27 September 2013

The Fed continues to buy bonds at the rate of $85b per month to keep interest rates down, printing money to do it. One of the important reasons for that is that if treasury bond interest rates climbed to normal levels the US would be even more bankrupt that it is today. Reviewing a chart of TBF – ProShares Short 20+ Treasury – shows all was fine until late last year and through April this year the market the Fed programs were working. Long about April the market started ignoring the Fed and sending rates up and bond prices down.

Also this last week the Congressional Budget Office said the current rate of federal spending will produce an unsustainable buildup of debt. http://www.nytimes.com/2013/09/18/us/congressional-budget-office-predicts-unsustainable-debt.html?ref=business
One of the other sources on the problems ahead is Stan Druckenmiller.
www.businessinsider.com/stan-druckenmiller-on-generational-theft-2013-9?op=1
So when the world finally realizes our dollars are no good, the “good” times will end and the market will die. In the meantime if you are not investing every thing you can and ready to get out immediately you are planning to be a victim. You might also review your current investments and suggest the same to your relatives. One older lady I met this year has over 1/2 million dollars invested in a tax free money market account on which she made $8 last year. I suggested she talk to her other broker about investments.
Chuck Jaffe in one of his internet Moneylife shows talked about a study from a site called datagenetics of 3,400,000 credit cards which had been stolen and for which the pins were now known. Seems every one of the 10,000 possible combinations had been used but 10.7% of pins were 1234. 6% used 1111. 2% used 0000. 26.8% of all passwords could be found by using the 20 most popular pins. 1004 is the sixth most popular and spoken in Korean is the Korean word for Angel. The 22nd most popular was 2580 – the vertical center line on a telephone. His point was make them harder to guess.The sum of the deviations (839,997,899) is not up for the last two weeks – not time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are not up – not time to invest.My current investments:
SAutomotive has a price of $54.79, a sell price $52.05, a relative rank of 03, and is a hold.
SBiotechnology has a price of $176.20, a sell price $167.39, a relative rank of 01, and is a hold.
JapanSmallerCompanies has a price of $14.21, a sell price of $13.50, a relative rank of 02, and is a hold.My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 60% invested

20 September 2013

etfdb.com contains a tool to find which ETF can be used to replace mutual funds you may be condidering. Fidelity Select Technology FBIOX has 30 ETSs listed as being similar. In looking at the 30, the best two are PBE and XBI both of which performed just about the same as FBIOX over the last couple of months. The advantage of the ETF is that you can buy or sell it at any time the market is open, have a stop loss order to limit losses, and do not have to contend with Fidelity’s stupid rules on round trip trades. However, if you buy or sell an ETF you have to pay a commission – Fidelity changes me $8. Fidelity Select Automotive has 20 ETFs which are similar, but only 4 are performing as well as FSAVX. Most ETFs are still fixed portfolios, however as more managed ETFs are offered I expect they will perform better. I imagine Fidelity has not offered ETFs which match their mutual funds because they make more money on mutual funds. One of the more interesting ETFs is TBAR. This is an ETF which invests in GLD (gold) but switches to Tbills when GLD is below its 200 day moving average. At finance.yahoo.com you can view a chart of TBAR and compare it to GLD. TBAR is less then 2 years old and GLD has not done much on the up side in the last two years. It will be interesting to watch.

I could repeat the same comments I made last week except refering to JapanSmallerCompanies this week. JapanSmallerCompanies has 14 ETFs which etfdb.com are alternatives. The best two of these are JPP and SCJ, neither preformed as well as JapanSmallerCompanies

The sum of the deviations (617,839,997) is up for the last two weeks – time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are up – time to invest.

My current investments:
SAutomotive has a price of $54.55, a sell price $51.82, a relative rank of 04, and is a hold.
SBiotechnology has a price of $174.72, a sell price 165.98, a relative rank of 01, and is a hold.
JapanSmallerCompanies has a price of $13.96, a sell price TBD, a relative rank of 02, and is a buy.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in JapanSmallerCompanies

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 60% invested

13 September 2013

Investors Business daily changed to Uptrend Confirmed on 09Sep13 after the gain the market had on Monday. Hopefully this will not be an average September. In one of his latest youtube videos, Jim Rogers suggest his investment in oil, gold, and other commodities are going to go much higher and stocks are going down. He also points out that with the slow end of artificially low interest rates, India, Indonesia, and Turkey are going to be hit hard. For the first time in history the world has been flooded with printed money and when it stops there will be panic in markets and it will be a huge mess. He feels the decline will be worse than 2008/09.

I am sure suprised the market is going so well and wish I had not sold SBiotechnology in the past. However, I never know how deep a decline in price is going. A couple of year ago I sold LatinAmerica 5 times. The 5th time it went from 70+ to 30- and that was a price change worth avoiding.

The sum of the deviations (414,617,839) is up for the last two weeks – time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are up – time to invest.

My current investments:
SAutomotive has a price of $53.63, a sell price $50.95, a relative rank of 02, and is a hold.
SBiotechnology has a price of $172.17, a sell price TBD, a relative rank of 01, and is a buy.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in SBiotechnology

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 40% invested

06 September 2013

Stock Trader’s Almanac 2013, updated each year by Jeffrey A. Hirsch & Yale Hirsch, contains a chart on page 148 which lists the Nasdaq monthly performance from January 1971 through April 2012. September is the worst month of the year with an average loss of 0.7%. Over the same time period, January is the best month with an average gain of 2.9%. Investors Business Daily claims the market is still in correction.

The sum of the deviations (674,414,617) is not up for the last two weeks – not a time to invest.
The DJ Wilshire 5000 index is below its 50 day moving average and the average is increasing – not a time to invest. Both trends are not up – not a time to invest.

My current investments:
SAutomotive has a price of $52.95, a sell price $50.50, a relative rank of 02, and is a hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 20% invested

30 August 2013

Dr. Chris Kacher with a PHD in nuclear sciences in 1995 (http://en.wikipedia.org/wiki/Chris_Kacher) wrote a book in 2010 titled “Trade Like an O’Neil Disciple: How We Made 18,000% in the Stock Market.” His web site is www.virtueofselfishinvesting.com. In his interview on the Gabriel Wisdom show last week he said he sold everything in this August after the Nasdaq had five distribution days in the last 20 days. Distribution days are days the Nasdaq market is down with higher volume. It is interpreted as day when the large portfolio managers are selling more than buying. O’Neil is the founder of Investors Business Daily and wrote the book “How to Make Money in Stocks”. I went to a seminar he presented about 20 year ago and sure wish I had paid more attention to his presentation. I am currently slowing reading the latest book his staff has published “How to Make Money in Stocks: Getting Started.” Investors Business Daily’s Market Pulse Current Outlook is still “Market in Correction” which IBD says is time to protect your profits and not a time to buy.

The sum of the deviations (672,674,414) is not up for the last two weeks – not a time to invest.
The DJ Wilshire 5000 index is below its 50 day moving average and the average is increasing – not a time to invest. Both trends are not up – not a time to invest.

My current investments:
SAirTransportation has a price of $48.61, a sell price of $49.17, a relative rank of 27, and is a sell.
SAutomotive has a price of $51.08, a sell price $50.50, a relative rank of 02, and is a hold.
SBrokerage&InvestmentMgnt has a price of $61.73, a sell price $62.44, and is a sell.
JapanSmallerCompanies has a price of 12.32, a sell price 12.75, and is a sell.
When I sell JapanSmallerCompanies, I will pay a fee of 1.5% since I’ve held it less than 90 days. Since it fell 3.6% this week, I do not think holding it for another 50 or so days is worth it.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Sell SAirTransformation, SBrokerage&InvestmentMgmt, and JapanSmallerCompanies.

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 20% invested