Hope For a Rally Is (Slightly) Restored

This article was written with Oliver Pursche, the Co-Portfolio Manager of GMG Defense Beta Fund. It was part of a series of articles developed under an agreement with thestreet.com to work with a variety of contributors and assist them in delivering actionable investment ideas each week.

NEW YORK (TheStreet) — Five things need to happen to facilitate and act as a catalyst for a market rally:

Successful Greek elections
Leaders in Europe take a more aggressive approach to the looming debt
Investors are positively surprised with the upcoming earnings season (AA just beat)
The Federal Reserve puts out a third round of quantitative easing, or QE3
Bonds start turning into equities
I am confident for more than emotional or hopeful reasons. Two of these catalysts have already happened — the Greek elections were successfully held and leaders in Europe are becoming more proactive about their debt — and many around the Street are saying that improving investor sentiment is on its way.

The Fed should launch QE3 based on recent jobs reports. People as well as institutions are going to need more liquidity than bonds typically offer. Accordingly, I still believe a market rally is afoot.

We know the saying, be fearful when others are greedy and greedy when others are fearful. I would like to add my own little tweak to it: Be rational when others are emotional, and emotional when others are rational.

I see Europe not as something that has shrunk, but rather as something that will grow. As such, I am buying multi-nationals at what I believe will someday be viewed as an historic discount.

The 10 multi-national names with exposure to Europe, which, if the rally materializes, I believe will pop are:

Total (TOT), Yum Brands (YUM), McDonald’s (MCD), Owens Illinois (OI), Advanced Micro Devices (AMD) , Caterpillar (CAT), Fluor (FLR), Chevron (CVX), Raytheon (RTN) and J.B. Hunt Transport (JBHT).

Amazon Summits A Dow That No Longer Exists

The addition of Amazon to the Dow with Walgreen’s unceremonious deletion, and the Dow’s current composition tells it like it

Financial Institutions Feeling the Crunch in Countdown to CECL Implementation

I was retained by Big Four accounting and consulting firm KPMG to assist them in their thought leadership efforts centered on changing accounting regulations. In this case, the Financial Accounting Standards Board or FASB had instituted new rules on the measurement of current and expected credit losses, i.e. CECL, that would require massive reorganization of financial reporting for the largest financial services organizations in the world. This thought leadership piece concerned the results of a survey among C-suite executives about their state of preparedness in the final countdown to the CECL implementation.

Securitizing Structured Settlement Payment Streams: A Primer

Fall 2012. This article was written with Stefano Sola and Phil Donahue, executives at JGWPT Holdings. We were engaged by JGWPT to assist them
in publishing the article below for The Journal Of Structured Finance.

Is The Media Biased?

This story is from our February 2024 update newsletter that offers communications insights, and hopefully, some amusing diversion.

David R. Evanson, LLC David R. Evanson, LLC