I am keeping some of my oil stocks, no more than 10% of my overall portfolio as a call option on crude. I am only bearish on crude because the trend is now lower. However, if we’d simply use our grey matter and understand that the recent price decline will eventually lead to a great reduction in US rig counts and subsequent cap ex budgets, at a time when the economy is growing at an astounding 5%, we’d easily surmise that lower oil prices is now something that is unsustainable. That’s right. Despite all of my arch-pessimism, there is an extremely bullish case for oil stocks setting up in 2015.
To that end, I remain long SLCA, DVN, FMSA and ECR.
However, I am not keenly focused on crude at the moment. There are global games being played in that arena and I don’t have an edge.
These are some of my stronger ideas, with a one or two liner explaining my thesis.
DTSI: Electronics maker and chief competitor to Sonos. I wrote a piece on it a month ago.
JAZZ: Don’t sleep on narcolepsy.
FRO: Super-contango and lower Brent prices is bullish for oil tanker storage.
AMZN: Fuel prices.
HABT: The MCD killer.Shake Shack ipo should keep this popping throughout 2015.
KMB: Domestic sales. Staple.
BID: One of my 30 year hold stocks.
PZZA: Fuel prices.
Gas station plays: CST, CASY, TA and IMKTA.
STZ: Domestic sales.
In summary, I am bullish on aspirational brands because lower fuel expenses pushes the poor guy to his local SBUX for a frappacino. Think of the economy as a video game and a bunch of disheveled poor guys just got upgraded. They will take their new found riches to stores that were slightly out of their price range, in order to bask in their new found riches, and spend it all. They will also extend their credit and delve deeper into debt, which is bullish for COF. I am bullish on cleaner eating and healthier choices. Rich or poor, Americans are moving in this direction, which is also bullish for WWAV, HAIN and CALM. Yes, eggs are healthy for you.
Domestic retailers are where you want to keep your money, thanks to our walled gardens. Avoid companies who whore their wares to third world neanderthals. These corporations are gluttonous and shall be punished. Stocks like CHD, CLX and IR will do well.
I also think AMZN busts loose soon and YELP catches a bid.
All of my bad trades in 2014 were in retarded stocks. I will try my hardest to avoid these cavernous black holes, until I fully regain my mojo of course.