Seeking Alpha by Adding Beta

It has been few days since new year started. It's time to take stock of performance of 2015 recommendations and come up with some new recommendations for 2016. As I mentioned in my previous blog, 2015 has been bad - really bad. Overall portfolio performance was minus 10%. Only 3 winners and 12 losers. Best winner was SRPT (up by 240%) and worst was LNCO (down by 88%). Nothing to be proud of except the fact that my inspiration in this field Mr Buffet was also down by 10-11%. Time to forget 2015 and look forward to 2016. Even 2016 started with turbulence in markets with first two days markets being down significantly due to various factors - main being China. However IMO, this provides great opportunity for taking some positions. So here are my 16 recommendations for 2016 - most of them are concentrated again in Solar, Energy and Biotech. Biotech: BLUE ($62), CMRX ($9), CLVS ($32), FOLD ($9), PTCT ($29) Solar: SUNE ($5.5), TERP ($11.50) Energy: OIL ($6.10), CHK-PD ($19), LNCO (...

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 l...

Yesterday me and Yash went to San Jose Airport to welcome India's PM Narendra Modiji. It was great experience to see one of the most popular world leaders in person and have slight of hand-shake two times. Yash managed to get a selfie also:-) The weekend is full of events culminating into Community welcome at SAP center which we plan to attend. It would be fun. What a change leader can make in terms of country's perception at world stage. 2 years back India was slowing, stuck in lack of governance and despite her potential no one was paying attention. After Modi became PM, he took on himself personally to travel extensively and use his charisma to change India's image on world stage. And what a success he got. He is only leader in world (other than Obama and Pope) who can fill a stadium of thousands of people to listen to him. His policies such as Digital India, Make In India, Clean India and many others have captured imagination of Indians across the world. No wonder he ...

Google is now Alphabet - very interesting move by one of the biggest company in the world and it came out of nowhere. This may be in works and may have been triggered by motivation of creating CEO positions for very capable candidates like Sundar P and others. Congrats to another Indian CEO at major tech company. This move by Google triggered me thinking. What are various companies which would complete Alphabet's A-Z? Here is my take: A: Airbnb (Hospitality) B: Baidu (Search in biggest market) C: Calico (Biotech/Life Sciences) D: Dropbox (Storage) E: Expedia (Travel) F: Flipcart (India's biggest online marketplace) G: Google (of course) H: Hulu (complementary to YouTube) I: Instacart (Grocery shopping) J: Jawbone (Wearables) K: Kickstarter (Fund-raising) L: LinkedIn (Professional social network) M: MonDB (Database for app developers) N: Nest (Home Automation) O: OpenTable (Online restaurant reservation) P: PayPal (Payments) Q: Quora (Search based on Q&A) ...

Last few weeks have been very interesting and blog-worthy. It has been while since I wrote my commentary regarding various events impacting economy and markets. End of Jun had multiple deadlines - all of which passed and still discussions going on: Greece/Creditors bailout discussions, Iran and world powers Nuclear deal. Unfortunately none of these are closed - deadlines gone and extended multiple times with leaders meeting over weekends. So what's in store over next few weeks and how it could impact markets? Here is my take: Greece and creditors would negotiate well into mid-night Sunday and may declare a last minute deal avoiding "Grexit" but it would only be temporary patch at best. The Greek drama would continue well till end of year creating repeat of Jun drama around holiday season. IMO, best course of action would be for Greece to come out of Euro and introduce local currency (which would be at 50% of face-value of Euro) and promote some structural reforms. Arg...

Let's celebrate Super-pi day with 10 digits in famous "pi" aligning today with 3/14/15 @ 9:26:53. Some math and science geeks are planning to wed exactly on that time to show their love for each other and for mathematics. Today also happens to be Albert Einstein's Birthday! So I am happy that my son Yash is going to spend his morning volunteering at Tech Museum and Isha would be spending her day participating in three events at Science Olympiad. Well done kids with your pursuit of science and math! Now coming to my events in finance world. March always have been quite interesting (2nd to months of Sept/Oct). 15 years back Nasdaq reached its peak (above 5000) in March and it touched 5000 just few days back just to fall back. In 2009 markets reached it's bottom on Mar 9 and this year oil markets are reaching it's multi-year lows in March. Even in currency markets, Euro and Yen are reaching multi-year lows. Euro is racing towards parity with US dollar and sho...

On Valentine's day, third biggest show on earth started it's latest incarnation in Australia/NewZealand (first and 2nd would be Olympics and Soccer WC). And what a start with most awaited India-Pak match. I was glad that India outplayed Pak in every aspect of the game and won the match convincingly. Hope "boys in blue" can repeat this performance in all games including knockout round which would be in March (the tournament goes on till Mar 28). Now let's look at geo-politics and its impacts on markets. Since my last blog in which I recommended 15 investment ideas, markets are on fire especially energy stocks. That makes sense for multiple reasons. First of all there was "irrational pessimism" in oil markets which pushed down crude to mid-40s and pundits were predicting it to go down to 30s. Crude came down by more than 50% just over 2-3% gap in supply-demand. If we look at normal macro-economic principles, it just did not make sense. However crude mar...

Last week words with "de" were popular. It started with Patriots winning their entry into SuperBowl with "defaulted" balls and ECB coming out with their strongest measures to deal with deflation which is setting in Europe. Interesting week indeed! Next Sunday is SuperBowl and as always it's time to bet on who is going to win. While both teams are strong, my prediction is Seattle Seahawks would win. This could be good for Markets as SuperBowl Indicator (which is nearly 80%) accurate says that win from NFC would mean markets would end positive for the year. Or maybe it's reverse corollary. Already with so much stimulus, it's most likely that markets would end year with positive means NFC team (Seahawks) would win. Let's see what happens in 2015. It's almost month into 2015 so it's time to recommend 15 picks for the year. Hopefully 2015 picks would do much better than 2014 picks. These picks are just an academic exercise. One needs to do his/...

First of all, Happy New Year to all. 2014 was a mixed year for my predictions. While my prediction of all indexes (DOW at 18K, S&P over 2014 and Nasdaq near 4800 were very close to my predictions at start of 2014). I am proud of my predictions at macro level. However my recommendations did not do that good. Overall couple of recommendations like Yahoo (up by 28%) and RAD (up by 57%), there were some bad ones like NBG (down by 68%) and SRPT (down by 28%). Overall portfolio based on my recommendations would have been down by 3-4% (assuming equal amount investments). That's pretty shabby compared to S&P returns of 13%. Most of my recommendations are normally in small cap. When compared to small cap index which returned about 4%, it's ok.  Maybe I should stick with macro predictions:-) So here are some: OIL had it's 2nd worst year of all time. So what's outlook for oil in 2015. I think it goes up from here. After coming down by 50% in 6 months, it would go up b...

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. 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.  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 North Korea - Looks like North Koreans found more effective way (than building nuclear bomb) to attack...

Looks like bubbles have 7-year itch. Every 7 years one bubble starts bursting based on recent history: 2000-2001 - Dot-com bubble started to unravel 2007-2008 - Housing/Finance bubble 2014-2015 - Could this be unravelling of great energy bubble which was forming around oil and shale gas If oil price is any indication (down by nearly 45% in one year), that seems to be case. In capitalist system, there are always excesses which need to be adjusted by these bubble-bursting events. In today's WSJ, there is article about unravelling of oil boom  which provides pointer to seed of this oil bubble. Ironically it was planted right when previous housing bubble started bursting. I am sure if we go back to 2000-2001, we would notice that similar seeds were planted for housing bubble. Are these 7 year bubble cycles would be new norm? Similar to technology bubble which mostly impacted high-tech areas like Silicon Valley, this time pain would be mostly around oil producing states like Te...

What a change few weeks can make? Just 5-6 weeks back, markets were collapsing and pundits were talking about possible recession coming and then come Oct 31, Japanese central bank started printing press to start printing yen. Suddenly market sentiment changed and all indexes are close to multi-year highs. So question is - what's next? Looking at historic patterns, holiday season has always been very good for markets. So I expect all clear to break some records and end the year on highs. In fact I would claim that DOW would break 18000 and S&P may touch (or come very close) to 2100. It may be little tougher for Nasdaq to break 5000 but you never know. So if don't do anything, you should expect 2-3% gain from here to year end. But having said that one could potentially start setting up for 2015. Here are some ideas with usual dis-claimers of watch out for risk. NFLX at $350 YELP at $55 SCTY below $50 SPWR below $27 CSIQ below $26 FEYE below $30 GILD below $96 BABA ...

We were at Berkeley campus yesterday for a course I am auditing and I noticed beautiful fall colors started appearing on trees.  Fall also brings interesting memories from markets in months of September and October. Historically September is worst performance month for markets. It is also filled with many events to remember (or not) from great recession of 2008/2009 which started with Lehman Brother's bankruptcy (anniversary of which is on Monday 9/15). So what it all means to remaining two weeks of September and upcoming October (which is normally most scary for markets) of this year. Let's look at some of the major market moving events which is coming up next week and what could be outcome of those events. FOMC 2-day meeting wrapping up on Wed 9/17 - most likely Fed would give some indication of timeline for interest rate increase by removing "considerable" word from their statement. This means interest rate increases would start in 6-9 months (1HCY2015). Marke...

Given the recovery of biotech stocks over last few weeks, investors can almost say "In Biotech We Trust". Monday started with big biotech buyout with Roche buying Intermune (ITMN) for $8.5 Billion. This is a deal for company which has less than $150M yearly revenue. But hey, when did those things matter when you have a promising billion $ drug waiting for FDA approval which could come as early as Nov 2014. One could have easily made some dough by buying ITMN stock when rumors started about 2 weeks back that some European drug giants are interested in this company. Luckily I have been studying, tracking and investing in this company since mid-30s. This deal gave a major boost to other bio-techs which could be next buyout candidates. Here are some of my predictions for either buyout or positive response from FDA. Since these stocks are extremely volatile, I won't recommend them to anyone AT ALL since one could lose all their investments . The reason I am even writing th...

I went into summer hibernation from updating my blog. After Modi's spectacular win, I could not find interesting enough topic for me to come out my hibernation and write about it. Finally now kids are back in school, summer trips are over, it's time for me to get into blog-writing mode. Yesterday I started auditing course at Haas School of Business, UC Berkeley (along with my friend). That is also motivation for me to write my blog which I started during my MBA days. Markets are all time high. Nasdaq is within teen percentage of all time high and it's just matter of time (most likely in early part of 2015) when Nasdaq would break it's all time record. So in such exuberant markets, what should an investor do? Go with the flow and invest in markets, sell all holdings and sit tight in cash (which may not be a bad decision given historically scary months of Sept/Oct) or pick-n-choose your stock selections. I am leaning towards 3rd option. While in long-run, efficient ma...

Today is historic day for India. After three decades, one party has won majority on its own and should be able to provide a strong government free of coalition politics pulls. And all credit goes to Mr. Modi who single handedly created the history by his and his party BJP's historic win. My father would have been so happy since all his life he had been RSS/BJP member. He used to be BJP President of our small city for some time. He passed away 4 years back on exact day (16th May). I am sure his soul would be happy to see his dream of strong BJP government is getting fulfilled by Mr. Modi. Now that Modi and BJP got historic mandate, I started thinking of how this new government should be run. History provides very good lessons (and I like History). The situation in India is almost exactly same as that in USA in 1980. During those years, USA had a weak government and weak President (President Carter). India has same today. USA economy was in problem and inflation was rampant. Situat...

Namo, Namo! It has become equivalent of Namaste in some sections of Indian society during these election times. Namo = Narendra Modi. After long time (nearly 20 years), one person has captured imagination, hope (and hatred on other side of aisle) in Indian politics. This reminds me US elections in 2008 when Obama ran for President. Every 5 years, there is biggest show on earth called Indian Elections when nearly 1 in 8 person on earth (815 million) have right o cast their vote and decide future of one of the most important country on earth. And the show normally carries on peacefully and reflects mood of country and generally create a viable government. Despite so much illiteracy, Indian voter have shown such level of maturity and intelligence which sometimes is missing in many developed countries. The elections which would start on Apr 7 wold finish by May 12 and counting would happen by May 16. By morning of May 17, most of the results would be out and next government formation woul...

Almost 9 months back, I wrote in my blog on how Tesla is like Apple of car industry . That was when TSLA stock was around 80+ with market cap of around $10 Billion. Fast forward 9 months and TSLA stock is hovering around 210 with market cap of close to $25 Billion. And during these 9 months lot of things have changed for US economy as well as Silicon Valley. Bubble type valuations are back with FB buying WhatsApp for $19 Billion (nearly 1000 times annual revenue) and market rewarding FB in taking this bold step. While all this is happening, Apple lovers (including myself) are patiently waiting for iPhone 6 and iWatch (not for iTV). Apple as company is doing great but in these growth hungry world, stock is not getting any love. It's trading at P/E of less than 10 (after accounting for cash on balance sheet). Why? Because heyday of growth are over at Apple. Even to grow at 10%, Apple needs to not only maintain the momentum in iPhone and iPAD but also find additional product category...

It is very rare to say public thanks to a public official But given what Mr. Bernanke has done as Fed chairman over last 5 years during financial crisis and almost single-handedly saved America (and to some extent) world economy from another depression, he deserves Thanks. Mr. Bernanke retired on Jan 31 and effective today he has become private citizen. I am sure he is proud of his achievements of saving world economy and most importantly saving millions and millions of jobs when politicians in Washington were fighting each other and doing nothing. We should consider ourselves fortunate that we had a student of depression era has Fed Chairman and was daring enough to follow un-conventional (and many times controversial) policies to prevent America from falling into another depression. For that Thank you and wish you best of luck Mr. Bernanke! This weekend is SuperBowl weekend. While we are little dis-appointed that 49ers did not make into SuperBowl, it's always fun to watch the B...

Year 2013 is ending on a very positive note and upbeat mood. Personally we just came from our relaxing vacation with two more families on Big Island. It was a great vacation. US Stock markets had their best run since 1997 and all indexes except Nasdaq is ending at all time highs. The yearly gains are outstanding with DOW 28%, S&P 32% and Nasdaq 41%. Instead of individual stock picking or investing in exotic hedge funds or PE, one would have done extremely well by just buying regular index funds with lowest costs. So how did my 2013 recommendations did? Here is report card (based on Happy New Year 2013 blog) Best recommendations: BBY (250%) and MTG (225%) Worst recommendations: VVUS (-31%), CRUS (-27%) Others like MBI, BAC, KBH, ITB also did ok. Overall if one had invested about $10K per stock, the portfolio would have returned 41% which would have beat S&P by 9 points. Not bad! During the course of year, I started tracking solar sector but since I had yearly reco...