The Company You Keep

April 25, 2017

Taking dead aim at May 1….Ever mindful of the admonition ” Play till May then go away ! ”

Aware that a possible government close down April 30 is a definite adverse market risk.

Aware that there are potential ” black swans ” in the pond such as Korea etc.

Nevertheless a trend follower and understanding that interest yields on bonds are lower than earnings yields on stocks.

Therefore I am operating in the market, ( no options at present ), under the protection of the ” SPY ” 200 day moving average umbrella.

Warren Buffett ( Berkshire Hathaway ) and John Vogel ( Vanguard ) would tell you that ” SPY ” an ETF passively representing the S&P 500 Index is the performance benchmark against which all portfolio managers are measured ( including Mutual Funds, and Hedge Funds etc ). The implication is why pay any professional to actively manage a portfolio if he can’t outperform a passive index of the 500 largest USA companies.

SPY….November 1, 2016 to April 24, 2017…positive gain
of 11.58% ( and that doesn’t include a 1.91% dividend… ( SPY is the benchmark )

So, what am I holding outperforming SPY ?

ETFs : QQQ ( passive ) 14.68%…ITA ( 17.74 %)…XLF ( 19.96% )…KBE ( 24.83% )…ROBO ( 18.84% )

SBIO ( 18.51% )

As a comparison reference GOLD ( GLD ) since November 1…negative 0.38%…VDE ( energy ) negative 0.36%.

Stocks: GS ( 25.24% )…AMZN ( 14.89% )…FB ( 11.05% ** thats right SPY is outperforming Facebook )
MCO ( 18.84% )…TMUS ( 33.75% )…C ( 20.94% ) AAPL ( 26.51% ) MSFT ( 12.70% ) GOOG ( 8.52 % )** thats right, SPY is outperforming GOOGLE !

This is the company I am presently keeping with full confidence SPY will not sink below its 200 day moving average as of the close Friday.

To make this list my chart analysis must be positive and I need to like the story underpinning the market’s action…as well as an analysis which includes PEG ratios, Debt / Equity, free cash flow/ price etc.

Richard Maurice Gore

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