2006 Holiday Shopping

On Friday, November 10, for the second straight year, I led a group of Stillman School of Business students from Seton Hall University (SHU) to the Palisades Center in West Nyack, NY for an intensive one day research project in which we surveyed and observed shoppers. The following Monday through Thursday we followed up the mall research with a nationwide survey focusing on shopping tends and preferences. Last week, SHU and LakeView Asset Management, LLC released some of our findings in the following press release:

_________________________________________________________________

HOLIDAY SHOPPING SEASON ANALYSIS IS IN!

Seton Hall University Students Forecast Holiday Shopping Trends,

in the NY Metro Area and Across the Country

Flat screen TVs are still hot, but satellite radio and Direct TV are not, and holiday season sales could be flat to somewhat higher compared to last year! These are just a few of the fascinating, fact-based predictions Seton Hall University’s Stillman School of Business students have to offer, based upon their second annual grass-roots, on-the-ground survey conducted November 10 at Palisades Center in West Nyack, New York, as well as their national telephone poll conducted November 13-16 at Seton Hall’s Polling Center.

Under the guidance of Scott Rothbort, M.B.A., professor of finance at Seton Hall and president of LakeView Asset Management, LLC, Seton Hall students interviewed over 700 respondents in total, asking a wide range of questions covering personal income, shopping preferences and plans. What are the answers?

• Personal income was once again the most important factor determining how much shoppers will spend this year.
• Overall, shoppers expect to spend about the same or just slightly more in the 2006 holiday season compared to the 2005 holiday season.
• Given that personal income and employment are higher in 2006 relative to 2005, we are predicting that total 2006 holiday sales will rise in line or slightly greater than increases in US Gross Domestic Product over the same period of time.
• Consumers prefer to stay down to earth when asked about satellite entertainment. Respondents who did not have satellite television such as Direct TV (DTV) or Dish Network (DISH) or satellite radios such as Sirius (SIRI) or XM (XMSR) overwhelmingly did NOT intend to purchase such technology.
• Flat screen televisions are more likely to be purchased by current non-owners than any other technology in our survey.
• When asked about fast food, respondents almost as often named Wendy’s (WEN) and McDonald’s (MCD) as their favorite fast food restaurant handily outranking rival quick service company Burger King (BKC). When it comes to pizza, nothing satisfies as much as the local pizza parlor.
• Google is definitely the dominant internet search engine.
• In a subject that has emerged from local grass roots efforts, we asked mall shoppers at the Palisades Center in West Nyack NY if aluminum bats should be banned in favor of wood bats. It appears that there is no decisive opinion either yes, no or not sure. However, while those agreeing to the ban were fairly evenly split between men and women, those opposed to it were almost 2 to 1 male to female, while the undecided were 1.5 to 1 female to male. This could be an issue which gets solved over the kitchen table at homes across our metropolitan area.

__________________________________________________________________________________

In addition, today, I was interviewed on TheStreet.com TV by Gregg Greenberg. We discussed our research and my thoughts on Black Friday.

At the time of this Blog entry, Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares of McDonald's (MCD).

Where's Mortimer and Randolph Duke?

On Monday November 6, 2006 I led a group of Stillman School of Business students on a visit to the New York Board of Trade (NYBOT). While at the exchange, the students participated in a simulated commodity futures trading session. That's me wearing my old Merrill Lynch (MER) bluish/green trading floor jacket given to me by my MER floor broker friends from the Chicago Board Options Exchange (CBOE)

The event was part of the "NYBOT Ringside Goes Schoolside" program where universities in the tri-state area are invited to the exchange. The NYBOT was founded in 1870 and was known as the New York Cotton Exchange (NYCE). It provides the world's premiere futures and options markets for several internationally traded agricultural commodities including cocoa, coffee, cotton, frozen concentrated orange juice (FCOJ) and sugar.

Remember FCOJ from the Eddie Murphy / Dan Aykroyd movie Trading Places? That movie was filmed at the exchange's old site in the World Trade Center.

At the time of this Blog entry, Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares and/or call options of Merrill Lynch (MER).

How To Invest By Brown Bagging It To The Game

Last Sunday I went to Giants Stadium for the New York Giants / Tampa Bay Buccaneers football game, also dubbed the Barber Bowl. Accompanying me were my wife, our oldest son and some cousins. As usual we brought along some sandwiches and soda in the car and eat them on the way to the game. Having not been to Giants Stadium since last season it was not until we passed the concession stand did I once again get stadium sticker shock. So, on my trusty Palm (symbol: PALM) Treo 650 I snapped a picture of the concession stand (which is posted above). For what you can save by eating before the game by bringing your own food, drink and snack you can buy one share of Aramark Corporation (symbol: RMK), the company that runs the concessions. So the next time you go to a game, bag your own lunch and call your broker the next morning.

Decision of the Year

Yesterday I joined my family for a viewing of the latest Robin Williams movie, Man of the Year. It was quite entertaining but not necessarily his best piece of work. The movie reminded me to check on the latest 2006 election polls when I returned home.

Right now the Democrats are clearly ahead in the race for the House. As for the Senate it is too close to call. If you count Joe Lieberman as a Democrat (though I am not so sure he will be siding with the party that just abandoned him), we could be looking at a 50/50 split, which means a 51 - 50 Republican advantage as the Vice President (President of the Senate) will cast any swing vote according to the Constitution

My own political views aside – for full disclosure I consider myself a Reagan Republican – my concern with the elections are the impact on the financial markets. Nancy Pelosi and Charles Rangel will no doubt in my mind seek to turn back or eliminate the Bush era tax policies. In danger are the dividend exclusion, low capital gains tax rate and final elimination of the “death tax”. They will also push to raise taxes though increased marginal tax rates or through other means. A totally Democratic Congress would make those politicians’ ambitions an ever greater probability.

When I look at the economy and the financial markets, I am not concerned with the Federal Reserve Open Market Committee’s monetary policy or corporate earnings or the housing market or even the consumer. The one single concern that I have that would cause the biggest and most immediate blow to the economy and the financial markets is a Democratic majority in both the House and the Senate. I am not talking from my own political perspective but from economic realities and the psychology of the stock market.

If a Democratic party sweep become a reality, it would trigger an investor rush to the exits. As for the 2008 Presidential elections, don't get me started.

Back To The Future

I recently visited the offices of CTS Trend a real-time market data technical analysis services company located in New Providence, NJ. At Seton Hall University we run the CTS suite of technical analysis solutions: Net; ViewNet; ScanNet; and, TickNet. I highly recommend the CTS http://www.ctstrend.com/roduct for both the technical based trader and the trader/investor who desires to add technical analysis to their arsenal of trading tools.

As it turns out I spent some time with CTS President and Founder, Dr. Frank Soong. CTS is an interesting enterprise. Not only does it develop and market the technical analysis products but Dr. Soong also manages money for some large banks using his own proprietary statistical based models. Here is how the day became interesting. Early in my career when I was at Morgan Stanley I worked under Nunzio Tartaglia and Gregg van Kipnis who together pioneered “Pairs Trading” and "Black Box" statistical arbitrage trading in the 1980s. From that group came David Shaw, founder of the highly successful DE Shaw hedge fund. While also at Morgan Stanley, I worked with the team of professionals who developed the global program trading business. As Dr. Soong began to describe his trading systems and ravel off some names of people who he has worked with or subscribe to his models, it was like a flashback my early days on Wall Street at Morgan Stanley. Dr. Soong did not know or know of Nunzio Tartaglia, the very gentlemen who broke ground for people such as Dr. Soong and David Shaw. After all of these years, it is quite heart warming to see that the legacy of these early pioneers lives on in a new generation of statistical arbitrage money managers.