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I Refuse to Celebrate Labor Day…Sort Of

Because the concept of a holiday celebrating the proletariat deeply offends me, I will anti-celebrate Labor Day by working on Monday, if only for a few hours.

It’s a matter of principle, you understand. We don’t have a holiday celebrating the entrepreneurs that take risk, work insanely long hours and actually create new jobs in America, so it’s hard for me to recognize a holiday dedicated to labor.

My ridiculous grandstanding aside, I am looking forward to grilling fajitas and cracking open a Shiner Bock or two.

Enjoy the day off with your families. The market will be there waiting for you on Tuesday.





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AAII Sentiment Survey: ‘Running of the Bulls’


It’s that time of year again.

Tomorrow morning, thousands of adventurous (or phenomenally stupid) young men from around the world will run with the bulls in the streets of Pamplona.

I was one of those adventurous (let’s be honest — phenomenally stupid) young men once (see “¡Viva San Fermin!“). Though it was over a decade ago, I remember it like it was yesterday.

Lest I get teary-eyed, I’ll cut the nostalgia short. Today, we’re going to focus on a very different “running of the bulls.” Among individual investors, it seems there is nary a bull to be found these days. According to the latest American Association of Individual Investors (“AAII”) Sentiment Survey, there are fewer bulls today than at any time since the 2008 meltdown:

The AAII survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months. To smooth out the noise a little, I used an 8-week moving average. And as you can see, bullishness is currently at lows you might normally associate with panic bottoms.

The weekly reading shows that just 22.6% of individual investors are bullish about the market over the next six months. To give a little long-term perspective, the long-term average bullishness reading is 38.8%.

While it has become cliche to call this “the most hated bull market in history,” at least by this metric it would seem like an accurate statement.

The AAII Sentiment Survey is viewed by many as a contrarian indicator. Like most measures that depend on investor psychology, it is noisy and doesn’t always give clear signals. But the takeaway here is that the bull market probably has a little longer to run. Yes, stocks are very expensive at these levels and probably won’t offer much in the way of returns over the next 8-10 years. But that doesn’t mean the market can’t continue to drift higher for the next several months.


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Why Americans Don’t Celebrate May Day

I had a colleague from South Africa ask why we don’t celebrate May Day as a holiday in America. The answer, of course, is that May 1 was the date chosen by the communist leadership of the Second International  to be the International Workers’ Day. It’s kind of anathema to celebrate international communism here. Just sayin’.

And I still contend that if we celebrate working slobs with Labor Day, we should also have Entrepreneur Day as a holiday. Except that no one would celebrate it, because all the entrepreneurs would be at their desks working, building the future.

For what it’s worth, I celebrate neither May Day nor America’s late summer Labor Day. I make sure to do at least a little work on both days…just as a matter of principle.

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This is why I love Switzerland

This story has absolutely no economic significance. I’ve just always admired the Swiss approach to national security, and I’m a little sad to see the bombs under their bridges dismantled.

With its cobbled streets and ornate houses, Bad Säckingen has little of the front line about it. But until recently, that is exactly how Swiss military planners conceived the picturesque town on the banks of the Rhine.

Like numerous other crossings between Switzerland and Germany, the bridge linking Bad Säckingen on the German side with Stein in Switzerland was fitted with explosives so that it could be detonated in the event of an attack.

The incendiary devices were part of a last-ditch defensive system built to protect Switzerland during the cold war. It is only now, 25 years after the collapse of communism in eastern Europe, that the last vestiges of that system are being dismantled. Due to be completed by year-end, by a quirk of fate the conclusion of the process comes just as east-west relations are at their lowest ebb since the fall of the Berlin wall.

Switzerland installed the explosives at strategic locations along its borders and on transport routes as early as the 19th century, and did so on a larger scale during the second world war. But it was only in 1975, with the introduction of what was known as the Permanent Explosive Deployment 75 programme that it took a more systematic approach to where it planted the hidden charges.

At its peak, the Swiss defensive network involved roughly 2,000 separate structures fitted with explosives. These ranged from bridges to tunnels — such as the Gotthard tunnel through the Alps — to roads and airstrips.

The idea was that the explosive-laden structures would deter aggressors considering an invasion. Failing that, the series of defensive lines would slow down and use up the resources of the invaders to give the Swiss time to prepare their defences.

Full Financial Times article can be read here.

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Holiday Shopping: Olaf Dethrones Frosty While Elsa Reigns Supreme

Last month, I wrote that pre-holiday shipments of Frozen merchandise pointed to a blowout year for Disney (DIS). Today, I have some updated numbers to share from global trade site Panjiva.

Frozen Graphic

Some points worth noting:

  • Olaf is the new Frosty. Olaf merchandise shipments outpaced Frosty the Snowman merchandise shipments by 77%, and this despite Frosty having a multi-decade head start on the upstart Olaf. Frosty merchandise is actually down by more than 30% year over year.
  • Elsa remains the queen. Shipments of Elsa merchandise outpaced that of sister Anna by 74%.

From Panjiva:

Frozen has already shattered records as the highest grossing animated film of all time, and stands as the fifth highest grossing film ever with ticket sales of more than $1.2 billion globally. According to shipment data from Panjiva, consumer demand for all things Frozen shows no signs of slowing. From August to October, the time when retailers stock their shelves for the holiday season, shipments of Frozen merchandise showed an increase of more than 470 percent in 2014 compared to the same time period in 2013. Furthermore, shipments of Frozen products were more than double the combined number of shipments seen from last year’s favorites, Sofia the First and Doc McStuffin, with a total of 1,267 Frozen shipments entering the U.S. ahead of the holiday shopping season.

The Christmas holiday season is getting off to a rough start, with Black Friday sales down an estimated 11%. But as I noted late last month, overall holiday shipments are up about 5% and toy shipments are up about 3%. Those are not stellar numbers by any stretch, but they do suggest that this year’s sales will end up being modestly bigger than last year’s once the registers stop ringing.

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.

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