Beruflich Dokumente
Kultur Dokumente
Economic
Experiment
Hows It Going?
June 3, 2014
Ron Muhlenkamp
Muhlenkamp & Company, Inc.
1980-1982
Slow growth & high inflation = stagflation
Reagan & Volcker
Cut taxes & Regulations
Slowed growth of the money supply
2008
Financial panic triggered by bad loans in housing
Fed lowered interest rates & kept them low
Government spending to replace consumer spending
Raised taxes & increased regulations
* HUDs increase of the Underserved Areas housing goal from 31% to 37% incorporates the effects of 2000 census data. The
31% Underserved Area housing goal for 2001-2004 was based on the 1990 census data. However, this same housing goal
would equal 36% if it had been based on the 2000 census data. HUD used the 2000 census data to create the housing goal
for 2005-2008.
Source: U.S. Department of Housing and Urban Development; http://www.hud.gov/offices/hsg/gse/gse.pdf
18,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Year
Source: Bureau of Economics Analysis
2013
2009
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
1953
1949
0
1945
16,000
Recession
40,000
30,000
20,000
10,000
Year
Source: Bureau of Economics Analysis
2014
2009
2004
1999
1994
1989
1984
1979
1974
1969
1964
1959
1954
1949
0
1945
50,000
6%
4%
2%
Year
Source: Bloomberg
2014
2011
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
1948
1945
0%
Year
2014
2011
2008
2005
2002
1999
165
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
1948
1945
Index Value
145
125
105
85
65
45
25
18
16
14
10
8
6
4
2
Year
Source Bureau of Economic Analysis
2013
2014
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
1965
1963
1961
0
1959
Percent
12
18%
16%
14%
12%
10%
8%
6%
4%
2%
Year
Source: Bloomberg
2012
2014
2008
2004
2000
1996
1992
1988
1984
1980
1976
1972
1968
1964
1960
1956
1952
0%
210
150
120
90
Year
Source: National Association of Realtors; 2014 Quarterly Data
2014
2010
2005
2000
1995
1990
1985
1980
1975
60
1970
Index Value
180
"Normal" is
probably
somewhere
between
1 mn and
1.5 mn starts
1.5
1.0
0.5
Year
Source: U.S. Census Bureau
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
0.0
1990
Units (Millions)
2.0
18
16
14
10
8
6
4
2
Year
Source: Bloomberg
2013
2014
2009
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
0
1953
Percent
12
7
6
5
Year
Source: Bloomberg
2014
2013
2012
2011
2010
2009
2008
2007
2006
4
2005
Rate %
Recessions
80
60
40
20
Source: Bloomberg
2010
2005
2000
1995
1990
Mar-2014
Year
1985
1980
1975
1970
1965
1960
1955
1950
0
1945
100
Source: Bloomberg
Date
Jan-13
Jan-11
Jan-09
Jan-07
Jan-05
Jan-03
Jan-01
Jan-99
Jan-97
Jan-95
Jan-93
Jan-91
Jan-89
Jan-87
Jan-85
Jan-83
Jan-81
Jan-79
Jan-77
Jan-75
Jan-73
Jan-71
Jan-69
Jan-67
Percent (%)
95
90
85
80
75
70
65
60
Recessions
240
220
200
180
160
140
120
Year
Source: Bloomberg
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
100
1993
260
U.S.
Investment as % of GDP
1947-Mar2014
25%
20%
15%
10%
5%
Year
Source: Bloomberg
2013
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
1947
0%
Unemployment Rate
Total in Labor Force
1948-Apr2014
(Quarterly)
12%
10%
8%
6%
4%
2%
2014
2011
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
1948
0%
Year
Data from U-3 report is seasonally adjusted: Official unemployment rate per the International Labor Organization definition occurs when people are without
jobs and they have actively looked for work within the past four weeks. Source: Bureau of Labor Statistics
120,000
100,000
80,000
60,000
40,000
20,000
Year
Source: U.S. Bureau of Labor Statistics
Survey includes persons 16 years of age and over
2011
2013
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
1948
0
1945
Thousands of People
140,000
Recessions
66%
64%
62%
60%
58%
56%
Year
2014
2008
2002
1996
1990
1984
1978
1972
1965
1959
1953
1947
54%
Japan
Government Spending as a % of GDP & Japanese Structural Growth Rate
0.139
5.0
4.0
0.153
Ratio
3.0
2.0
0.168
1.0
0.0
0.185
-1.0
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Year
Government Spending as a % of GDP Left Scale [ma 4]
Structural Growth Rate of the Japanese Economy [c.o.p 4 quarters, ma 28]
Japan
Government Spending & Long Rates in Japan
0.1
0.13
7.2000
3.6000
Ratio
0.16
1.8000
0.19
0.9000
87
88
89
90
91
92
93
94
95
96
97
98
99 00 01 02
Year
Japan, Government Benchmarks, Bid, 10 Year, Yield, End of Period, JPY [ma 4]
03
04
05
06
07
08
09
10
11
France
France: Ratio of Public Sector to Private Sector & Structural Growth Rate
Ratio Public Sector to Private Sector & Structural Growth Rate
0.68
4.0
0.67
0.66
3.5
0.64
0.63
3.0
Percent
Ratio
0.65
2.5
0.62
0.61
2.0
0.60
0.59
1.5
0.58
0.57
1.0
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Year
Right Scale: Structural Growth Rate
Ratio
Source: GaveKal Research
Compliments of GaveKal Research. Used with permission.
France
Ratio Public Sector to Private Sector & Unemployment in France
0.43
11
0.42
10
0.41
0.40
Ratio
0.39
8
0.38
0.37
0.36
6
0.35
0.34
5
0.33
0.32
4
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Year
France Unemployment rate Right Scale
Ratio Public Sector to Private Sector
Source: Reuters EcoWin
UK
UK:Ratio Central Government Expenditures to GDP
40
Government as a Solution
0.18
Supply Side
35
0.19
30
0.20
25
0.21
20
0.22
15
0.23
Government as a Solution
0.24
10
70
72
74
76
78
80
82
84
86
88
90
92
94
Year
Stock Market Value vs UK Companies Gross Operating Surplus (PE Ratio)
96
98
00
02
04
06
08
10
12
U.S.
Government Spending as a % of GDP & Structural Growth Rate
0.16
5.0
4.5
4.0
0.19
Ratio
3.5
3.0
0.23
2.5
2.0
1.5
68
70
72
74
76
78
80
82
84
86
88
90
92
94
Year
United States, GDP, Overall, Total, Constant Prices, AR, SA, Chg Y/Y [ma 40]
Gvt Spending as a % of GDP, Left Scale, Inverted
96
98
00
02
04
06
08
10
12
Canada
United States
Japan
45%
40%
35%
30%
Source: Bloomberg
Year
2013
2008
2002
1997
1991
1986
1980
25%
14,000
1600
12,000
1100
10,000
8,000
600
6,000
4,000
100
2,000
0
-400
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
16,000
Year
Source: World Bank
2100
18,000
Source: http://federalreserve.gov
1000000
Recessions
900000
800000
49%
700000
52%
2.5
600000
34%
20%
500000
400000
28%
20%
26%
1.5
22% 36%
300000
48%
200000
20%
100000
NOTE: The S&P 500 Index is a widely recognized, unmanaged index of common stock prices. You cannot invest directly in an index.
Source: Bloomberg
2014
2010
2005
2000
1995
1990
Year
1985
1980
1975
1970
1965
1960
1955
1950
27%
1
1945
Base 10 Log
23%
S&P 500 Index vs. S&P 500 Index Earnings per Share (EPS)
1945-May2014
2.2
3.5
1.7
52%
1.2
2.5
20%
34%
0.7
28%
22% 36%
26%
1.5
20%
48%
0.2
20%
Year
NOTE: The S&P 500 Index is a widely recognized, unmanaged index of common stock prices. You cannot invest directly in an index.
Source: Bloomberg
2013
2014
2009
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
-0.3
1953
1949
27%
1945
Base 10 Log
49%
Base 10 Log
23%
1.6
1.4
$1.14 Trillion
1.0
0.8
0.6
0.4
.34
0.2
.27
.14
.20
.08
.11
>10 mil.
5-10 mil.
2-5 mil.
1.5-2 mil.
1-1.5 mil.
500-1 mil.
200-500K
100-200K
75-100K
50-75K
40-50K
30-40K
25-30K
20-25K
15-20K
10-15K
5K-10K
1-5K
0.0
$0
Dollars (Trillion)
1.2
Natural Gas:
An Energy Game Changer
- An Update
Ron Muhlenkamp
Muhlenkamp & Company, Inc.
Last 24 Months
5-year average
Note: The shaded area indicates the 5-year range between the minimum and maximum values for the weekly series,
between 2009-2013.
Source: U.S. Energy Information Administration; Form EIA-912, Weekly Underground Natural Gas Storage Report.
Natural Gas
Crude Oil
19956/2/2014
(Daily)
Source: Bloomberg
150
100
50
Year
Source: U.S. Energy Information Administration, Monthly Energy Review.
Note: Reflects total carbon dioxide emissions in metric tons by month.
2014
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1990
1988
1986
1984
1982
1980
1978
1976
1974
0
1972
200
550
500
450
400
350
300
Year
Source: U.S. Energy Information Administration, Monthly Energy Review.
Note: Reflects total carbon dioxide emissions in metric tons by quarter.
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
250
Analysts Presentations
Direct TV
Purchased in June 2013
At purchase:
Forward P/E
10.5
Return on equity N/A
Free cash flow 6%
Source: Bloomberg
Oracle
Financial Metrics
ROE
Trailing PE Forward PE
>20%
17.5X
14.4X
Bloomberg data as of 6/2/2014
Total Revenue
35.6 37.1 37.2
YoY Sales Growth
4.2% 0.2%
*Credit Suisse forecast, 5/31 Year End
38.5
3.7%
40.5
5.2%
Catalysts
2.0
1.5
1.0
0.5
Year
Source: U.S. Census Bureau
2013
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
0.0
1959
Units (Millions)
2.5
HanesBrands
Innovate to Elevate
Dominant Global Brands
World Class Manufacturing
Distribution
Stock Valuation
Management Team
Industry
% of Assets
Industry % of
Assets
IT Services
8.7
8.1
5.2
10.2
Airlines
4.6
8.0
SONIC AUTOMOTIVE
Specialty Retail
4.3
5.3
STATE STREET
Capital Markets
4.2
4.0
Software
4.2
7.0
Biotechnology
3.7
6.0
Insurance
3.4
6.0
LINCOLN NATIONAL
Insurance
3.2
6.0
MICROSOFT
Software
3.0
7.0
ORACLE
CELGENE CORP
Holdings are subject to change and are not recommendations to buy or sell any security.
Questions and
Responses
(ROE) is a companys net income (earnings) divided by the owners equity in the business (Book Value); ROE = Earnings/Book Value. This percentage indicates company profitability or how efficiently a c
Glossary
Return on Equity
(ROE) is a companys net income (earnings) divided by the owners equity in the business (Book
Value); ROE = Earnings/Book Value. This percentage indicates company profitability or how
efficiently a company is using its equity capital.