· FX discussed in the cover story< – cautious on the US$, saying in the future the dollar-centric model of the world will deteriorate w/other currencies (inc. the yuan and real) gaining in credibility and value. Says investors can benefit by buying some large multinationals (like KO, IBM, and XOM) or FX brokers (like FXCM, GCAP). Some ETFs inc. CEW (long) and UUP (short).
·HPQ –pos. comments; the stock could have upside into the $60s if new mgmt articulates a credible growth strategy to investors; HPQ’s multiple is one of the lowest in the industry; HPQ should embark on a low-cost open-source software strategy rather than compete w/ORCL and IBM by selling a me-too “stack”; Barron’s thinks HPQ should buy RHT. Other potential software targets for HPQ include SYMC, TDC, INFA, BMC, CVLT, and TIBX.
·Santoli –this is prob. just a long-awaited stock correction vs. the start of a broader macro downdraft. Correlations could start to break down again. Barron’s http://bit.ly/gF7zbA
·VC –pos. comments; the stock could be worth in the low $80s. Barron’s http://bit.ly/gF7zbA
·BAC – positive comments; the stock could rise 40% from present levels; earnings could be north of $2.
·pos. on TM, PRU, MFC, AFL, XL
·Hyundai – positive comments. The co is gaining a lot of market share and the stock could have another 40% upside from here.
·Interview w/Bridgewater’s Ray Dalio – US growth could slow meaningfully at year-end due to an end to fiscal and monetary stimulus unless private-credit growth picks up. The European debt crisis will intensify in the coming year as events get out ahead of regulators and tensions between Germany and the peripheral economies intensify.
We could see a massive FX event in the next 18 months where creditor nations revalue their currencies higher and adopt independent monetary policies (China, Brazil) while debtor countries that can print money will devalue their currencies. Debtor countries that can’t print money will restructure their debts. Says he has exited the US bond market on the long side and has initiated some select short positions (not just in the US but in DM markets overall). Dalio says that currency devaluations are good for stocks, commodities, and gold.
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