Back to the markets and what is going on. Thomson Reuters Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) took in $11.6 billion of net new money for the fund-flows week-ended Wednesday, December 7. This marked the fourth straight week of net inflows for U.S. funds, during which time they grew their coffers by $43.6 billion. The positive flows for the past week were driven by money market funds (+$14.7 billion) and taxable bond funds (+$1.1 billion), while municipal bonds funds (-$2.2 billion) and equity funds (-$2.0 billion) both suffered net outflows.

The post-election rally continues for the equity markets; this rally is tied to Trump’s business-friendly campaign promises of lower corporate taxes, less regulation, and a bump in infrastructure spending as I noted earlier. I don't see why this momentum will not continue into 2017 and beyond...if Trump delivers!

Equity ETFs (+$7.9 billion) pushed their consecutive net-inflows streak to nine weeks, including over $40 billion of positive flows since the election. This is insane to me. ETF's are the dumbest investment possible and should only be used as a hedging instrument. Buying an ETF is the equivalent to buying every home in a neighborhood. Some homes in the neighborhood will be worth more than others given their location, size and care. Why also buy the home that is dilapidated and not valuable if you don't have to? Well, when you buy an ETF you buy the good homes and the bad.

Investors continued to pull money from safe–haven assets, municipal bond mutual funds (-$2.1 billion) experienced their fourth consecutive weekly net outflows over $2 billion. Funds in the Intermediate Muni Debt Funds (-$578 million) and High Yield Muni Debt Funds (-$469 million) classifications were the hardest hit during the week. This comes as no surprise and I expect this to continue given how bullish investors are. Investing is fun again, except in microcaps. Microcaps face a slew of issues including poor management, limited funding sources and as a result have been a nightmare for the past two years. This will change when people begin to sour on the large and midcap names and chase alpha and pick up microcaps. My guess is this happens sometime around Q3 of 2017, when the Fed Funds rate might be 1.25% considering how hot this market is, lol.

Ross's Random Musings

I am terrified for the holiday season and I will tell you why, because I have three little monsters under the age of six that will be tugging at me and yelling Dad at me 100 times a day when I take the last week of the month off. Why hasn't someone invented something that can distract children and be healthy and help them grow? Come on technology titans, help a Dad out! How about a flying shuttle they can board and fly around looking at the neighborhood and be kept occupied and fed while I sleep or watch one college football game. Wouldn't that be awesome!

I am very guilty of adoring my children and I can't wait to take them sledding and skiing in a couple of weeks, they will go bananas!  Being a parent is the hardest thing I have ever done in my life and I pour every drop of my being into my children and I know the reward will come later when they become people. Everyone tells me to cherish these moments as they go by in an instant, that is a blatant lie and the next person that tells me that can spend the day at my house, the most active home on Earth. Santa is bringing my two boys a cement truck and an excavator toy and my daughter a doll set. My boys have torn up our front lawn to make it a construction site which is a riot but to some of neighbors it is an outrage. I have actually been reported to my HOA for not adhering to the aesthetic code of our neighborhood. In response to those I "offended" I offered to send my boys over to their house with a bag of rocks and paint bulls eyes on their home windows and let my sons fire away. Some people in life need to smile more!

Have a wonderful holiday season and keep an eye on our stock of the month page, https://sylvacap.com/stock-of-the-month. My picks have been on fire, UIS was up 42% last month and XXIA (who will benefit due to CES hype, in my opinion) is up 23% so far this month.

Stocks to watch:

Wells Fargo (WFC) - banks soaring, a leader

Vuzix Corp (VUZI) - M300 being shipped, hope adoption is strong

Snipp Interactive (SPN.V) - revs exploding and my guess a takeout in 2017

Facebook (FB) - absolute beast

Insignia Systems (ISIG) - a standout in the industry

Oracle Corp (ORCL) - I expect a strong 2017

CLS Holdings (CLSH) - waiting on permits and game changing tech

Sysroex Global (SYRX) - what a run earlier this month, IOT a white hot area

Goldman Sachs (GS) - the leader of banking stocks

Biogen (BIIB) - awesome combo of pipeline and drugs on market

AcelRx Pharmaceuticals, Inc. (ACRX) - a favorite idea of mine for 2017

Soligenix (SNGX) - just completed a financing and plans to move to Nasdaq

Gilead Sciences (GILD) - love this management team, acquisitions have been strong

Mast Therapeutics (MSTX) - has a strong balance sheet and optionality

Inovio (INO) - an industry leader and highly disruptive science

Replicel (RP.V) - I love autologous cell therapies, very compelling clinical pipeline

InMed Pharma (IN.CN) - Orphan disease candidate may reverse EB and other assets

GW Pharma (GWPH) - Largest cannabis company by market cap, compelling pipeline

Towerstream Corp (TWER) - Equipment in filed worth more than mkt cap

At&T (T) - Industry leader, I like the satellite tv acquisition

PeerLogix, Inc. (LOGX) - Highly disruptive tech and in a white hot adtech market

Qualcomm (QCOM) - mega cheap and institutions starting to take a look again

Fiserv, Inc (FISV) - Solid company

Jack Henry & Assoc (JKHY) - Growing top and bottom line

Cachet Financial (CAFN) - Looks like guidance of $8-$10M for '16 in the bag

Cummins Inc (CMI) - A nice spot to be in a shovel ready economy

Power Solutions Intl (PSIX) - Mgmt remains optimistic, could see this one be up 3x soon

Navistar Intl (NAVI) - Well run business

BioHiTech (BHTG) - Revolutionizing industry and well run company

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