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Happy Labor Day

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The following is an excerpt from today’s 5-Day Forecast:

Today is Labor Day, a holiday to honor the American worker by giving them a day off. The markets are closed, so you should really stop reading this, step away from the computer and enjoy the unofficial end of summer.

But if you insist on reading, I’ll tell you a story. A few months ago, we had a discussion about labor holidays in the office. Our Editorial Director, Teresa van den Barselaar, who hails from South Africa, asked why we American workaholics insisted on working on May 1, which is Labor Day for most of the rest of the world.

My response – mostly in jest – was that May 1 was a commie holiday, and this is ‘Merica.

I’m a child of the Cold War, and I had always assumed that May Day was a creation of the communist USSR… and that we Americans came up with our own Labor Day in September because we didn’t want to give the Russians a propaganda win.

Boy, was I wrong.

It turns out that both days have their roots in U.S. history… and that the American September Labor Day is actually the older of the two holidays.

The first American Labor Day celebration took place in New York City in September 1882. Five years later, the first state – Oregon – made it an official holiday, and the rest of the states and the Federal government followed thereafter.

May 1 – May Day – commemorates an incident in 1886 in Chicago’s Haymarket Square, where a labor protest turned into a violent confrontation between anarchists and police… and eight people ended up dead in the melee.

In the U.S., the Haymarket marchers were, rightly or wrongly, mostly remembered as a bunch of anarchist and socialist troublemakers. But in the rest of the industrializing world, it became a rallying cry for the nascent labor rights movements.

So there you go, Teresa. That’s why Americans celebrate Labor Day in September.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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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.

–Charles

 



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Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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AAII Sentiment Survey: ‘Running of the Bulls’

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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:

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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.

 

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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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.


Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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The Economics of Disney’s Frozen

Frozen fever” largely passed over my house.  As the father of two young boys, I’m a lot more likely to have Teenage Mutuant Ninja Turtles playing on my living room TV. Still, even my rowdy boys have watched Frozen a few times, and I’ve caught my wife singing Let It Go more than once.  Frozen is the highest-grossing animated movie in history–bringing in more than $1.2 billion–and it is selling more merchandise than ever.

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Research firm Panjiva had some interesting statistics to share on the Frozen phenomenon:

As you may have seen earlier this week, Disney (DIS) released that they have sold over 3 million Frozen costumes this year, and the latest data from Panjiva shows that fans aren’t ready to “let it go.”

According to an analysis of shipments from July to October (the time when retailers stock their shelves for the holidays), the Disney blockbuster is freezing over retail shelves this holiday shopping season, with shipments being up more than 570 percent in 2014 compared to last year during the same time period:

  • Frozen is taking over retail shelves: From July to October, there was a total of 1,508 shipments of Frozen products, up more than 570 percent from last year (Almost doubling the total number of shipments for 2013 Disney favorites, Sofia the First and Doc McStuffins, combined)
  • Elsa v. Anna: Queen Elsa has proven she is the true ruler of Arendelle, beating out her sister Anna by 46 percent in number of merchandise shipments
  • The major characters support demand: While Elsa might be dominating merchandise shipments, the other major characters aren’t doing to shabby in terms of demand. Elsa, Anna and Olaf all saw more than 1,000 percent increase in shipments in 2014 compared to the same time period in 2013.

Now, you should consider the time periods involved here.  No one was buying Frozen merchandise this time last year because the movie hadn’t come out yet.  All the same, it’s interesting that enthusiasm for the merchandise appears to be stronger than ever even though the movie hasn’t been in theaters for months.  Anecdotally, I’ve noticed that half the elementary-school-aged girls trick-or-treating in my neighborhood were dressed as Elsa…and a fair number as Anna.

Bottom line: Don’t be surprised if Disney enjoys a blowout quarter.

 

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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