WAT Christmas gathering - talk by Conrad

THE NEXT BUBBLE HAS STARTED

- S&P 500 has always been weighted with stocks that will lead to the next bubble.
- S&P is currently heavily weighted with healthcare and pharmaceutical stocks. However this is mainly due to these stocks being recession proof.
- The current PE ratio of the S&P 500 is 140.
- The global asset bubble (commodities) is just beginning and its going to be a huge bubble.
- Bond yields are flattening.
- Employment is still sinking
- Credit contagion is spreading to other countries. (Dubai, Greece)
- Asia is NOT immune.
- The recent rally in the dollar is because people feel that there is nothing safe to buy and hence is going for safety.


On a lighter note:

- There were no DFDM in November and December, indicating that there may be no nasty surprises.
- Oil run is starting now.


Sectors and stocks to watch (from the annual cycle of stocks/commodities):

Consumer – BEN, AB
Natural gas – Spikes in Sept and Oct and does a double bottom in July and August
Gold peaks in December
Grains – corn rallies from Oct to Jun (ADM, MON, CAG)


Sectors to watch in 2010:

Pharmaceuticals
Biotech ( STEM, GERN, JNJ) – watch out for JNJ in Feb and Apr due to the approval of cancer drug
Defense & Aerospace
Agriculture
Oil & Gas
Metals