By David Levine
I did very little trading this month with the Aspect Large Cap Value portfolio. And honestly, there is very little reason to act in my opinion.
I watch the market every day, and it seems like it is slowly reaching higher highs. However, underneath the surface there is a lot of churn and rotation.
In my opinion, investing in large-cap tech stocks is advantageous at the moment. There are some big and familiar names that pay dividends. Still, I think you have to be selective.
Despite the fact that I like large cap tech, I continue to marvel at how incompetent Microsoft's (MSFT) management has become. I own an old Windows 7 laptop that I would like to upgrade. I have waited for a decent Windows replacement, but have heard so many horrible things about Windows 8 that I am about to buy a Mac Mini.
I am continuing to wait for Teva Pharmaceutical (TEVA) to make some type of major announcement - perhaps they will be acquired or they will buy someone else. The stock is priced below fair value.
My mining stocks have pulled back, but I think that this has more to do with the fact that we are approaching the beginning of summer and nobody is really thinking too much about anything.
Again, any geopolitical turmoil, or even just a continuation of these insane central bank policies will eventually result in higher silver and gold prices in my opinion. In the meantime, I will sit and collect the dividend on existing holdings.
I have been looking at World Wrestling Entertainment (WWE), but I am not willing to pull the trigger. It is a great franchise, and Vince McMahon is a talented manager. If it gets under $10 per share, I will consider buying.
If I had to guess, and I have no way of knowing for sure, the market may be higher by the end of the year, but there could be a nasty pullback along the way. With interest rates so low, and with investors starved for income, the stock market continues to be the favored asset class. In fact, it could easily turn into the next asset bubble - let's not forget that the 2008 bull market peaked at 18x earnings and the 2000 bull market peaked at 28x earnings. Rates are much lower than either of those two periods and yet the PE ratio of the Dow Jones Industrial Average (DJIA) is around 17.
DISCLAIMER: The investments discussed are held in client accounts as of April 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Dividends reflect past performance and there is no guarantee they will continue to be paid. Past performance is no guarantee of future results.
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