Fire hydrant analyst meeting update….10 meetings under our belt with more to come

Yesterday the analyst fire hydrant meeting was opened and the meetings began in quick fashion, running throughout the full day. After a total of 10 meetings and a terrific lunch presentation by Dr. Harvey Rosenblum of the Dallas Fed, whom I ended up sharing lunch with prior to his presentation (analysis of his speech soon) I came away with a few interesting observations.

But first, one quick thought:

Sharing out thoughts in this venue mandates we clarify what we learned, hopefully provides you with a good picture of our findings, and also works as a diary for future reference.  Thanks in advance for following.

So here we go..

Interestingly while the capital markets careened lower, I jotted down several CEO’s quoting their business backlogs (future orders) were as good as they had been since 2006 (one year prior to the 2007 peak) business was not great, but good, and improving especially looking into next year. With over one half of my day spent with companies from the technology sector, most of which are smaller, I came to the conclusion that at least the tech sector seems to be ready for lift off.  While many of these companies are in the food chain of larger companies, they were by far the most positive in guidance, enthusiasm, and expectations.

An oil and gas company being opportunistic and buying beaten down hard natural gas rights along with several industrial production companies had a slightly less, but still positive outlook, which rounded out my afternoon.

The lone somber discussion was a VERY large global cement company that had experienced a close call by making a huge ($15 billion) all debt acquisition at the top of the market in 2007 only to see sales shrink by over 50% globally, and over 80% in some markets. They survived, and happily stated that the US seems to be on a slow uptrend with residential housing starts rising over the last five quarters adding to their bottom line in the near future. They were extremely negative on Spain for the foreseeable future.

Interestingly there we no talks of fiscal cliffs, political rumblings or negativity, but many commented of slight delays, while for the most part again backlogs were very good and rising. Overall a very positive tone as a whole. More to come, as I will let you know what I know, when I know it !

Have a Great Day!


PS I have an evening meeting with my stately study group to discuss the post-election analysis.

PSS Capital markets are now down about 7.5% from their Bernanke juice is loose high….we feel much more positive now as valuations are more in line with fundamentals, even as it appears the FOMC may be ready for more juice…..a topic for another time!

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