Tag Archives: Wealth Management

Reminder of Expectations for 2010 (From Q1 2010 J.K. Financial, Inc. Newsletter)

We thought it timely to refer back to our thoughts from our Q1 2010 Newsletter, penned earlier this month.

“The year 2010 will be a teaser for many investors. We feel the markets will end up somewhere between 8 – 10% but the journey will be one we have not experienced recently.

The year 2010, in our opinion, will be a roller coaster market with frequent drops of 10% -15% or more, chasing the weaker hands out of the capital markets, just in time for the capital markets to take an about face and move to new highs, again frustrating shorter term investors.

Just a Reminder!

Our thesis relies on two premises. First, the economy will need to transition from assisted growth (government stimulus) to self reliance, leaving many to question the strength and timing of the transition period. Second, the “buy and hold is dead” thesis will lead to short-sighted investors selling at the small drops, only to be frustrated as the capital markets turn, leaving many in negative return territory as the markets have a nice total gain for the year. We are already seeing this second event occur in the commodity area, and expect the same in the capital markets eventually.”

Again, these are our toughts and no guarantees of course, but possibly timely!

Have a Good Day! Thanks


Black Friday, Cyber Monday Update– The Winner “Suzie the Saver”!

As a quick update from last weeks humorous duo of fabricated personalities, we wanted to give you a quick status report.

It appears as if “Sammy the Spender” did make a few runs to the store, but was trumped by “Suzie the Saver” as we firmly established a new holiday lingo “Cyber Monday“. 

As a side note, I found myself on a few cell phone text updates for holiday specials, as an interesting way to monitor company sales, the technology they were using, and this rather new form of marketing.

Overall we estimate retail and related sales were not as robust as expected, as the consumer, rightly so, remains frugal in spending. This situation will form an interesting end of the year struggle as public companies via for a smaller sales pool, at reduced rates. We will keep you updated!

Have a Good Day!


Dubai, The Reaction is What Matters !

Most likely, anyone hearing the Dubai news over the holiday shortened week that just passed, had some type of mental image of the area.

The importance of the region is not as great as the World Reaction to the news. The World is a much smaller place today and getting smaller by the minute. See our August 17, 2009 post  An Interesting Weekend of Sports and How it Relates to World Capital Markets 

A quick Summary of the events and a few stats of Dubai:

  • Dubai announces they need an extension on their estimated $70-90 billion of debt (Interesting comparable stat- Bill and Melinda Gates foundation Assets ~$35 billion http://www.gatesfoundation.org/about/Pages/foundation-fact-sheet.aspx)
  • Dubai GDP annually is about $85 billion (Debt approximately equal to GDP)
  • Dubai Population ~1.5 million (Phoenix Arizona 1.5 million)
  • Federal Government of Abu Dhabi loaned Dubai $10 Billion earlier this year

In our opinion, the big Government is teaching less than thrifty little brother a lesson, especially after the quick usage of the $10 billion, but again the importance is the connection of the world reactions.

In closing we have attached an outstanding image from the CIA’s website along with their commentary.

The artificial peninsula and islands that make up Palm Jumeirah in Dubai as seen from the International Space Station. This massive earthwork is reclaimed from Dubai’s Persian Gulf coast. Advertised as “being visible from the Moon,” the palm-shaped structure displays 17 huge fronds framed by an 11-km (7 mi) protective barrier. It is the first of three residential and commercial palm-shaped projects being undertaken in Dubai. Image courtesy of NASA.”

Have a Good Day!


Black Friday Conclusion,”Susie the Saver” and Happy Thanksgiving!

Yesterday (Black Friday Looms-”Sammy the Spender” and “Susie the Saver”) we introduced a few casual seasonal thoughts concerning our interest in “Black Friday” and also our hopeful busy appearance of a cheerful character, “Sammy the Spender” as an investor’s and analysts best friend. Today we share experiences with “Susie the Saver” a planner and saver.  

After winding down from Thanksgiving, Susie spends time thinking of the various gifts she has not already purchased for the season, along with a few important needed items for the remainder of the year.   Understanding that many items will truly be at a great discount on Black Friday morning, Susie’s time is spent organizing her possible final purchases. Contrary to her counterpart Sammy, Susie takes time to understand the items she “needs” and the other items she just “wants”.

As Friday morning makes its appearance, Suzie takes time scan the local paper for bargains, and before venturing out to the various retail establishments, happily discovers on-line, most of her needed items are also offering “free shipping”.  After a few point and clicks, most all of Suzie’s “needed” items and gifts are complete, leaving her time to visit with friends and family and take an occassional exhausted call from her good friend “Sammy the spender” (still fighting crowds late into the night).

Have a Happy Thanksgiving!


Black Friday Looms-“Sammy the Spender” and “Susie the Saver”

Most know that Black Friday’s name came from days gone when retailers finally turned a profit for the first time of the year, or moved into the “Black”.

Fortunately as analysts in this day and age, most companies profit throughout the year, but certainly have a heavy dependence on the next few days of revenue.

In a slightly humorous two-part post starting today, we share two totally different imaginary people, “Sammy the Spender” and “Susie the Saver”. 

Today “Sammy the Spender” (An Analyst and Investor’s Dream) 

We want everyone to hit the malls with Sammy and shop until they drop. Retailers and consumer related companies are ready for a frugal shopper and have stocked their inventories and priced their products appropriately. All retailers need are a few good shopping hours. Sammy, which we hope shows up on Friday morning, early, in good spirits, with money to burn, would make for a major positive season. Consumers have been relatively frugal as unemployment fears have reigned in their spending, keeping consumer related companies on their toes.  As an Analyst, we hope Sammy makes for a positive start to the season! 

Last holiday season was extremely tough for retailers, making comparable growth numbers (comparisons from last year) a low, and easily jumped hurdle. As revenue numbers are reported  from the season, easy comparisons should make for nice growth year over year, in turn propelling further good will (moving upwards) the capital markets.

As an Analyst and Investor, we wish Sammy a Spirited Holiday, and VERY busy Season.

Tomorrow: “Susie the Saver”  Our Planning and Investing Client!


Markets taking a Breather-Finally

As we enter the half way point of earnings season, the markets have taken a more negative tone.

As the headlines will most likely read, the “Insert Favorite Index” is now down “X” days in a row. And certainly this is true, but given that earnings numbers are coming in, for the most part, pretty good, it is very possible we are finally taking a much-needed breather.

Looking ahead to the end of the week, we will hit an end of the month period lending some pressure from the usual end of month, Let the “Mark Ups” Begin and we still have folks who may have missed the entire move, see related post , I Missed It! I Missed It!.

Businesses are, again for the most part, saying things are getting better, and while anything can happen, a breather might be just what we need.

Have a good day!


Earnings Season, An Update from the Front Lines–Unintended findings, Future Employment??

As we near the heart of earnings season, our internally named, 90 day treadmill, we wanted to give you a brief update on our findings.

As a comparison to last quarter’s earnings season, More Clues: U.S. Jobless Rate, A Take From Recent Earnings and Longer Term A Need for Higher Personal Emergency Funds we had many companies who were making their numbers on the bottom line, Net Income, but missing on the top line.

As of this time of the season, we are seeing more top line (sales/revenue) growth numbers as well as continued bottom line/Net Income beats.

This is very good news for a continue capital market growth, but also, longer term for unemployment numbers.

Higher Sales = Eventual need for more employees

Overall, so far we give earnings season a B+

Have a good day!


Third Quarter 2009 Performance Cover Letter

Enclosed you will find your Third Quarter 2009 Quarterly Performance Report. Not to sound repetitive from last quarter, but again our patience is being rewarded terrifically along with the rebalancing and adjustments we have made along the way. 

For the 90 day period ending September 30, 2009 the S&P 500, our favorite domestic equity index, gained just over 15%. This is not only an extremely positive return, but comes on the heels of a similar return for the prior quarter.  Again not to repeat our comments from last quarter, but we do not expect these kinds of returns on a continued basis.   

We suspect a large amount of investment dollars are pouring into the markets as clarity is gained not only here in the US, but globally as well, marching the collective capital markets higher. (See our September 17th Blog  “I Missed It! I Missed It” !

Inflation is no where to be seen as of yet. Yes, we are still watching with a careful eye, and continue to monitor our indicators for future inflationary forces. 

Interest rates, another areas of focus, and the main topic of our current Newsletter (Fourth Quarter 2009), have been extremely cooperative as they have remained low much longer than we thought, and actually dropped late in the Quarter, providing more steam for the capital markets, and continued help for the housing market.

While the last Quarter of the year has historically been the best returning quarter, we feel the bar has been set high and jumped over in the prior two quarters.  A slower, more deleveraged economy, on solid footing, is our rather.  This may mean a very meager return compared to the last two quarters, but would, in our opinion, give the economy, and investor’s, time to heal. 

Thanks so much for your confidence and compliments. 

Best Wishes, 


John A. Kvale CFA, CFP

Enclosure (2009 Quarter 3 Performance Report)