Bullseye Brief presents three thematic, actionable investment ideas every other week. My goal is to help identify opportunities most worthy of your time. I analyze data, distill complexity and share insights from a deep network of experts. In the process I read vast amounts of information, and while the journey sometimes presents more questions than answers, I do my best to pluck kernels of truth which reap bushels over time. I love what I do and invite you to join me.

Adam Johnson

Adam Johnson anchored several business programs at Bloomberg Television over five years, interviewing CEOs, heads of state, and Nobel laureates. His daily video investment blog, Insight and Action was sponsored by a major U.S. lender. Previously he managed global risk assets for ING Furman Selz and Louis Dreyfus, trading oil futures, listed equities and equity options. Adam began his career at Merrill Lynch with a degree in economics at Princeton.

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Change of Possesion

Ten Offensive Names as Defense Gets Benched

  • Tech, Energy and Banks have beaten defensive Telecom and Utilities by two to one since July
  • Record S&P 500 payout ratios highlight company and investor preoccupation with income
  • September FOMC minutes indicate a Fed poised to raise rates in December on strong job gains
  • Prepare for a rising rate environment by rotating into growth companies like the 11 profiled here

Imagine a football game where linebackers scored and quarterbacks tackled… not just the occasional pick six or on-sides kick… but quarter after quarter. Fans would shout in disbelief and coaches would throw their clip boards in disgust. If it happened the following week, there’d be talk of rewriting the playbook. A third episode would confirm the trend. Breathless commentators would explain how the world had changed and why It’s different this time. The best players would aspire to defense, and general managers would build franchises around safety. Impossible? Look at Wall Street’s winners of the past two years. Utilities and Telecoms have marched up the field to dividend cheering crowds as flashy Semis and Banks have languished on the bench. Dee-fense has ruled, but not any more. Coaching staffs dusted off the old playbook at pre-season in July. Look at the scoreboard now. Offense owns the field.

October 14, 2016

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Turning the Aircraft Carrier

Two ETFs Caught in the Wake

  • IMF officials voice serious concern over record public and private debt now 225% of global GDP
  • Bridgewater’s Ray Dalio and Janus’s Bill Gross call bond market “clearly overvalued”
  • China and Hong Kong lead debt growth as a percentage of GDP since 2008
  • Shifting spreads between key risk instruments indicate capital flight to home markets

The USS Harry Truman stretches three football fields in length and provides pilots like my friend Steve about 4.5 acres of flight deck when it’s time to land. To say the ship is big is to say the sun is bright or the the moon is high. These magnitudes are so unimaginable we don’t have the words… and one is even man-made!. Steve and I catch up every year at our high school reunion and I pepper him with questions like how fast can a carrier go, and how long does it take to turn around? The answers are understandably classified, so our honorable aviator suggests cool YouTube links https://www.youtube.com/watch?v=d4KnCqcTEOU and offers nebulous comments along the lines of “Faster than you’d think, but still a long time.” Carriers need time, and so do investors. As we debate the IMF’s warning last week about unsustainable leverage, I find myself wondering: How long will it take to turn this giant around and put low rates in our wake?

October 14, 2016

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Billion Dollar Cannabis Gel

A Patented New Approach to Pain & Epilepsy

  • Cannabis sales will total $7B in 2016 and could triple by 2020 according to researcher Arcview Market
  • Several dozen biotechnology companies are focused on the perceived analgesic benefits of cannabinoids
  • Addressable patient markets for cannabis-derived compounds include epilepsy, osteoarthritis, neuropathy
  • Bloomberg will feature a Cannabis symposium in November for family offices and high net worth clients

Scientists, regulators and millions suffering from pain are trying to get their hands on cannabis –but not the kind you smoke, eat, or grow in an alley. This is the cleaner side of marijuana. One small biotech company has figured out how to synthetically manufacture the plant’s two defining compounds, cannabinoid (CBD) and tetrahydrocannabinol (THC), then deliver to them to patients as a wearable patch or topical gel. Preliminary results are impressive: No nausea, no high, no pain… and for investors, no correlation to the S&P 500. The breakthroughs are so promising five separate Phase II trials are either planned or underway. If recent results from a competitor are any indication, FDA applications could follow. From backyard contraband to laboratory legitimacy, pot has grown up.

October 14, 2016

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As is Sprint executes a $3.5B sale/leaseback with parent Softbank to shore up finances… just as I wrote in June. Our Sprint bonds have rallied over 20 points.


As in Apple’s 13.6% global smart phone market share is about to get a lot bigger as Samsung cancels all Galaxy 7 production… and recall Apple got the go-ahead for Indian retail stores last quarter. This Bullseye name is still cheap at 13.0x 2017 earnings. Morgan Stanley told clients this week to expect an iPhone “super cycle” into 2018.


As in the University of Michigan Consumer Expectations Index falls to a two year low of 76.6. This is a highly subjective number meant to characterize how people feel about their personal finances over the next several months.


“There’s a lot we need to make right –make no mistake– I get it and our team is on it.”
–Newly named Wells Fargo CEO Tim Sloan as he takes the helm and reports earnings. I’ve interviewed Tim many times. He is high integrity, and in command of the numbers. He will lead Wells Fargo forward AND higher.

“I think that Twitter’s data has been undervalued in the market, and many of these companies as they look at it, are thinking of ways to extract value.”
–Trinity Ventures GP Ajay Chopra on CNBC 10/14. Twitter, Facebook and Google know more about us than we do. They’re collective data on consumers’ mindsets is vast and almost impossible to quantify. Twitter will get bought.

“Today everybody from Bruce Springsteen to U2 owes Bob a debt of gratitude.”
–President Obama as Bob Dylan receives Nobel Prize for Literature.