Scout22.com

Thanks in advance to at Scout22.com for supporting our beliefs and for the impending website overhaul.  If you have a Veg oriented business or website you really should give them strong consideration.

Proudly named “Five Companies That Are Changing The World”

Five Companies That Are Changing The World

There’s no question that the concept of cruelty-free is making it into the mainstream. Plant-based products are lining the shelves at big-box retailers, hitting the major morning shows and popping into recipes.

Vegan living has clearly moved from niche area of interest to significant player in popular culture. And while there’s still a long way to go, lots of companies are helping to perpetuate a paradigm shift. These groundbreaking businesses are making amazing products, raising awareness and showing people what’s possible when we leave animals out of the equation.

Here are five such companies who are changing the world:

Hampton Creek

This Silicon Valley food start-up, fueled by investors including Bill Gates, is the brand behind the eggless wonder known as Just Mayo. Their tangy spread is taking over store shelves nationwide. Its popularity even raised some red flags with Unilever — makers of Hellmann’s, who filed suit against Hampton Creek earlier this year, claiming that mayonnaise isn’t mayonnaise without eggs. Instead of hurting the newbie brand, however, the lawsuit reportedly earned Just Mayo a whopping $21 Million dollars in free advertising before Unilever has the sense to drop it. Led by visionary CEO Josh Tetrick, the company’s long term goal is to replace the egg using sustainable, cost-effective, cruelty-free methods. Clearly, they’re well on their way.

Optimized Partners

Some people think business and ethics don’t make good bedfellows. This list is proof positive that that’s a myth, and there’s no better example than Optimized Partners (originally known as Rocky Mountain Humane Investing, Corp.). This remarkable business dates back to 1995, when founder Brad Pappas launched the company as the first ever investment advisory firm in the U.S. that focused solely on vegan, green and environmentally sustainable investment strategy. Their time-tested, proprietary system is designed to protect client assets while actively participating in advancing markets and supporting social responsibility. In the realm of finance, they’re showing the world that it’s possible to make money AND make a difference, and that’s huge.

Veganz

The world’s first vegan supermarket chain, this German company opened its first store in the summer of 2011, and they’re already in Berlin Friedrichshain, Frankfurt, Hamburg, Munich, Essen, Cologne, Prague and Vienna with a plan to have 21 stores across Europe by the end of 2015. Best of all, they’re slated to break ground in the U.S. by opening a clothing store and restaurant in Portland, Ore. in 2016. With the motto “Wir lieben Leben” (we love life), this company is transforming the concept of cruelty-free shopping, and making life easier for herbivores all over the world.

Beyond Meat

Another big winner in the mainstream market, Beyond Meat is becoming the meat alternative of choice for millions of Americans — many of them omnivores. Cooked up in a laboratory in California, their chickenless chicken strips and beefless crumble are staples in stores like Target and Publix, and even the stars of The Today Show couldn’t tell the difference between Beyond Meat and meat in a taste test. The future of meat is meatless, and Beyond Meat is leading the charge.

Native Foods

This rapidly expanding chain of eateries is fundamentally changing the definition of “fast food.” Founded in California in 1994, Native Foods Café has locales from coast to coast, and their fast-casual, cruelty-free cuisine is popular with vegans and omnivores alike. Their 100% plant-based menu features foods all made fresh daily, from Native Nachos to Super Italian Meatball Subs to Classic Deli Reubens. With locations in California, Colorado, Oregon, Illinois, Washington, DC and Virginia, there are many more to come. This company is turning attention away from the usual fast food suspects, and opening the eyes of eaters to the deliciousness of cruelty-free cuisine.

The plant-based marketplace gets bigger and better every day, and these are just a handful of the amazing companies working tirelessly to improve life for humans and animals, alike.

What other companies would you add to the list? Tell us about them.

Coming soon: “An introduction to effective investing for the Vegan Investor.”

In 1990 I created the first Humane oriented screen which was termed “Cruelty Free Investing” by the Humane community.  Up until that time, screening for animal issues didn’t exist and to my knowledge there was no one with a foot in both the animal welfare and investing communities to bridge the gap.

That was 25 years ago and today the term “Vegan Investing” is gaining lots of attention and traction.   The vast majority of our incoming inquiries are asking for Vegan based portfolio screens.

So we think the time has come to write a paper on how to create and manage an effective Vegan portfolio via our data based quantitative style of investing.

FYI all of our portfolios visible on the Collective2.com platform (see the links on the right side of our home page) are Vegan portfolios.

Brad Pappas

Au Revoir Planar Systems

Approximately a month ago we began to purchase of electronic display manufacturer Planar Systems (PLNR) for client accounts and for Collective2 portfolios OP III and OP IV. Most of our purchase prices were in the mid $3’s (OP IV was $3.37 and OP III was $3.33).

Quarterly earnings were released and PLNR reported a 17% in total revenues and earnings of .14 which is almost a triple from last years 5 cents a share. This morning the stock is skyrocketing 80% higher which does appear at first glance a bit ludicrous to us. We have learned time and time again to sell off investments making parabolic moves higher. Not only are such moves unsustainable but also prone to significant downside once profit taking takes hold and panic stricken buyers who pay near the highs cut their losses quickly.

So we have sold our shares for clients ($6.597) and Collective2.com portfolios ($6.57).

PLNR

No positions anymore.

10/30 client update

As I’ve mentioned in an earlier post: Show me a portfolio manager with strong convictions and I’ll show you a manager with a spotty record.

We are always very cautious when it comes to hedging our managed portfolios with inverse exchange traded funds when there is no recession in sight.   Flexibility is key.  Over the past month we’ve been expecting climactic selling to occur in October which we believe was fully realized by mid month.    The headlines were quite scary with the threat of a worldwide spread of Ebola and concerns about the US economy in the face of the end of Quantitative Easing and the European economies degrading into recession.

“Hedging” is the purchase of securities that move inverse to the stock market.  Its one method of protecting your capital during periods of higher than average risk and volatility.  Protecting your capital or principal is essential for the long term success of any investor but oddly, is almost unheard of in the mutual fund and in most private portfolio management firms where “buy and hold” regardless of market environment  is the mantra.  Without hedging or any sort of risk control your principal is at risk of a nauseating roller coaster ride that should only be ridden by an investment masochist.

At present, it would appear that the concerns regarding Ebola and the US moving to recession were quite overblown but they served the purpose of providing the necessary catalyst for a market sell-off and creating the necessary atmosphere of fear for a potential rally.   Fear is an essential factor in the creation of market selling and market bottoms but the transition from bearish market action to bullish can occur in a matter of just a few hours or even minutes as was the case on October 15th and 16th.   On those dates the stock market plunged and Treasury bond prices soared to such an astonishing degree that could only be viewed as climactic.  “Climactic” is viewed in market terms as the end of the move, an absolute blow-out of selling or buying that typically ends a market trend.

During these days of mid October we sold all of our hedges and Treasury bond holdings and reverted back to a standard fully invested in equities status.   Had we been as dogmatic as typically seen with the talking heads on CNBC we would have missed the reflex market rally to the end of October.   We don’t use any sort of quantitative based market model to make these quick decisions, these decisions are quickly made with the benefit of decades of experience and study of bear market behavior.  We also knew that the chances of recession were nil and that any major weakness was in fact, an opportunity to buy.  We also knew that a major seasonal and yearly economic cycle wave was about to commence, and staying hedged would probably come back to bite us badly.

 

OctoberSPY

US markets have experienced a textbook V-shaped recovery which is not too surprising considering that the risks of a US recession are non-existent for the time being.   Without a recession, market weakness should be viewed as a buying opportunity.

But now lets take a look at a chart we showed you in January.   Below is the cycle forecast for 2014.   Notice the peak in the Spring to be followed by an extended period of weakness ending in October.   This chart proved to be quite accurate for the small stock Russell 2000 but the larger stock Standard and Poor’s 500 was relatively defiant and did not endure the Spring to October weakness.

 

NedDavis 2014

October 2014 and beyond:  From our point of view the investing year of 2015 started at the market bottom two weeks ago.    As you can see from the chart above market cycles bottom in mid-October and begin a strong and prolonged rally that typically endures into what would be 2016.

To be honest, I can’t give you a concise reason for why cycles work.   It used to be that 4-year cycles were closely aligned with US monetary policy but there is no longer a direct correlation to actions by the Fed.   But in my experience they tend to be relatively accurate more often than not and we continue to give them credence until proven otherwise.

Ned Davis 4 year cycle

 

Summary: Its our belief that the rocky patch for equities we expected in 2014 has passed and a new leg up for US equities could be on the horizon.   At present the chances for a peak in the US economic cycle in 2015 appears about nil.   Ebola appears to have been a short term scare in the United States and other developed countries where the rule of law, medical care and lack of political corruption are present.

There are no cases where a recession in Europe pulled down the US economy into a recession as well.

The small stock Russell 2000 appears to have regained its footing on a relative basis to the S&P 500 index, in other words small stocks may have started to stabilize which is necessary if they’re going to being their traditional out-performance of larger stocks in November through January.

While we all reserve the right to gripe about the markets, the economy and financial inequalities, the path of least resistance for stocks does appear higher.   But keep in mind that this market rally dates back to 2009 and is rather mature.   There are no great deals out there anymore and investor’s search for yield in the absence of any real return on CD’s or Treasuries has reached the absurd.   Fixed income or long term Treasuries might be the single most overvalued asset class today.

Be careful out there.

Brad Pappas