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Tonight’s Agenda

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Tonight’s Agenda

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  1. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

  2. Tonight’s Agenda • Market Recap • Earnings • High Frequency Trading • Gold • Next Emerging Market

  3. Announcements • Peter Schiff  April 28th – W10 – 6:30-7:30PM • Bar Crawl  Friday, May 3rd

  4. Peter Schiff Resume • CEO and founder of Euro pacific capital, a brokerage firm in Connecticut: http://www.europac.net/ Successfully predicted 2000 tech bubble and 2008 housing crisis: http://www.youtube.com/watch?v=Z0YTY5TWtmU

  5. 2.1% Turbulent Markets log worst week of 2013

  6. 2.7% Nasdaq

  7. Q1Earnings Earnings Update

  8. Headlines • GE earnings top sales, but Europe weights on sales • McDonald's profit rises, falls short estimates • Google earnings beat, but revenue misses • IBM earnings and revenue fall short • Pepsi tops earnings estimates, raises full year forecast • American express earnings beat, revenue misses • Ebay earnings beat by a penny, outlook falls short • Bank of America earnings fall short of expectations • Yahoo earnings beat, but revenue falls short • Intel earnings miss by a penny, revenue hits target • Microsoft tops earnings expectations

  9. Earnings so far… • As of Friday, a fifth of the S&P 500 had reported, and two-thirds had better-than-expected earnings. • But an unusually high amount—57 percent—missed their top-line revenue estimates, according to Thomson Reuters.

  10. Chipotle Profits jump, hammer Q1 Earnings expectations • Earnings of $2.45 a share and beat estimates of $2.14 • Earnings growth of 24.4% • Revenue growth of 13.4% • During the first quarter, Chipotle launched 48 new units. As of Mar 30, 2013, the company operated 1,458 restaurants. • Menu prices expanded 70 basis points (bps) during the year while average check grew 30 bps. • CMG repurchased 164,000 shares worth 51 mil. And announced an additional $100 million next quarter. • Total operating margin increased 50 bps to 16.5% • Increased Cash $23 million • Stock up 11.5% after earnings release!

  11. CMG Stock Performance 16.35% (10/22/12) 11.54% 4/20/13

  12. Apple Continued Apple may have lost nearly half of its value since its peak in September, but it's still the talk of the town. Only this time, it's all about how low can it go? Apple, which was once the world's most valuable company, is trading at nine times trailing earnings. Stock was down 8.43% last week alone

  13. Apple Continued

  14. Is Apple a Buy or Sell Ahead of Earnings?

  15. Next week’s Earnings Game plan GDP

  16. High Frequency Trading http://www.youtube.com/watch?v=2jj8q6Mh5BU

  17. Investments Vote Yuzhu Chen for Tippie Senate

  18. Investments (2) • Examples: • House (assuming proper inflation) • Equities (IRA, 401k, retirement plans) • Bonds

  19. What is Systematic Trading? • First, what’s the difference between trading and investing? • Investing: Buying and holding securities to profit from their long term appreciation • Trading: Frequent buying and selling of securities to generate returns greater than traditional investing

  20. Trading

  21. So, What is Systematic Trading? • What does systematic mean? • Done or acting according to a fixed plan or system; methodical • Utilizes algorithms and parameters as signals for trading (buy and sell signals) • How much? When to? How to? Which to?

  22. Determining Systematic Trading Strategies • Observe “anomalies” and create algorithm/parameters to exploit the anomaly • Typically use computers due to the highly technical nature of systematic trading • Removes Human Error

  23. Buy Signals BlueGreen UP White Arrow Sell Signals PurpleRed DOWN White Arrow

  24. Will it make money? • Systematic Trading provides a framework to easily test profitability based on historical prices • Retrieving price quotes and running algorithm/parameters to determine profitability using statistical analysis • Past performance doesn’t guarantee future performance

  25. Why is HFT important? • Affects liquidity and price fluctuations • Regulation as a result • Will become increasingly important • http://www.youtube.com/watch?v=J-0jENLaUfk

  26. Questions?

  27. Gold – Monday 4/15

  28. Gold – April 2013

  29. Gold – 2000  present

  30. How bad was it? • Friday was a 4.88 SD move for gold • Statistically, one 5 SD move is seen every 4,776 years!!!!!!!! • Shouldn’t expect to see gold fluctuate similarly until the year 6789

  31. Friday & Monday • GLD – 2 day price change = 16.65 • This can be converted to just over 8 SD “I wanted to share what this comes to, but the table I use only goes up to seven SD. Let’s just say the sun ix expected to burn our first.” -Russel Rhoads, CFA of CBOE Option Inst.

  32. Statistical Takeaway • The selloff seen in gold is dramatic and substantial • However, we invest in an ever changing financial system that continuously evolves • Example: statistical analysis to storms shows similar frequent “outliers”

  33. Gold & Commodity Selloff

  34. Bull or Bear? • Testing bearish territories this week • Fundamental value of gold • No one can agree what its value should be

  35. Discussion • What does the gold/commodity selloff show? • Bullish or bearish on gold? • What unfolding global issues will impact gold/commodities in the near future?

  36. Antoine van Agtmael • Arguably, founding father of emerging markets investing • Africa, Asia, Latin America, and other less developed areas • “When I started talking about emerging markets 30 years ago, people knew it made sense but they didn’t quite believe it.”

  37. Next emerging market?

  38. The United States of America • The US is at beginning of industrial revitalization • 10 years ago, 9/10 companies factoriesChina • Now, more like 3/10  China • And 5/10 might  US • We are becoming more energy independent and on track to be net exporter • Major advancements in shale gas, 3-D printing, and robotics

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