Month: January 2016

Returns for the month of December were negative.
In December IRA#1 -2%, IRA#2 -2%, PDP PIE PIZ DWAS -4%, QQQ -1%, SPY/RSP -3%, DWTR -3%.
For the last 3 months, IRA#1 -2%, IRS#2 -2%, PDPetc -0%, QQQ 3%, SPY/RSP -6%, DWTR -2%.
December portfolio changes:
IRA#1 – None
IRA#2 – Sold FBSOX 12/21
PDP PIE PIX DWAS – Sold DWAS 12/14
QQQ – Sold QQQ 12/04
SPY/RSP – Sold SPY 12/14
DWTR – None
All sales (except for IRA#1 and IRA#2) were done with stop loss orders set for 7% below the latest highest close. I really like those automatic sell orders at any time during the day – unlike mutual funds which are only sold at the end of the day, and there is not minimum holding period – like Fidelity’s stupid 30 day hold requirement.

On Chuck Jaffe’s podcast, MoneyLife, for 20Jan16 he featured the the growth at a reasonable price baker’s dozen Sabrient Systems picks. It is a good show to hear. This years list is featured at Sabrientsystems.com but you have to click on firsttrustportfolios.com and then initial offering info to see the list. First trust builds a Unit Investment Trust (UIT) around these 13 stocks so you can buy them all with one purchase of a UIT. I think the UIT fees are excessive and if you want to buy them all it is cheaper just to buy all 13. In 2014 I followed all 13 and purchased one as it was going up. It was a small purchase, but it had a nice gain. I might try that again this year. It is real easy to put 10 or fewer symbols into PerfChart at stockcharts.com to see which investment is doing best over whatever time period you select. The best two over the last 30 days (adjust the time period by double clicking on the 200 days on the bottom axis to enter the number of days you want) are Adobe +3%, and T-Moble US up 2.6%.

On Consuleo Mack’s podcast, Wealthtrack, for 22Jan16 she featured the 10 excessively depressed deep value risky stock “robot” portfolio of John Dorfman. He says even he does not invest in all of them but they have done ~4X better than the S&P500 over the last 17 years. Wealthtrack.com/dorfman-valuable-investing/ contains the list and the podcast is worth hearing. Dorfman fells those stocks priced for perfection like Facebook, Amizon, Netflix, and Goodle are good shorts.

IBD TBP’s Market Pulse is “Uptrend resumes” as of 01/29/16 – If it is still an uptrend in a week, I will probably buy something. It changed to “Confirment Uptrend” on 01/26/16 and then to “Market in correction” as of 01/27/16
If it hadn’t been for Japan changing their policy to charge banks 0.1% interest on their deposits of excess reserves with the Bank of Japan (their FED) the market would not be up as much on Friday. The goal is to force banks to lend money to stimupate the economy and make their currency decline. It must be a good idea, it has worked so “well” in Europe for the last 18 months. The negative interest rate in Switzerland is now the highest at 0.75%.

My current investments:
IRA#1 and IRA#2
GovernmentCashReserves
IRA#2
GovernmentCashReserves

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

My portfolio market exposure after this weekend’s changes:
IRA #1 – 00% invested
IRA #2 – 00% invested

Not a bad week. Just a pause in the decline (in my opinion). The biggest up days occur during bounces in bear markets.
Doug Fabian has a podcast where he discusses various ETFs. On his 15Jan16 podcast he discussed where income investors should be investing their portfolios. He likes DBLTX (a mutual fund), BOND, or TOTL as a low risk income fund.The next level with a little more risk and a little more income he likes PFF. In a higher risk income fund he likes closed end funds which are currently selling at a discount and can be purchased in an ETF as PCEF and YYY.
In the 22Jan16 podcast he discussed growth investments and started by saying it was not a time to buy growth investments.

IBD TBP’s Market Pulse is “Market in correction” as of 12/29/15 – Not a time to invest.
Only GovernmentCashReserves, which has an annual yield of 0.01%, is a buy on my list.

My current investments:
IRA#1 and IRA#2
GovernmentCashReserves
IRA#2
GovernmentCashReserves

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

My portfolio market exposure after this weekend’s changes:
IRA #1 – 00% invested
IRA #2 – 00% invested

So the worst, first week for any year in the stock market, became the worst, first two weeks for any year in the stock market.
Last week 37% of the Nasdaq stocks were above their 50 day average. This week the number is 29%. I am suprised the market did hot have a big week this week. My guess is that it is bound to have some great up days soon, before the decline continues. The only investments I own, other than money market funds, are a few shares of stock in the companies I work for as part of an employee stock purchase plan.

Has the US lied to you lately? Last week the US Bureau Labor Statistics announced the US gained 292k jobs in Decmember. Yet if you read the statistics in detail the increase was only 11k jobs. The other 281k jobs were a “seasonal adjustment”. About the same ratio was true for the November Jobs report also. Liers, damn liers, and staticians. Economic number watchers frequently complain about the unreliability of statistics from China, perhaps they should look at the US also. Maybe the US economy is not as good as the government claims.
If you have ~50 minutes, James Dale Davidson has a presentation where he tells you how bad things are and then tries to sell you is “Strategic Investment” newsletter. The facts he presents are true and scary. The conclusion may or may not be correct. The conclusions he presents are not positive. All in all an interesting sales pitch.

IBD TBP’s Market Pulse is “Market in correction” as of 12/29/15 – Not a time to invest.
Municipal Income and GovernmentCashReserves are the first and second fund on my list of best funds. They are also the only two funds which do not have a negative precent deviation. This is the first time in years that no other stock or bond funds had a positive precent deviation. I’m sure it also happened in 2008 and 2000.

My current investments:
IRA#1 and IRA#2
GovernmentCashReserves
IRA#2
GovernmentCashReserves

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

My portfolio market exposure after this weekend’s changes:
IRA #1 – 00% invested
IRA #2 – 00% invested

Probably the worst week I’ve ever had in investing. Everything is to be sold.
I really expected a big rebound this week. I expected the federal reserve board to say something. I expected the plunge protection committee to intervene. So much for expectations. The unemployment numbers looked good today and yet the market closed down. In bear markets good news is bad and bad news is worse. In bear markest you sell on bounces. Based on some of the business news shows, this is the worst first week of a year in market history.
Last week 43% of the Nasdaq stocks were above their 50 day average. This week the number is 37%. At major market bottoms the number is close to 20%. The 50 day average is significant because major investors use that as a indication of when a stock should be sold.

IBD TBP’s Market Pulse is “Market in correction” as of 12/29/15 – Not a time to invest.
It took 6 days for the “Confirmed Uptrend” to be turned into “Market in correction.” It looks like the major investors did all they could to keep the market from going down significantly before year end so their numbers would not look too bad. Then when the year ended, they had no reason to continue to “paint the tape.”

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 98.70, a sell price of 103.16, a rank of 08, and is a Sell. (ETF – XLY)
IRA#2
SSoftware&ComputerServices has a price of 113.13, a sell price 118.38, a rank of 11, and is a Sell. (ETF – MTK)
SConsumerDiscretionary has a price of 32.10, a sell price of 33.88, a rank of 42, and is a Sell. (ETF – FDIS)
STechnology has a price of 109.98, a sell price of 115.61, a rank of 50, and is a Sell. (ETF – IGM)
My funds lost between 6.06% to 6.87% this week. Every ETF I owned was sold this week when its 7% stop loss was hit.

My portfolio changes this weekend:
IRA #1 – Sell SRetailing
IRA #2 – Sell SRetailing, SSoftware&ITServices – new name, SConsumerDiscretionary, STechnology

My portfolio market exposure after this weekend’s changes:
IRA #1 – 00% invested
IRA #2 – 00% invested

I was looking for a podcast on staying asleep since I wake up about 4am every day and found one by Tim Ferriss. I generally do not listen to The Tim Ferris Show podcasts since most are not on investing and last 2+ hours. His podcast from Oct 16 called “5 Tools I Use For Faster And Better Sleep” had a very interesting sponsor. wealthFront.com/tim offers automatic wealth management at only a 0.25% management fee. They have an evaluation quiz to determine their recommended investments for your age, risk adversion, income, and investment assets. The portfolio they suggested for me are 6 or 7 ETFs. As I decrease my risk tolerance I get more municipal bond ETFs and the less stock ETFs, expecially the US, foreign, and emerging market stocks. They offer slightly different suggestions for IRAs. They use Modern Portfolio Theory (MPT) developed by Markowitz and Sharpe who shared the Nobel Prize in Economics in 1990. A lot has been written about MPT – both suggesting it is great and suggesting it is rotten.
I do suggest you not place too much value on winning the Nobel Prize in Economics. Scholes and Metron won it in 1997. They, along with others, started Long-Term Capital Managment LP (LTCM) in 1993 which made 21% the first year, 43% the second year, 41% the third year but by 1998 had to be bailed out by the Federal Reserve Board and several banks and was liquidated in 2000. The partners once had 1.9b invested of their own money invested in LTCM and ended up with zero.

IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 12/29/15 – If it is still the same in a week I will buy something.
My personal thought is with 43% of the Nasdaq stocks above their 50 day average it is not too bad, but not good.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 105.21, a sell price of 103.16, a rank of 01, and is a Hold. (ETF – XLY)
IRA#2
SSoftware&ComputerServices has a price of 121.41, a sell price 118.38, a rank of 03, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 34.17, a sell price of 33.88, a rank of 29, and is a Hold. (ETF – FDIS)
STechnology has a price of 118.09, a sell price of 115.61, a rank of 10, and is a Hold. (ETF – IGM)
My funds lost between 0.11% to 0.96%. Not very wonderful.

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 – 80% invested