The S&P 500 is now up 8.3% YTD, best 1H since 2003, augurs well for strong remainder of year. . .

The S&P 500 gained 8.31% in the first 6 months.  This is the best since the market rose 9.8% in 1H 2003.  The market has gained 8.3% or better in only 27 years since 1926.  The market has gone on to rise an average of 11.2% in 2H in 78% of the years with such strong first half performance. The following chart from Stock Charts displays the similarity of the market action this year to the bottoms made in 2011 and 2010.  Jeb Terry, Sr. June 30, 2012

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Earnings Estimates are still pointing up for 2012 despite fears of slowdown. . .

The updated estimates for the S&P 500, displayed in the following chart, are still indicating growth of 18% for 2012 – not bad –eh?  The estimates for Q2 have been dropped by 2.6% from late March.  The estimates for the full year 2012 have been dropped by 1.1%.  While the estimates for 2012 have dropped a little, the forward 12 month P/E ratio has dropped by a lot.  The FTM P/E has dropped 6.6% since March 31 to 12.28X.  The market has plenty of room to appreciate.   Jeb Terry, Sr. June 30, 2012

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Historical Election Cycle Says there is BIAS TO UPSIDE for remainder of this year . . .

The Crossing Wall Street Blog has displayed a good chart compiling 115 years of market history that shows the typical movement in the stock market in the four years of a presidential term.  Some of you may be surprised to see that the historical low point of the election year has occurred on May 29th.  Investing in the S&P 500 at that point and holding the position until August of the following year (1st year of the presidential term) has produced an average return of 23.2%.   This analysis comports with my work and work done by Ned Davis ResearchElection years are typically up 74% of the time.  Of course, this could be one of those years where 26% of the time the market is down.  Jeb Terry, Sr. June 25, 2012

HT to Abnormal Returns for publishing this.

Aberdeen Investment Management – a guide service for micro-cap technology investment

NASDAQ bottom may be setting . . . similar to 2011, 2010

The NASDAQ chart suggests we may have set a medium term bottom.  I now expect more strength to end the quarter.  The macro numbers have been weaker than expected but not too weak.  The upcoming earnings season should provide enough “beats” to drive the market higher going into the seasonally stronger 2H and the election.  The highly anticipated Supreme Court decision on the constitutionality of Obamacare will be disclosed next week.  While the Euro / PIIGS train wreck is problematic, it is potentially losing its ability to surprise the markets.  Jeb Terry, Sr. June 24, 2012

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Why we like online advertising . . . because it’s growing FAST!

The online ad ecosystem has strong growth despite global macro economic concerns.  The chart below (courtesy of the IAB Internet Advertising Report 2011), displays the growth in quarterly online ad spending in the U.S. since 1996.  Online ad spending has grown ~14% per annum since 2000 even taking into account two recessions.  It took only 12 months for spending recover following the 2008 Great Recession.  Spending grew 22% in 2011.  Growth remains strong this year.  1Q spending was up 15% over 2011.  Seven Aberdeen portfolio companies benefit from the strength and innovation in online advertising.  Jeb Terry, Sr. June 23, 2012

Spending for online advertising now exceeds spending for cable TV.  Growth is expected to continue at the expense of “analog” ad formats.  Spending accelerates in 2H each year.

The most dramatic growth by far is related to mobile/wireless advertising which grew 149% in 2011.  Aberdeen has multiple touch points to the mobile ad market.

Aberdeen Investment Management – a guide service for micro-cap technology investment

Record high crude oil inventory = lower gasoline prices = consumer windfall

Bespoke Investment Group published a remarkable chart showing the record level of crude oil inventory compared to levels seen since 1984.  No wonder gasoline prices have fallen sharply since March.  The market strategist at Stifel Nicolaus has estimated that the drop in gasoline prices has generated as much as $100 billion in savings for U.S. consumers.  As you look at the chart on gasoline prices below (courtesy of gasbuddy.com), I am sure you will notice the similarity to the spike in gas prices last year in the Spring.  Fears of Middle East oil disruption arising from the “Arab Spring” contributed to the spike in gas prices which contributed to the slow-down in the U.S. economy in 2Q2011.  The slow-down was mitigated later in the year as gas prices coincidentally also dropped.  This may prove to be an instructive scenario for 2012.  It’s too early to assume growth has started to trend down.  Aberdeen companies continue to enjoy strong growth from surging wireless internet, SaaS and cloud computing adoption and online video.  Jeb Terry, Sr. June 21, 2012

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Obama odds for re-election lower than Bush’s in 2004, lower than his own in 2008.

According to the blog Sober Look, “the president’s reelection chances are now lower than his own chances 4 years ago and even Bush’s reelection probability 8 years ago. What this tells us is that even though Obama is still more likely to win (by a narrow margin), his path to the White House is far less certain”.  They base this viewpoint on the trend in bets made on the popular prediction marketplace – Intrade.  The following chart displays the evolution of the odds for election for Bush in 2004 and Obama in 2008 and year to date.  Jeb Terry, Sr. June 20, 2012

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US corporate liquidity is the highest in 50 years – lots of ammo for an investment boom if confidence improves.

Capital Economics recently published an amazing chart illustrating the degree of liquidity in the U.S. corporate market.  U.S. companies haven’t been this awash in liquid assets vs. total assets and short term liabilities since the early 60’s.  There is no shortage of money to make investments – we just need some clarity from Washington and Europe to allow business confidence to improve.  Jeb Terry, Sr. June 10, 2012

Aberdeen Investment Management – a guide service for micro-cap technology investment

As if we didn’t know this – Mobile data will grow 15X by 2017. Means we need more bandwidth, lots more bandwidth.

Ericsson just published their latest report on online data traffic (you can see it here)  The gist is the global surge in smart devices / internet connected devices continues to boom.  Mobile data traffic will grow 15X by 2017.  Fixed broadband traffic (i.e. your PC) will grow 5X – which is still a 30% CAGR.  This is a good time to be invested in all things online – mobile or fixed.  The implications for online commerce, ads, social apps, cloud computing, productivity (and distraction) are far reaching.  We are deeply engaged throughout our portfolio.  Jeb Terry, Sr. June 10, 2012

Aberdeen Investment Management – a guide service for micro-cap technology investment