Ian Mausner Comments on Wells Fargo Strategist Stock Plunge Forecast

Today, Wells Fargo economic strategist Gina Martin Adams proclaimed that stocks are about to plunge. Adams is highly skeptical about the rally that the market has enjoyed thus far. Ian Mausner begs to differ.

ian-mausner-comments-on-wells-fargo-strategist-forecastOver the years the market strategists and prognosticators come and go. No one has ever predicted the market over any extended time. With thousands of strategists, there will always be a few who get it right for a brief moment. Statistically, if there are thousands of strategists so at any moment, a few get it right.

The chances are that this strategist is wrong. The valuations are low, cash reserves are high, dividends and buy backs are increasing, interest rates though rising are still very low, inflation is non existent and the global economy is recovering and growing slowly allowing earnings to continue to grow. That is no recipe for a collapse.

The only plausible scenario for a collapse would be one precipitated by an significant exogenous geopolitical shock like from Iran or some such place, or heaven forbid, another 9/11 type event.

Otherwise, the outlook is quite sanguine…

Ian Mausner Comments on Federal Reserve Stimulus Plan Announcement

The Federal Reserve says the economy isn’t strong enough yet and they have decided to continue to keep up the stimulus plan. Chairman Ben Bernanke announced that the progression towards a stronger economy is taking longer than originally expected.

ian-mausner-comments-on-federal-reserve-stimulus-plan-announcement

Image: BBC News Business

The Fed, correctly, wants to err on the side of over stimulation and more growth rather than risk the economy sputtering or worse. The recovery has been the weakest recovery in the post WW2 period and with so many still unemployed and so many on good stamps, the need for economic growth is severe.

Markets rose as a result of the news which bodes well for continued US economy growth.

For the latest information and advice related to investments and financial planning, follow Ian Mausner on Twitter at @imausner.

Ian Mausner Comments on Fed Chair Candidates

Lawrence H. Summers, Obama’s top pick, recently withdrew his name from consideration for the position of Fed Chief. Which has prompted senators and economists to lobby for Janet Yellen to be the top choice for the title of Federal Reserve Chairwoman.

image: Federal Reserve Candidates

Picture source: New York Times

Of course it is mostly a political issue as all of the candidates are extremely well qualified and capable of doing a solid job. Of greater significance is when and how fast will the Fed start applying some tapering to their asset purchases and beyond that actually start tightening monetary policy.

In the meantime, rates are still so low and will be even after an additional 100 basis points move so the level of rates won’t be a real concern to the market for quite some time. There will be single day moves of course reacting to that day’s news but nothing sustained caused by rates.

Therefore, the best element for the market regarding the Fed Chairman is not so much who it is but rather that it just gets done to remove the uncertainty and distraction.

For the latest information and advice related to investments and financial planning, follow Ian Mausner on Twitter at @imausner.

Ian Mausner Helps You Choose the Right Cell Tower Stock

Last Monday, Apple made the news when it unveiled its new iPhone models: the iPhone 5S and the iPhone 5C. The latter is supposed to make the iPhone reach new markets as its half the price of previous models and it comes in bright colors. The event at Apple Headquarters was big news and carried by all of the major news outlets. While it’s true that the cell phone manufacturers and mobile service providers do get most of the press, that doesn’t mean you should focus on these companies only when investing in mobile communications.

image: cell tower

Cell tower stock has generally been a very safe investment as individuals become more reliant on cell phones and other mobile communication devices in their daily lives. As they use their cell phones more, the demand put on towers will continue grow, thus creating the need for even more towers. Those that invest in these companies have the potential to see their portfolios soar. But which cell tower company should you choose? Ian Mausner, founder and CEO of J.S. Oliver Capital Management weighed in on this very subject recently. Here’s what he said:

“In the cell tower sector, we like American Tower as they are the global leader and the proliferation of mobile devices will continue well into the future. They are essentially a toll booth on the mobile device highway and as such represent a very solid investment.”

For the latest information and advice related to investments and financial planning, follow Ian Mauser on Twitter at @imausner.

Ian Mausner’s Twitter IPO Thoughts

It’s official. Twitter will be the next big tech IPO. Twitter announced via tweet yesterday that they have confidentially submitted an S-1 to the SEC for their planned IPO.

image: Twitter IPO tweet

Twitter looks to be a very successful stock over time.

Initial thoughts: Twitter is going public at a great time. Its business is growing solidly and the company has brought in senior management who have already proven to be excellent stewards of the company and the market for IPO’s is also very strong. It will be a deal in great demand but its initial success will be dependent on the level of intelligence versus greed in the pricing and sizing process. Regardless, just like Facebook, it will be a very successful stock over time.

Experts expect the deal to hit the stock market by early December. No price range for the stock has been set.

-Ian Mausner

 

Is Natural Gas the Next Big Thing? Ian Mausner Says It’s Promising.

image: natural gas investingDuring the summer, you might have heard a lot of talk from politicians and energy officials about natural gas. As evidence continues to grow about man’s effect on climate change, those in Washington, motivated by public demand, continue to try and find alternative forms of energy to oil. One of the solutions many are seeing to the emissions problem is through a greater reliance on natural gas. This has left many investors wondering whether or not they should invest more in natural gas companies. According to Ian Mausner, of J.S. Oliver Capital Management, you should. He said:

“Natural gas prices are down over 80% over the past few years due to the huge supply discoveries brought on by new technology including fracking. Though demand has also increased substantially, it has not kept up with the huge new supply discoveries. However, going forward, it is unlikely that there will be such new supply increases and demand will keep growing as more companies and industries switch to natural gas as it is cheaper and cleaner burning than oil. As such, we see a multiyear, very large opportunity in natural gas.”

There are many questions still out there about natural gas, but there’s no question that natural gas will gain new media spotlight as Americans search for a cheaper, cleaner form of energy for their homes and businesses. Other countries are looking at the advantages of natural gas too over other forms of energy, and American natural gas companies are taking advantage of this demand. By 2020, the US could export up to 12% of all the liquefied natural gas in the world. And then there’s the idea of being self –sufficient in energy. Natural gas makes this possible, and controversial technology like fracking may be more welcomed if it brings low-cost energy and less reliance on other countries for oil.

For all of these reasons, natural gas looks to be a very promising investment.  For the latest information on investing and market trends, follow Ian Mausner on Twitter at @imausner.

Ian Mausner Explains Why You Should Invest in Smaller Biotech Companies Today

If you’re thinking about ways to expand your portfolio, one route to consider is investing in the smaller to medium sized biotech companies out there. In a story earlier this year, Detroit was heralded for its distinction as one of the biggest biotechnology hubs in the country.  Now, while many of the things we have read in the news about Detroit in the past year haven’t been the best, one area Detroit has shined is in biotech startups. The reasons for this are twofold:

First, a major portion of the startup companies out there are focusing efforts on stem cells and regenerative medicine. Michigan has very lenient laws related to embryonic stem cell research. Second, Detroit has a low cost structure. The situation in Detroit is just one example of the emergence of startup biotech companies that are drawing the attention of larger pharmaceutical companies out there.

In 2011, the National Defense University conducted a study on the United States biotechnology industry and concluded that the industry as a whole made nearly $93 billion in 2010. And these numbers should continue as the study also indicated short term industry growth of at least nine percent. This growth is due in part to the advancements made by these startups as well as the demand for more drugs. According to a study from Mayo Clinic researchers, seven out of ten Americans take at least one prescription drug.

Given the short term growth prospects and demand from Americans for new drugs to help maintain chronic conditions, larger pharmaceutical companies will be on the lookout for smaller research teams and companies that are making breakthroughs with their respective work. If you’re looking for new investment opportunities, companies that offer potential with dynamic new research and innovative biotech products should certainly be considered as these are the companies that could be acquired.

For more insight on this, here’s what Ian Mausner of J.S. Oliver Capital Management had to say on the subject:

“Large cap Pharma is desperate for new drugs and the small to medium sized biotech firms have them. So the large pharmaceutical companies are systematically buying all of the small and medium sized biotech companies. One can’t know, of course, which ones they are going to buy but the trend is strong and long lasting so buying the industry through IBB and XBI is the way to go. It has been extremely profitable over the last year and we expect it to continue to be so for at least several more years.”

For more information on these and other investment opportunities, follow Ian Mausner on Twitter at @imausner.

Syria, Egypt and Iran: Impact on Market by Ian Mausner

ian-mausner-sec-9-2Despite daily headlines about Syria and Egypt and the horrible human tragedy, all of these events in the Middle East are completely irrelevant for the market. We have seen some weakness due to fear created by these headlines but none of the events have any effect on earnings and interest rates, the real determinants to stock prices. Dips should be bought and we expect the market to continue its consolidation mode after the big run up earlier this year and finish the year on a slightly up note. We expect next year to be another solid 10-15% year.

The Iran issue, however, is somewhat more relevant to short term market action. If there is any intervention by Israel and/or the US, though it too is not significant in the long run, it will have a slightly longer short term impact. We expect a few days to 2 weeks of market weakness, stronger oil prices and then a very quick recovery. It is highly unlikely that the Straights of Hormuz will be closed and even if they are, they will reopen in a matter of days. Retaliatory strikes against Israel will likely be short lived and ineffective. Again, no long term impact on interest rates or earnings. One longer term positive would be the removal of the uncertainty regarding an attack against Iran and if the attack is successful that would be a slight positive for the market.

Will the European Banking Union Work?

Last week’s Economist featured an article about the problem the European Union faces in creating an effective banking union to help stabilize its financial system. In many countries, debt is becoming a major burden that needs to be addressed sooner rather than later. A major component of this debt comes in the form of ailing regional banks that are in need of help to stay above water. While a majority of the countries agree that a banking union is needed, there are some key issues that stand in the way.

The first issue European countries face is the political ramifications of the necessary components of a banking union. While most countries agree that there needs to be a single authority to write and enforce rules, the majority is not there with the other two components:  money and deposit guarantee. It would be up to richer, more stable countries like Germany to pump money into the system and hope that banking supervisors have learned from the past. This money would have to come in the form of taxation. In addition, universal depositors insurance among all EU nations is considered laughable considered the shaky past.

The second issue Europeans face is the legal changes that would need to be made in order to have a uniform system. As all European countries are sovereign states and have their own bankruptcy codes, new provisions in the treaties would have to be written in order to allow a single authority to seize assets and impose penalties.

Given that the EU’s state is shaky at best, it should be interesting to see how the European Bank Union idea gets off the ground. While things might not look so great right now, sometimes it’s in the most desperate times that the biggest steps in progress do occur.

Follow Ian Mausner on LinkedIn or Twitter for financial news, tips and predictions.

 

What’s a Traveler’s Opinion on Europe’s Economic Crisis?

Flights to Europe

If you are thinking about traveling to Europe or have traveled to Europe in the past, you probably have read a Rick Steves travel guide before. Steves is a world-renowned traveler and writer, and you might have seen or heard his public television and radio shows devoted specifically to European travel. Steves recently wrote a blog on the Huffington Post about the economic situation in Europe. We’ve all heard and read countless news stories about the protests and other civil unrest, labor strikes and walk-offs, and  violence going on as European governments move towards austerity in order to battle crippling debt and find a route to sustainability. Steves brings an interesting perspective on the European economy given his extensive research on the sights, sounds and culture of Europe.  He stresses a number of things:

  • It’s really not that bad: In America, Europe and other civilized areas, we tend to lose grip on reality given our status as industrial and financial powerhouses. Europe is far richer than a majority of the countries in the world. Many countries would trade their position with a European country in a nanosecond.
  • Recovery will require a new outlook on retirement: The reason why the French were able to have a retirement age of 62 was because there were many workers to make up the difference in production. Nowadays, not so much. In most industrial countries, birth rates are down. Combine that with an increase in life expectancy, and many countries are suffering from a production deficit – more people are retiring and fewer are working to offset this. In order to reverse this, Baby Boomers and younger workers will have to take the 62 retirement age out of their heads.
  • There will be social unrest:  As someone who knows practically everything about Europe, Steves will be the first to note that Europe has never been the most stable area. He notes that it’s in the blood of many Europeans to fight for their rights and demand change when they feel their government is failing them.

So what does this all mean? Unfortunately, there are no certainties with what’s going to happen to Europe’s economy and how Europeans will react to the changes needed for sustainability. However, the people who are able to predict what the process will be can take advantage of the changes in the marketplace.

“The wash out in European assets and changes in the marketplace has presented the same type of opportunities in Europe as there were in the US in 2009. High quality distressed real estate and discounted top blue chip stocks represent a generational investment opportunity,” said Ian Mausner, a finance expert and founder of J.S. Oliver Capital Management.

However, there’s one good thing still to report: According to Steves, you can still visit the Louvre or Dublin without fear.