Author Archives: Scalper1

Porn studio beats Hollywood to market with VR content

LAS VEGAS — While the major Hollywood studios ponder what content to produce for virtual reality headsets, one adult movie studio is already making a business selling VR porn. Naughty America, one of the largest U.S. producers of adult video, has been offering virtual reality porn to its subscribers since July. Early adopters have been using Alphabet’s (GOOGL) Google Cardboard and Samsung Gear VR headsets. Those are low-cost, lower resolution

Portfolio Rebalancing – A Potentially Golden Opportunity

For a variety of reasons, gold is a widely-held asset class within investment portfolios. Many investors include gold in their asset allocation mix for its perceived ability to act as both a diversifier and as a potential store of value in times of uncertainty; these perceptions contribute to the concept of gold as a “core holding” in many diversified portfolios. Indeed, with the notable exception of Warren Buffett , 1 some of the investment community’s most distinguished names currently maintain investments in gold. 2 Like any investment, gold is subject to rebalancing or reallocation when its value relative to other portfolio components shifts significantly. Examining quarterly data from the beginning of 1976 (the year that gold started trading freely in the United States) through the quarter ended December 31, 2015, suggests that gold is overvalued relative to historical price relationships with the major agricultural crops of corn, wheat, soybeans and sugar. 3 In fact, at quarter-end December 31, 2015, the gold/corn ratio, defined herein as the number of bushels of corn an investor could buy with the proceeds from selling one troy ounce of gold, was 296 bushels versus a 39-year average value of 169 bushels. Gold investors attempting to maximize portfolio performance through disciplined quarterly or annual rebalancing may want to consider adjusting their gold holdings in tandem with their existing or anticipated agricultural sector portfolio investment mix. For example, the historical data for the gold/corn ratio suggests that a mean reversion 4 from December 31, 2015, levels of 296 bushels to the 39-year mean value of approximately 169 bushels of corn for each ounce of gold (bu/oz) could benefit an investor rebalancing gold for corn within their portfolio. Click to enlarge As illustrated in the chart above, at 296 bu/oz, the gold/corn ratio is approximately 75% above its nearly four decade average of 169 bu/oz. Hypothetically, if an investor sold gold and purchased corn at the current 296 bu/oz level, and the ratio subsequently retraced to its historical mean value of approximately 169 bu/oz, the investor would then be able to sell the corn and buy back 75% more gold than was originally sold to make the temporary reallocation from gold into corn. While the gold/corn ratio was historically above its 39-year mean at the end of Q4 2015, other major agricultural crops were also very near all-time historic highs for the same time period. Charts for the gold/wheat, gold/soybean, and gold/sugar ratios are shown below. The gold/wheat ratio was 80% above its 39-year mean value, the gold/soybean ratio was 77% above, and the gold/sugar ratio was nearly 47% above its historical 39-year mean average value. Click to enlarge Click to enlarge Click to enlarge The current availability of both futures contracts and futures-based exchange traded products for gold, corn, wheat, soybeans, and sugar makes rebalancing the gold and agricultural components within a portfolio easier than ever before. Investors and advisors need to make an assessment of the relative value of gold versus their other portfolio constituents, including agriculture, and appropriately adjust their allocations to suit their individual investment needs and objectives. 1 ” Why Warren Buffett Hates Gold .” NASDAQ 15 Aug. 2013: Web. October 9th, 2014. 2 Based on the 13-F filings for holders of the SPDR Gold Trust (NYSEARCA: GLD ) as of 12/31/15, and found using Bloomberg Professional, January 4th, 2016. 3 Analysis & corresponding charts were prepared by Teucrium Trading, LLC, using Bloomberg Professional, January 4th, 2016. All supporting detail available upon request 4 Mean Reversion : A theory suggesting that prices and returns eventually move back towards the mean or average. This mean or average can be the historical average of the price or return or another relevant average such as the growth in the economy or the average return of an industry. Additional disclosure: I have held in the near past, and may purchase in the near future, shares of DGZ as a proxy for short gold against my long agricultural holdings of corn, wheat, soybeans and sugar.

New Dow-Based Dividend ETF For Yield-Hungry Investors

There have been some concerns over dividend ETFs lately, thanks to the Fed liftoff in December and the possibility at least four more hikes throughout 2016. Yet is still plenty of interest in income ETFs. And with the long-term U.S. treasury yields not budging much even after the Fed rate hike, some have started to believe that lower rates are here for a bit longer, suggesting that dividend ETFs may be solid plays. There is surely a plethora of options in the dividend field, but newer approaches are always welcomed. Probably, this is why Guggenheim recently launched a new income fund, namely the Guggenheim Dow Jones Industrial Average Dividend ETF (NYSEARCA: DJD ). DJD In Focus This new ETF looks to give investors a way to target higher-income-producing securities in the U.S. market. This is done by tracking the Dow Jones Industrial Average Yield Weighted index, which is price weighted. The ETF will charge 30 basis points a year in fees for the exposure. In total, the ETF will hold 30 stocks in its basket. The stocks are selected on a yield-weighted technique. Only companies having a history of steady dividend payment in the last 12 months get an entry into the index. The portfolio of the ETF is focused on industrials (18.4%), information technology (18.1%), healthcare (12.89%), consumer staples (1211.59%) and energy (10.7%) while the top holdings include Chevron (NYSE: CVX ) (6.44%), Verizon (NYSE: VZ ) (5.11%) and General Electric (NYSE: GE ) (4.79%). The index also has a pretty decent yield of 3.01% and so looks to be a good income destination. How Does It Fit In A Portfolio? This ETF is an intriguing choice for investors seeking a new take on income investing. Investors should note that the Dow Jones index is under pressure lately on oil price worries. The only silver lining in the index is its dividend-rich nature. Plus, among the dividend-loaded stocks, a focus on the top-yielding could be better trading options. This technique is often known as the Dogs of the Dow investing theme, which considers the top 10 dividend-paying blue-chip stocks of the Dow Jones Industrial Average (DJIA). Investors should also note that the “Dogs of the Dow” technique has historically outpaced DJIA several times. ETF Competition Needless to say, the divided ETF investing area is packed with products. So, from that perspective, the newbie is likely to face tough times ahead. However, we believe that the Guggenheim Dow Jones Industrial Average Dividend ETF’s real competition will be with other ETFs following the Dow Jones Industrial Average index. There is already an exchange-traded product revolving around the “Dogs of the Dow” theme, namely ELEMENTS DJ High Yield Select 10 ETN (NYSEARCA: DOD ) . The product provides investors pure play to the 10 highest dividend-yielding securities in DJIA in equal proportions and charges 75 bps in annual fees. So, from the expense ratio point of view, the newly launched fund enjoys greater advantage. Notably, the regular Dow-based fund SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ) lost 1.2% in the last one year (as of January 4, 2015) and 3.1% in the last six months while the yield-heavy fund DOD advanced over 1.5% in the last one year and over 2.1% in the last six months. These data clearly explain the need and the expected success of the newly launched ETF. Original post