Good News…..But

April 1, 2015

Not to rub it in, but the December 31, 2011 SPY trade ended the quarter still on a buy signal ( 815 days / ahead 75.65% )

I’m not gloating,  because I’m not in this trade.  I use it and the fact that interest rates are low as the basis  of my continued belief that the FED is trying to create the “wealth effect”  ( consumer spending is 70% of GDP ) via the stock market.  To me, it means its OK to purchase any stock which makes sense in terms of its bottom up internals and the theme of the general market …..which is to avoid stocks whose price needs to fight the dollar ( energy, commodities, exporters ). By default that means to purchase  stocks which do business and make their profits in the US of A.

Since November 3, 2014  SPY has advanced  only 1.95% reflecting all the pushing and pulling going on within the S&P 500 Index.

Here are some other USA Index ETFs and results since November 3.  It seems the result hinges on whether the index contains big cap names which export or manufacture foreign currency profits which will shrink income statements  when translated against the dollar.

MDY ( Mid Caps ) …+6.80%,  OEF ( top 100 S&P)…..+0.25 %, VTI ( entire stock market- lots of small caps ) …2.85%,  IJR ( S&P bottom 600 small caps )….5.81%. and , as mentioned above , SPY 1.95% ( the top 500 USA stocks )

In contrast , here are a couple of individual stocks which have a USA focus, no overseas manufacturing, minimal exports, and don’t need a return from commodity like products…….CVS ( 18.74% ),   UNH ( 23.81%, DLTR ( 33.52% ), HD ( 17.73% ).

I’ll be back at you when I complete researching and writing my blog on managements which are sensitive to shareholder needs.

Bye….Richard Maurice Gore




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