April 8, 2015 Newsletter

Dear Friends,

Tangents:

Here is something from WSJ.com that might interest you aka “the merits of investing in art and beauty for the long term”:

Southern Song dynasty-era vase sells for $14.7 million at Sotheby’s auction

By Dean Napolitano

The Wall Street Journal

April 7, 2015 6:26 a.m. ET

A Southern Song dynasty-era vase sold for 113.9 million Hong Kong dollars (US$14.7 million) at a Sotheby’s sale in Hong Kong on Tuesday, one of the highest prices ever paid at auction for a ceramic from that period.

Sotheby’s said the buyer was Shanghai-based collector Liu Yiqian, who last year paid a record price at auction for Chinese porcelain—a Ming dynasty-era bowl known as the “chicken cup.”

The roughly 8½-inch vase will go to the Long Museum in Shanghai, which is owned by Mr. Liu and his wife, Wang Wei.

In a crowded room at the Hong Kong Convention and Exhibition Centre on Tuesday, bidding opened at HK$48 million and quickly reached HK$100 million, where it hovered briefly until the hammer finally came down on Mr. Liu’s bid, which was phoned in. The auction house charged an additional buyer’s premium of HK$13.9 million.

Mr. Liu, a taxi driver turned stock-market investor, beat out seven other bidders.

It was the third-highest price ever paid at auction for a Song ceramic, after a brush washer that sold for HK$207.9 million in 2012 and a basin that sold for HK$146.8 million in 2014.

Those two sales also took place at Sotheby’s in Hong Kong.

The vase is part of the guan, or official, ware that was made for the imperial court of the Southern Song dynasty (1127-1279) in Hangzhou. It has a grayish-blue monochromatic glaze with threadlike crackles, which developed in the kiln during the cooling-down process after the piece had been fired.

“It’s a masterpiece of understatement,” Nicolas Chow, Sotheby’s Asia deputy chairman and international head of Chinese works of art, said during a news conference that followed the sale.

In a later interview, Mr. Chow said there was a revival of neo-Confucianism in the late Northern Song and Southern Song dynasties.

“The values of humility were incredibly important, moving away from the ostentatiousness that you will find among most Tang dynasty arts,” he said.

Mr. Chow, describing the vase’s octagonal shape as “very architectural,” said the design harked back to early Chinese bronzes, adding that the Southern Song dynasty suffered from a shortage of bronze because most of it had been melted down for use in warfare.

“In the state rituals in the Southern Song dynasty, after the court fled south, it was very important to reinstate the political legitimacy of the ruler,” he said. “Given the shortage of bronze, ceramics were used to copy bronze shapes.”

The vase had been in a private collection in Japan for the past 40 years. Before that, it was in the hands of a collector in London, where the vase had likely been brought from China about a century ago.

Sotheby’s said that because of the vase’s high quality, it likely was handed down over the centuries rather than excavated. http://on.wsj.com/1DmD1nu

Also, on this day in 1974, Hank Aaron hit his 715^th career home run, breaking Babe Ruth’s record of 714 homers.

PHOTOS OF THE DAY

A cherry tree is in full blossom in front of the skyline on a sunny day in Frankfurt, central Germany, Wednesday. Michael Probst/AP

People head home as the sun sets behind Raisina Hill and the Indian presidential palace in New Delhi Tuesday. Manish Swarup/AP

Market Closes for April 8, 2015 

International Markets

Bonds

Currencies

Commodities

Whatever method you use to pick stocks….your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.  It isn’t the head but the stomach that determine the fate of the stockpicker. –Peter Lynch, Fidelity Investments, Beating the Street, 1994, b. 1944.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fifth day, extending the longest winning streak since February, as an advance in financial and health-care shares offset losses in energy producers amid oil’s worst slump in two months.

     Manulife Financial Corp. added 2 percent after nearing a deal to sell its insurance products in Asia through DBS Group Holdings Ltd. Pacific Rubiales Energy Corp. tumbled 8 percent as crude slumped 6.6 percent in New York. McEwen Mining Inc. dropped 6 percent after armed robbers stole $8.5 million of gold from its Mexico mine. Valeant Pharmaceuticals International Inc. and Concordia Healthcare Corp. jumped at least 3.8 percent for a second day of gains.

     The Standard & Poor’s/TSX Composite Index rose 24.76 points, or 0.2 percent, to 15,213.60 at 4 p.m. in Toronto. The equity gauge has advanced 2.1 percent over five days.

     Eight of the 10 main groups in the equities benchmark advanced, with financial shares rising 0.7 percent. The group accounts for about one-third of the index by weighting. Health- care shares rallied after Mylan NV offered to buy Perrigo Co., adding to a spate of recent deals in the sector. Trading volume was 3.1 percent below the 30-day average today.

     Manulife, Canada’s largest life insurer, climbed 2 percent for a second day of gains. The company will pay S$1.6 billion ($1.2 billion) to DBS Group to sell and market its products in Singapore, Hong Kong, China and Indonesia.

     Yamana Gold Inc. slipped 1.5 percent as gold for June delivery declined 0.8 percent to $1,199.26 an ounce in New York.

     Canadian Natural Resources Ltd. dropped 2.6 percent and Crescent Point Energy Corp. lost 3.6 percent as energy producers declined 1.6 percent as a group.

     New York crude futures plunged 6.6 percent a day after reaching their high for the year. U.S. oil stockpiles climbed 10.95 million barrels in the week ended April 3 to the highest level since 1930, a government report showed on Wednesday.

US

By Oliver Renick and Joseph Ciolli

     (Bloomberg) — U.S. stocks rose as minutes from the Federal Reserve’s latest meeting showed officials were split on the timing for raising interest rates.

     The Nasdaq Biotechnology Index jumped 2.9 percent after Mylan NV offered to buy Perrigo Co. for $28.9 billion. Chevron Corp. and Exxon Mobil Corp. fell at least 1.7 percent as oil retreated after data showed crude inventories grew more than expected last week. Alcoa Inc. fell 3.2 percent in late trading after reporting first-quarter results.

     The Standard & Poor’s 500 Index climbed 0.3 percent to 2,081.90 at 4 p.m. in New York. The Dow Jones Industrial Average rose 27.09 points, or 0.2 percent, to 17,902.51. The Nasdaq Composite Index gained 0.8 percent as biotech shares rallied for a second day. About 6.2 billion shares changed hands on U.S. exchanges, 10 percent below the three-month average.

     “The market is reacting very short-term right now to all these little bits of news,” said Randy Warren, who manages more than $100 million at Exton, Pennsylvania-based Warren Financial Service & Associates Inc. “We’re bouncing around in a band of a couple of percentage points one way or the other. What’s important for investors right now is to look for good companies, not react to every twitch of the Fed.”

     Fed policy makers last month were divided over whether they would raise interest rates in June, a debate that occurred before recent disappointing payroll figures, according to minutes of the March 17-18 Federal Open Market Committee session released Wednesday.                          

     While some participants argued for higher rates in June, others said a rate increase should be delayed until later in the year. A couple said the economy probably wouldn’t be ready for tighter policy until 2016.

     “This is just confirmation that there’s uncertainty,” said Scott Wren, the senior equity strategist who helps oversee $1.4 trillion at Wells Fargo Advisors LLC in St. Louis. “We’re two months from June, there’s no way in my mind the Fed is going to make a move without telling us three to four months ahead of time.”

     The Fed in its meeting last month dropped an assurance to be “patient” on the timing of the first interest-rate increase since 2006 and described job gains as “strong.” Since the meeting, economic data have suggested the economy cooled as a result of unusually harsh winter weather, tepid overseas markets and a slowdown in energy-related capital investment.

     New York Fed President William Dudley said Wednesday that while recent data has surprised to the downside, he can imagine scenarios in which policy makers raise borrowing costs at the June meeting. Fed Governor Jerome Powell said he saw a greater risk of damaging the economy with a premature rate increase than of triggering inflation by waiting too long.

     U.S. equities rallied on March 18 after the Fed said data suggest economic growth has moderated and officials indicated rates will rise more slowly than previously estimated.

     The S&P 500 has lost about 1 percent in the three weeks since, as speculation grew that signs of a slowdown will hurt earnings. Profits for S&P 500 companies probably fell 5.8 percent in the first three months of the year, according to analysts’ estimates compiled by Bloomberg. Earnings are also projected to slump in the next two quarters.

     Alcoa lost 3.2 percent as of 4:35 p.m. in New York. After the market closed, the largest U.S. aluminum producer reported first-quarter sales that trailed analysts’ forecasts. Earnings beat expectations as the price of the metal rose. Alcoa gained 1.8 percent during the regular session.      

     The Chicago Board Options Exchange Volatility Index fell 5.4 percent Wednesday to 13.98, the most in two weeks. The gauge, know as the VIX, slipped 2.7 percent last week.

     Seven of the S&P 500’s 10 main groups rose. Consumer discretionary shares rebounded 0.9 percent to lead the advance after their biggest drop in more than a week. Health-care companies rallied for a second day, also up 0.9 percent.

     Perrigo soared 18 percent and Mylan added 15 percent amid Mylan’s takeover bid, which sent the benchmark’s health-care group up 0.9 percent. Regeneron Pharmaceuticals Inc. and Vertex Pharmaceuticals added to Tuesday’s gains, rising more than 2.6 percent. The Nasdaq Biotech index rose the most since Jan. 16, up 2.9 percent.                         

     Netflix Inc., Dollar General Corp. and Macy’s rose at least 2.7 percent to pace the advance in consumer shares. Macy’s reached an all-time high. Nike Inc. climbed 1.2 percent, the Dow’s best performer.

     Airlines led a rebound in transportation stocks as oil retreated. Delta Air Lines Inc. snapped a five-day losing streak, rising 4 percent for its best gain in more than two months. Southwest Airlines Co. added 3.7 percent, its biggest climb since Jan. 22.

     Energy companies in the S&P 500 slid 1 percent amid a 6.6 percent slump in West Texas Intermediate crude, oil’s biggest drop in two months. Murphy Oil Corp. lost 2.8 percent, while Exxon fell 2 percent, the worst among Dow components.

Have a wonderful evening everyone. J

Be magnificent!

Fear is one of the greatest problems in life.  A mind that is caught in fear

lives in confusion, in conflict, and therefore must be violent, distorted and aggressive.

Krishnamurti

As ever,

Carolann

What is life?  It is the flash of a firefly in the night.  It is the breath of a buffalo in the

wintertime.  It is the little shadow which runs across the grass and loses itself

in the sunset.

                     -Crowfoot, 1830-1890

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7