What We're Reading

Life has intervened of late however I felt I would post my random thoughts viewing my port yesterday:

• Russia is still working. RSX at it’s 100d today. I will add more if it comes back to the 50d http://screencast.com/t/Eh88iqLP   Long hold, definitely.  Throw it in a drawer and forget about it.

• Buffet lowered his XOM stake and bought DE.  DE Monthly sure looks like its coiled up for something. Buffet obviously thinks new all time highs http://screencast.com/t/rlyFa0yzLeb  DE earnings this Friday bmo. I'd be long common and get put protection.  Buy or add on any selloff.  Daily view, bouncing off that 50% fib (to me) equals good chance it wants to challenge/break the high http://screencast.com/t/oEgnCfo0SJg 

• I still like the consumer stapes sector here. XLP or one of its components. They come into seasonal demand next month thru Summer.   I'm already long PEP and KMB as mentioned here previously in Chat.  For a list of XLP components, visit http://etfinvestmentoutlook.com/etf_hold

Unlike the Dogs of the Dow, which is a strategy buying the 10 Dow stocks with the highest dividend yield at the beginning of the year, then dumping the "dogs" at the end of the year and selecting new ones, the "Free Lunch" trade is a very different strategy executed in mid December and shorter in duration.  It attempts to take advantage of several year end phenomena such as index re-blalancing, tax selling, Santa Claus Rally, January effect, etc. and lasts until February.

According to MrTopStep:

Research has shown that NYSE stocks making new 52-week week lows in mid-December, primarily due to year end tax-loss selling, tend to outperform the NYSE through mid-February. These stocks are selected ahead of the Santa Claus Rally and approximately near the start of the January Effect.

Many of the stocks selected for the “Free Lunch” trade are down for good reason. Declining revenue and shrinking profits are most common amongst these names while others may have run into legal or accoun

As the old saying goes, 'buy' when stocks are hated and there's blood in the streets but for the Russian market, one might want to sit on their hands before buying the Russian ETF RSX until Mr. Putin becomes more "market friendly".

It would seem Putin’s dream of making Russia one of the world’s five biggest economies by 2020 is now in ruins, according to Sergei Guriev, a former economic adviser to Prime Minister Dmitry Medvedev who fled to Paris last year. He says it could have been achieved had Putin focused on delivering economic growth of 5 percent to 6 percent as promised.

“Russia had such a massive potential because of its inefficiencies that it was perfectly feasible to achieve this rate of economic growth,” said Guriev. “What changed is that the government decided not to fulfill its promises.”

According to Bloomberg The sentiment was different in 2000, when Putin replaced Boris Yeltsin. One of his early acts was to close Russia’s radar base in Cuba, the only intelligence-gath