Here are key themes worth noticing. They are my guiding principles for the strategy:
1: Obama's attack on bankers and their bonuses shows how immature, reactive and populist this president has become. I think the hidden theme here is the confidence in the US banking system and money these banks are going to generate in the coming years. Remember, Obama is planning to tax these banks for next 10 years. So against tide I would buy banks right here if you are a long term investor. I am a buyer of GS, MS, and BAC on dips.
2: One sector that is hot right now is Agriculture. There are two reasons: as the world economy improves the demand for more nutritious food will grow which means more use fertilizers. There will be a shortage of land available for Agriculture due to rising urban and middle class in emerging markets. That means making the most of the available land and using crop rotation techniques to keep the land fertile.. guess what.. you will need fertilizers...I am a buyer of MOS, IPI, Innophos in this space
3: Technology is my favorite sector but it is also the most crowded sector. Everyone is playing the smartphone and mobile Internet boom. It is too risky to play this sector using individual stocks as the valuations are over the roof. There are still some companies out there which are trading at lower multiples and have strong balance sheets and future growth. One such company is Neutral Tandem (TNDM), a small cap with excellent balance sheet and currently trading at 16X forward earnings. This stock has come down from 33 to 19.30 in just 5 months even after producing a great quarter. I think the competitive threats are overblown and I would pull a plug right now... Other investments are: AAPL, CTRP
No time to cover all other sectors.. Here are some names that I am watching: AMED, VTIV in Healthcare, SPWRA in Cleantech, FLR, BIP, CSR in Infrastructure, NEP in energy, RTP, ABX in mining and precious metal.
Happy investing :-)
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