SPY 500 a buy until Sep 30, 2016

September 1st, 2016

August 31, 2016

The USA stock market, as represented by the Etf  symbol “SPY”, is a basket of 500 USA stocks which trade as one stock.  SPY ended August at $217.44 per share, only 32 cents above August 1, and that says a lot about its lack of direction.

The good news is that the 200 day simple moving average of SPY is $204.03,…6.16% below today’s closing price.

So, the bullish trend continues.  This is reinforced by the fact that bond yields are low and offer almost no competition to the earnings yield of stocks.  There may be a misguided interest rate increase by the Fed but there seems to be nothing behind it in terms of strong data that would argue for a trend of rising interest rates.

If you had a million dollars invested in SPY on December 31, 2016, and ignored the December 31 sell signal, your million dollars would now have a value of $ 1,066,543 ( 6.65% excluding dividends ) ( 4,905 shares )

If you followed the sell signal of December 31 and then repurchased shares at the subsequent buy signal, your million dollars would now have a value of $1,040,667 ( 4.07% excluding dividends ) ( 4.786 shares )

If I had had my liquid resources invested at the million dollar level, my million dollars would have grown at the rate of 8.4% , but this is me unchained and investing in anything I want, based on my recognition that the investment climate is safe and that I am investing in Etfs and specific names that do most of their business in the USA. That means I am invested in IWM ( 2000 smaller cap companies ) and offshoots realizing that SPY companies contain too many energy names and firms that are forced to translate foreign earned profits into shrunken dollar profits on their quarterly income statements, or export at a disadvantage because of the dollar’s strength..

I am under invested at present based on my belief that SPY will continue to grow, but very slowly until the dollar weakens. My risk is  that the market will move higher with me not participating sufficiently. My thought is that stocks will sell off a bit but remain in the ” buy ” zone and offer better prices than at present for the next leg up.

Richard  Maurice Gore

July 31 SPY still on BUY

July 31st, 2016

July 31, 2016,

WSJ Headline July 30 / 31 ” USA in Weakest Recovery Since 1949 “

Just another brick in the USA stock market’s ” Wall of Worry ” ?

For me, as an investor and trend follower, it’s a significant signal that while SPY may still be in an uptrend, the trail is going to get narrower and flatter from here,  and more dangerous for individual stocks unless they carry attributes tuned to the new reality.

For me, SPY on its own,  won’t do it at this point.  Contains  too many oil dependent names….too many names dependent on higher interest rates for operating margin….too many names  dependent on a weak dollar to generate exports or protect dollar profits  already earned overseas.

For me, instead of SPY I will tilt heavily toward indexes whose components are USA focused.  Instead of SPY, I am attracted to the Russell 2000, IWM,  whose components are are smallish and not as likely to be dependent on foreign activity for profits .  I also like Utilities ( XLU ) and REITS, VNQ, as, generally,  they benefit from low interest rates.

Weak recovery will mean growth stocks possessing the right mix of attributes will provide outsize rewards.  The attributes I favor are #1 the story must make me conclude the stock possess a sustainable competitive advantage as evidenced by #2,  acceptable growth in Revenue coupled with sufficient Cash Flow to impressively  reward investors with dividends, buy backs, debt pay down, and / or  intelligent acquisitions and meaningful R&D investments. And, finally, #3, the chart.  It must  say that this equity in my portfolio will pass the test that 90% plus of stock pickers  fail…beating SPY.

I am only 60% meaningfully invested but  I am willing to go 100% to acquire great stocks  at great prices if somebody in the balcony shouts ” Fire “.and the audience rushes for the exits.  And, me remaining in the theater will still take some courage, with me constantly reminding myself that interest rates  are saying the market is a screaming buy.  That SPY is still above its 200 day moving average is consoling but not as re-assuring as low interest rates, a quiet Janet Yellen and declining DJT poll numbers versus ( ugh ) Hillary.

In terms of holding SPY versus following the model since January 1.

Buy and Hold:  4905 shares x $217.12 =  $ 1, 064, 974 ……6.5% excluding dividends

Model                 4786 shares x $217.12 =   $ 1, 039,136…….3.9% excluding dividends

RMG  mixed Portfolio……………………………………………. .7.1%   excluding dividends

 

Richard Maurice Gore

 

 

 

Month End SPY Signal, June 2016

June 30th, 2016

June 30, 2016

 

If I had told you last Friday, after the BREXIT announcement, that SPY would close June above it’s 200 day moving average of price, would you have believed me ? Was the sky falling in, or were there international money funds just trying to scare the hell out of you so that they could  pick up your shares at a more reasonable prices.?

As it turns out, the sky isn’t falling, exactly, but if you will look down and ahead , it would be fair to conclude the road may be littered  with potholes sufficiently deep to ruin you low profile rims, if not your portfolio.

On one side of the equation, you have low interest rates which may remain unchanged into 2017….plus an earnings season which gives every indication of being positive for stocks, well, some stocks.  On the other side of the argument, you have,  BREXIT and the potential for a  level of  international political and economic uncertainty that will make the dollar a safe haven for the forseeable future.  And that means it will be tough for dollar exports and inward remittances of overseas profits which need to get translated into dollars.  I’ve concluded, for me its best to stay with USA companies whose profits are mainly driven by USA revenues.

My lineup includes SPY  and Put writing involving July $200 and August $180 contracts.

ETFs  in descending order of investment: IWM, MDY, SPY, SDY, VNQ, XLU, ITA and XBI

Equities in descending order of dollars invested: T. VZ, NOC, TASR, AMZN,DLTR,FB, MCD, BAESY, SNE

Utilities: ED, EXC, AEP

If you had ignored the December 31, sell signal your $1 million invested in SPY  ( Shares  4905   ) would now be worth $1,027,744

If you had acted on the sell signal and repurchase signal,  you would now have ( Shares 4786   )  and they would be worth $1,002,811

The next buy / sell signal for SPY will be generated at the close of business July 31

 

Richard Maurice Gore

 

 

SPY Model Still On Green

June 1st, 2016

June 1, 2016

SPY closed May 31, 2016 at $209.84 per share.

SPY’s 200 day moving average of price closed at $ 199.97,

At 4.9% above SPY’s 200 day moving average the BUY signal for SPY remains in effect till the close June 30, 2016…..if you follow the back tested model I follow….which has generated only six trades since January 1, 2000…..five of the six SPY trades have been winners. The model has dramatically out performed BUY and HOLD.

I use the SPY model more as the backdrop for all my market decisions.  I, personally,  would not go out and buy SPY at $209.84 per share. Instead, just yesterday  I wrote 10 contracts to buy  SPY at $200, even if the price of SPY is $190 or lower at the options expiry  July 15.  I was paid a premium ( yesterday ) of  $1.07 per share to make this commitment.  This will work out to be 4.339% per annum .  The annual dividend for a shareholder of SPY is 2.20% per annum.  So, I am being paid more than twice the annual dividend of SPY ( now, not quarterly ) ) to be bullish on SPY at $200 per share.

If SPY had closed on May 31, below its 200 day moving price average, sell signal ,  I would not have made this trade. I would have been trying to guess how much SPY would sell off  and would use some of my sidelines money to write contracts to buy SPY,  at that estimated  level, for a greater premium… and continue to nibble in this fashion as SPY moved lower.

In this way, I would be averaging down my cost of SPY, something I would not do with any stock,  which could be sent to zero.  SPY will eventually come back, even if my heirs need to show some patience !

At some point soon, I will amend this post ( in upper case, as a postscript  ) to update your wealth effect if you ignored the December 31, 2015 sell signal and had continued to hold till  today ….versus following the model exactly. ( SEE POSTSCRIPT BELOW )

Richard Maurice Gore

PS: IF YOU DID NOT SELL YOUR 4,905 SHARES OF SPY ON JANUARY 4, THEY WOULD NOW BE WORTH $ 1,029,266…2.93 % EXCLUDING         DIVIDENDS

IF YOU FOLLOWED THE SPY MODEL AND SOLD JANUARY 4 AND THEN REPURCHASED AT HE BUY SIGNAL, YOUR 4,786 SHARES             WOULD  NOW BE WORTH $1, 004,294., EXCLUDING DIVIDENDS.

The model has no chance to get even until after the next sell signal.

 

Fed Up with the Fed

May 21st, 2016

May 21, 2016

Think smart guys can’t  get it wrong ?

Our ” Best and our Brightest ”  got it terribly  wrong  in  Viet Nam and did it again , a generation later , in Iraq.

Now, enter our  regional Fed officials ,  letting us,  know they have the  power, can toy with our financial anxieties  and that the jury is out on a June interest rate increase.

There seems to be no rational explanation why regional Fed officials can’t constrain themselves and just  let the next move, or non-move, be obvious and be data driven, rather than an ego driven mouth trip.

We used to play a game called ” Bullish or Bearish “.  This is a game for wannabe ” traders ” and requires fast and intuitive thinking.

An event is announced,  and it is your task to verbally pinpoint the impact on different areas of the financial  market; currency,  precious metals, the stock market,  the bond market,  housing market etc  that would be positively or negatively impacted by the event.  And, that’s at the macro level.  You can drill down through sub categories into specific situations.  The more specific you  get the more valuable your correct answer.

For instance, at the start of the financial crisis ,  I had  said the housing market was collapsing  and mortgage loans were beginning  to default. And , you said  you were  bearish on buyers  of Collateralized Debt Obligations, CDOs ,  and ultra bearish on issuers of Credit Default Swaps ( Credit Insurance Issuers ) and named AIG as a short target you would have been a gzillion percent correct !

This week,  the Fed hinted strongly  about a rate increase in June.  So  investors,  ( governments,  institutions , hedge funds,  and individuals ) ,  must consider the hint tantamount to an announcement and see the need to consider the  bullish or bearish implications of the hint becoming  reality.

Any increase in interest rates by the Fed will strengthen the  dollar because, simultaneously,  interest rates in Europe are being  lowered  to stimulate economic activity. Europeans  will buy dollars and invest  in USA issued bonds, because money seeks a higher return.. ( Short the Euro ? )

A  stronger dollar will make it more difficult for USA firms to export because a stronger dollar will weaken the purchasing power of the local currency of  overseas buyers ).  Loss of exports will mean loss of USA jobs. ( Buy equities targeting USA sales, including overseas exporters  to the USA , and avoid USA exporters carrying a cross currency sales pricing handicap.? )

The stronger dollar will make it more difficult for USA firms whose overseas manufacturing , operating  and sales activities, result in an accumulation of foreign ( local ) currency profits.  These profits need to be considered converted back  into dollars  whether or not the actually  remitted home to the USA, because such non-repatriated profits will still get included in the USA parent’s consolidated income statement. But,..at a lower cross currency valuation  , and thus  have the net effect of reducing  the consolidated  world wide profits of the USA firm.

How many times have you heard that the quarterly result of  a USA company was a disappointment because overseas earnings did not translate well on the USA firm’s consolidated  income statement ?.   Also, lower stated profits will have  an inhibiting effect on the capital investment decisions made  by USA Boards.. ( Avoid USA firms which generate a substantial amount of operating profits overseas ? )

As the dollar gets stronger, the price of commodities, including oil,  gold and precious metals weakens.  And this means closing down rigs, mines etc and the loss of more jobs.

The down stream impact of a strong  dollar will negatively impact overall consumer confidence and undercut any attempt to create the ” wealth effect”  required to get consumers to buy houses and big ticket items. The consumer is 70% of GDP and a stronger dollar can be the psychological wet blanket the stock market can absolutely  do without to push toward  higher stock prices.

Bottom line, based on the present lackluster performance of our economy, a rate increase by the FED could dramatically increase the possibility of a recession. Not Needed YET !  Got the picture ?

So then ..Why increase interest rates ?

1 – To keep Russia and Iran on their heels ?

2- To give the big USA banks the profit margin they need to create profitable loans. ?

3- To give China the possibility to keep exports ( including to us ) steady so that China’s expansion doesn’t falter and create the need for further  Chinese currency devaluation..?

4- To give Europe and under developed countries an opportunity to reflate their own economies by exporting to the USA while American expansion takes a time out for the sake  of world prosperity.?

5- To give the market a rest and re-set of valuations  before the next leg up.?

None of the above are worth snuffing out an upward trending stock market ( wealth effect )

To me, it seems the smart money, including George Soros and Carl Icann, already recognize this and they  are bad mouthing the Market because they have established positions which will allow them to invest at more ” realistic ” valuations if the FED makes good on its hint…

Count Mini Me in with the smart money because   I am way under invested,  but still invested enough  to check my year to date  unrealized Profits at the end of each day.

We are still on a ” buy SPY ” signal.  But,  I am committed to accept  SPY shares  at $180 and $ 185 per share if SPY falls below$ 180 and $185  by July 15.  I do not consider it prudent for me to blindly buy SPY  at today’s closing price of  $205.89. when I can get paid a premium equal to SPY’s yield for being patient instead of exposed.

Remove the interest rate cloud and I will consider getting  much more involved and aggressive, bearing in mind that for the past 50 years between May and November the average gain in the market has been only 1.3%……November thru April 7.2% average gain.

Richard Maurice Gore

 

 

 

 

Index to Gore Time Capsule Posts

May 9th, 2016

May 9, 2016

All are found in the April archives except ” Lilibeth Gore and Me ” which is in May archives

#1     Maurice Gore….To the New Babies, Sammy and Cooper

#2     Throggs Neck

#3     Home Base,  2923 Myers Street

#4     My Fathers Family

#5     My Mother’s Family

#6     A Few More Words About Ruthie

#7     Maurice Gore,   Of  The Merchants Bank of New York

#8     A Tale of Two Banks

#9     ” My Matt ”

#10       Lilibeth Gore and Me

 

 

 

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Handicapping the Donald / Hillary Matchup

May 8th, 2016

May 8, 2016

 Donald versus Hillary.

Here is how I handicap it.

Donald…….Unscripted, childish, emotional….but transparent.  Hillary is scripted with fake and exaggerated displays of emotions. You don’t even get to see her Goldman speech… brazen or what ?….. + 1 For Donald

Donald   is without restraint and will not hesitate to aim for your crotch and then rationalize it.  Just ” Win Baby Win ” versus  deserving to win. Doesn’t measure up to the standard   ” Win One  for The Gipper “,..or  ” Shane”, or…….  the ” You start it, We’ll  finish it ” image of a Reagan or a Kennedy with which most Americans identify.  Hillary is sufficiently self righteous and  delusional enough to risk allowing  100 potential killers  cross the boarder rather than unfairly block the entry of  just one innocent man.  + 1 Hillary

Donald.…Inclined to be mean spirited and vengeful, cunning  and self  advised enough to  present an inviting target for a three dimensional chess player who knows how to face down or otherwise manipulate bullies.   Hillary is a schooled, disciplined politician and believes in measured diplomacy with access to  no nonsense advice from experienced staff.  Don’t worry…she is a match for Putin.  + 2 Hillary 

Donald’s…. support base is from white, under educated, working class men who didn’t double down on education while the unions were protecting them. Now they are angry and instead of looking in the mirror they are fingering everyone in sight as betraying America. World economics has left them behind in the same way Fordham Prep left me behind ( on the dunce platform ) when I didn’t keep up with my Latin vocabulary.

They don’t see that $50 per hour will create more  Detroits and a mass exodus of manufacturing unless you can out produce and out R&D overseas competition..  They don’t see that in true ( non-perverted capitalism ) borders don’t count when you are competing world wide, the way the French didn’t see they were fighting the blitzkrieg in the  last war hid behind their Maginot line, and were outflanked.. They don’t understand that you can artificially sustain the protection of tariffs for only so long before mutual self destruction creates a world wide depression. They don’t understand that profit and the shareholder are the foundation of the  non-socialized system they say they want…but then they  want  protective tariffs  from the big government they say they hate. Unfortunately, for them , capitalism is based on money seeking its highest risk adjusted return and the shareholder having a first alligience to his investment not any flag, even ours.  Any gross manipulation of this is a perversion that will cause disruptive problems. Hillary is for trade deals which manage the situation while we adjust to the new reality.  I feel a lot safer with Hillary and so does Wall Street. + 3 Hillary

Hillary takes money from Wall Street and re-distributes it  to buy the vote of  minorities ( maybe keeping a little for herself ? )  the way the Saudis contribute to world-wide Jihad just  to keep the Jihadis away from Riyadh.   ” Reparations ” ? That is a non-starter with American voters and she better steer clear of that!  This  Black Lives Matter crowd better double down on raising their children to be responsible citizens if they want the rest of America  to give a hoot about Black Lives Matter. Donald  can’t be bought ( except with flattery ) +2 Donald 

So whom do I vote for ?

The instrument of white anger, Donald Trump. is counting on his supporters not realizing that he can’t deliver a lot of what he promises….unless he dismisses Congress and issues edicts in the manner of a Charles II, Napoleon or Hitler. Or,  do I vote for Hillary where you need to accept her aquisitive inclinations……  but get to BUY One and Get One Free…..Bill..aka ” Slick Willy ” in  a tag team match against Putin. +4 Hillary

Since I have money in the stock market and don’t want to risk my money speculating on the performance of an unpredictable entity, I will go for On Base Percentage Hillary rather than the possibility  of a homer ( or strikeout  from Trump.)…...+5 Hillary

at this point Hillary 5 Trump 2.

# 10 Lilibeth Gore…and me

May 3rd, 2016

May 3, 2016

Seven years younger,  a girl ,  and having been plucked from a garbage pail,  my new  sister, Lilibeth,  ( March 12, 1944 ),   didn’t make me feel threatened in the slightest.

But,  truthfully , I didn’t see the need for her and my vote would have been…….thumbs down..

Nor was I lonely,  or looking for a playmate.  I was quite happy playing my own games, listening to my radio programs,  and expressing to my parents and anyone else who would listen my opinion on any subject I thought I knew anything about.  And,, her arrival notwithstanding, I was still the one and only Prince Richard, with all rights and privileges pertaining thereto.

But, then, things started to change.  The first hint that my world was changing was the day Beth  came home, and  I  saw my parents dis-assembling my youth bed which had occupied space parallel to their bed along the hall-side  bedroom wall.  Then, a crib was erected in the  spot my bed had occupied.  I was told that as a big boy,   seven ,  I could now be trusted to occupy a ” grown up ” ( no side rails ) pullout bed on wheels which could be rolled into the living room for me  each night. They made it sound like  grade promotion at school , and I ” bought into it”  , even  though I felt something was strangely amiss.

From the start , people commented  on Beth’s good  looks……far more enthusiastically than one would consider them  just being polite..

And,  I didn’t mind that either,  because looks,  including mine,  meant so little to me . My life revolved around my radio interests which included “Captain Midnight”, ” Jack Armstrong, The All American Boy” ,  and “The Lone Ranger ” or, after school, riding my bike all over Throgs Neck  or sending away for prizes enclosing  box tops from products such as Ovaltine chocolate drink.

And,  my feel good relationship with my mother and father continued. EXCEPT, I was starting to notice they weren’t being as protective of me as they had been,  and were beginning to have higher expectations about my performance at school, and how I went about doing  things in general. They were beginning to stress the benefits of self reliance.  So, while  my sister went through a  stage where she was a passive baby doll , my relationship with my parents began to change..Sometimes my father looked at me with what could be considered  bad intentions, especially if I talked back. I decided they were both capable of  giving me a parental  spanking…..although not to the degree or intensity  of the    “spanking machine”,we were told was  located behind the” green door ” at school..

I plainly remember my mother having an afternoon coffee and crumb bun conversation  with her sisters  Rose and Lilly ( with me  on the floor , all ears but doodle playing with my plastic cowboys ), saying  how lucky we were that the government had changed selective service classifications soon after my sister was born.  Before the change,  my father would have been  “1A “, draft bait,  even with two children. Now the army was no longer drafting men with two children..providing the wife didn’t have a job.   My father never wanted my mother to work. And, neither did I.  Her job was at home and that wasn’t questioned in any way…..EVER…especially now that my sister required lots of attention and care…And, my mother never worked,  the entire 34 years they were married.  And,  it was always made clear to me that a father’s role was to  work and provide  and the mother’s role was  at home…..if at all possible.

Then, I was told that my sister would become a Walter Thornton model because of her 2-3  year old good looks. And,  my Aunt Rose swung her focus from me to Beth as soon as Beth could walk. .  But, I knew my Aunt Rose would be there if I needed her,  and I was just as happy that she wasn’t totally focused on me because she could be a loving ” obstacle “..untitled (8)

Looking back, I can now  see that my sister was far more likely to be dependent on family and school relationships than I.  She smiled and never complained,  made friends easily  and was a  pleasure to be around.  I, on the other hand,  was more likely to question everything ,  especially  in terms of the  “fairness and  justice “.of rules and how they were applied.  I was far more assertive than Beth and accepted all the admonishments and penalties that came  with being a ” trailblazer” for childhood , individual freedom..

I was more likely to find my friends  in the neighborhood, because with neighborhood friends you had ongoing,  year round, daily contact via sports, pretend games and mischief such as stealing  peaches by infiltrating an orchard on a moonless  summer night, or, smoking cigarettes ( age nine- ) hidden among the reeds that General  William Howe found so unsuitable for military operations, or hollowing out these marsh reeds to construct  blow guns suitable for use with dried split peas.. We also found wood dowel sticks and rubber bicycle handlebar grips excellent for dueling. And, surprise….no one lost an eye.  My friends went to Public School 14.  I attended  Saint Benedict (  $1.00 per month tuition ).

And then, there were the chestnuts falling from trees to be drilled and threaded with a shoelace and hung from an outstretched arm awaiting the overhand pendulum  slam from another boy’s chestnut. If he missed, it was your turn again until one of the chestnuts was destroyed.  You would continue to use your chestnut against others until it  suffered a similar fate.  A win was recorded as a ” year “, so a chestnut with 40 wins ( years ) was probably as hard as a rock  and had been soaked in mysterious solutions to make it even harder.

While Beth was becoming an angel in an ” alice blue gown “,  I was sliding down the slippery slope of negative incidents  which upset my parents to the point where I no longer could consider myself  Good Prince Richard… Left to my own devices and the influence of older Throggs Neck boys, who could be merciless if you didn’t go along to get along,   I slowly became Richard the Perpetrator.

I was hit by a laundry hook thrown at my head by a neighborhood  kid and needed to get 5  stitches in my forehead.  I took a yellow towel from our bathroom and headed toward the trolley tracks determined to show my friends,  to their delight ,  that, like Billy Batson,  I could become Captain Marvel and stop a trolley with a good stiff arm.

I jumped from our bathroom window  because I was convinced the ” Invisible Man ” had somehow  entered the room and ,  I helped my friends liberate an unwanted ( we thought )   boat hull from the Marine Supply Yard  which backed onto the Green and in doing so  sliced my wrist while climbing over a fence . My mother drove me to the doctor’s office for seven stitches in my wrist, driving with one hand  while reaching across to the passenger seat so that she could backhand me and drive at the same time. That is when she told me that if I  kept on my present path, I would wind up in the electric chair at Sing Sing prison. Not  exactly positive reinforcement.

I was sent to the A&P for groceries with our ration book.  I lost it.  When my mother found out, she informed me that I better dress warmly because she was putting me out of the house.  I was to go to the trolley  stop and wait for my father to arrive from work and tell him that, through carelessness I had lost our entire book of food ration stamps for the month.  There I stood, in the cold November dark, waiting for my trolley of doom to arrive carrying my father, my  executioner.  But just then, a little girl came up to me and said..”.did you lose this ? ”  I replied ” you were  sent from heaven to rescue me !!!”   Can you imagine the outrageous  egocentricity of me  literally believing  that, …giving absolutely no credit whatsoever to anything of possible  worthwhile purpose in  her life other than finding my ration book ? !

My sister gave no one any trouble whatsoever.  She was a ” pleasure ” and I was a ” pain “. And, I had to listen to my Aunt Lilly fill in everyone on the latest accomplishments of   “My Matt”.  I wasn’t jealous of Beth or Matt.  I just wasn’t happy with the total absence of  optimistic predictions for me..

Beth really entered my consciousness in 1948 when we spent the summer renting on the ocean,  at Long Beach, Long Island.. I can remember her sitting there watching “Howdy Doody,”  eating from  a dish of dry Cheerios,   playing Solitaire and carrying on a conversation…..simultaneously.  That’s when I had my first preview of how smart she was. She never caused a problem or had a tantrum.  Everyone marveled at her non -confrontational disposition. The only thing she didn’t do was rub it in by sticking  out her tongue at me from behind  Aunt Rose’s skirt. She didn’t need to…the praise she received was unending …..but well deserved..

Its a good thing she was a girl and seven years younger, otherwise our relationship would have taken a more confrontational turn because I  would have felt compelled use my older brother status to demonstrate my seniority in all sorts of ways.  And, whenever, due to circumstances,   I wished I had a protective older brother instead of her , I quickly dispelled that notion,  realizing that I valued my higher place in the pecking order far more than being protected.

Once in a while, my sister was a pain.  After we moved to an apartment ( 234th Street, Woodlawn, the Bronx ) , she is the one who alerted my mother to Mary Biggins and her red pigtails and me carrying her books from school ( Saint Barnabas ).  It wasn’t too long after that that our neighbor Mrs. Slevin alerted her actual biological sister, my 7th grade teacher, Sister Delores that I couldn’t think straight because of the influence of that girl ( who sat two desks in front of me ). The relationship with Mary was terminated by Sister Delores forthwith.

And, there was the time my sister noticed that some of the 16 and 17  year old tough guys of the neighborhood ( furniture movers )  had decided to punish me, a thirteen year old,  for being” bold and  impudent” with them..  The punishment decided upon was to take  me to the 238th Street Bridge over the Bronx River Parkway and dangle me by my ankles  above ( far  above )  the oncoming traffic.  My sister caught wind of their plans just as they were getting ready to move me to the bridge.  She raced home and alerted my parents.  My father raced out of the house in his undershirt, ran two blocks  and confronted this gang and forced my release, which , in the eyes of the Council , was merely  a stay of  execution.

Then, my dad,acting  as general contractor,  had a house built on  McCollum Place, just next to the Hillview Rescevoir in Yonkers,  about 2 miles  away.. We were no longer residents of the Bronx and never would be again.  My sister was attending Saint Paul’s Grammar School , McLean Avenue,  Yonkers.  Aside from one after school incident playing running bases,  in which  she had  her front ( second ) tooth knocked out,  she never gave my parents an ounce of worry.

I was a different story because I still had pals in Woodlawn.  Fourth of July was coming and I and a big fellow named Ray were assigned the redemptive  task of travelling to the Gun Hill Road section of the Bronx to buy $35 worth of fire crackers from a curbside Vegetable Truck which was parked  next to an unimproved,  barren building lot / field.  We  made our purchase and were walking back toward Gun Hill Road when we realized we had company. Several guys our age  started to walk along side us and tell us about the intense police  activity focused on confiscating fire works. They said it would be best if we just dropped our shopping bag and ran if we encountered any  police.  Well, before long someone shouted ” police “, but I didn’t drop my bag and I didn’t start running until I saw the  switchblades come out.  And then, I did run as fast as I ever ran in my life.  So fast that I reached the car  traffic of Gun Hill Road faster than Ray,  shopping bag and all..

I raced out to the middle of Gun Hill Road and got a car to slow down enough for me to throw myself on its hood.  This brought the car to a complete halt.  The  driver later said the look on my face made him decide to open the door for me.  Both Ray and I hopped aboard with our shopping bag and we made it back to Woodlawn with our  haul.  It would not have been a  good outcome  if we had come back minus the $35 and minus the fire crackers.  My punishment for being impudent was satisfied by successfully accomplishing this task. And, we had a great time with the fire works until the police showed up and gave chase through the streets of Woodlawn.  I was able to save myself by sneaking into Saint Barnabas Church and stretching out under the first pew, nearest the altar, and staying there for one hour , planning the safest route home.

My sister and I were at home for dinner just about every night and I had as little to do with her as possible because seven years apart,  we had different lives. She thought I was a tease. a  ” torturer ” and I suppose I used to tease her a bit, especially by threatening to twist the heads off her dolls if she bothered me when I was with my friends…In truth, my feelings for her were a lot more protective than I wanted her to know.

We each had our own bedroom.  Mine was set up like a sitting room with wood panelled walls, a big desk and a couch which opened into a double bed.  Beth had a girls room that could have been decorated for Olivia Newton John, with a girls double dresser,   mirrored tray upon which sat a hand mirror and a brush….ugh!.  In fact, now that I visualize it, that’s who Beth was…Sandy  in ” Grease ” the movie. and believe me, we had a few John Travolta type guys   at the intersection of McLean and Kimball Avenues which was Woodlawn’s outer boundry with Yonkers.   But Beth was not a ” hang out ” type person like me and had nothing to do with anybody at the corner  of McLean and Kimball..IMG_1477 (480x640)

It showed  whose genes she carried, when  Beth formed a company ” The Offsetter Flower Company ” and traveled the neighborhood, door to door, selling her flowers ( colored toilet paper folded into various shapes ).  She always could sell and  she always had a gunslinger mentality when it came to risk….just like my father.  She has always had trouble dealing with the unpredictable consequences of unpredictable events which  couldn’t be handicapped in  advance. That loss of control could drive her to tears and to me.  I always expected the worst and always planned for it, so I had far fewer nasty surprises to deal with.   I find it interesting that Lloyd Blankfein, President of Goldman Sacks says he spends his day planning for 98% of what has 2% chance of happening. That has always been me..

Time flew by , Beth  attended Saint Barnabas High School and won a full four year New York State Scholarship to College and gathered  lots of friends with whom she has stayed friendly to this day..

I told you she was smart!

She later proved it again when she appeared on” Match Game ”  and won with her partner,  Roddy McDowell.   She had what I would describe as a memory that would allow her to spread out  cards, turn them over,  and them re-locate them from memory, on demand. Another a gift from my father. And, she and my mother loved to play cards and  gamble,  because they both had luck.

The turning point for me came when I overheard my parents discussing me and Beth after discovering  I had cut the afternoon session of the College Entrance Boards.  I heard my parents saying ” lets put whatever money we have behind her because he has the attitude of a loser “.  That infuriated me and I said to myself, ” I’ll show them “.  That very night,  I decided that when I started college I would turn over a new leaf and totally re-educate myself, and, to a much higher standard.  And, I did, graduating college Magna Cum Laude .four years later.and then, aiming still higher seeking an overseas career in international banking.

Beth then graduated from Saint Barnabas High School and decided with my parents to attend Manhattanville College of  the Sacret Heart, Purchase, NY . as a boarder, even though the campus was less than a half hour from our house so that she could experience the full college experience. Those were the days when the school was famous for the Kennedys and Ethel who had graduated just a bit before Beth. My parents made no bones about her meeting someone  who could support her in the style they wanted for her.  My marching orders were to prepare myself to support a family the way a man should…as my father had.  I got what I deserved, and wanted, four years as a day hop at Iona College, re-educating myself among the bookstacks and brick chimneys of  Iona’s Library attic.  And, summers working as a wire lather , mainly on housing projects, as my cousin Matt had done before he died.

My parents moved to Bronxville just as Beth was hitting her stride with the boys.  Take a look at her photo below and you will know why she was absolutely pursued  by the boys. And, like my mother, she was a great dancer, only it wasn’t the Charleston. it was the Watussi.beth0002beth0001

 

 

 

I won’t get into her marriages or mine because I don’t think its good to bring up the past when you have been married more than once.

I’ll close by saying that it wasn’t until Beth could be comfortable.. without being hostage to the limitations of  a marriage partner,  that she really came into her own as an independent and self assured person…and , today she is indeed a happy lady ,deservedly enjoying her sons, their wives and her grandchildren. And, I know for sure,  my parents would be absolutely happy at  the way her life has evolved !  Great  job …Betsy!

 

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Please tell me where I am wrong !

May 3rd, 2016

May 3, 2016

I have been told,  according to a recent  Charles Schwab communication…..For the past 50 years…..nearly ALL of S&P 500 gains came between October and April.

May through October……+ 1.3%…..average

November through April + 7.2%…. average

That reinforces the idea of Play till  May…..

But ,positioned  opposite ” Play till May ” are concepts which are pushing back against it as a course of action.

#1 ..The chart of SPY is in an uptrend with its price $204 above its 200 day moving average, $196.

# 2 Reinforcing # 1 is that SPY’s 10 day moving average is above its 50 day moving average and its 50 day moving average is above its 200 day moving average.  Nice.

#3 Interest rates remain low and the Fed is signalling they will stay low because world wide inflation, including ours, is tame.  Martin Zweig always said that equities tend to go higher when the perception of the market is that interest rates will stay low.

# 4 The average closing price of SPY over the past 52 weeks is  $197….Only 3.55%  below today’s price…so the market is not on an unsustainable trajectory.

All the above being stated,  the truth remains that the market could go lower.  

Since making money in the market is buying great stocks at great prices, I have decided to position myself  to buy SPY at a lower price and to buy more specific equities if the prices of these equities collapse…not as a result of specific causes, but because the market has gone down. I own between 10 and 50 shares of  enough stocks so that it is worthwhile to be in the market , but emotionally can accept a market retreat as a buying opportunity. At this very moment I am discarding equities that don’t conform to my ” be in it ” but ” be ready to buy more ” strategy.

I don’t want any money in fixed income because the return is so low.

My alternate strategy is to sell options that pay me a premium competitive to SPY’s dividend but, if the market corrects, deliver me 500 great stocks ( SPY ) at a price which is about 12% below SPY’s today price.

Therefore, I have sold 10 SPY Put option contracts  expiring July 15 with a strike price of $185, and 10 contracts with a strike price of $180. at a premium level that will pay me the same dividend as if I owned 2,000 shares of SPY right now at $204 per share..

Richard Maurice Gore

 

” SPY ” buy signal remains in force

April 29th, 2016

April 29, 2016

SPY closed April at $206.43 per share which is above its 200 day price  moving  average of $ 199.76.

That means the SPY model Buy Signal remains in the GREEN…I’m to.be long the ETF…. SPY. ( a basket of 500 shares which trade as one share ).

If you had followed the dictates of the month end  SPY model, you would have sold your SPY position on January 4, the first trading day of 2016 in response to the Sell signal generated December 31 as the price of SPY violated its 200 day moving average on a closing basis that day.

We are tracking to see how much of your theoretical investment of $1,000,000 you would have now by ignoring or following the dictates of the model.  The model has been wrong only once since the year 2000…..and right 5 times…..and far more profitable than Buy and Hold.

Following the model, you would have sold all 4,905 SPY shares and received $983,500 leaving you with a realized loss of $16,500.

You would have stayed on the sidelines until March 31, 2016 when a Buy signal was generated ( still in effect ).  You would have used your $983,500 to purchase 4,786 shares of SPY… the number of shares you have today.

As of the close today, your 4,786 shares of SPY would be worth $987,973.  Versus the $1,000,000 you started with on January 1,2016.

On the other hand

If you had ignored the December 31, sell signal because you preferred to Buy and Hold,  your 4,905 shares held since January 1, would now be worth $1,009, 664. resulting in an unrealized profit of $9,664 , ….instead of a realized  loss of  $12,027,  a net difference of  $21,691.

This doesn’t mean this is how the year will end , with Buy and Hold , on top as a strategy, because the next sell signal, if ignored might trigger a disaster where better than 50% of your investment could  vanish ( at least temporarily ). I believe my stomach isn’t strong enough to deal with being under water to that degree.

I follow the model specifically because it results in fewer trades, smaller losses  and has been right 5 times and wrong only once over a period of 16 years.

When you factor in fundamentals such as historically low interest rates and consider Professor Martin Zwieg’ s theory that stocks tend to go up when interest rates are low and go down when rates begin to trend higher, then, I’ve reached my comfort level to invest. Zweig is famous for calling the 511 point one day crash in 1987 which he predicted on the previous Friday’s Wall Street Week and for owning the top floor of the Hotel Pierre, Fifth Avenue….which was acquired by following his own advice.

On the other hand ” Play till May, then Go Away” is only a day or two away and I am already respecting it and moving to the sidelines on some volatile stock positions I have been holding

 

Richard Maurice Gore.