Still Chugging Along

April 14th, 2014

April 14,2014

The VTI trade is now 572 days old and showing a profit of 53.7%.  Not that this specific trade is doing me any  good because I’m not in it.

To me its a signal that its still  ok to trade in this very changeable, volatile  market.  Up 2% ( $20,000 on a million ) one day and down 2% the next and so on.

I’m beginning to think that our new Fed Chairman, a heralded White Swan could, at some point,  be perceived as  a dreaded Black Swan by Wall Street.

This market is showing me that if you have a queasy  stomach, high momentum stocks are the last place to be.  Give me the far more gentle ride on a SPY, or  VTI.

I do own some stocks because I fancy myself to be something more than an ordinary investor.  Pure hubris on my part.  But, trust me,  I’ve learned my lesson and eagerly await a profitable , safe and final exit from Tesla and Facebook on the shore.

My core ETF  holdings…RPG, QQEW, XLV, ITA, XLF, QQEW, VB, VDE and IBB

My core Equity holdings…FB, TSLA, ITT, GE, CNQ, DFS.

Presently, my consolidated Portfolio is underwater 4.7%.

I intend to hold my positions until VTI tells me otherwise.

Richard Maurice Gore

 

 

 

Sell Signal for Gold – No Foolin !

April 1st, 2014

April 1, 2014

Gold did not survive March.  It closed below its 200 day moving average March 31,  so I sold my entire position this morning at the market open…at a loss of 3 %

On the other hand VTI ended March safely above it’s 200 day moving average.  Price $97.47…..200 day moving average $90.17.

Since its VTI that keeps me in the market, I thought I’d round out a few long positions.  I increased my holdings  in RPG, my #1 position,  ITA, XLV and XLF.

I am very interested in XBI and IBB, but they  represent too much beta for me to deal with at the moment.

Richard Maurice Gore

Cross Currents

March 24th, 2014

March 24, 2014,

VTI ( Vanguard Entire USA Equity Market )  As of the close March 21, 2014, the ETF ….VTI completed 557 days with no sell signal.  Accumulated profit, including dividends,  is 58.37%.    On March 31, VTI’s close, relative to it’s 200 day moving average,  will tell me to stay in or get out of the trade and the surf altogether…except for GLD which has its own month end  eject button..

GOLD ( GLD )   Friday concluded the 15th day of the long trade with a gain of 0.67%.  Yes, I know that the Crimea question looks to be concluded, but that is only part of what’s impacting GLD.  I’m just following the trail to the next bend ( March 31 )  to decide whether to sell.   Or,  add another 3% of my liquid net worth to my GLD  holding because GLD’s 50 day moving average has swung upward to positively intersect its 200 day moving average

QQEW / ZACK February 18 ( Fictional ) Portfolio. This portfolio is down 2.7% since inception.  The portfolio is comprised of any of the 100 stocks in the QQQ  100 Index which are accorded a Rank of 1 ( strong buy ) or 2 ( buy ) by Zacks.  My understanding is that the Zack #1 or # 2 Rank is given only to equities whose performance is derived from positive reporting, especially relating to positive earnings surprises.  This portfolio was constructed to tell me something about the thrust of the market.  Here, two factors could be impacting performance…the harsh impact our weather is having on GDP and/ or the market pausing for a refresher.  So, while the existing VTI signal says its safe to stay in the water. the recent performance of these stocks has me looking over my shoulder to make certain my water wings haven’t sprung a leak.

Think I’ll spend part of today checking the relative performance of some of the sector ETF s  in my portfolio and on my watch list.  These include VDE, ITA, XLF, XIV, XBI, RPG, and VB.

Richard Maurice Gore

 

Convergence

March 13th, 2014

March 13, 2014

 

Gold….the  ETF….”GLD”  ended February above it’s 200 day moving average, so I invested 7% of my liquid net worth in  GLD .  This investment is ahead 2.6% in eight trading sessions.

Now, I’m awaiting a confirmation that my decision was correct.   My thought is that the  confirmation will take place when GLD’s 50 day moving average ( trend line) crosses above it’s 200 day moving average ( trend line ).  We are almost there.  GLD’s 200 day moving average is $125.74.  It’s 50 day moving average, $ 123.45, and  climbing toward an intercept.  Should that happen, I’ll invest another 3%  of my liquid net worth, ( my final allocation to this asset ).

Why is GLD  awakening ?  You would think I’d know a little more about gold than I do, given that for 3 years my desk at Citibank, Johannesburg sat and vibrated about 5,000 feet above the floor of a working gold mine…. just across Fox Street from the main entrance to the Johannesburg stock exchange,  where trading  gold shares is very serious business.

But, I would never buy gold based on my analysis of what should happen to it’s price..  No, instead I consider myself  just an old Indian scout following a trail ( trend ).  My version of a broken twig or bent branch is found on a chart in doing trend analysis.  I don’t care whether the Chinese or George Soros is buying gold or why.  All I care about is that its being bought often enough and in sufficient quantity  to move the trend needle into the ” Buy ” zone.

I am a firm believer in using moving averages,  strength relative to the trend of  a relevant benchmark, and volume to  determine the viability of  a trend.

Where does the trail end ?  Gold can be volatile, so  I hope I don’t find the exact top because there could be a sink hole waiting just before trails end !   I’ll probably  exit with not  quite as much profit as possible.   In fact, as soon as I’m ” all in “,  my next move will be to locate the exits and formulate an evacuation plan..

Richard Maurice Gore

February 28 – Gold Signal +Staying Long

March 1st, 2014

Close February 28, 2014

VTI closed the month at $ 97.40.  This is 9.3% above its 200 day simple moving average of  $89.11.  It’s my barometer for staying long until March 31, 2014, unless,  at some point during the month VTI closes 5% below its 52 week high ( $ 97.86  ) less 5   % =  $ 92.97.  That would get my attention and with other factors could cause me  to lighten up by as much as  50% of my total invested position in the market. I would then wait until month end to determine the fate of the remaining 50% of my invested positions, ( or depending on tape momentum ) go back in.  Since I am not in the December 31, 2011 VTI month end trade, I trade around it.  For instance this week I liquidated my entire VTI position and replaced it with RPG ( Rydex SP 500 Pure Growth ).  Since Jan 1,  VTI is up  1.54% while RPG is up 6.55%.  So, I’ve narrowed my diversification from 3500 to 500 stocks and tilted from balanced performance  to pure growth. Its my expectation that as the market moves higher, momentum will grow more concentrated and RPG may evolve into OEF ( 100 names ) always with me keeping one eye on VTI and where it is in relation to its 200 day moving average.  VTI is my canary because its been on the right side of the trend for 500 plus days. And, when the trend ends…..well, you know the rest.

Gold ( GLD ) $127.62  finished February above its 200 day moving average, $125.89.  I could see by noon that this was in the cards, so I invested 7% of my liquid investment assets into GLD.

My February 18 ” Watch List ” QQEW / Zacks Portfolio finished the week with a gain of 0.30%  versus 1.3 % gain for SPY.  Since February 18 the Watch List portfolio has gained 2.53% while SPY has gained 1.11 %.   The Leaders are TSLA 23.5%, GRMN 16.4% and WYNN 9.1% – The laggards are EXPD, negative 5.6%,  MU, negative 3.5% and ADSK, negative 3.1%.  Of the 20 entries, 7 are in negative territory.  Which among this 20 has a compelling and sustainable competitive advantage over its competitors.? For me, that , and sustainable momentum,  will be the factors that determine how long  I tag along for the ride.  Time for me to begin to get to know more about some of these names.  But, be assured,  nothing I learn will stop me from bailing out, at least temporarily, if VTI signals the party is over or specific momentum begins to sputter..

Richard Maurice Gore

 

 

 

 

Housekeeping

February 22nd, 2014

February 22, 2014

As of this moment, there are 18,424 unread comments to me. ( This week )

Probably 18,423 of these comments are about Barbour Jackets, or Nike Air Express Sneakers etc.  Too bad, because in the past I actually had comments directed to me and I could read them and reply.  Since I am not a techie and have no idea how to stop the influx of all this intergalactic trash and spam,  I have had no recourse but to cancel all pending comments, understanding all to well I’m throwing the baby out with the bath water.  In fact I have no idea of how to access WordPress for their help.

So, if anyone out there has any idea on how I can control this, please contact me at rmg81836@gmail.com or simply comment about a post and I’ll do my best to reply

Richard Maurice Gore

 

Update Market Close February 21, 2014

February 22nd, 2014

February 22, 2014

” Watch List ” QQEW /Zack portfolio  was up 2.23% for a 4 day week, while SPY was negative 0.06% for the same 4 day period.

Biggest Gainers:  Garman 12.8%, XBI ( Biotech ETF ) 5.7% -( This was the substitute for Biogen ), Tesla 5.7% , Monster Beverages 4.5% and BIDU 3.1%.

Laggards: CHH ( Choice Hotels as substitute for Priceline ) negative 0.9%, EXPD -0.7%,  Paycxhex -0.6%,  KLAC -0,5%,  VRSK -0.2%

Of the 20 selections, 15 were either up or neutral.

So far, so good.

 

VTI December 30, 2011 trade : Closing Price February 21 …$96.10…..200 day moving average  $88.76.  Days in trade without a sell signal,  537 days. Trade unrealized profit 55.7%

Richard Maurice Gore

 

Get Ready for Gold ( GLD )

February 18th, 2014

February 18,2014

I suppose the snow has something to do with my thoughts about the market.  Visualizing the snow flakes as dollars falling from the sky somehow energizes me.

GLD Alert:

The ETF ” GLD ” crossed above its 200 day moving average at the close February 14.

If you were to buy today, and sell when GLD violated its 200 day moving average, back testing indicates a losing trade 77.3% of the time ( going back 10 years ). There were 17 losing round trips of a total of 22 round trips.

BUT, if you waited until month end to buy, and the price of GLD was above its 200 day moving average at month end,  you would have won on 2 round trips and lost on 2 round trips.  The winners were 37% ( 482 days ) and 75% ( 756 days ) .  The losers were 4.25% ( 42 days ) and 1.84% ( 102 days ).

Based on the above ( with no guarantee of repeat performance ) it would seem that it would be preferable to wait until March 1 to see whether GLD ( $ 127.15 – current price ) closes above its 200 day moving average ( presently $126.47 ) before investing.  I will invest if such is the case.

QQEW / Zack Portfolio alert-   be advised , I will not be investing today as  I have decided to run this as a phantom, watch list  portfolio instead of investing immediately. I’ll be tracking closely and will advise when I decide to implement .  As I explained previously,  I can best be characterized as a hungry ( but nervous ) deer rather than as a bull or bear.

Richard Maurice Gore

 

Necessary Substitutions

February 17th, 2014

February 17, 2014

I’m glad I had this extended weekend to prepare for Tuesday’s market.

I am investing an equal amount of money in each of the equities mentioned in my post of February 14…except that I now discover that I won’t be able to purchase Biogen at $328 per share,  Priceline at $1279 per share,  and Netflix at $435 per share.  The amount of money I am investing would allow only a few shares of each of these names.

What to do ?  My answer is to substitute Disney ( also a Zacks # 2 rank)  for  Netflix,     XBI, a biotech ETF ( also a Zacks #1 rank ) for Biogen, and  Sands China, SCHYY  ( a Zack #1 rank ) for Priceline ( a Zacks #2 rank) .  This means three of the 20 equities selected do not reside in QQEW.  I’m not worried !

To close….my intent is to purchase equal dollar amounts of all 20 stocks tomorrow ( if possible ) and call this Portfolio my ” QQEW / Zacks 20  Portfolio.”

Richard Maurice Gore

 

Facing My Investment Limitations

February 16th, 2014

February  14 ,2014

I am constantly searching for a methodology that will allow me to sidestep the time required for the analysis of individual stocks. Then, there is the patience factor of waiting for a stock I would select  to do what I think it should do. Patience is not my strong suit.  That’s why I naturally gravitate to stocks exhibiting strong momentum characteristics; PE Ratios be damned !  But, of  course, every stock involves its own  specific risks.  That’s why I would prefer to invest in 20 stocks and  consider my group of 20 to be just one stock – bought together and sold together.

On the basis of the above, my starting point is to shop for equities found in an index which is outperforming.  Year to date, QQEW ( Nasdaq 100 ) is outperforming other indexes as follows:

QQEW ( + 3.5% ),  SPY ( -0.4% ), VTI ( 0.0% ), Barrons Managed 400, BFOR  ( -1.5% ),  VGK – Vanguard Europe ( 0.6% ) , VEU,  Vanguard, the World ex-USA ( -1.8% ).

OK, so which of QQEW’s 100 stocks is driving its momentum, and which can sustain the momentum ( at least for my purposes ) in the short term.  The answer is that I have no idea.  But, I am aware of a ranking /rating service which has analyzed every one of the QQEW  100 and has an opinion on each in terms of its short term performance.  That service is Zacks,  and it just so happens I am a dues paying subscriber.

So, I sat down with my QQEW prospectus and went through every name with Zacks Ranks at my elbow.

Here are the 20 QQEW stocks Zanks currently ranks Buy or Strong Buy:

Gilead Sciences, Facebook, Biogen, Priceline, Baidu,  Tesla, Alexion Pharmaceuticals, Netflix, Micron Technology, Wynn Resorts, Western Digital, Paychex, Verisk Analytics,  SBA Communications, KLA Tencor,  Akami Technologies, Autodesk,  Expediters International, Garmin, and Monster Beverage.

Do you think I could have come up with this list on my own ?.  Absolutely not.  Is each of these names a risky stand alone  investment? Very probably, YES.

Hate to hark back to my training days  ( 1960 )  at Citibank.  Don’t invest more than 5% of your investable capital in any one risk.  Perfect, here are 20 names each to carry 5% of the risk.  I will treat the entire grouping as one name and call the portfolio either the RMG Lazy Man Portfolio or Zack’s QQEW Portfolio.  I’m sure Zacks won’t mind because there will be only one investor…me. Right ?

So, on Tuesday I enter the water hoping to catch a good wave with this portfolio.  When do I exit the water ?  When the VTI signal turns negative ( see below ) or until the tape tells me this portfolio is sputtering.  I won’t overly concern myself with the performance of any one name because its performance has been dampened by the other 19 names.  Maybe, I can re-balance the portfolio with fresh names every month, eliminating the laggards.  Perfect, I can look forward to the results of this portfolio every mid month and VTI at month end.  That should keep me focused .  Now, all I’m missing is week 3 ( options ? ) and week one.  I’m sure something will turn up.

VTI Update – ( sell when price of VTI is in violation of its 200 day moving average…. at a month end ) Existing trade opened December 31, 2011…533 days without a sell signal … and counting.  Gain as of February 14, 2014….55.37%.  As a market barometer its saying its ok to be in the water.  Let the trend be your friend – till the end !

Back up to the attic where a hot hose awaits me for the purpose of melting the heavy snow on a rather large vinyl awning !

 

Richard Maurice Gore