Archive for February, 2014

Housekeeping

Saturday, 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

Saturday, 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 )

Tuesday, 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

Monday, 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

Sunday, 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

Jingle Jangle – There go my nerves again !

Monday, February 10th, 2014

February 10, 2014

As you already know, I am not part of the December 31,2011 VTI trade, although I wish I were.

Therefore, for my present purposes, that trade represents a barometer for whether it is safe to be long the market or be on the sidelines.

The way the market pulled back during January, told me to take nothing for granted….even though I believe we have far to go on the upside…barring a very Black Swan.  The pundits say a 10% pullback would be healthy for the market.  That may be true, but I consider 10% of my money left on the table to be decidedly unhealthy for me!

So, following my own advice, I set a trailing stop for VTI …just in case.  The stop was activated February 4.  I split my doubts down the middle and sold a bit more than 50% of my VTI position and liquidated all other Index type ETF positions.  As last week  concluded, the market found its legs pushing back against weak job numbers.  Since my VTI barometer is still positive I decided to add small positions in the following ETFs to get a better feel for “the tape” and because I believe this is where the market is headed.

DXJ …..a bet on a weak yen strengthening Japan’s export business.

FEZ ….Europe’s top 50 stocks by market cap.

IYT …Dow Transport as a leading economic indicator

QQEW…Take a look at the 100 stocks in QQQ and re-sort so that each has an equal amount of money invested.

RPG …S&P 500 purged for pure growth.

VEU… Whole world minus United States

XBI — Biotech

XHB…. not just Construction ..includes Home Improvements and Furnishings.

XLF…. not just banks…includes Insurance plus Brokers etc.

XLV….North American Health Care

Despite the bad January , I realized 2.9% profits on invested capital as I moved to sidelines  ( 35 % annualized – I should be so fortunate ).

At the moment, I consider myself neither Bull nor Bear.  Rather, I’m embarrassed to say,  a nervous but hungry Deer.

Stay tuned.

Richard Maurice Gore

 

 

 

Safe Again – But Just !

Saturday, February 1st, 2014

February 1, 2014

VTI ( Vanguard’s basket of 3500 USA stocks ) closed January at $92.88,… 5.78%  above it’s 200 day moving average…and safe from an end of January  sell signal.

So, I remain invested in VTI ( 1271 shares at $89.53 ),  I intend to add more very soon ( based on no particular indicator except maybe my  perception that the market is extremely  oversold )

For anyone who invested in VTI at the time of its BUY signal ( December 31, 2011 ), ( not me ),  the trade has persevered without a SELL signal for 522 days and shows a profit of  51.47%.

There have been four other round trips in this trade since it generated its original buy signal, April 30, 2003.  The longest holding period was from September 30, 2004 to December 31, 2007…..818 days.  All four closed  trades have also been winners.  The score is 5 wins versus zero losses. This is not a Buy and Hold strategy because the  end of  any given trade can come at any month end.  Neither is it a short term technical trade.  It’s history has been that of a long term” trend trade”.  To my mind this is the perfect compromise between short term speculation and buy / hold.  Additionally it seems to perform as a long term barometer of whether its safe to be in the market.

I am using VTI as a direct investment ( hoping  eventually to get in sync with its methodology ), plus I use it as a ” Surfs Up “indicator.

I use other index ETFs to weight VTI’s all encompassing composition toward big cap, growth, technology etc..  For that purpose, I may invest in SPY, QQQ. QQEW. RPG, VGK, BFOR and PRF.  I can’t report the timing  or selection of these investments in any way that I believe can be useful to you.  Too much of a gap between my action and your possible re-action.  Additionally, I may invest in sector ETFs such as XBI,  XLV, XLF, KRE and DXJ for different reasons, an example being DXJ which I believe will be ultimately driven by the dollar yen exchange rate and the impact a weaker yen will have on Japan’s export driven economy.

Then, I  have positions (presently losing)  in ITT and GE.

And, for the boy in me who would like to have worked under the hood of a 56 Chevy  ( but couldn’t because my attention  was directed elsewhere by my parents )  I tinker with trying to understand the levers of what may turbo charge the market performance of a WBMD, CAMP, and/or  a YAHOO.

Bottom line.  I believe the average  individual investor should focus exclusively on when to be in or out of VTI.  I believe that is the key to reducing your risk to a point where you  can drive the result based on accurate transparent data that is readily accessed.  In other words, stay safely on the beach when the surfs not up and don’t  chase  an alluring  result that could put you back in the Wall Street jungle. !  If you are not in VTI, assuming only market risk, you definitely shouldn’t be assuming. sector risk, cross currency risk. political risk,  and the cornucopia of risks associated with specific corporations.

I’ll keep you up to date on the VTI trade.

Richard Maurice Gore