Tuesday, November 04, 2014

Republicans Take Senate!

$SPY – The GOP takes the Senate, and gridlock will continue. The stock market tends to like it when each side cancels each other out.  The difference will be that instead of Harry Reid stopping legislation, President Obama will have to use his veto pen.

The only way legislation gets enacted is if there is compromise.  There are a lot of pro-growth ideas coming from the Republicans, from the Keystone Pipeline to corporate tax reform.  But it will be hard to push those through the mighty veto pen of the President.

Still bullish on stocks, though.

Thursday, October 30, 2014

#240: market seasonality: the end of the bad season

Monday, October 27, 2014

$TWTR - Twitter Crash!

$TWTR - Twitter stock crashing after earnings this afternoon.  I follow this one and facebook as they both seem to take a lot of my online time.  

I still think this stock plays out over time as the place where folks get instant news and reaction to news.   Dips are probably buying opportunities. 

Just thinking out loud. 

Sunday, October 19, 2014

IBD Top 50 Stocks Strategy – 10/19/2014

Here is the latest on the IBD 50 stocks investing strategies vs. $SPY

imageDespite the crazy hair-pulling volatility, the IBD 50 portfolios outperformed the broad index this week.   For the week, there were 32 stocks up and 18 stocks down for the IBD 50.

ATHM led the IBD 50, up 18.19% for the week.  The biggest loser for the IBD 50 was LAD, down 12.84%.

The IBD 50 portfolios total return since 2/8/2014 are underperforming the SP500. For anyone expecting a bounce or a rally into the end of the year, what outperforms from here?  Will the strategies continue to lead the way in the direction the market is heading?

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.  Dividends are excluded from total returns.

Trading costs $706.45.

image The IBD monthly strategy is mixed versus  the SP500.

The portfolios concentrated in fewer holdings are performing better than the more diversified portfolios. Only the IBD 5 has a positive return at this time.

The IBD 50 has 7 gainers and 43 losers. 

ATHM is the top performer for the IBD 50, returning 12.31%.  The weakest stock in the IBD 50 so far is SLCA, losing 24.28%.

Trading costs $149.25

I will assume a $9.95 trading cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif.  Note that Motif limits the size of portfolios to 30 stocks).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered.  The value for SPY is based on buying 2/8/2014.

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

Fox Business Block Gurus Update – 10/19/2014

imageHere is an update on how the Fox Business Block gurus are doing year to date compared to the indices (excluding dividends).  This return is based on investing $1000 per weekly stock pick at the closing price Friday night. 

Larry Glazer has only made one pick, F (Ford).  He lead the league for awhile, but that company has taken a hit lately.

Rich Karlgard has also made just one pick, INTC (Intel). 

Ben Stein makes a rare appearance near the top of the list.  The index trackers seem to be holding up better than individual stocks, and Ben tends to stick to picks that track a market index or are at least widely diversified.

It doesn't surprise me to see Gary B. Smith and Gary Kaltbaum near the top of the list.  I've often thought that those two seem to be the most consistent.  Maybe this kind of study is confirming my gut feeling.

Charles Payne "tends to" pick volatile stocks.  As the market trends strongly in one direction or another, his picks have a little extra beta to the upside or downside.  One of his picks in April, $GTAT, went bankrupt.  That’s a -100% return for this study.

At some point, I will go over each guru's best and worst picks.  Maybe during a lopsided Thursday Night Football game.  (As if we haven't had enough of those...)


Nothing shocking here.  My suspicion was that the Cashin' In gurus would underperform the other gurus, and that most all of the gurus would underperform the SP500 (SPY). 

Wednesday, October 15, 2014

Panic at the Disco

$SPY $QQQ - buying some stuff near the lows.  Did some this morning already. 

I have been waiting for the panic open and we got it today. I thought a reversal should take the whole mess into the green. Looked like it was going to happen quickly.  

But market gave almost all back as of now.

Keep a level head, right?  

Travel stocks are screwed for now.  Ebola!  Heck and fuel costs should be dropping like a stone and would normally be helping out...

Tuesday, October 14, 2014

Market Thoughts!

image $SPY - The stock market has been in correction mode the last couple of weeks, and where the heck have I been!  I am partially in cash and waiting for someone to ring a bell at the bottom of the correction.


But seriously, I have had a watch list ready for the last few weeks with stocks I have been wanting to buy.  I may have missed a few at yesterday’s lows.  But I do think that the bull market is still on.  I started adding to some positions Thursday and Friday, and plan to continue here and there.  I would love to see a big gap down early in the morning and a reversal through the day.

Here are a few bullet points.

  • The Federal Reserve:  Tapering ends soon and the Fed flooding the country with cash ends! I believe this has made the rich richer, going into stocks and real estate.  Of course, this has also helped the economy as a whole.  Today, a Fed Head said that the Fed would be willing to revisit Quantitative Easing if the economic numbers stalled out.  “Data Dependent” is the new phrase that pays.
  • Ebola:  We don’t know how bad that is or will be down the road.  It is scary.  I think this impacts travel stocks.  So things like airlines, cruise ships, and travel related companies are going to struggle.  Folks are buying out Hazmat suits!  Every sneeze seems to halt an airline.  With a long incubation period, this could continue to keep folks scared for a while.
  • Russia:  The Ukraine crisis is on Page 2 these days, but the impacts from Russian mischief are impacting Europe and world economies.  Heck, i remember early on when I tried to play Russian stocks for a bounce and hoped there would be a quick resolution.  It drags on and on.  I’m out of those stocks, by the way.
  • Europe:  See above.  Germany is tanking, for goodness sakes.
  • Goofy Stocks:  I’m looking at you, $GPRO and $MBLY.  But there are also biotechs and other companies that either have IPO or ramped up without much if any earnings.
  • Oil:  Falling oil prices are a positive impact on all of us.  The less we spend on gasoline, the more money we have to spend on other things.  (Like hazmat suits).  The oil boom in the US is having a huge impact on world oil markets.  Combine that with declining demand due to slowing world economies, and prices have been falling.
  • US Election:  Every four years, there seems to be a stock market correction and then a powerful rally into the next year, that coincides with the US mid-term election.  The reasons for the correction differ from cycle to cycle, but it seems to happen no matter what.