced so this offers a very different(than DAL) opportunity. Calls on GE for January 2016 with a strike price of 20 is at $5.50. In other words you can buy 2016 options for a mere premium of $0.50(or $50 for 100 shares). Ford too keeps getting more and more attractive. In 2013 Fall, topped off at $17.50 and now it is at $15.83.All through 2013, I rode the Ford roller-coaster and made money several times on options.

However for the general market, until we have a 10+% correction, it is going to remain a dangerous place. For the past 3 months, the put-call ratio has been extremely low which means that the bullishness is at an all-time high and that is a disaster waiting to happen (contrarian view).

Sent: Friday, February 14, 2014 8:53 AM               Subject: Gold

 It is interesting that we talked about gold yesterday. This morning several analysts were discussing the future of gold on CNBC.

One analyst stated that if the price of gold goes above $1300 (right now it is at $1317), there could be a s short squeeze and drive the price much higher.

The price has been creeping up. Gold miner’s ETF (GDX) is up 12.76% since 12/23/13-see below.

A few days ago, I sold my Barrick Gold calls at a 45% profit. Over the weekend, I will look in to re-entering the gold market-probably through GDX.

Sent: Tuesday, April 01, 2014 4:09 PM

Subject: RE: Market Update

Oh Yes! As long as I do not lose everything and the overall gain is decent, I am okay with losing some money. I am not worried about missing out on some opportunities as it is better to be disciplined than chase every possible opportunity.

Some hard lessons I had to go through:

Calls on Honda.

 Jim used to beg people not to buy ultra-long and ultra-short ETFs. That did not make sense to me so I bought some calls and puts on these ETFs. I lost most of that money as I found that they have a very short life span (like the dealer reshuffling when the cards are in your favor at the blackjack table) and the people behind those ETFs manipulate those funds. Now I use calls and puts on DIA, SPY and QQQ.

Made a lot of money on Home Depot but I also lost some on calls that expired prematurely. This is the problem with options. Timing matters.

Lost money on most of the puts purchased as hedges. That was partly expected. Even now I keep putting some money on puts as hedges. We should have a good correction within the next 12 months or so.

Initially I made good money on XHB (home builders ETF) and then when the Feds reduced their treasury purchases, I lost some money on XHB as one option expired worthless and some I had to sell at a loss.

Losses are not that bad. With each experience I learn something that will help me immensely in the future. As I see it, a loss and a lesson with a tax benefit! More than making money I like experimenting with different ideas. One day, God willing, I will own my own hedge fund! When I start one, I will let you know.

Please stay tuned for future blogs. Thank you for your interest. May you have peace and happiness.

                                                                   L.S.Fernando                                                                                                              Prosperitystocks@yahoo.com