EDINBURGH, Scotland — Scottish voters decided they are better off remaining part of the United Kingdom, a blow against independence that produced a huge sigh of relief in London and averted an uncertain future for the country.
Thursday, September 18, 2014
Monday, September 15, 2014
Not a good day for growth stocks. Check out the IBD50! Wow!
$SPY - Everyone says they want a pullback in stocks but as soon as one happens they get scared and don't buy.
Wednesday, September 10, 2014
Yes, there are lots of competitors out there. Seems like there are gourmet burger places all over the place that sell food that isn’t too much more expensive than a McDonalds meal. Some fast food and casual diners are seemingly higher quality and more fashionable. Folks want to at least think they’re eating healthier, and McDonalds is associated with an unhealthy lifestyle. (Heads up: 2400 calorie burritos won’t do your body any favors, either!)
And what’s next, McBrunch?
Fed Weighs Change to Rate Guidance in Quest for More Flexibility
Jeff Kearns, Christopher Condon and Steve Matthews
Bloomberg - Bloomberg - Wed Sep 10 17:00:00 UTC 2014
Federal Reserve officials are considering whether to alter their guidance on the likely path of inte...
If you have Windows 8, open this in Finance.
Tuesday, September 09, 2014
Apple Unveils New iPhones and Watch
The Wall Street Journal. - The Wall Street Journal. - Tue Sep 9 19:55:37 UTC 2014
In an ambitious blitz of new products, Apple Inc. unveiled a pair of larger-screen iPhones, a sleekl...
Monday, September 08, 2014
$SPY - The road is littered with bad market calls in 2014. I know I’ve made some, expecting the correction that never comes. After all, it’s a mid-term election year, and we’re guaranteed a correction of gut wrenching proportions sometime during the calendar year, to be followed by a glorious rally. So far, we’re just getting the glorious rally part of the deal.
Yes, there have been a few teases to the downside. But after a few days of getting folks riled up and the TV business networks unleashing the bear market forecasts, it’s been rip city, baby. This is an amazing picture!
Now we are on the verge of a few market catalysts that one would think should alert contrarians. The first was a Barron’s cover this weekend. Uh, tempt fate much?
Tuesday is the new product announcement from everyone’s favorite fruit company, Apple! $AAPL. Okay, so the rumors are that we’re getting multiple sized iPhones, and maybe some sort of new wearable. Folks are calling this the biggest Apple Event since Moses parted the Red Sea with an App from the first gen iPhone. Is this a potential sell the news event where the heavily index weighted AAPL drags down the index trackers? Stay tuned.
Finally, there is the Alibaba IPO, $BABA. You can’t watch five minutes of a financial news channel without someone mentioning the hot IPO and the best ways to play it. $YHOO – Yahoo stock has put on a nice rally as it will be a benefactor of the IPO feeding frenzy. I think $BABA can be a huge winner, too. But then I’ve caught the momo fever, too.
So where am I at right now? Mostly long. I still have some high flyers even though I’ve trimmed around the edges (but looking for somewhere to put that, too). I believe in the pullback that never comes, but grew tired of waiting for it. I am probably destined to suffer through it when it eventually comes. (Hopefully, that’s from much higher levels!)
This is the week before options, and if the market is going to pull back this looks like a likely spot. Although there is no reason to think that any dip won’t be bought up quickly. There are always the external headline news threats, but those haven’t done much damage so far this year.
Long and strong.
Final thoughts: Nice comeback win from Carson Palmer and the Arizona Cardinals. It’s been a great opening weekend to the NFL. My biggest surprise was the Bears losing at home to the Bills. I imagine that knocked a lot of folks out of their elimination pools in week 1.
Saturday, September 06, 2014
Here is the latest on the IBD 50 stocks investing strategies vs. $SPY
Since I last updated the strategy, the market has been on an amazing run and the popular, high beta stocks have been outperforming. As the portfolios reallocate each Friday night to the latest IBD updates, all of the portfolios are outperforming the SPY. For the week, there were 28 stocks up and 22 stocks down for the IBD 50.
AMBA led the IBD 50 with a return of 7.74% for the week. The biggest loser for the IBD 50 was FANG, down 8.22%.
The total return since 2/8/2014 is outperforming the SP500. As the market rallies, the portfolios concentrated in fewer high-flying positions are outperforming the portfolios that are more diversified with more positions.
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 $567.15.
The portfolios concentrated in fewer holdings are outperforming the market as a whole. Only the IBD 50 is underperforming the SPY at this time.
For the month of August, the IBD 50 has 44 gainers and 6 losers. Each portfolio smoked the returns of the market. And the more concentrated the portfolio in fewer stocks, the better the return.
BITA was the top performer for the IBD 50, returning 61.57%. It was also in each of the portfolios, so the more concentrated holding benefitted each portfolio dramatically. For example, if you own only 5 stocks and one of them is up 61%, it’s likely you’re looking at your account statement and wearing a watermelon smile. The weakest stock in the IBD 50 for August was ARRS, losing 10.42%.
Trading costs $109.45
As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed. Going forward, I will list the “in and out” rebalancing costs for each strategy. I will assume a $9.95 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.
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.
Here 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. (Granted, none of us have a chance to buy that pick until the Monday open, but I wanted to give each guru the closing price on the day they made the pick and not any reaction or bump that occurs at the open on Monday morning).
Larry Glazer has only made one pick, F (Ford). I may have to set a "minimum picks" eligibility requirement. But for now, having just one pick "for all the marbles" is a valid investment strategy. Some folks believe that over diversification leads to mediocre performance, and that the only way to make your fortunes is to concentrate your investments in just a few stocks. This works great if you pick the right stocks, and underperforms if you pick the wrong stocks!
One other observation is that Ben Stein and Adam Lashinsky "tend to" (but not always) pick diversified index ETFs, large mutual funds, or Berkshire. It doesn't surprise me to see their results close to the SP500, but underperform due to expenses and fees of their holdings.
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).
Tuesday, September 02, 2014
Silicon Valley Meals Whet IRS Appetite
The Wall Street Journal. - The Wall Street Journal. - Tue Sep 2 17:18:29 UTC 2014
There is a grumpy new face in line at Silicon Valley's lavish freebie cafeterias: the Internal Reven...