The Daily Dose: Balancing Life's Importance

 | Jan 03, 2014 | 12:00 PM EST
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The beginning to 2014 has been highly unusual for me on a personal level. First, a young trader friend of mind that was active on social media passed away following a bout of pneumonia. That had me, aka the "Fiscally Fit Man" on Men's Health, questioning my own mortality.

Then, a buddy's dog that I helped rescue 13 years ago had to be put to sleep. That had me wondering what the hell was going on in my always positive, upbeat, full of sunshine, self-imposed bubble world. Finally, a chance, disturbing occurrence regarding a family member left me pondering life's messages to me at this point.

Through all of the newfound heartache, I have found myself turning off the Debbie Downer news and reconnecting with the truth as proudly displayed on a real-time trading platform. Gone is the noise, which these days could be a single session move in Twitter (TWTR) or Tesla (TSLA), or how flat out sucks.

What's important to me aside from stabilizing an out-of-control commencement to 2014 you ask? Well, in terms of the market, I have highlighted three things. As for the personal stuff: I can't share everything in these digital pages.

Dry Bulk Dying?

Many high beta stocks were whacked on the first day of trading, but on a positive note I didn't see any large moves into defensive names (gold excluded). Profit-taking following some reasonably solid global PMI data looked to be the case, for now. However, keep an eye on dry bulk shipping stocks exhibiting particular weakness/relative underperformance following China's worse- than-expected PMI data.

Dry Bulk
Yahoo Finance
Wal-Mart China vs. Wal-Mart U.S., Fresh Food Edition

Other than the obvious differences in palate such as not finding donkey meat in your California Wal-Mart (WMT), fresh food bought in a Wal-Mart China is different in that it's stacked high and very close to its natural state. For example, if you look at any photo of Wal-Mart China meat displays there are sections in a store that show people touching the meat out in the open as opposed to the U.S. (FDA wouldn't have this) where meat is packaged or in terms of fresh cuts, kept inside a case for presentation purposes. I think this difference demonstrates how the Chinese are more focused on eating naturally-looking food straight from a farm. But also because of the high volumes in the stores and low margins, it doesn't make sense to package a piece of steak at a Wal-Mart China.

Donkey meat is more a specialty product in China, meaning it's usually bought by a wealthier clientele. At least initially, the impact on Wal-Mart's brand and sales will be muted. However, this development is likely to spread through the Chinese blogger scene, and cause concern amongst the core price-conscious Wal-Mart shopper in the country. Overall, there will not be the same impact as KFC as it's isolated to one niche product. But it's the perception that Wal-Mart is not properly running its business that may hinder sales going forward.

Sears' Epic Stock Plunge

The Sears (SHLD) stock is -21% since my firm Belus Capital Advisors went live with research on the company's sorry state of affairs at the store level in late October, and as profiled in the New York Times "Dealbook." Based on our research since then, including the holidays, I see no reason to back off our concerns on the company's long-term outlook.

New Concern

In talking to disgruntled customers in some of Sears' go-to categories, such as appliances and tools, I was left with the impression of lacking quality assurance checks at warehouses. Those insights only reinforce my view that the internals of the company are broken due to continuous executive turnover and massive systems underinvestment. The last shoe to drop on Sears is further share loss in its traditionally strong categories to the likes of Home Depot (HD) and Lowe's (LOW) as it would cause the market to question the value of the assets that management loves to trumpet in annual letters and in various statements.



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