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Happy Holidays!

Happy holidays to all. Year 2014 is almost ending. As we close on 2014, it was interesting to see that last week became kind of historical week with 3 different "communist" countries in news for different reasons.
  1. Russia - its currency ruble dropped by nearly 50% in last 6 months. Last week was capitulation when it ranged from 60 to 80. That's unheard in currency markets. Has ruble stabilized around 60. I doubt it. But worst may be over and it should hover between 40 to 60 for next few months unless Putin pulls up something like what he did in last spring. Oil dropping also did not hep Russia. 
  2. Cuba - Cuba was in news for good reasons, After nearly 55 years, US and Cuba has re-opened discussions and started process of normalizing relations. This could be good news to Cuba and America. Americans would be flocking to Cuba for vacations and buying lots of Cuban cigars
  3. North Korea - Looks like North Koreans found more effective way (than building nuclear bomb) to attack on "freedom of speech". SONY and theatre owners decision not to release movie "The INTERVIEW" is being interpreted as attack on "freedom of speech" which in a sense is correct. This could set dangerous trend unless countries and companies are ready for it and react to more wisely than what happened in this case
Oil continues to be on "slippery" slope. Last week it may have found some footing after nearly touching 5 year low of $55 (for brent). There was definitely fear in oil markets as well as any company dealing in energy. As Buffet said, be greedy when there is fear in market. So here are some potential stock picks which are very risky but could be rewarding (if they survive)
  1. FEYE (around $30-$32) - Cybersecurity play
  2. LNCO (around $11) - energy play with very large dividend. Even if dividend gets cut in half, could still be above 10% yield
  3. EXXI (around $3) - this may not survive and hence it is selling at $3 as if it's going to declare BK which is real possibility. However if it survives (similar to what it did in 2008/2009), this could easily double
  4. RBL (around $14) and GREK (around $14) - Bet on Russia and Greece not getting worse
  5. PBR (around $7) - another oil play. All worst possible news about oil down, corruption, dis-appointment at election results in Brazil have brought down this by 60%. What else could go wrong?
  6. CSIQ ($21) and JKS ($18) - Chinese solar plays which have come down in sympathy with energy sector. These two could go back above $30 by summer 2015
All of these are very-very high risk bets. So be careful.

Happy holidays to all. 

/Shyam

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