Upgraded and Under the Radar Firms

Katie Stockton of BTIG Research likes Google.The stock has underperformed.It is oversold.There's a pretty good risk-return profile from the technical standpoint.*
Stifel Nicolaus has raised eBay to a buy,with a 65.00 price target.They believe eBay is the real deal in ecommerce.*
Bernstein Research has raised United Technologies to a buy.They like the new CEO,Chief Financial Officer Gregory Hayes.*
Goldman Sachs has given Chipotle a 790.00 price target.It is cheap in proportion to its cash flow.*
Morgan Stanley has raised LaSalle Hotel to overweight.They raised its price target to 45.00 from 35.00.*
Don Wordell,CFA,Managing Director at RidgeWorth Investments,likes Mattel.The yield is very attractive compared to any of the bonds.Also,it's undervalued.
We like Tyco for the fundamental catalysts.They have a tremendous pipeline of deals in the near future.
A company called Tidewater has supply vessels running equipment and crews to offshore oil rigs.They have all new equipment,and utilisation and day rates are going to hold up better than most.They also pay a 3.5% dividend.I'm very,very comfortable that offshore drilling will remain strong,and this company is very,very attractive at these levels,Mr.Wordell concluded.*
Google(GOOG),United Technologies(UTX),Chipotle Mexican Grill(CMG),Mattel(MAT),eBay(EBAY),Tyco International Plc(TYC),Tidewater Inc(TDW),LaSalle Hotel(LHO)

Inside Goldman Sachs,November 2014

At a Bank of America Merrill Lynch Banking and Financial Services Conference,Goldman Sachs Executive Vice President and Chief Financial Officer Harvey Schwartz laid out what drives the company's returns.I understand the appeal of a simple firm-wide return target,Mr.Schwartz said.Having one isn't,nor has it ever been the driver of our returns.Our operating principles and philosophy have been essentially to generating superior returns.Underpinning our principles and philosophy is a belief that we should manage our resources dynamically,and therefore,circumstances and return profiles should naturally fluctuate across the cycle.Most importantly,it's not a target per se that drives our firm-wide returns,but rather our capital allocation process.*
Goldman Sachs has named 78 new partners,bringing the total number to 467,or 1.6% of full-time staff.The breakdown by specialty includes:
securities,25;
investment banking,23;
Federated(finance,compliance,risk management and other back and middle office functions),12;
and investment management,11.*
Goldman has added Time Warner Inc. to its conviction buy list on undervaluation,raising the price target to 90.00 per share.*
Goldman Sachs(GS),Time Warner Inc.(TWX)

News Notes:Citi's Internet Calls;Best Investment Banks 2013

The IMF has reduced its estimate of world growth to 3.1%,down from 3.3% in April.For 2014,it sees China growth at 8.2% and India at 6.2%. Citigroup has initiated coverage of major Internet stocks.LinkedIn,Netflix and Facebook are rated neutral. Facebook is a relatively young company going through a transition,said Citi analyst Mark May.Amazon,Google,eBay and AOL are buys.Yelp is a sell. Key Internet themes are the shift from PCs to mobile;the emergence of adtech;and the proliferation of data. The US-China Strategic and Economic Dialogue has begun,led by Secretary of State John Kerry.BMW sees China as its top 2013 market,based on its growth in small cities. GE Oil and Gas is establishing its global headquarters in London. Global Finance magazine has named its Best Investment Banks 2013.Global winners include J.P.Morgan,Best Investment Bank;Bank of America Merrill Lynch,Best in Emerging Markets;Qatar National Bank,Best in Frontier Markets;and Goldman Sachs,Best M&A Bank. Global Finance said J.P.Morgan grew market share across the board because of its loyal client base;a long term startegy of embracing regulatory reform;a legendary corporate lending legacy;and the integration of equity underwriting talent from Bear Stearns,which it acquired in 2008. It made a world-leading 465 billion dollars for its clients through 2,164 bond deals;and earned more than 5.6 billion in investment banking fees,the best in class. JP Morgan Chase(JPM),Amazon(AMZN),Goldman Sachs(GS)

The Goldman Sachs Playbook

The market thought the falling price of gold was an avalanche,but that's not necessarily the case,said Goldman Sachs CEO Lloyd Blankfein.As confidence in the currencies and the economy grows,it's not advantageous to invest in gold,so we had a sell-off.
One of the things we'e looking for is the infrastructure and commitment to deliver those services and elements of our 10,000 Small Businesses program.In New Orleans,we have a great community college partner in Delgado.It's a mini-MBA,with mentors and access to small capital at the end.
For example,we have a small tool business and a caterer.They don't have the tools for analysing their business and haven't been to accounting schools.They dedicate their weekends to the program,learning analysis,negotiation and business planning.Most of these people end up hiring new workers because of the program.
It's market sentiment in a lot of cases.We've chewed through a lot of problems.I'm in the risk management business,but we're muddling through,and I think we're in a good part of the cycle.The trauma was big.
It's a confidence thing.The penalty for making a mistake is very great at this point.People aren't gonna take risks.We will get there,but I think sentiment and people's feelings really matter.
I'm not sure we're in the right place with regulation.We shouldn't be burdening some of these small banks.In industries like our own,growth is the correlant for our success-and it's global growth.
The US is still the best place to invest.If you want to invest in the most valuable thing-your career-the US is the best place to do that.
The second half playbook is industrials.They do well in this environment.When you listen to such as Boeing's Jim McNerney,you feel confident.This is their time,Goldman CEO Lloyd Blankfein observed.
Newsletter publisher Dennis Gartman  of "The Gartman Letter" has just turned bullish on gold,citing the overwhelmingly negative sentiment against it as a signal to buy the precious metal..
Goldman Sachs(GS),Boeing(BA)

Asia's Investment Surge;Goldman Sells China Stake

The mood is very upbeat,said Nick Good,Head of Strategy and Business Development Asia Pacific for BlackRock,attending the CFA Institute Annual Conference in Singapore.Asians believe in Asia.Seventy percent or more of any given portfolio is invested in Asia,and 50% of capital markets growth will take place in Asia.
We're seeing the rise of the Asian investor.Wealth in China has increased tenfold.Asians need to invest for the long term,and that dynamic will inform the growth of the region.They are looking for bond and income funds that meet their needs.
We are developing funds that cater to that market and educating about long term investing.We try and take a broad view of the markets,providing both active and index funds.You're seeing an emphasis on income funds.
Goldman Sachs says it is committed to China,despite its recent sale of a minority stake in the Industrial and Commercial Bank of China.Goldman unloaded its seven year investment in ICBC for 1.1 billion dollars.Macquarie Capital Securities Ltd estimates Goldman made about 12 billion dollars in dividends and sale proceeds on its 2.58 billion investment in ICBC.Many banks are selling such holdings to cover the new,more stringent Basel III capital requirements.
The world just went through a big trauma,a credit crisis,said CEO Lloyd Blankfein.Not all the fixes work.Sometimes the fixes need fixes.
BlackRock(BLK),Goldman Sachs(GS)

Voices and Trends in Wealth Management

We favour US equities to the emerging markets,said Kelvin Tay,Regional CIO for the Southern Asia Pacific at UBS Wealth Management.We like high yield corporate debt.We don't see a huge amount of risk.We're still positive on it at this stage,with an overweight on it.
Cyprus was a reminder that structural issues in Europe are far from over.We need to see that US growth is sustainable to the 3% GDP target that we have.We also need to see that China growth is achievable.
With strong US figures,the emerging markets will struggle for attention.Export numbers in Asia are sharply lower on sequestration in the US.
South Korean exports were worse than expected on the strong US dollar.Goldman Sachs says investors are buying Treasuries at fastest clip since 2009.
Global stocks have posted the best return of any investments for another quarter,but Stephen Wood,PhD of Russell Investments thinks it is unlikely that Q2 results will repeat the first quarter.There's a tug of war.This has been a very broad-based rally,but it also has a defensive character,too.Dr.Wood recommends a globally diversified,multi-asset portfolio constructed in a case-by-case,security-by-security way.
Carter Worth,Chief Market Technician at Oppenheimer,believes several stocks are fully priced,such as Johnson and Johnson and The Traveler's Companies.When does a stock become dangerous?We have a four-year bull market that has taken us to all-time highs.Markets don't normally go up 40-80%.Only four times has that happened.Go to cash,Mr.Worth advised.
Johnson and Johnson(JNJ),The Traveler's Companies,Inc(TRV)

Goldman Sachs and the Global Markets

We're in a better part of the cycle right now,said Gary Cohn,President and Chief Operating Officer of Goldman Sachs.Our results in 2012 were a direct reflection of what our customers needed and wanted to do,and we've been there to facilitate that.We have adapted our business to really accommodate and facilitate our customers' needs.
We are a fiduciary for our shareholders.We increased our dividend two times in 2012.
I think we've got our compensation right for our people.We're in a very competitive industry and the capital we have is human capital.The average 2012 pay was about 400k.
As I look out at 2013,I feel that we're in a relatively good position in terms of head count.We look at global GDP.If we see an upward move,that will stimulate our customers and we will hire people to serve them.
The zero interest rate policy will end at some point and that will be positive for our business.I'm fairly bullish about global stock markets.With blue chip stocks,you're long inflation and long global growth.
We can't be the buyer of last resort of fixed income.Somebody has to buy it.The zero interest rate policy clearly drives down currency values.
I think a sudden or dramatic backup in rates would be shocking to the market.I'm not sure that capital can come back into the market quick enough.Just because it's a bond doesn't mean it doesn't go down.Bond prices go down as interest rates go up.
Goldman Sachs(GS)

Greek and Canadian Business Notes

We have some challenges ahead of us,admits Kostis Hadzidakis,Development Minister of Greece.We know that we have to surprise in a positive way.We have to succeed.There is no alternative.
We want to change the business environment.Greece has to become a business-friendly country.We are about to vote on a law providing a single licensing authority.We are cooperating with the OECD as regards competition in the Greek market.
Because of the crisis,Greece had a very negative image over the past years.We believe that we can see some light at the end of the tunnel.Now we are privatising the natural gas company.We know we must focus our effort on this:to deliver.
EU Commission President Manuel Barroso has praised Greece for showing a strong commitment to financial reform.
Air Canada is planning an Asian expansion.It will spend two billion dollars on new aircraft to accomplish this goal.At the same time,Goldman Sachs has raised Research In Motion to a buy rating ahead of the release of some new devices.
Air Canada(TSX:AC/A),Research In Motion(RIMM)

Hedge Fund Advisor:Fighting and Grinding

You've got to watch Europe now,said Sarah Quinlan,founder and Chief Investment Officer of QAM.The IMF and EU are fighting.There was a joint national strike in Spain and Portugal.I think it's sort of a grind lower.Eventually the car runs out of gas.
I'm loving my sovereign bonds-obviously from the emerging markets and the US.
If they start a more entrepreneurial economy,they could start to grind out of it.The austerity is the wrong move.They'd better do something today.
Treasury Secretary Tim Geithner should stay through February to keep the market calm till we get through the debt ceiling.It's an overall anemic volume world that we're living in.
We are way overstaffed on Wall Street.Fewer partners were made at Goldman Sachs this year.I think it's a fundamental change.
QAM is a hedge fund advisory firm.Founder Sarah Quinlan is active in the 100 women in hedge funds peer advisory group.

Asset Allocation:A Standard Chartered View

We believe the U.S. economy is stronger than most people believe it to be,said Steve Brice,Chief Investment Strategist at Standard Chartered Bank.We do believe we're in a more constructive risk environment,but it's not gonna be a straight line,in our opinion.
We are overweight global equities.The dividend yield in the U.S.,Japan and Germany is significantly above government bond rates.It makes total sense from a global equities perspective.We are also overweight corporate debt.We are overweight the U.S.,China and Korea.We do see high dividend yields in Malaysia,Mr.Brice added.
The case for buying Europe is based on the sentiment being awful;cheap valuations;shares trading at a 49% discount,versus a 20% premium in the U.S.;and the dividend yield at a 320 point spread to the German bund,according to Katie Koch of Goldman Sachs Wealth Management.The smart thing is to initiate or add to positions;but keep some dry powder.Up to 25% could be in emerging markets;the other 75% will include some exposure to emerging markets,which means you will have over half of your return from emerging markets,Ms.Koch explained.

NYSE/Euronext Sells Indian Stake

NYSE/Euronext has sold its 5% stake in the National Stock Exchange of India to Temasek,a Singaporean sovereign wealth fund,for 150 to 180 million dollars.The stake is part of a growing trend of foreign investment in robustly-growing India.India's central bank said the economy will grow at least 8% in the current fiscal year,which began April 1.
The National Stock Exchange has 1470 listed companies,with a combined market capitalization of about 1.3 trillion dollars as of March 1.NYSE/Euronext had purchased the stake in NSE in January 2007.At the same time,Goldman Sachs had purchased its own 5% of the Indian exchange.
Wisdom Tree Investments offers an India exchange traded fund,EPI,which includes 126 profitable companies,according to the firm.It is a fundamentally weighted fund,meaning allocation to the holdings is determined by their success.

The World of Gold

Jewelry demand drives most of the annual trade in gold,says George Milling-Stanley of the World Gold Council,but it is investment demand that sends gold prices higher.Gold prices have been following oil because of their inverse relationship to the U.S. dollar,not to each other.Gold is accumulated,not consumed;that's why it is a form of money.Despite adverse economic conditions,jewelry demand was up in Q2.India produces 25% of the annual demand for gold.Global dollar gold demand reached new heights in Q2.Gold has an excellent 6,000 year track record as a hedge against inflation and geopolitical tension,making it desirable to hold in a portfolio.

India's New Stock Exchange

The NSE is India's New Stock Exchange.CEO Ravi Narain notes that the country's economic reforms of the 1980s and 90s are now bearing fruit.The NSE takes its benchmarks from the much older SENSEX,but builds positions in the Nifty Fifty stocks.Goldman Sachs(GS) and NYSE Euronext(NYX) have bought stakes in the NSE.Finance crosses international boundaries very quickly now.The NSE goes where its customers go,being all electronic,Mr.Narain said.Its stocks have been down this year,but not as much as China's.