Wednesday, November 15, 2017

Are the GOP Tax Cuts Dead?

Analysis: GOP tax plan deeply unpopular — and unimportant to many Americans.


On Tuesday, the Senate proposal was expanded to include a repeal of the individual mandate that’s part of the Affordable Care Act (better known as Obamacare). The effect was to create a sort of policy Frankenstein (actually, a policy Frankenstein’s monster) that combines two of the party’s biggest priorities. It’s an iffy move, given the deep unpopularity of the health-care proposals the Republicans were proposing. But, then, two new polls show the Republican tax proposal isn’t that popular, either, even before health-care reform was jammed inside of it.

The Kaiser Family Foundation asked Americans what Congress and the president should focus on. What’s important to address, the survey asked: Tax reform? Reauthorizing the children’s health insurance program (CHIP)? Funding the recovery from this year’s hurricanes?

More than 6-in-10 Americans said CHIP reauthorization and hurricane recovery should be a top priority. Only 28 percent said reforming the tax code should be.

https://a.msn.com/r/2/BBF0Y6q?m=en-us&ocid=News

This is from the Washington Post.  So...  #FakeNews

But is it?

I get this feeling that the tax cuts are dead.  The Democrats have done a great job as the opposition party.  It doesn't matter if they're right or wrong.  They have persuaded enough people that whatever the Republicans are doing regarding health care and tax cuts is straight out of the Adolf Hitler playbook.  Or Ronald Reagan (same thing, they say).

I'm one of those people in California who would probably end up paying more taxes, should the Republican bill pass.  But I think that the Republicans have this one chance to reduce corporate taxes and income taxes for most people.  And those "most people" live in a lot of those battleground states!

The line I bolded in the quote was a key point in the WaPo article.  People want the government to spend other people's money.  There are always enough just causes and emotional buttons that need to be pushed.  Who could be against feeding kids or hurricane aid?  Or free college?  Or affordable housing? Or ...?

Just not enough money to do everything for everybody.

But I think the tax cuts are dead.  Spend on, Washington.  Spend on.

Monday, November 13, 2017

Roku

Can Roku Stock Keep Going After Last Week's 70% Pop?

Wednesday afternoon's hot quarter suggests that Wall Street was underestimating Roku's potential. All but two of the seven underwriters that took Roku public slapped it with uninspiring neutral ratings with the stock in the low $20s last month. The stock is now in the low $30s after hitting a new all-time high on Friday.

Roku's model is more compelling than you may think. Its operating system is now built in on a fifth of the smart TVs being sold. Hardware sales are sluggish -- player sales are flat through the first nine months of the year relative to a year earlier -- but the growing installed base of video buffs with either Roku media players or devices running Roku OS is delivering explosive platform growth. We've seen active accounts soar 48% to 16.7 million over the past year. Engagement is clicking as consumption, up 58% to 3.8 billion hours during the third quarter, is growing faster than the active base.

https://a.msn.com/r/2/BBESxsu?m=en-us&ocid=News

Roku.  Apple TV.  Amazon Fire.  Chromecast.

I own three Roku players and one Apple TV.  I have checked out a Roku TV.  I think Roku gets it compared to the others.  

Roku is easy to use.  There are a ton of apps and content for the Roku.

When the stock went IPO, I thought maybe I should short it.  Heck, it looks like a little device maker standing against the forces of much larger companies with much larger budgets.  And I wonder if a lot of the stock pop is due to people who think like I do, and that this isn't going to work.  But maybe these folks have been forced to cover their shorts since Roku published their earnings numbers!

Anyway.  I'm thinking about getting a Roku TV for my office.

Bitcoins or Tulipcoins?

Bitcoin's roller-coaster ride cuts $38 billion before reversal.

Bitcoin is proving that investing in digital currencies isn’t for the faint of heart.

After plunging as much as 29 percent from a record high following the cancellation of a technology upgrade on Nov. 8, the largest cryptocurrency came roaring back in early trading Monday before fluctuating between gains and losses.

“Crypto trading is not for the novice investor,” said John Spallanzani, chief macro strategist at GFI Securities LLC in New York.

https://a.msn.com/r/2/BBETi1k?m=en-us&ocid=News

Ya think?

Bitcoin has been a huge winner for those who got in early. Even if the crypto-currency has been extremely volatile. But is this thing really the kind of currency you can go to the grocery store and buy a loaf of bread? If the value is fluctuating like crazy, how can there be a stable market for anything?

Is Bitcoin the latest Tulip bulbs mania?

Sunday, November 12, 2017

The Magic of Compounding

A little patience and $5K a year will net you $1M, billionaire says.

"It's wrong for people to think that they have to be wealthy to get rich investing in the stock market, famed buy-and-hold investor Ron Baron told CNBC in a Friday interview.

"You have to have a small amount of money and invest it regularly for a long time, and live to get to be old. That's how you get rich," said the billionaire founder of Baron Capital, which has nearly $26 billion in assets under management. "

https://a.msn.com/r/2/BBEOYmE?m=en-us&ocid=News

Here's what I tell anyone who will listen:  Get started.  Pay yourself first.  Whenever your pay increases due to a raise or promotion, add at least 50% of the new money to the portfolio every month.  Stick with a large index like the SP500 or the Total Stock Market Index for diversification.

The biggest argument I hear is that people can't afford to do this.  Too many bills and other responsibilities limit the amount people say they can save.

My answer is that you can't afford not to!  Time passes by and it's difficult if not impossible to make up for lost years of saving.

Ode to Ozark

Did anyone watch Ozark on Netflix?  I'm just thinking out loud.  (Great show by the way).

The lineman got $63 an hour. The utility was billed $319 an hour.

"The small energy outfit from Montana that won a $300 million contract to help rebuild Puerto Rico’s tattered power grid had few employees of its own, so it did what the Puerto Rican authorities could have done: It turned to Florida for workers."

https://a.msn.com/r/2/BBESQr1?m=en-us&ocid=Money

The GOP Tax Cuts

Mnuchin Stands by Trump That GOP Tax Cut Is Biggest Ever

Steven Mnuchin stood by President Donald Trump’s declaration that the Republican plans now working their way through the House and Senate will deliver the biggest U.S. tax cuts ever. But the math says otherwise.

I don’t think we know enough about what the tax cut will look like.  They’re still arguing on what corporation tax cuts will look like and when they will happen.  What deductions on the personal side will be included and which ones won’t.  And they want this done by Christmas?

The biggest problem with the government budget is spending.  The government needs more and more money.  Can’t cut entitlements.  Can’t cut the military.  Can’t cut interest payments on the national debt.

What’s spending is there left to cut?

I think the Republicans know that they have to cut taxes.  They will cut taxes. 

Saturday, January 28, 2017

Top IBD 50 Stocks Update

The Dow, SP500, and Nasdaq all finished lower last week.  How did the IBD cream of the crop stocks perform?

image The top 50 stocks outperformed the SP500 index in the fourth week of 2017.

All IBD50 strategies were up more than the SP500 index.

The weekly strategies do a lot of trading in and out of the IBD50 index as the stock rankings shift, as if “chasing performance.”  This could work well in an extended uptrend, but not as well in a market moving down or sideways.

There were no losers in the IBD 5 portfolio this week!  The worst performer was ONLY up 4%!  $JCOM was the worst performer in the other strategies.  $NVDA and $AVGO led the IBD50 portfolios.

image
All strategies exclude dividends in the calculations.

How is the monthly investing strategy for the top 50 IBD leaders do?

imageFor the monthly strategy, all of the portfolios are now leading the SP500 index in the fourth week of 2017.

It’s always interesting to compare how the changes in the monthly vs weekly IBD 50 strategies diverge as the month goes on.

$HQY is the top ranked stock in the IBD50 for the month in the top 25 and top 50 portfolios.  $UBNT is at the top for the top 5 and $EVR for the top 10 portfolios.

Top 50 stock $FFIV leading to the downside for the month. The top 5 strategy has no losers, with $IDCC only up 2.24%.  $GATX is struggling in top 10, and $ANET leading the loser list for the top 25 and top 50 portfolio.

image

All strategies exclude dividends in the calculations.

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).

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

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 at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

Sunday, January 22, 2017

Top IBD 50 Stocks Update

The Dow, SP500, and Nasdaq all finished lower last week.  How did the IBD cream of the crop stocks perform?

image The top 50 stocks underperformed the SP500 index in the third week of 2017.

All IBD50 strategies were down more than the SP500 index.

The weekly strategies does a lot of trading in and out of the IBD50 index as the stock rankings shift, as if “chasing performance.”  This could work well in an extended uptrend, but not as well in a market moving down or sideways.

There were two major disasters for the IBD50 this week:  $GIMO and $ANET.  $GATX led the IBD50 portfolios.

image
All strategies exclude dividends in the calculations.

How is the monthly investing strategy for the top 50 IBD leaders do?

imageFor the monthly strategy, all of the portfolios are now lagging the SP500 index in the second week of 2017.

It’s always interesting to compare how the changes in the monthly vs weekly IBD 50 strategies diverge as the month goes on.

$HQY is the top ranked stock in the IBD50 for the month in the top 25 and top 50 portfolios.  $ESNT is at the top for the top 5 and $EVR for the top 10 portfolios.

Top 5 stock $NVDA leading to the downside for the month. $GATX struggling in top 10, and $ANET leading the loser list for the top 25 and top 50 portfolios.

image

All strategies exclude dividends in the calculations.

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).

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

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 at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

Saturday, January 14, 2017

Top IBD 50 Stocks Update

The SP500 was relatively flat the second week of 2017, and the IBD leaders played catch-up.

image The top 50 stocks outperformed the SP500 index in the second week of 2017.

With the weekly changes and rebalancing of the weekly portfolios, it seems that the strategies are chasing performance.

$HQY was the top ranked stock in the IBD50 for the week in the top 25 and top 50 portfolios.  $UBNT had a nice gain for the top 5 and top 10 portfolios.

image
All strategies exclude dividends in the calculations.

How is the monthly investing strategy for the top 50 IBD leaders do?

imageFor the monthly strategy, the larger portfolios are besting the SP500 index in the second week of 2017.

It’s always interesting to compare how the changes in the monthly vs weekly IBD 50 strategies diverge as the month goes on.

$HQY was the top ranked stock in the IBD50 for the week in the top 25 and top 50 portfolios.  $UBNT is at the top for the top 5 and $EVR for the top 10 portfolios.

Top 5 stock $NVDA leading to the downside to start 2017. $GATX struggling in top 10, top 25, and top 50 portfolios.

image

All strategies exclude dividends in the calculations.

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).

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

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 at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

Sunday, January 08, 2017

IBD50 Lags SP500 in Week 1

The SP500 started of 2017 with a 1.7% gain, but how did the IBD leaders do?

image The top 50 stocks collectively struggled to beat the SP500 index in the first week of 2017.

$NVDA is the top ranked stock in the IBD50 and negatively impacted the return of the more concentrated porfolios, as the stock was down -3.4% to start 2017.

The best performing stock in the IBD50 this week was $EVR, up 4.8%
All strategies exclude dividends in the calculations.
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).

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

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 at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

Market Begins 2017 Up!

One week into 2017 and the S&P 500 is up 1.7%. $SPX

I am a little surprised. I thought that once the calendar flipped over into 2017, that we would see some stock selling. People who have postponed paying 2016 tax rates on gains, who are worried about the Federal Reserve hiking interest rates, and who are concerned about the incoming Trump administration.

Eh. Bricks in the wall of worry so far. I remain close to 100% long, but worried and thinking I should book some gains and build up cash for the selling that we all know is coming.

Meanwhile... All 11 sectors of the S&P 500 are up so far in 2017. The health care sector is leading so far, up 2.9%. The utilities are lagging, up 0.5%.

These are the 10 best and 10 worst U.S. stocks of 2017

Monday, January 02, 2017

2016 Review–2017 Preview

I kept pace with the market in 2016, with a 12% return. 

The biggest winners were $T, $LVS, $UPS, and $XOM.

I also had a few ugly ones, including $JD and  $TWTR.

Two other large concentrations held me back a little, $QQQ and $FB. Tech and biotech were a little underwhelming in 2016.  The overall economy has been sluggish, and the Trump win in November has folks wondering what that means for large cap technology companies.  Small caps stocks sure seem to love the results of the election.

My largest position is in $VTI – which acted like a center of gravity for my overall performance.  I also have a large position in small cap index funds which helped.

Then I had a few names that towed the line with index, and didn’t do anything other that spit out a few dividends every quarter.

2016 was a year where I bought and held stocks and dollar cost averaged every month.  I didn’t chase the IBD hot stocks or take the hot tip of the day.  I did the least trading in 2016 than I ever have! I didn’t run my market timing model every day. I did not “sell in May and go away.”

By the way, had I used my market timing system using $QQQ, I would have made 8.8% on 10 trades, with 6 of them winning trades.

Heading into 2017, I am fully allocated and remain in the holdings I mentioned. 

I am still a long term believer in $TWTR.  I could just repeat what I said at the beginning of 2016.  I truly believe this is the go-to place on the web for instant news and commentary.  There was no better example of this than the 2016 election.  I spend a lot of time there.  (@muckdog if you want to follow – I do follow back!).

Rotating back into $XOM worked out well for me last year.  I’m thinking about selling it and moving into some international dividend stock like Nestle $NSRGY.

Last year I thought my big 2016 winners would be $FB and $DIS, and maybe $TWTR. Wrong!

I think $NKE is interesting heading into 2017, but I don’t have any positions in it.

My outlook is that with the presidential transition and after 7 years of a bull market, things could get a little rough in early 2017.  People may have delayed selling stocks in 2016 anticipating lower tax rates in 2017.  Plus uncertainty of what Trump wants to do and what the Federal Reserve will do.  I think we all assume the Fed will raise rates.

Expecting a low return 2017 and remaining long at this time.  May change,..  Follow me on my podcast for more!  (On the right sidebar and on iTunes –search for Muck).

Happy New Year!

IBD Top 50 Stocks Strategy – 2016 Final!

Here is the IBD 50 stocks investing strategies vs. $SPY. This analysis is from 1/1/2016 through  12/31/2016. 

The weekly strategy is investing $10,000 at the beginning of the year and then reallocating every week to the top 5, 10, 25 or 50 IBD50 stocks.

The monthly strategy is investing $10,000 at the beginning of the year and then reallocating on the last day of the month in the top 5, 10, 25, or 50 IBD stocks.

IBD went from Daily to Weekends only in the middle of 2016, so I did the best I could, using whatever the most recent IBD 50 rankings were every week and month when it was time to invest.

Quick analysis:  It’s tough to beat the unmanaged index.

imageThe Weekly Strategy total return for each strategy underperformed the SPY over the course of 2016.  Concentrating into fewer stocks was worse than using all 50 stocks.

All strategies exclude dividends in the calculations.

imageThe Monthly Strategy total return for each strategy also underperformed the SPY over the course of 2016.  But using the top IBD 10 stocks was at least close.

All strategies exclude dividends in the calculations.

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.

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

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 at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

2016 – Dollar Cost Averaging into an Index

If you had invested $1000 in an index ETF every Friday (or last trading day of the week) at the closing price in 2016, how would you have done?

image

Excludes dividends and trading costs. 
Some brokerages wave the trading cost if investing in certain index ETFs, as long as the investment is held for a certain period of time.

  • $SPY – SP500
  • $VTI – Total market index
  • $QQQ – Nasdaq 100
  • $IWM – Russell 2000
  • $EEM – Emerging Markets

Fox Business Block Gurus Update – 2016 Final Part 2!

Here how the Fox Business Block gurus performed individually (excluding dividends). 
This return is based on investing $1000 per weekly stock pick at the closing price Friday night. 

The stock picks started 12/31/2015 through the 12/23/2016 picks. In addition to total return, I tracked the percentage of winning picks.  Here is how they did!

image

image

image

Best picks and worst picks of 2016!

image

Fox Business Block Gurus 2016 Final!

imageHere’s how the Fox Business Block gurus performed in 2016 compared to the indices (excluding dividends).  This return is based on investing $1000 per weekly stock pick at the closing price Friday night.  The stock picks started 12/31/2015 through the 12/23/2016 picks, versus dollar cost averaging into the index ETFs during the same time period.

The stock market had a good 2016, so you think that everyone would look like a great stock picker in a rising market.  There is some saying about a monkey throwing darts at the stock page could pick winning stocks when the market is in an uptrend!

Rich Karlgard from Forbes on Fox is the 2016 winner!  Rich made 7 stock picks.  The most stock picks were made by the Bulls and Bears crew.  Gary Smith, Jonas Max Ferris and John Layfield all made 33 picks.  Scott Martin only made 5 stock picks for the year, and came in last place.

After the 2016 election of Donald Trump, Small Cap stocks roared and finished at the top of the index ETFs.  Overall, the index ETFs outperformed most of the gurus – as expected.

Only a few gurus beat the market.  And Adam Lashinsky and Ben Stein tend to pick mostly diversified ETFs.

How did the shows do compared to each other?

image

The Forbes on Fox team won the battle this year, although underperformed the market.  Also note that Cashin In doesn’t make stock picks anymore.  But I still have Jonathan Hoenig in that group for 2016.  After Eric Bolling took over, the show is mostly political and the stock talk is long gone.  Jonathan has moved on to appearing on the other shows when he is on. 

Most stock picks are made without any future guidance.  Once you buy, there is no advice to sell or buy more.  The shows do have an occasional “follow up” show that goes over the best and worst picks for each guru, and what they’d do with that one or two picks going forward.