Author: Flynn

“Last week, Third Avenue Focused Credit Fund suspended investor redemptions, and credit markets reacted violently. This was the first time mutual fund investors were similarly gated since the financial crisis of 2008. However, the $788.5 million Third Avenue fund might be the tip of the iceberg.”
http://finance.yahoo.com/news/why-the-current-credit-crisis-might-be-35-times-worse-than-you-thought-134706002.html
Contains a list in this URL which names the 35 funds which may freeze customer sales. If you own one of these mutual funds, I suggest you sell while you can.

Talking to Fidelity, they explained that the their list of “all” Fidelity fund distributions does not contain all Fidelity fund distributions. Turns out that there is not list of all Fidelity fund distributions. And again, calling Fidelity and entering your userid and password results in a longer wait than just calling Fidelity without identifying yourself. So their fund data not always easy to use and their phone support is not good.

Any time CashReserves, which never goes up, is on your top 20 funds, you know you are in a down market.

IBD TBP’s Market Pulse is “Uptrend under pressure” as of 12/18/15 – Not a time to buy. The Market Pulse went to Confirmed Uptrend on 12/16/15 and then to Uptrend under pressure.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 104.49, a sell price of 103.16, a rank of 01, and is a Hold. (ETF – XLY) – DIS
IRA#2
SITServices has a price of 39.43, a sell price 39.62, a rank of 13, and is a Sell. (ETF – XLK) -DIS
SSoftware&ComputerServices has a price of 122.87, a sell price 121.89, a rank of 02, and is a Hold. (ETF – MTK) – DIS
SConsumerDiscretionary has a price of 33.92, a sell price of 33.88, a rank of 19, and is a Hold. (ETF – FDIS) – DIS
STechnology has a price of 116.82, a sell price of 115.61, a rank of 08, and is a Hold. (ETF – IGM)
Four of these funds has a distribution which changes their sell price.

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

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

The price of copper has been an indicator of the state of world economic health because it is vital to so many industries. The price of copper has declined by 50% over the last 5 years. Another indicator of ecomomic health is the price of oil since it is also a vital part of the economy. The ETF which follows the price of OIL is USO. USO started trading at $68 when it opened in April 2006. It is now trading for under $12 or a decline of 80%. USO traded at $114 in 2008. I do not know what the drop in almost every commodity price is saying about the future of the world economy, but it does not look good. It nice to see oil decline and pay lower gas prices, but oil companies are probably the biggest investment positions in most major retirement funds.
I was talking with a couple from Brazil a week ago. They indicated since Brazil is dependent on commodity prices and also has serious political corruption (sound familiar?) the country is a depression. When I went to Brazil 8 years ago the Brazilian Real was worth $0.50 and now is worth $0.25. The couple indicated I should visit Brazil again because everything is so much cheaper than when I was there before. I did not mention I had a very small gain in BZQ (ProShares UltraShort MSCI Brazil Capped ETF) during the year.

So I talked to Fidelity last week and they had no solution for their failure to report distribution. The price of a fund is automatically reduced by the value of a distribution. So with major distributions not being reported today, I apent 90 minutes on the phone to Fidelity. Last week the agent said I could not look at fund details to see the distributions because they are not updated until Monday. This week the agent said I should look at the fund details to see distributions. I suggested looking at details for 100 funds was not practical. So Fidelity does not produce an accurate way to determine the exact price change of a fund. This is nothing new, it is just worse. I have complained for years about the problem which takes place every December. Somehow they just fail every December (and probably during the year, it is just not as obvious).
I used an estimate of the distribution for many of the funds and will be correcting it on Monday (Fidelity claims it will be fixed then). I do not plan to send out a new list, just include the correct numbers next week.

IBD TBP’s Market Pulse is “Market in Correction” as of 12/13/15 – Not a time to buy.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 104.39, a sell price of 103.24, a rank of 01, and is a Hold. (ETF – XLY)
IRA#2
SITServices has a price of 40.01, a sell price 39.98, a rank of 08, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 122.87, a sell price 121.89, a rank of 02, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 34.45, a sell price of 34.44, a rank of 18, and is a Hold. (ETF – FDIS)
STechnology has a price of 116.53, a sell price of 115.61, a rank of 06, and is a Hold. (ETF – IGM)
I am happy (I think)  and surprised that none of the funds declined below their sell price.

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 – 100% invested

A lot of Fidelity funds had a distribution this weekend and the distributions will continue weekly until 2016. I strongly suggest you not have the distributions reinvested into the fund which paid them. That represents a fund purchase of a fund you may not to buy or may be ready to sell. You have to call Fidelity to get that done.
As I reviewed the list of distributions this weekend, based on the price change in the fund (which declines by about the same amount as the distribution) I found a fund which had a distribution Fidelity did not report. I called Fidelity and verified that. In fact I made two calls at the same time. On one I indicated I was not a client and was able to talk to a  representative immediately and after 3 minutes of discussion, he gave me the information and agreed it was not reported. On the other I identified myself with userid and password and waited 31 minutes to talk to a representative. It took me 5 minutes of discussion to have him come to the same conclusion. On both calls I requested Fidelity provide better phone service to customers. Fidelity has been providing rotten phone service on weekends to customers for months and I’ve written them 3 times about it without success.

David Stockman produces a Contra Corner email each day. In the one on 12/05 there was an article titled “Bill Gross: De-risk Now, Wile E. Coyote Time Is Near”. “One day the negative feedback loop on the real economy will halt the ascent of stock and bond prices and investors will look around like Wile E. Coyote wondering how far is down.” Mr. Gross is the former manager of the world’s largest bond fund who joined Janus Capital Group last year.

IBD TBP’s Market Pulse is “Uptrend under pressure” as of 12/03/15 – Not a time to buy.
IBD TBP’s Market Pulse was “Confirmed Uptrend” for only 15 days before the 12/03 change.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 108.67, a sell price of 103.24, a rank of 01, and is a Hold. (ETF – XLY)
IRA#2
SITServices has a price of 41.84, a sell price 39.98, a rank of 05, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 128.30, a sell price 121.89, a rank of 02, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 36.06, a sell price of 34.44, a rank of 11, and is a Hold. (ETF – FDIS)
STechnology has a price of 121.67, a sell price of 115.61, a rank of 06, and is a Hold. (ETF – IGM) The sell price was adjusted for a distribution.

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 – 100% invested

“Long both yuan and US dollar, Rogers predicts a period of market turmoil next year once higher US base rates start to bite. Investors would flee to the greenback’s relative safety, he said, even though there was “no country so indebted in the history of the world” as the US was now.” Jim Rogers.
http://www.scmp.com/business/companies/article/1882261/fortune-be-made-cleaning-china-says-investment-guru-rogers

Doug Fabian, in his latest podcast, was quite bullish on Japan and Japanese equities.
Seems their “federal reserve board” and their government are working together to foster economic growth.
Sounds like a very constructive activity – something US should try.

On a completely unrelated subject, K92.3 Orlando’s Country (FM radio) is offering a chance to win 4 Disney annual passes. Like last week’s contest (as you reminded me), this is for Florida residents only. If you visit the K92.3 web site, listen to AJ & Ashley’s Second Date Update. Some of these are very entertaining.

IBD TBP’s Market Pulse is “Confirmed uptrend” as of 11/18/15 – a time to buy.
It is a week after IBD TBP’s Market Pulse said buy. The best fund to buy is SRetailing. I sold it about on 11/16 for a loss of 1.3% and I plan to invest in it again.

My current investments:
IRA#1 and IRA#2
Invest in SRetailing (my investment in ETF – XLY, did not decline to its stop loss price and I still own it).
IRA#2
SITServices has a price of 41.88, a sell price 39.98, a rank of 04, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 126.73, a sell price 121.11, a rank of 02, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 36.10, a sell price of 34.44, a rank of 05, and is a Hold. (ETF – FDIS)
STechnology has a price of 123.18, a sell price of 117.02, a rank of 11, and is a Hold. (ETF – IGM)

My portfolio changes this weekend:
IRA #1 – Invest 100% in SRetailing
IRA #2 – Invest 20% in SRetailing

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

On a completely unrelated subject, cokeholidaysweeps.com is offering a chance to win 4 Disney passes for Theme Park visits all year long. Give it a shot.

Returns for the month of October were better.
In October IRA#1 3%, IRA#2 1%, PDP PIE PIZ DWAS 2%, QQQ 7%, SPY/RSP 0%, DWTR 0%.
For the last 3 months, IRA#1 -14%, IRS#2 -5%, PDPetc 2%, QQQ new 4%, SPY/RSP new -6%, DWTR -4%.
September portfolio changes:
IRA#1 – Purchased FSRPX 10/12
IRA#2 – Purchased FSRPX 10/12, FBSOX 10/19, FSCSX 10/26
PDP PIE PIX DWAS – Purchased PDP 10/06, DWAS 10/12, PIZ 10/19
QQQ – Purchased QQQ 10/06
SPY/RSP – Purchased SPY 10/23
DWTR was power 4 – Purchased PSL 10/06, PXI 10/12, sold PXI, PSL 10/19, purchased DWTR 10/19

IBD TBP’s Market Pulse is “Confirmed uptrend” as of 11/18/15 – a time to buy.
It is a time to buy but none of my top 20 funds has had an increasing deviation from the its moving average for the last two week. It was a good week, but I’m still convinced this up market, the third longest in history, is terminating.

My current investments:
IRA#1 and IRA#2
CashReserves
IRA#2
SITServices has a price of 41.71, a sell price 39.98, a rank of 04, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 125.77, a sell price 121.11, a rank of 02, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 35.42, a sell price of 34.44, a rank of 11, and is a Hold. (ETF – FDIS)
STechnology has a price of 121.84, a sell price of 115.75, a rank of 09, and is a Hold. (ETF – IGM)

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 – 80% invested

The worst week in months. The Confirmed Uptrend which started on in October has ended. This uptrend lasted 42 days. There has been 9 Confirmed Uptrends issued by Investors Business Daily this year. It has been a relative untrending year. I follow the numbers, but still believe that the problems of too much debt which caused 2008 have only gotten worse. We have the federal reserve board (and the rest of the central banks in other countries) keeping interest rates at zero thus causing more debt.
BTW Downtown Disney is now called Disney Springs and no matter where you want to shop, it is at least a mile away from were you are.

IBD TBP’s Market Pulse is “Uptrend under pressure” as of 11/13/15 – not a time to buy.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 101.27, a sell price 102.62, a rank of 01, and is a Sell. (ETF – XLY). The associated ETF (XLY) has not hit its stop loss and has not been sold.
IRA#2
SITServices has a price of 40.78, a sell price 39.98, a rank of 03, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 122.79, a sell price 121.11, a rank of 01, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 34.56, a sell price of 34.44, a rank of 08, and is a Hold. (ETF – FDIS)
STechnology has a price of 118.46, a sell price of 112.54, a rank of 11, and is a Hold. (ETF – IGM)

My portfolio changes this weekend:
IRA #1 – Sell SRetailing
IRA #2 – Sell SRetailing

My portfolio market exposure after this weekend’s changes:
IRA #1 – 00% invested
IRA #2 – 80% invested

A podcast, “The ETF Store Show”, on 02 Nov featured a show on the 15 most important ETFs and the history of ETFs. I had not realized that SPY, an ETF which matches the S&P500, has been available since 1993. I have suggested to several others who expresed interest in investing that they just buy SPY and keep it as long as it remains above its 200 day average. In the last 22 years you would have sold SPY about 6 times, purchased it back 6 times and gained +/- 500%

IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 10/02/15 – a time to buy.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 108.02, a sell price 102.62, a rank of 01, and is a Hold. (ETF – XLY)
IRA#2
SITServices has a price of 42.08, a sell price 39.98, a rank of 03, and is a Hold. (ETF – XLK)
SSoftware&ComputerServices has a price of 127.48, a sell price 121.11, a rank of 02, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 36.25, a sell price of 34.44, a rank of 05, and is a Hold. (ETF – FDIS)

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Buy 20% STechnology (ETF – IGM)

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

There is a web site alletf.com which contains a Performance Quilt. Including leveraged ETFs in the quilt will illustrate how some ETFs are up over 100% during some years. Looking at the performace chart on stockcharts.com for the last 1000 days (about 5 years) indicates that TQQQ is up 566%, UPRO 366%, SPLX 358%, UMDD 291%, and MIDU 290%. I have never liked buy and hope investing but if you can stand the volatility, it may be worth a shot.
Another web site to look at is etfscreen.com. There are 7 ETFs which have been up more that 100% over the last year. 8 ETFs have been up more than 50% over the last 6 months. 5 ETFs have been up more than 25% over the last 3 months. 16 ETFs have been up over 25% over the last month. Again if you can live with the volitility it may be an investment for you. One ETF, DGAZ, has been up 20% over one week, 39% over one month, 106% over 3 months, 96% over 6 months and 163% over one year.

IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 10/02/15 – a time to buy.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 106.26, a sell price 101.29, a rank of 01, and is a Hold.
IRA#2
SITServices has a price of 41.68, a sell price 39.68, a rank of 03, and is a Hold.
SSoftware&ComputerServices has a price of 124.58, a sell price 118.35, a rank of 02, and is a Hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Buy 20% SConsumerDiscretionary

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

Sometime ago I mentioned the Power 4 investment strategy suggested on one of the Dorsey Wright Associates (DWA) podcasts. DWA provides the portfolios for 9 PowerShare momentum strategy ETFs. Each ETF – PYZ Basic Materials, PEZ Consumer Cyclicals, PSL Consumer Staples, PXI Energy, PFI Financial, PTH Healthcare, PRN Industrials, PTF Technology, PUI Utilities – are managed in the same manner. The funds are updated each quarter with a minumum of 30 stocks within all within the sector selecting the stocks with the best momentum. A complete list of Invesco PowerShare ETFs and their current holdings holdings (updated daily) can be viewed at https://www.invesco.com/portal/site/us/investors/etfs/.

After DWA started providing the ETFs portfolios, they set up a model called the Power 4. Its goal was to own the top 4 of these ETFs based on performance and go to cash when the top 4 were not positive. I tried to follow this model with limited success – if I had signed up for their web site service I probably would have been more successful. However, two weeks ago Invesco came out with another ETF which does it for me. PowerShares DWA Tactical Sector Rotation Portfolio (DWTR) is the ETF. Each month it is updated with the top 4 ETFs. Current it holds PSL – Consumer Staples, PEZ – Consumer Cyclicals, PTH – Healthcare, and PTF – Technology.

DWTR is expensive for an ETF – management fee of 0.75% per year (which includes the fees for ETFs it holds). However Fidelity Select Retailing Portfolio management fee is 0.81%, with a voluntary cap of 1.15% – a relative low fee for a mutual fund. Fidelity does charge me $8 to buy or sell DWTR, but there is no minimum holding period, orders can be executed anytime the market is open (mutual funds can only be purchased or sold at market close), and stop loss or stop limit order can be used.

Another interesting thing about ETFs, unlike mutual funds, you do not have to pay taxes for capital gains and losses caused by the ETF. Unlike funds which give you a distribution of capital gains and losses, ETFs do not. I’m not sure how it works, but you only pay capital gains and losses as a result of you selling the ETF.

All in all I think this does a better job in momentum investing than I have been doing since 1/6/82. I have switched my Power 4 portfolio to 100% DWTR and am maintaining a 7% stop loss. If it works out as well as I think it should, I may quit following Fidelity funds completely. I am also sure that there are other rotational ETFs, I’ve just not found them.

Returns for the month of September were nothing.
In September IRA#1 0%, IRA#2 0%, PDP PIE PIZ DWAS 0%, QQQ 0%, SPY/RSP 0%, Power4 0%.
For the last 3 months, IRA#1 -21%, IRS#2 -5%, PDPetc -3%, QQQ new -5%, SPY/RSP new -7%, Power4 -4%.
September portfolio changes:
IRA#1 – None
IRA#2 – None.
PDP PIE PIX DWAS – None
QQQ – None – third month for this portfolio.
SPY/RSP – None – third month for this portfolio.
Power4 – None

IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 10/02/15 – a time to buy. It has been 22 days since IBD said we are in an uptrend. I am still conviced the market is headed for trouble, but I only invest based on the numbers. I am buying SSoftware&ComputerServices and MTK as the ETF equivalent.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 103.61, a sell price 101.29, a rank of 01, and is a Hold.
IRA#2
SITServices has a price of 41.77, a sell price 39.68, a rank of 02, and is a Hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Buy 20% SSoftware&ComputerServices

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

Sometimes Fidelity just really sucks when it comes to customer services. After complaining many times on the phone, in early September I wrote a letter to the CEO explaining that the wait to get a rep on the phone, when I use my userid and password, was excessive – sometimes it was greater than an hour. I also explained that I could call and claim I was not a customer and get a rep in minutes. Somehow they changed their phone system in July. I received a useless answer to my letter claiming staffing problems. If staffing was the problem I should wait about the same time, customer or non customer. Last weekend as I waited 53 minutes on hold, during that wait I called on my cell phone as a non customer and the phone was immediately answered. So I wrote another lettter to the assistant, who had answered my first letter, suggesting he come up with another story. (I first suggest he find another lie to give me, but thought that was a little aggressive.) So I strongly suggest that if you want to talk to Fidelity on weekends, you not use your userid and password so you can get service.
The Federal Reserve should consider ways to make monetary policy more accommodative, including negative interest rates, said Minneapolis Fed President Narayana Kocherlakota. With negative interest, your 1k bank CD pays no interest and you get 999k or less back in a year. It is happening in a couple of countries in Europe.

IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 10/02/15 – a time to buy. It has been 15 days since IBD said we are in an uptrend. I am still conviced the market is headed for trouble, but I only invest based on the numbers. I am buying SITServices and XLK as the ETF equilivant. I am still holding XLY as the ETF equilivant to SRetailing.

My current investments:
IRA#1 and IRA#2
SRetailing has a price of 106.62, a sell price 101.29, a rank of 01, and is a Hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Buy 20% SITServices

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