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May the Force be With You

I have taken such a long break from my blogging that it almost felt like waiting for Star Wars movie or interest rate hike by FED. Both events: new Star Wars movie after 10 years and interest rate hike by Fed after 9 years. What a timing - both these events happened in span of less than 48 hours!
These events and upcoming new year inspired to start blogging again.
Year 2015 have been tough for my investing suggestions. I just looked it my recommendations and collectively they are down by about 15% (assuming shadow portfolio of equal amounts invested at start of year). It's bad - there is no other way to say it. I almost started doubted my own analysis.
Hopefully you did your own diligence and did not lose as much. But that won't deter me to continue my passion of analyzing market trends and come up with some investment ideas. Here are few. I will follow up for 2016 recommendations in next blog.

  • Sunny outlook for solar and wind - This was another significant development last week that congress extended green energy tax credits by another 3 to 5 years (they were supposed to be expired by end of 2016). This gave a major support to solar stocks many of them doubled in 1 week. However there are still some "relative" bargains. I am considering SUNE ($6.5), GLBL ($5.5) and TERP ($12). These are from same management team which really messed up with their balance sheet and got punished by market by pushing these stocks by nearly 70-80% in span of 6 months. Finally management wised up and started to pull back. This should reduce their bankruptcy risk and could give these stocks at least 50% run in 2016. For GLBL and TERP, there is nice 10%+ yield (provided they do not cut)
  • Biotech - this has been one of my favorite sector. Given trends like older demographics, better early detection mechanisms, wider covered pool due to Obamacare and FDA willing to grant approvals for unmet needs, this sector had good long-term prospects. However picking winners and losers are like picking lottery numbers unless one has excellent background in this area (which I don't). Having said that I am excited about biotech focused on cancer areas (due to some personal reasons) and especially interested in immunotherapy. Few names to mention are BLUE ($60), KITE ($60) and risky company CLVS ($32). I also like PTCT ($32) which focus on unmet need for DMD
  • Energy - this has been bummer (and cause for major losses) for me and I have been completely wrong about quick recovery in energy sector. Given that OPEC has absolutely no influence and shell revolution in USA, oil glut would continue till crude falls closer to $25. It's repeat of 1980's. So it would be at least year or two before energy sector recovers. If you have long-term horizon (5+ years), then picking XLE around $50 may be wise move.
Coming back to StarWars - it broke all time records and is on way to become only 2nd movie to worldwide gross of $2B. Only Disney can put such an excitement in 30 year old franchise. I just caught up with Episode 4, 5 and 6 over weekend and now looking forward to seeing "Force Awakens" today evening. Next blog would be on 2016 recommendations - till then let the Force be with you!
/Shyam

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