XMAS SHOPPING

So this year I did my annual Short Hills Xmas trip to buy all of my loved ones presents for the upcoming XMAS year. Every year around this time(last minute), the malls are usually packed beyond belief and by the time I buy Aunt Tessy a gift I'm profusely sweating, angry, mad, irritated, and a bunch of other adjectives that make me re-consider the whole Catholicism thing and potentially consider Judaism, fasting for one day can't be as bad as shopping for one day, could it? This year though was different, I got their early, found a spot right in front of Neiman Marcus, and needless to say the mall for a week before Xmas was generally empty.

This brings me to my investment thesis, granted it's been written before but the general progression of the consumer has gone from main st to big box/malls where you can just get everything done in one centralized locations, this can be malls or marketplace or commons. Now of course, and it has been well documented everything is now moving online, AMZN, NFLX, OSTK, and of course all other corporate websites that you can just go on there and have it shipped to your house in a simple click.

Oil keeps rising, energy keeps rising, costs for employees keep rising, yet shopping with human interaction keeps dropping this is a combination of a bad economy and everyone moving to the net. This should be the way it is, it is the next logical step in the consumer evolution. I'm beginning to wonder in 15-20 years are malls going to be around? Are retail stores going to be around? Will there be storefronts?? Sure some people are going to go out and pick up goods at these places, but will be enough to offset Rent, labor, and energy costs that keep on rising. Will the mall just be one big Apple store, one other interesting fact I witnessed today, it's that half the stores in Short Hills are woman's fashion, usually most stores are that way, but I found this to be more than usual. To me the reason this occurs is basically because woman still shop for sport, it is fun for them as much as it is torture to us, why a majority of us men have turned to online. I was looking for toys for my goddaughter today, no toy stores left, just go to amazon or toys r us.com

This observation leads me to believe that companies like GGP, SPG, CBL are big time shorts over the long term, I can't see where these market forces against them how malls and other commercial real estate properties can maintain. Another big time short to me is GME, I read something recently that video game players can just download games directly onto their game systems, this sounds eerily familiar to NFLX/BBI(BLOKA). If everyone begins to stream their games on, how much business does GameStop lose, probably why their P/E is so low. I think over the long term unless they can transform their business model further I see them being like the company that develop the buggy.

On the long side, AMZN I like with a little bit of a dip, you will see monster numbers come out of them after the holiday season, I also like the companies that help transport the goods, UPS/FDX. If no one is going to the mall, and people are still buying it needs to get there somewhere.......

I'm sure a lot of this article may have been heard before, but take it from someone who was just on the front line , in 10-20 years malls are toast!

FOOD, ENERGY, AND AGE

First off before I begin writing up a column I want to first throw out the disclaimer that I am by no means a professional investor. The stock market is something that has fascinated me for more than half my life(I'm 31) I by no means have hit it big or have gotten killed, but I for the most part have been on par with the rest of the investing public, especially in 08 which was an awful year all around. I like to think that I knew house prices were out of control back in 06 but I never took action on it, I would like to think that BAC @ 3$ and C@ 1$ back in March 08 were bargains along with a slew of other stocks, another time I never manned up and took action on pulling the trigger when I felt what was going on in my head would have made me money although I swear I have a notebook in my apartment with about 20 stocks I made up that April that I wanted to buy but the market rallied and I looked for better entry points that were never found. With that being said I feel I'm better suited to take a step back and to look at the big picture and to see where we are headed in 5-10 years, what stocks makes sense, to take a look at the market by looking above and seeing trends. Also on a side note I would like to write down my picks, see if they make sense after re-reading my thesis and either invest in them or see where they are down the road and hell if I find I make sense and I do well maybe it will give me more gumption to invest and stay along with my thesis.

Taking an eagle's eye view of the world in the next 10 years, I'm seeing 2 major shifts, first off the rise of the rest of the world, we have been spending years importing, outsourcing, and generally strengthening the rest of the world. I for years have been against outsourcing and the so on but if you read the World is Flat the theory goes is that eventually everyone who you helped enrich should eventually be able to import from us. That is my hope at least one day that we become a nation that makes widgets again and makes them well versus a nation that trades them and renders legal opinions on them basically becoming a manufacturing powerhouse again. I threw out my World is Flat theory but now here's the way to look at it India and China make up and I'm guesstimating 30% of the worldwide population and if you have seen Slumdog Millionaire you know a good percentage of the people live in what we consider to be poverty standards. The people who make up these areas are hard working, intelligent individuals eventually there is if not already going to be a major rise to the middle class, with the way information gets out due to the Internet everyone is going to want a taste, everyone is going to want to live longer, everyone is going to want a car, a home, everyone out there is going to want to eat. This leads me to believe that Food and Energy are going to be major plays going forward in trying to figure out how to feed all these people and how to provide clean efficient energy to this burgeoning middle class.

My second major shift is the baby boomer generation. Bottom line people are just living a lot longer, and based on my first shift those billion people plus our baby boomer are going to live a lot longer and the longer they live the more replacement parts they are going to need, they are going to need medicine and parts to keep them going till their 90s and this thesis ties into my energy thesis is that we need cleaner energy so that when our population has risen in the future that we stop destroying mother earth.

Food is my big major play for the next 5-10 years and I think it's starting to be seen with the commodity markets prices of wheat, coffee, etc. Commodities that people consume keep flying up in prices also on top of that the rest of the world including our own fat asses keep eating. Now there's only so much natural resources to go around leads me to believe that the next big thing is genetically engineering food. This is something that should be looked at closely some stock picks that I have done some research on are the following.

Monsanto Corporation(MON)- According to their website this is them at a glance......

If there were one word to explain what Monsanto is about, it would have to be farmers.

Billions of people depend upon what farmers do. And so will billions more. In the next few decades, farmers will have to grow as much food as they have in the past 10,000 years – combined.

It is our purpose to help farmers do exactly that.

To produce more food.

To produce more with less, conserving resources like soil and water.

And to improve lives.

We do this by selling seeds, traits developed through biotechnology, and crop protection chemicals.

I Love this idea they're story fits into my investing thesis by 2050 their goal is to provide the food to feed 9,000,000,000 (billion) people. They basically genetically engineer food to help feed a burgeoning population. The stock is a little pricey at 18x's Forward earnings and it is traded at $52 and change but I think long term companies like this one and others are going to make $$$$$

The next pick I have in the food space is Mosaic(MOS), according to their website, "Mosaic is the world's leading producer and marketer of concentrated phosphate and potash, two of the primary nutrients required to grow the food the world needs. Our business engages in every phase of crop nutrition development, from the mining of resources to the production of crop nutrients, feed and industrial products for customers around the globe. Our customer base includes wholesalers, retail dealers and individual growers in more than 40 countries."

The stocks fwd PE Is approximately 15x's fwd earnings and trades around $58 per share.

Now I still need to do moew homework and see if their are better competitors or derivative plays(companies who provide them with products that help them do what they do) but off the bat off my long term thesis I think that I'm getting close to the center of the dartboard with my thinking and I want to spend more time studying and following these 2 companies, if anyone reads this and has any thoughts or comments please let me know.

Next up is energy, like I said before I feel that the world demand for energy is going to grow exponentially in the next 10 years, there is going to be a whole lot of demand to come up with that new energy source over the next few years and the company that can make alternative energy cheap will make a whole lot of $$$ on it. I still believe we are headed back up to the $120 level on Oil in the next 5 years, demand from China/India and other growth nations will move it there and the U.S. will suffer. I think the smartest way to play energy over the next few years are with ETF's I hate writing a stock picking column and offering ETF's it's such a cop out but I really believe that as a diversified play on alternative energy it's your best play for every FSLR there are 20 solar companies that are struggling not to run out of money.

GEX Which is the Market Vectors Global Alternate Energy ETF includes holdings such as Vestas Wind Systems, First Solar, Cree Inc basically a who's who of alternative energy ETF plays. This is just so you don't have all your eggs in one basket play on a risky area. $19.75 22 P/E

IYE Is the next energy ETF, these are all your big oil plays , after seeing BP get clobbered this year by that devastating oil spill it's a good idea to maintain a diversified mix here even though it is heavily weighted by XOM(25%). I believe with oil moving up in the next 5 years, these stocks should follow suit. I always preach to friends and family diversification is huge. $31 price 11 P/E

My final and most exciting area I believe is age, people living to 90s is going to become commonplace in the next 10-20 years so you have to figure they are going to be needed to taken in for repairs more often than ever.

One stock that caught my interest is Stryker Corp (SYK), the gist of SYK is that they provide orthopedic products to patients in need of them, think hip replacements. This is a company that when elderly citizens need new parts they are going to be the Autozone for the geriatric community. I like them , the stock has been down and might be a good time to buy. $ 46 and 13xs fwd P/E. Might be something to look at.

Another stock I like that might be a little too late, personal story at one point I owned options on this company at $50 before earnings came out I was up about $500 , nothing crazy I decided the day before to just take my profit and get out lets put it this way if I held on to those options after 3 days I would have been up $15,000 on a small investment. Intuitive Surgical (ISRG) is the next company I like although the story is long in the tooth. The background on this company is they are the makers of the DaVinci product which is basically a robotic way of performing heart surgery, their product has many advantages such as more precision, better recovery time, etc. Hospitals have been lining up left and right to get this product into their hospital and with an aging population with a bigger waistline than past aging populations, there are more tickers that need fixed than ever before, hence ISRG. It's not cheap around $275 and 25xs fwd P/E but it fits into my thesis.

The ETF play on age and medicine are IHI....which holds companies like SYK above as well as MDT, STJ, etc.....also seniors will need their meds an ETF to look at that I like is IBB which is the IShares Nasdaq Biotech ETF, a whole slew of superdrug plays in there.

One final thought about this aging, hungry, energy dependent 2020 population, people are going to need clean water, check out PHO, which is the water ETF.

I will try and get on here every now and again to throw out individual ideas long/short or something like today which is a thesis of mine. Have a good labor day.

TP