Month: October 2013

Dorsey Wright & Associates is a money management and research firm. They produce a weekly podcast (which you can listen to with windows media) on their web site (dorseywright.com) and the one on 10/16 was rather exceptional. They started by indicating the market had moved into a structural bull market which in the past has from 8+ to 20+ years. The podcast discusses the method they manage their ETFs. DWA manages 4 ETFs: PDP which holds ~100 mid and large cap stocks, DWAS which holds ~200 small cap stocks, PIE which holds ~100 emerging market stocks, and PIZ which holds ~100 developed market stocks. Every quarter they evaluate the the hundreds of stocks which meet the ETF’s criteria. They then select the best performing stocks and adjust the holdings of each fund. In the podcast they discuss a global technical leaders strategy of investing in the four ETFS and cash. In the best perfroming fund 50% of your portfolio is invested, 33% in the second best, and 17% in the third best. Over the last 3 months PIZ is up 13%, DWAS is up 7%, PDP is up 5%, PIE is up 3% and cash is up 0%.

Jim Rogers discusses investments: http://www.youtube.com/watch?v=_WiuofkAAWs

The sum of the deviations (869,1120,1123) 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 $55.55, a sell price $53.10, a relative rank of 06, and is a hold.
SBiotechnology has a price of $175.44, a sell price $169.78, a relative rank of 02, and is a hold.
JapanSmallerCompanies has a price of $14.07, a sell price of $13.56, a relative rank of 09, and is a hold.
Nordic has a price of 44.81, 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 Nordic.

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 80% invested

Chuck Jaffee produces a market show which you can hear at www.moneylifeshow.com every day. On 04Oct he interview Elaine Garzarelli on her view of the market. Garzarelli has been generally, correctly predicting the market for 30+ years. Listening to her interview is worth doing. She currently thinks the up trend will continue. Jaffee’s show is interesting and features many market money managers every day. I listen to it on the downloaded podcasts.
This week Investors Business Daily switched from “uptrend under pressure” to “confirmed uptrend” which say now is the time to buy.

Jim Rogers:US is exceptional…it’s largest debt nation in the world!
http://www.jimrogersinvestments.com/2013/10/jim-rogers-cut-spending-with-chainsaw.html

Not my only excuse, but one contribution to my slowness in publishing this weekly email is the Samsung Windows 8 computer I purchased last November. The first one lasted a week before it was replaced – bad sound. I started documenting the BSOD (blue screens of death) on my current machine in July and over the nest 3 months has 50+, not counting the sound which quit. So I took it back to the Microsoft store on 05Oct, they reimaged it, and I got it back on 12Oct. They did give me a list of the programs they deleted. I have had 7 BSODs since then – not ready for prime time in my opinion. Back to the Microsoft store this weekend. With every BSOD you lose what you were working on. Sort of like the old mainframe days when the minute you saw lightning or the lights flicker you would yell “Save” so everyone would save their work before the machine died. My current BSODs do not give any warning.

The sum of the deviations (874,869,1120) 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 $55.89, a sell price $53.10, a relative rank of 01, and is a hold.
SBiotechnology has a price of $172.46, a sell price $169.78, a relative rank of 04, and is a hold. SBiotechnology has recovered enough to it is not a sell, and also I’ve owned it 30+ days so I can sell it without Fidelity yelling at me.
JapanSmallerCompanies has a price of $14.27, a sell price of $13.56, 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

SAutomotive and JapanSmallerCompanies are doing ok, but SBiotechnology is not. Based on just the 5% decline from the highest weekly close since owned, it should be sold and I have a 3.2% loss on my position. However, I have not owned it for 30 days and do not want to violate the dumb, stupid Fidelity rule on round trip trades. They get nasty. Next week I will have owned it 30 days and we shall see what happens.

The sum of the deviations (899,874,869) 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 $55.03, a sell price $52.28, a relative rank of 01, and is a hold.
SBiotechnology has a price of $166.97, a sell price $169.78, a relative rank of 05, and is a sell – see above.
JapanSmallerCompanies has a price of $13.95, 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

So the news says the US government is shut down – based on reports from the US administration. 17% of the government is shut down, 83% is not shut down, and many employees have been recalled. (We are also going to pay them for not working.) 83% is the same number of students who attend high school in New York on an average day. Maybe New York high schools are shut down. It is also interesting the the EPA says 93% of their employees are not essential – I think that is 7% too low. 

The news says US government is going to default and destroy the world economy based on reports from the US administration. The US is not going to default (this time) – it gets twice the income needed to pay the interest every day – now some programs may have to be cut. Any number of US administration officials and news outlets are projecting disaster. The US public is being lied to and played for suckers so the US administration can get what it wants. Keep lying and the public will believe and worse, it may come true. I think this month’s market actions are an indication these lies are working and it is our investments the lies are killing.

Investors Business Daily (IBD) changed the market outlook to “Market in Correction” Tuesday PM.

I wrote the above on Wednesday, then BHO nominated Yellen to become next fed chief. The belief is her views on printing money makes Bernanke look like a tight wad. The market believing bigger floods of money are coming, took off.

On Thursday. IBD changed the market outlook to “Uprend under pressure” on Wednesday PM.

The Dividend Aristocrats are S&P 500 constituents that have increased their dividend payouts for 25 consecutive years. Currently there are 54 stocks on the list. This week a new ETF was launched which purchases these stocks – NOBL. It may be a good ETF to watch – http://investorplace.com/2013/10/dividend-aristocrats-etf-nobl-sdy/

This last week and next week until Wednesday is excessively busy with tax filings for those with extensions. At this time I do not have time to produce my normal price lists. I will put out an update as soon as I can.

SAutomotive and JapanSmallerCompanies are doing ok, but SBiotechnology is not. Based on just the 5% decline from the highest weekly close since owned, it should be sold and I have a 3.2% loss on my position. However, I have not owned it for 30 days and do not want to violate the dumb, stupid Fidelity rule on round trip trades. They get nasty. Next week I will have owned it 30 days and we shall see what happens.

I received an email from TraderPlanet offering me a free quarterly subscription to the TraderPlanet Journal. The issue available now starts with an article titled “Bill O’Neil Explains Why Growth Investing Still Works.” Bill O’Neil is owner and publisher of Investors Business Daily (IBD), author of several books, and inventor of the CANSLIM method of investing. You might want to subscribe at www.traderplanet.com/subscribe/.

Each Saturday afternoon IBD has a radio show (www.investors.com/radioshow/) and archives the show when it is completed. Over the next 3 Saturdays, celebrating their 100th radio show, they will have an interview with Bill O’Neil on investing. When you get the opportunity, please listen. You can also get the shows in ipod format. IBD has changed the Market Pulse Current Outlook to “Uptrend under pressure” due to the market results on Thursday. This translates to invest with caution, trent may be turning.

I was working with a tax client this week who was going to get 40k in capital gain with no other taxable income. He was surprised to lean there would be no tax on that gain. He was also surprised when I showed him if interest rates doubled, his bonds would lose 50% in value. He felt bonds were a risk free investment. It is true if you own individual bonds you will eventually get your money back (for what it’s worth) but if you own a fund, that is not true. At finance.yahoo.com take a look at the 6 months trend for TLT – the ishare barclays 20+ year treasury bond. It is only down about 10% over the last 6 months. Since it yields about 3%, owners lost 3+ years of interest with this decline. So much for risk free investments.

The sum of the deviations (997,899,874) 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 $54.55, a sell price $52.05, a relative rank of 02, and is a hold.
SBiotechnology has a price of $178.72, a sell price $169.78, a relative rank of 01, and is a hold.
JapanSmallerCompanies has a price of $13.83, a sell price of $13.500, a relative rank of 03, 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