Upload
rudolf-glenn
View
215
Download
1
Tags:
Embed Size (px)
Citation preview
Built By Advisors For Advisors
GO FIGURE – MATH CAN LIE (A BIT)
SO IF: 1/3 = 0.333WHAT DOES 3*0.333 = ?
0.999 RIGHT?
3 X 1/3 = 1 (RIGHT?)
ACTUALLY NO: IN MATH 0.999(REPEATING DECIMAL) = 1
HERE’S PROOF:X= 0.99910(X) = 9.99910X – X = 9.999 – 0.9999X = 9X = 1
GOT TO LOVE THIS STUFF????
Built By Advisors For Advisors
BIGFOOT INVESTMENTS OPEN FORUM
Mar 28th, 2013
WELCOME!
Built By Advisors For Advisors
AGENDA WELCOME! ADMIN NOTESQUOTE OF THE DAYOPTIMISM GAUGECHARTS OF INTERESTSO WHAT’S UP WITH: CONVERTIBLE BONDSA CLOSER LOOK AT DAVID’S CORNERSWAPS AND SPREADSLEE’S COMMENTS QUESTIONS/COMMENTS
Built By Advisors For Advisors
IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TOHAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT.
WE’LL UN-MUTE YOU ON OUR END SO YOU CAN ASK QUESTIONS.
PLEASE MUTE AUDIO FROM THE MENU ON YOUR SCREEN SO WE DO NOT GET FEEDBACK.
THANK YOU!
“NOTES”
Built By Advisors For Advisors
BigFoot Investments is now on Twitter, LinkedIn!
Built By Advisors For Advisors
BigFoot On LinkedIn!
Don’t Forget To Join Our “Group”
Built By Advisors For Advisors
Notifying You!
SMS Alert System
Built By Advisors For Advisors
Screening/Scoring for AprilACTION POSTING DATES
Stock Screen By 5pm CDST – Friday 3/29/2013*
Dividend Screen
ETF Selections
Stock Screening
*Note: We will attempt to have all postings completed AMC on 3/28/2013
Built By Advisors For Advisors
QUOTE OF THE DAY:Take time to deliberate; but when the time for
action arrives……
Andrew Jackson
…STOP THINKING AND GO ON!
Built By Advisors For Advisors
Optimism Gauge
As of: 3/28/2013
Indicator Current Value Prior/Metric Value Current Value
St Louis Fed Financial Stress Index -.696 -0.639(Revised) +1.0
Chicago Fed National Act Index (3 Mon Mov Av) 0.09 0.28(Revised) -.50
Unemployment 7.7 7.9 (Revised) +.50
Weekly Jobless Claims (4Wk Mov Av) 343,000 340,750 -.50
ECRI Weekly Index 6.3 6.4(Revised) +.50
Conf Board Leading Indicators (NEW) 94.1 93.9 +1.0
University of Michigan Sentiment - Final 77.6(Final – Feb 2013) 73.8(Final-Jan 2012) -.25
Monthly Retail Sales (Adjusted) 416,990 416,070 +.50
NFIB Small Business Sentiment 90.8 88.9 -.50
ISM Manufacturing 54.2(Expansion Line = 50) 53.1 +.50
Economic Capacity Utilization 79.1 79.3(Revised) +.50
Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A
+.50
S&P Case-Shiller 20 City Comp Index 146.14 145.95 (Revised) +.50
Total +3.75Last Update: 3/28/2013
Measuring Our Economy
NOTES/COMMENTS
CURRENT READING: 67.7%
PRIOR READING: 76.3%
BIAS: MILDLY BULLISH
9 OF 13 INDICATORS POSITIVE
TREND - NEGATIVE
EconomicOptimism
Index
15
25
35
45 65
75
85
95
67.7%
READING AS OF: 3/28/2013
POSITIVE AS OF: 8/17/2012
Current Reading Prior Reading
Measuring Our Economy
Built By Advisors For Advisors
Charts of Interest!
Built By Advisors For AdvisorsSource: EIA
WE CAN HOPE
Built By Advisors For Advisors
WATCH CAREFULLY
Built By Advisors For Advisors
EVER HEARD OF THE MSDP? It’s the Monthly Statement of Public Debt
Published by Treasury Direct??? Summary of Debt Holdings Last published in Feb, 2013 Also includes Statutory Limits
Built By Advisors For Advisors
MOST OF ‘EM STILL LOVE US
Built By Advisors For Advisors
THEY’RE STIILL BORROWING DESPITE THE RUMORS
Built By Advisors For Advisors
THINK THERE IS CONCERN IN THE MIDDLE EAST?
Built By Advisors For Advisors
SO WHAT’S UP WITH:Convertible Bonds
Built By Advisors For Advisors
A bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the
discretion of the bondholder. It is much like a Call Option that is attached to a bond.
As such, there is a premium “attached” - a lower interest rate
The conversion feature is a RIGHT NOT AN OBLIGATION!
Sometimes called "CVs” or “Converts”
Source: Investopedia
DEFINITION
Built By Advisors For Advisors
THE BASICS: Par Value: Price when issued Conversion Price: Set when bond issued Conversion Ratio: Components
Par Value of BondConversion Price
Bond Description (Sample): Acme Company 5-year CB with $1000 Par Value and Coupon
of 5%; Conversion Price = $40
$1000 $40
25
Conversion Value
Current Stock Price ($30) X Conversion Ratio (25) = $750AS YOU CAN SEE THIS BOND IS SELLING AT A PREMIUM
= orPar Value of BondConversion Ratio
$40Conversion
Ratio
Built By Advisors For Advisors
MORE :Parity – Bond’s conversion is equal to stock price
Conversion Premium - Price of Bond exceeds market price of stock an investor would receive upon conversion
Stock Split – Original Conversion Ratio/Split Ratio
Dividend Declared - Conversion Ratio increases by dividend amount therefore the Conversion Price decreases.
Built By Advisors For Advisors
PROS AND CONS FOR PURCHASING CONVERTIBLES
CONS: Often issued by companies with poor credit ratings Can be dilutive to EPS of company If stock of company performs poorly – no conversion If issuer goes bankrupt have lower priority than common bonds Sell at premiums Usually “callable” – capping gains Can have limited upside
PROS: They pay interest Typically offer better returns than conventional bonds (Kiplinger) If stock falls – they can only call so far since they eventually pay principal You may get to convert for a profit Offer some degree of protection against market fluctuations You can get dividends from companies that don’t normally pay such
Sources: about.com BONDSBioStockspro.com
Built By Advisors For Advisors
INVESTING OPTIONS:
Buy the bond ETF – CWB (SPDR Barclays Convertible Securities)
YTD - +3.51% 1 – Year - +9.03 CVRT Closed in Feb, 2013 (Invesco)
Mutual Funds – Next Pages Best option – ETF or Fund
Built By Advisors For Advisors
Built By Advisors For Advisors
Built By Advisors For Advisors
Ranked Based On: 3-yr Return Expense Ratio Earnings Growth Rate High YTD Return High 5-yr Return High Star Rating Low P/E
Built By Advisors For Advisors
INDEX COMPS
Built By Advisors For Advisors
INDEX COMPS
Built By Advisors For Advisors
WHAT’S A REVERSE CONVERTIBLE BOND?
While a CONVERTIBLE BOND gives the BONDHOLDER the right to convert the asset to equity, a REVERSE CONVERTIBLE gives
the ISSUER the right to convert to equity.
In this case it is like a PUT OPTION that is held by the bond’s issuer on company shares. The company has the right , but
not the obligation, to convert the bond into shares of company stock at the set date – and are exercised when the
stock is below a “strike” price.
Why would you buy one? Higher interest rates – sometimes 10%+ Sideways markets
Built By Advisors For Advisors
DAVID’S CORNER
Built By Advisors For Advisors
SWAPS & “SPREADS”
IGNORE AT YOUR PERIL
Built By Advisors For Advisors
SWAPS AND SPREADSRATE PRIOR CURRENT STATUS
Libor/OIS 14.01 14.56
Euribor/Eonia .146 .148
DTCC RepoIndex
Agency .167 .139
MBS .193 .158Treas .160 .143
High Yield 4.78 4.78
Federal ReserveCurrency Swaps
(ECB)USD million
7 Day 25 2
Open 7,963 7,963
Note: Status = No impact Status = Negative Impact
As Of: 3/27/2013
CREDIT ANTICIPATES – EQUITY CONFIRMS
Built By Advisors For Advisors
QUESTIONS & COMMENTS
THANKS FOR JOINING US!
Built By Advisors For Advisors
IMPORTANT DISCLOSURE INFORMATION
Content is intended for investment professional use/review only. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future
performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot Investments.com), or any non-investment related content, made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), be suitable for any investment professional’s clients portfolio or individual situation, or prove successful. The investment professional retains
all decision making authority as to whether or not to follow and/or implement any of the presentation content. BigFoot has absolutely no responsibly for any suitability determination pertaining to any of the investment professional’s clients, such
obligation being exclusively the initial and ongoing responsibility of the investment professional. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.
Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot Investments.com. BigFoot Investments.com. is neither a law
firm nor a certified public accounting firm and no portion of the content should be construed as legal or accounting advice. Investment Professional acknowledges that to the extent required to do so, it is his/her/its exclusively responsibility to advise
his/her/its employer/broker-dealer of its BigFoot subscription. BigFoot Investments.com is a service of Lee Johnson Capital Management, an SEC registered investment adviser located in Fort Worth, Texas. A copy of the Lee Johnson Capital Management
LLC’ current written disclosure statement discussing our advisory services and fees is available for review upon request.
No Sharing of Content: You acknowledge that the presentation content is for investment professional use only. You warrant and represent not to share any portion of the presentation content with any non-subscriber, including but not limited to your
clients or prospects