The New Years Race

Every new year the first several days trading is always interesting to behold.

First off any tax swapping is done, that is selling Merck and buying Pfizer because you want drug exposure but since they are both down you take a tax loss in one and swap to the other… thought being any rebound will effect the other as well since most sectors trade together and you get a loss and maintain your “weighting”….

-portfolioese….

 

But more important than that is the bets that are placed on the new year. The companies whose shares see the best inflows of fresh capital will generally rise the most in these first few days and while not always fool proof may prove a good indicator for the years strength and what sectors and companies lead it.

 

So it is that Chipotle… Lululemon… Deckers… Nuance…. Baidu… Amazon…. Have been leading the charge. We own all of these, and were accumulating them into the 4^th quarter. We are certainly appreciative of the upgrades in recent days and specifically Goldman’s nice words on Lululemon and Chipotle. – We agree.