“Where Are the Customer’s Yachts?”

Fred Schwed Jr. wrote a book titled “Where Are the Customer’s Yachts?”, copyright 1940.  Mr. Schwed Jr. was a professional trader who got out of the market after losing a bundle in the 1929 stock market crash.

In the introduction, he talks about the buttonwood tree on Wall Street where buyers and sellers used to meet.  That meeting spot fulfilled all the necessary functions of a market place.  A man could go there and do his financial business.  But soon, the brokers moved in.  And the brokers began adding the business of predicting what the market would do in the future. Mr. Schwed Jr. states the next thing that happened was that the prophecy business almost swamped and ruined the brokerage business.

“The broker influences the customer with his knowledge of the future, but only after he has convinced himself.” Aww, how true!

Interestingly, Mr. Schwed Jr. quoted a Mr. Andrew Mellon (melon head?) who was heard to murmur something to the effect that “gentlemen prefer bonds” even during the late twenties when Wall Streeters knew the market was too high.

Mr. Schwed Jr. recounts the “scattering of bears” who would eventually bow to the force which finally seemed cosmic, switching to being bullish at a later period in the era.  The remainder who were still short covered too soon.  Then, as prices fell ever lower, the shorts took their profits and bought stocks.  If they bought on margin, they went to “the Cleaners”.  “The Cleaners” was not one of those exclusive clubs.  By 1932, everybody who had ever tried speculation had been admitted to membership.

In the chapter Wall Street Semantics, when asked “What is the market doing?”, the answering phrases are-“It is going up” or “It is going down.” When the stock market is “going up”, it is not the same as an elevator. There is no indication that it will continue to go up. The stock market is not a physical thing, yet we find ourselves unconsciously thinking that it is.

This is huge!

Hundreds of clinical trials across the country suggest immunotherapy could be beneficial for more than two dozen kinds of cancer. Former President Jimmy Carter was treated with KEYTRUDA along with radiation therapy for advanced melanoma that had spread to his brain.  The combination worked so well, causing his tumors to disappear; that he was able to stop treatment.

“Hematogenix Laboratory Services, LLC (Hematogenix)- Announces the Launch of two U.S. Food and Drug Administration (FDA) Approved PD-L1 Companion Diagnostic Tests to Help Guide Oncologists Using Immuno-Oncology Therapies

TINLEY PARK, Ill., April 25, 2016 /PRNewswire/ — Hematogenix, an industry leader in the field of integrated pathology services for drug development and clinical testing, announces the availability of the FDA approved PD-L1 companion diagnostic assays PD-L1 IHC 22C3 pharmDx for KEYTRUDA(R), Merck’s Anti-PD-1 therapy for metastatic non-small cell lung cancer, and PD-L1 IHC 28-8 pharmDx, a complementary diagnostic assay to support Bristol-Myers Squibb’s OPDIVO(R) anti-PD-1 therapy for non-squamous non-small cell lung cancer. Both kits are available through Dako, an Agilent Technologies company. Learn more about Hematogenix’s comprehensive biomarker development and testing services at www.hematogenix.com.”

Hematogenix Laboratory Service is a private company.

Merck and Co., Inc. MRK  has an YTD return of 7.31%.  It is currently showing a hybrid oversold at 2.59 with the threshold at 2.43. Debt/Equity 0.17, PE 36.04, Price/Cash 4.84, Price/Sales 3.99, Free Cash Flow (ttm) 11.14b, Net Cash per Share -4.73, Net Cash per Share / Price -0.08, Net income 14.43b, Operating Cash Flow (ttm) 12.42b, Revenue (ttm) 39.50, Total Cash 13.43b,Total Debt 26.54b. Return since 11/06/08 171.27. Dividend Yield 3.24.

Agilent Technologies A  has an YTD return of -0.19, Debt/Equity 0.13, PE 30.19, Price/Cash 5.89, Price/Sales 3.39, Free Cash Flow (ttm) 519.00m, Net income 819.00m, Operating Cash Flow (ttm) 617.00m, Revenue (ttm) 4.04b, Total Cash 1.93b, Total Debt 1.73b. Return since 11/06/08 181.83. Dividend Yield 1.1.

“Dako developed PD-L1 IHC 22C3 pharmDx in partnership with Merck & Co., Inc., maker of the anti-PD-1 therapy KEYTRUDA(R) (pembrolizumab). KEYTRUDA is approved by the FDA to treat patients with metastatic NSCLC whose tumors express PD-L1 as determined by the companion diagnostic assay and who have disease progression on or after platinum-containing chemotherapy.”

Bristol-Myers Squibb Company BMY  has a YTD return of 3.2%, Debt/Equity 0.06, PE 75.95, Price/Cash 2.56, Price/Sales 7.13, Free Cash Flow (ttm) 1.30b, Net Cash per Share -1.46, Net Cash per Share/Price -0.02, Net Income 4.98b, Operating cash flow (ttm) 1.83b, Revenue (ttm) 16.56b, Total Cash 4.27b, Total Debt 6.70b, Return since 11/06/08 171.27. Dividend Yield 2.15

“Bristol-Myers Squibb Company BMY, -0.07% said early Monday that the Food and Drug Administration would expedite the development and review of its head and neck cancer drug Opdivo on the strength of its phase 3 trial results. Opdivo, which received the special status for the potential indication of recurrent or metastatic squamous cell carcinoma of the head and neck after therapy, also previously got the designation for the purposes of Hodgkin lymphoma, previously treated advanced melanoma, previously treated non-squamous non-small cell lung cancer and advanced or metastatic renal cell carcinoma. According to Bristol-Myers Squibb, nearly all of head-and-neck cancers are classified as squamous cell carcinoma. The company’s stock was up 0.5% in pre-market trade.”

Our son, James, is exceedingly savvy with numbers. A few of his past occupations include sales at Sears and Best Buy as well as co-owner in a used car dealership.  Today his chosen field is trading options.  He has a passion for numbers and technology; this new enterprise is a prodigious fit for his skills.

James and Amanda have five children, all in school and all living at home. Looking down the road, they anticipate college and wedding costs as well as transportation.  Seven weeks ago, they decided to bestow $1000 to each child to invest in the stock market with the confidence that by the time each child graduates from high school, they can use those funds to purchase their first car.  James specified two rules.  One, only one trade at a time per child, and two, the kids pay the cost of commission on each trade.

Surprisingly, the oldest grandson, age 14, decided he would invest in Southwest LUV. I say surprisingly, because we thought for sure he would go with a more trendy choice, like Nike.  Perhaps it was the upcoming trip to Florida that contributed to his decision, but he did show me the LUV daily graph; so I know there was some merit and thought that went into it.  Coincidently, Payton said they are now studying the stock market in his economics class at school.  To date, his gains in LUV are 13.16%.  With his 15^th birthday coming up, he asked for money to put into his stock account, which reflects what we are trying to teach.  We are trying to show the kids the rewards of saving and investing.

The second oldest grandson, age 12, was not home at the time. He started his trading with Walt Disney Co DIS and has moved on to Tyson Foods Inc. TSN.  Truthfully, I think he picked this stock because he has the same name, Tyson.  Hopefully Argus Research initiating coverage on TSN and calling a buy will help this stock move up.  Today his account is -3.87%.  Go TSN! Tyson has a lot of energy!

Elle, the oldest granddaughter, age 12, did her research before we had our get together. She had her heart set on Dicks Sporting Goods and told me that DKS was coming out with their March report in the next couple of days.  I remember Jeff Macke outlining his call on DKS just that week on the IBC website. To date, her gains in DKS are 3.77%.  Elle is taking this endeavor very seriously.  Her notes and graphs looked very similar to my own.  Proud Grandma here!

McKenna, our 10 year old granddaughter, was not home at the time, but her decision fell in line with Tyson’s and she also chose DIS. To date, her gains in DIS are 3.78%. Nice choice on her part!  She is a princess in our book.

Mia, who at 7 years old, has the best chance of doubling her $1000 before graduating high school, was more interested in having me watch Disney movies on her IPad then discussing the pros and cons of choosing a stock. I’m ok with that.  Her first choice was McDonalds because that’s her favorite place to eat, but in the end she picked DIS also.  She is a sweetheart.

We also have a son, Brian, who has three children of his own. We are pretty blessed. So there you have it.  I’m not exactly comfortable with putting myself out there.  My husband and I had plans to retire when he turned 55 years old.  We were on track with our savings and our investing.  Then 2008/2009 hit like a brick wall.  In my application letter to Dr. Fly, I explained to him that in 2008/2009 I listened to all the yahoos on CNBC telling me to “stay the course”.  “Do not take your money out of the stock market”, seemed to be the underlying theme of the day.  Quarter after quarter, we saw a 28% drop in our 401K by the end of the “Great Recession”.  Like many baby boomers, it took four years before we were back to our pre 2008 totals.  Thus began my thirst for knowledge concerning the safety of our investments, and a Bear was born.

Thank you for taking the time to read my articles, I truly appreciate it. Happy hunting.

WD-40 WDFC is the trademark name of a penetrating oil and water-displacing spray. The spray is manufactured by the San Diego; California based WD-40 Company.   Norman Bernard Larsen (1923–1970) was an American industrial chemist whose most famous invention is WD-40.  In 1952, Larsen and three investors founded the Rocket Chemical Company.  One of the three investors was Sam Crivello, who was on the company board for many years, and whose son Mario continues to hold a seat on the board and also maintains a stake in the company totaling more than 5 percent.  In 1968, sales surpassed $1 million, and the next year, when John Barry became president, the firm officially changed its name to WD-40 Company. The name WD-40 stands for “water displacement, formulation successful in 40th attempt,” because it was on the 40th try that Larsen perfected the product.

WD-40 is sold in more than 160 countries worldwide. A one-product company until 1995, WD-40 Company also produces 3-in-One Oil, a lower-priced general purpose lubricant; Lava and Solvol heavy-duty hand cleaners; and several household cleaning product brands—2000 Flushes, X-14, Carpet Fresh, Spot Shot, and 1001. An increasingly global firm, WD-40 generates around 44 percent of its revenues outside the United States, with Europe responsible for 28 percent and 7 percent originating in the Asia-Pacific region. The company’s lubricants franchise accounts for about two-thirds of overall revenues, with household products bringing in 31 percent and hand cleaners the remaining 2 percent.

I missed the oversold flag on 4-14-2016 when WDFC closed at 100.96. Although it’s down 0.36% at the time of this writing (12:45 pm), it is still up 101.11.  The YTD return is 3.48% with revenue reported on 2-29-2016 at 94.55m and earnings reported at 13.67m

WD-40 came to mind this morning when I was thinking about my Grandmother. My Grandfather was a drinker and gambler.  In the 1940s, he lost the family farm in a poker game; literally, 40 acres and the house.  His competitor took pity on him and gave my Grandpa the keys to a house in town.  Now, my Grandma was a hard worker and when the aches and pains got too much for her, she would apply WD-40 to her joints and wrap them with a sock.  She continued to use WD-40 for her aches and pains till her passing at the age of 101.  On a side note, she loved watching the Bulls play and never missed a game on her 13 inch TV.  She called Michael Jordon, Mikey, and would coach him from her living room.

April 19, 2016, Reuters, citing “people familiar with the matter,” noted that Cabela’s CAB peer, Bass Pro Shops, has partnered with Goldman Sachs Group’s private equity arm to prepare an offer to acquire the company. By teaming up with Goldman Sachs’ private equity arm, Bass Pro has the necessary financing to pursue an acquisition. However, other firms are interested in acquiring the retailer and the sale process is still in early stages.

On Jan. 2, 2016 CAB posted a profit of $78.8 million, or $1.14 a share, up from $78.6 million or $1.10 a share a year earlier. On an adjusted basis, earnings increased to $1.26 a share from $1.11. Revenue climbed 10.5% to $1.41 billion.

Back in March 31, 2016, Cabela’s Incorporated CAB announced that the variable funding facility with Bank of America, National Association (BANA) has been extended through March 2019. In addition, the commitment under the variable funding facility has been increased from $300 million to $500 million. The variable funding facility relates to an outstanding series of variable funding notes issued by Cabela’s Credit Card Master Note Trust.

Previously, on November 5, 2015, there were reports of Bass Pro Shops exploring a bid for CAB. At that time, CAB’s equity advanced 8.20% to $42.77.

CAB was founded in 1961 and is headquartered in Sidney, Nebraska. The retailer markets hunting, fishing, camping, and related outdoor merchandise.  Cabela’s also issues the Cabela CLUB Visa credit card.

Bass Pro Shops (www.basspro.com) is a private retailer supplying outdoor gear with 94 retail stores in the U.S. and Canada. The home store is located in Springfield, Missouri and brings in over 4 million visitors yearly. Bass Pro Shops also owns Tracker Marine.  Bass Pro Shops revenue in 2014 was 4.23 billion.

When the kids were growing up, we did our fair share of camping. Both Bass Pro and Cabela’s offer a magnificent amount of outdoor gear, something for everyone.  Additionally, each retailer possesses museum quality displays of wildlife and firearms.

The American Society of Plastic Surgeons (www.plasticsurgery.org) claimed the number of lip implant procedures increased by 48% since 2000. The rise in lip surgery is attributed to the “selfie” photograph.

First we had the fish lips selfies, now we have the lip injections.

I’m not sure how one can play this knowledge in the stock market, except maybe Facebook?

Freddie Mac has projected total home sales for 2016 will be 5.92m compared to 2015 total home sales of 5.73m. Projection for 2017 is 6.16m total home sales.

A few reasons to look into Lending Tree, Inc. are they are not involved with the oil companies, they are an active online tool, and the “millennials” seem to favor them over traditional banking institutes.

Latest Ratings for TREE

After the housing bubble, TREE saw its quarterly revenue drop to 11.90m on Dec. 31, 2010.   As of Dec. 31, 2015, quarterly revenues were back up to 78.34m.

Beating Wall Street Financials (BWS) currently has a Buy with $150 price target.

The next earnings report is May 5, 2016. On Feb. 25, 2016, they beat the estimates by 265.22%, estimates were for $0.69 and they reported $2.52.  Oct. 25, 2016 estimates were $0.52 and reported $0.79.  Aug. 03, 2015 estimates were $0.33 and reported $0.63.

TREE has experienced growth in the non-mortgage products which include free credit scores. TREE offers information, tools, and access to various conditional loan offers for non-mortgage products, including auto loans, credit cards, home equity loans, personal loans, reverse mortgages, small business loans, and student loans. In addition, it offers information, tools, and access to other products, including credit repair, through which consumers obtain assistance improving their credit profiles; debt relief services, through which consumers obtain assistance negotiating existing loans; home improvement services, through which consumers have the opportunity to research and find home improvement professional services; personal credit data, through which consumers gain insights into how prospective lenders and other third parties view their credit profiles; real estate brokerage services, through which consumers are matched with local realtors who assist them in their home purchase or sale efforts; and various consumer insurance products, including home and automobile, through which consumers are matched with insurance lead aggregators to obtain insurance offers. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 2008 and is based in Charlotte, North Carolina.

UPDATE: 4-19-16

Between sitting wrapped up in a wooly blanket attending the kid’s baseball games and sitting wrapped up in a wooly blanket attending the kid’s football games; if you reside where there are four seasons, there is a small window of opportunity to “get things done”.

Then the “to do” list comes out. You know, the “to do” list from last year when you ran out of time?  Hmmm, paint the outside trim on the house, replace the cracked downspout, wash and stain the back deck…that darn “to do” list.  Damn, does the roof really need to be replaced?!

We love Menards because of the good prices and great merchandise selections. But best of all, on special weeks throughout the year, Menards offers an 11% rebate on all merchandise.  The advantageous part is when you use the rebate; taxes are already paid on the new purchases.  I look at it as saving 17.25%!  When we built our garage, we purchased all our materials at Menards during the 11% rebate offer.  I call it double dipping; because we used our $1100.00 rebate check during the next 11% rebate offer…see where I’m going with this?  It’s genius! Menards builds up a customer base.  Sure, some may say “but you do not get the rebate in cash”.  Aha, but we love Menards, so it’s fine with us to use our rebate in their store.

We cannot play Menards on the stock market, but these fine Home Improvement stores are in the running:

BLDR Builder’s First Source, Inc.  Based in Dallas, TX, BLDR supplies building materials to professional contractors, sub-contractors, and consumers in the United States.  Revenues jumped in the last quarter of 2015 and they have an YTD return of 8.30%.

HD The Home Depot, Inc.  They are a home improvement retailer with 1,977 stores in the United States, 183 stores in Canada, and 115 stores in Mexico.  They also sell products on line.  HD ( I always think Harley Davidson when I see this symbol.) has a nice steady uphill climb in the daily chart. The seasonality is great!  The YTD return is 2.62% with a 0.13 debt/equity and a 2.05 % DIV yield.

LOW Lowes Companies, Inc. As of January 29, 2016, it operated 1,857 home improvement and hardware stores in the United States, Canada, and Mexico. The company also sells its products on line.  Lowes has a steady uphill climb in the daily chart.  They have been up 17 out of 30 years with an average return of 2.96% in May. The YTD return is 1.91% with a 1.46% DIV yield.

P.S. I’ll swap you “to do” lists.

In 2015, total US government revenue, federal, state, and local, was “guesstimated” to be $6.38 trillion, with federal $3.25 trillion; state $1.84 trillion; local $1.29 trillion. www.USgovernmentrevenue.com

Gross Federal Debt: That’s the gross amount of debt outstanding issued by the US Treasury. “Debt held by the public” and “debt held by federal government accounts”. At the end of 2015 the federal debt was $18.1 trillion.  At the end of FY 2016 federal debt is budgeted to be $19.4 trillion.  http://www.usdebtclock.org/

The IMF reported in April of 2012: Household debt soared in the years leading up to the Great Recession. In the five years preceding 2007, the ratio of household debt to income rose by an average of 39% points, to 138% points.  If this does not scare you, it should.  High level of household debt is holding back the economy.  High level of debt means lower consumer spending, which leads to job loss.

“With 7 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” CardHub CEO Odysseas Papadimitriou said in a statement.

Last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.

So as consumers, we are getting back into our old habits of saving less and charging more. In conversation with a family member, I jokingly asked “what would you do if given $50,000 today?”  Her answer, “pay off most of my credit card debt.”  What??!!  I had no idea.  I think consumer debt is the silent downfall of today’s economy.

Are you aware that simply breathing can attract mosquitoes? Yes, mosquitoes are drawn to carbon dioxide, which you release when you exhale. Additionally, people give off two mosquito attractants – body heat and lactic acid (a substance your body emits when you perspire).

On February 1st, the World Health Organization (WHO) took the unusual step of declaring an international public health emergency regarding the mosquito-borne Zika virus and its suspected link to the birth defect microcephaly. And April brought reports that Zika might be related to other neurological disorders in adults, including two types of encephalitis and a spinal cord inflammation called myelitis.

The Aedes aegypti mosquito carries the virus. Zika gets its name from the Zika Forest of Uganda, where the virus was first isolated in 1947. There were few cases of Zika in humans until 2007, when an outbreak occurred in Micronesia. Since then, there have been outbreaks in 2013 (French Polynesia) and 2014 (New Caledonia, Cook Islands, Easter Island). The current one in Brazil represents the first widespread event in the Western Hemisphere.

The virus can be spread from the bite of the mosquito, but it was also found in blood and semen. This is crazy!  So how can you help protect yourself?  Here are the CDC guidelines:

• Avoid traveling to any of the areas where Zika is circulating; visit the CDC website for the latest list (and prevention advice). If you have visited one of them, don’t donate blood for a month after your return.
• If you can’t avoid going to one of these regions, avoid mosquitoes and their bites: Use an EPA-registered insect repellent with DEET, picaridin, oil of lemon eucalyptus (OLE), or IR3535 (these are safe for pregnant and breast-feeding women to use, but not for babies under two months old); wear clothing with long pants and long sleeves; sleep in a room with air conditioning (or under a mosquito net if you’re outdoors).
• If your partner/spouse has been to an area with Zika, the CDC recommends using condoms (but doesn’t specify for how long; it’s not known how long the virus might survive in semen). Public Health England recommends that men who’ve traveled to Zika hotspots use condoms for a full month upon their return.
• In particular, pregnant women should always use a condom when having sexual contact with a man who has been in a Zika-infected area.
• If you do come down with Zika, try to avoid getting bitten by mosquitoes to protect others from getting your illness (mosquitoes can pick up the infection from your blood and pass it on).

A private company, SC Johnson, makes a devise called OFF Clip-on. Studies have shown the devise kills and knocks down mosquitoes while the wearer is mostly stationary.

One other note is the Cerus Corporation (CERS). It is a biomedical products company focused on improving blood transfusion safety.  Its INTERCEPT Blood System is designed to reduce the risk of transfusion-transmitted infections that may be present in donated blood.  It is important to note that the company has not received label approval for the specific use in eradicating Zika from a blood sample.  However, there is a growing body of evidence presented by the company in a research paper published in August of last year that its platform could be applicable for treating Zika.

Here are some ETF’s with exposure to Cerus Corp: March 14, 2016.  IWC (1440 holdings), XHE (70 holdings), IHI ( 50 holdings), and PTH ( 53 holdings).  These four ETF’s Algos and info can be found in Exodus.