{"id":3084,"date":"2016-02-19T19:04:38","date_gmt":"2016-02-20T00:04:38","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/being-greedy-when-others-are-fearful\/"},"modified":"2022-02-26T13:23:01","modified_gmt":"2022-02-26T13:23:01","slug":"being-greedy-when-others-are-fearful","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/being-greedy-when-others-are-fearful\/","title":{"rendered":"Being “Greedy” When Others are Fearful"},"content":{"rendered":"

Being “Greedy” When Others are Fearful<\/strong>\u00a0\u2013 it\u2019s one of the oldest adages in investing and some of the world\u2019s biggest investors are putting it to work. In Q4 2015, Warren Buffet\u2019s Berkshire Hathaway opened a new 26.5 million stake in pipeline operator Kinder Morgan (ticker KMI), whose master limited partnerships and stock prices have suffered deeply in the oil decline.<\/p>\n

Billionaire investor George Soros also sensed opportunity there and purchased over 50,000 shares of KMI and added 685,000 shares of Baker Hughes (BHI).<\/p>\n

Crude Prices Bounce<\/strong> \u2013 as the global economic expansion levels off, it\u2019s difficult to envision anything that will move oil prices significantly, apart from significant supply moves. The market got one earlier in the week in the so-called Doha meeting, where Saudi Arabia and several key OPEC members (finally) agreed to put some measure of control on output. They agreed to freeze crude output at January levels which, according to the International Energy Agency, pegs Saudi Arabia at 10.2 million barrels per day (bpd), or 300,000 below their peak production hit last summer. It puts Russia at 10.9 million bpd, which is virtually a record. So, supply is still in a glut, but at least the market got some assurance that the world\u2019s biggest producers are interested in addressing the situation.<\/p>\n

U.S. Job Market Shows More Signs of Strength <\/strong>\u2013 fewer Americans filed for unemployment last week, posting the lowest number in three months. Claims came in at 262,000, and unemployment hovers around 5%. When it comes to the U.S. economy, it\u2019s consistently surprising that all of the attention focuses on the negative \u2013 the labor market has been a strong data point throughout most of the expansion.<\/p>\n

Checking-in on Earnings <\/strong>\u2013\u00a0combining the actual reported earnings of 345 S&P 500 companies along with estimates for the remaining 155, earnings are projected to decline by -6.5% on -4% lower revenues for Q4 2015 from the previous year. Finance earnings are estimated to grow at +3.1%, without which S&P 500\u2019s earnings growth could have dropped to -8.6%. Transportation (+14.4%), Business Services (+3.5%), Medical (+9.1%), Autos (+8.2%), Consumer Discretionary (+0.8%), and Construction (+0.2%) are predicted to grow positively. For Technology, a tepid hardware\/semi-conductor segment will outweigh the strong internet\/software space, leading to a -1.2% lower earnings but +1.7% higher revenues. The maximum drag on S&P 500 earnings will be from, not surprisingly, the Energy\/oil sector. Earnings in the space are predicted to plunge -79.4%, without which the S&P 500 earnings would fall by a marginal -0.1%. Basic Materials (-23%), Industrial Products (-17.9%) and Aerospace (-13%) constitute sharp earnings declines as well, largely on the heels of the commodities slip.<\/p>\n","protected":false},"excerpt":{"rendered":"

Being “Greedy” When Others are Fearful\u00a0\u2013 it\u2019s one of the oldest adages in investing and some of the world\u2019s biggest […]<\/p>\n","protected":false},"author":1,"featured_media":4259,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-3084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=3084"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3084\/revisions"}],"predecessor-version":[{"id":11447,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3084\/revisions\/11447"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=3084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=3084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=3084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}