Sunday Morning Coffee

Some odds and ends.

My buddy Art, whom I used to work, with posted this picture on Facebook from his stroll past Occupy San Francisco. While I still think this movement is trying to figure out exactly what it wants to say, they clearly are not fond of capital markets and many market participants.

Just as no one knew what a CDS was five years ago, (almost) no one knew the extreme relative disparity between the wealthiest people and the rest of the population. Now we all know multiple stats about the wealth gap.

The path that has always seemed logical to me was for each person to figure out how to make their way in the world they live in. They might have success or they may not.

While I can't be sure, this seems to be a missing component in what the protesters are talking about. Whether that is correct or not, I think the protests are going to last for a while and more people are going to be attracted to what they are trying to say.

On a related note, when Art posted his picture it drew a lot of comments including a couple of his friends asking for his opinion on a couple of market related topics. Like many of us, Art is very interested in the markets, he worked in the industry for a long time and still trades. The comments reinforced something I've mentioned before which that like Art, many of you are the go to person for investing questions/advice for your respective circles of friends and colleagues. Pretty neat that you might help prevent someone from doing something truly stupid.

Barron's had a recap of the latest implosion with solar stocks, specifically First Solar (FSLR). I've never been a fan of this theme as an equity investment. I got flamed for an article I wrote for theStreet.com in 2008 where I was negative on the group which lead to a CNBC visit where I said essentially the same thing. It would be great if it made economic sense either on everyone's roof, building massive farms here in Arizona and in Nevada or both. It didn't take much work, from the top down, to realize the extent to which subsidies were needed to make this work (at least for now) and now subsidies are disappearing--although maybe they will come back again. The foundation has just been too shaky.

Barron's also had a two-article special report on Brazil. The market is down a fair bit this year lagging behind the US by a meaningful amount. The threats to the story have not changed much over the years but the market seems to care more now as China may or may not be looking at a slowdown, GDP growth in Brazil this year is very low and inflation while a far cry from Brazil's past is a pretty big number these days.

This period of lagging will end, hopefully soon, but the threats will be the same it is just that the market will care a little less, that and GDP will start going up again. The big thing here is that the story, in my opinion, has not changed making this year more of a cyclical event. It is very interesting that the EG Shares Brazil Infrastructure ETF (BRXX) is only down 9% versus a 19% drop for the broader iShares Brazil ETF (EWZ).