If you are looking at this page for the first time about the worst thing you could do is immediately adopt the below positions. This would be like cashing all out or all into the stock market at once. Be gradual. Pick your spots, buy the dips , and move toward a definite position slowly. Rash moves all in one direction are way too risky and usually made out of panic .
Long Term Outlook =NEUTRAL
On a 1 to 5 scale NEUTRAL is #3 out of 5.
Forecast for 2010
The same as 2009 – The problem in the financial sector is far far far far far bigger than first imagined. Impact of this mess is going to take years to resolve. This is not your father’s buy and hold market. Investors411 is buying and selling far more than in past years.
The 2008 over leveraged casino capitalism of shadow institutions has dramatically altered some major worldwide trends. Hopefully this will return to normal. However right now the fix instituted by US congress does NOT solve problem and European over leveraged and debt problem has made things worse.
Several NEW position may/will be used in 2010 - Three lettered symbols = an ETF (Last Update 8/15)
- EDC – This is an ETF that does 3 times what emerging markets do. Lots of risk here so it will only be bought or sold under specific conditions involving the McClellan Oscillator (see below & more later)
- ROM & TYH – Technology. Again like EDC these two involve lots of risk because they do 2 and 3 times what tech stocks do. (see above) For complete list fro ProShares of ETF that do 2x &3X markets see LINK
- SSO – does @2X what S&P 500 does. UWM does @2X what the Russell 2000 does
- Commodities – There are many ETF’s that are solely based on a commodity like GLD and not based on a company. Diminishing resources and increased demand other commodities a decent investments. (more later)
- Individual Stocks – Because YOU asked for it some stock positions like IMAX, AAPL, ICON, SHOO, CAAS, PCLN, SNDK, VCI, ESRX will be suggested. My level for these riskier investments is a position less than 25% of portfolio.
- Stocks. 6/2 was update of YOUR Stock list. This is the list from 8/4 – BIDU, AAPL, SNDK, PCLN , F, CREE, SAM , GMCR, HMIN ,SWKS, RADS , SKX, VCI, UFS, IMAX, UPS.
- SDS & DXD These are ultra short positions of the S&P 500 & the Dow.(2x short)
- For a complete list of ProShares (a company that offers ETF’s that short the markets/sectors) see this LINK Also Direxion has a list of funds that are 300% short and long sectors and indexes- LINK
- Here a list of top ten dividend stocks from an author in at Seeking Alpha. Also a list of the Dow’s top 10 divividend stocks
Asset Allocation
This is what I’m buying and selling
(with exception of one mutual fund BRSIX – I’ve had for @ a decade and short term trades)
Buy/nibble the dips See strategy section before investing.
Note
- I trade in 5 different accounts and often many purchases are made in multiple accounts. Therefore, the numbers are approximations.
- I try to use 5 to 7% stop/loss orders on most investments/trades
- As of 7/4 the benchmark S&P 500 is down @ -9%
Investors411 Investments Positions – 2010
- 5% of portfolio - EWZ (Brazil) on 2/11 at 65.75. Sold 5% on 3/2 at 72.00 +6 .
- 5% EWZ Still own 5% bought last year at 59.5. Sold on 5/4 for 69,53 +17%
- 6% FXI (China) Sold on 3/26 at 41.00 for +2 % gain.
- 5% MOO(agriculture) Sold on 3/2 at 44.55 +6%
- 1% IMAX (3D stock) at 12.9 Sold on 3/2 at 13.4 +4%
- 1% IMAX at 12.7. Sold on on 5/10 for 18.98 +50%
- 1% IMAX at 12.4 on 2/10 – Sold on 5/20 for 18.05 +44%
- 1% IMAX at 13.0 on 3/3 – Sold on 5/20 for 18.05 +40%
- 1% IMAX at 16.93 on 4/9 – Sold on 5/24 for 17.88 +5%
- 2% IMAX at 17.25 on 5/7 – Sold on 5/25 for 17.52 +2%
- 1% IMAX at 16.98 on 5/21 – Sold 1% on 6/2 at 17.02 +0%
- 5% TYH (3x what techs do) Bought at 117.14. Sold 2.5% at 123.56 = +6%.
- 5% TYH at 123.76 on 2/11. Sold 2.5% at 139.00 & 131.35 +9%
- 5% THY at 123.76. Sold on 3/2 at 143.50 for +15%.
- 10%THY at on 3/11 for 151.50, sold 1/2 0n on 3/12 at 156.o +3% sold on 3/15 at 151.58for 0%
- 10% TYH on 3/24 and sold again for +3% & 0%
- 1% ESRX at 97.10 on 5/7 – Sold 1% on 5/27 for 101.73 +4%
- 1% ESRX at 99.94 on 5/21 – Sold 1% on 6/21 for 100.94 +1% (Note this stock has done a reverse split)
- 5% UWM Bought at 37.57 0n 4/16 Sold at 39.75 on 4/26 = +6%
- 5% UWM at 33.5 on 5/10.- Sold on 5/17 at 35.o2 = + 3%
- 2% VCI @32.98 on 5/7 – Sold 1% on 5/27 at 35.63 +8% Sold 1% on 6/15 for 38.00+15%
- 5% TYH at 36.10 on 5/11.- Sold on 5/13 for 38.81. +7%
- 1% SNDK at 41.51 on 5/10 – Sold on 5/14 at 41.98 +1%
- 4% FAS at 23.25 on 5/21 Sold 2% on 5/25 at 24.45 +5% Sold 2% on 5/25 for +2.5%
- 2% SDS at 35.25 on 5/24 Sold 1% on 5/25 at 37.35 +5% Sold 1% at 35.33 +0%
On almost all trades I have a 5% to 7% stop/loss
Mistakes
- 1% of portfolio IMAX Bought at 13.9 sold at 13,0 lost -7%
- 2% ENOC Lost -7%
- 2% DWA Lost -4%
- 2% TEVA Bought at 63.75 on 3/31.Sold at 60.75 on 4/27. Lost -5%
- 3% FXI at 39.55 on 5/11 Sold on 5/11 for 38.76 Lost 2%
- 5% UWM at 35.34 Sold on 5/20 at 31.o2 -12%
- 5% UWM at 35.34 Sold on 5/14 at 34.68 -2%
- 5% TYH at 37.55 on 5/12 Sold on 5/14 at 35.31 -6%
- 1% ICON at 17.50 on 5/11 Sold on 5/20 at 16.59 - 5%
- 5% EWZ at 74.75, Sold at 67.25 on 5/6 -10%
- 1% ESRX at 102.00 on 5/7, Sold at 5/20 at 101.76 -0%
- 1% SNDK at 41.51 on 5/10 Sold on 5/19 at 39.71 -2%
- 1% ESRX Bought at 102.00 Sold on 5/25 at 101.25 for -1%
- 4% UUP Bought at Sold 2% on 6/15 for 25.08 -2% Sold 2% on 6/16 for 25.07 -2%
2009/2008 Positions/Results
When you add all the gains and subtract losses, then add open positions at end of year the final tally = @+35.5% for 2009 – This does beat our benchmark S&P 500 (up @ + 22% ) Last year – 2008 – Investors411 lost @ -13% vs a @ -35% loss for the S&P 500. We were able to get out just a bit ahead of financial meltdown. (I may be off by a couple points)
Biggest mistake - Investors411 #1 strategy = buy the dip of a trending sector is NOT followed enough .
See Strategy, Overview & Help Sections before investing .
AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING
Some Positions in More Detail
These are listed under Recommended Sectors. Also the strategy of when to buy is listed under the strategy section on the blog. The major reason these were chosen (except for GLD) is because of their interaction with the mega trends. (See Overview Section) Because they benefit from globalization, have energy resources (peak oil) & are growing their middle class (spread the wealth) they are growing faster than the USA. List revised 8/21
GLD (Gold) – Investors usually buy gold when everything else is going bad. The second reason is all the stimulus plans & governments printing more money around the world in the long run means inflation and that’s usually good for gold.
FXI (China) Relative to the USA, China is far better off. They have a surplus of money while we are massively in debt. Their stimulus plan is a greater percentage of GDP than ours. China @ $4 trillion yearly GDP, stimulus = $580 billion. US = @ $14 trillion GDP, stimulus = $780 billion. Our military costs are huge and we are deeply involved in wars/conflicts throughout the world. China is far less financially involved militarily. China has a growing middle class and our is shrinking.
EWZ (Brazil) Brazil has an abundance of natural resources – Both oil and alternative energy. About 5 years ago a left wing government took over and spread the wealth to more middle class working families. Even more so than China they are vulnerable to the worldwide recession because oil prices fall in recessions and they have lots of oil. Unlike USA, China and Brazil are NOT debtor nations.
IFN (India) India has an overall better balance sheet (debt to equity ratio) than the US, but not as good as China. India is exploding in the technology field. Example it is now #2 to the USA in production of medical technology. The big Congress party victory in recent elections (MAY) is good for profits and stability. Besides being a more capitalist oriented than the nationalist or far left parties, the Congress party also backs a strong social welfare agenda that grows the middle class.
EWS (Singapore)-Singapore is a trade center smack dab in the middle of middle of many emerging sectors. Technically it has been the fastest growing major international market this year (S. Korea also up there). Newsweek (8/22 edition) recently rated their economic system as #1 “dynamic” economyly & USA #2.
EEM -Emerging Markets – Mostly China & Brazil, but other countries included. A market baske fund.
EWY – South Korea – Exports twice what it does to USA to China. North Korea a problem, but export driven economy.
EWC- Canada – Rich in Natural resources. What’s not to like except it gets cold.
EMB -Emerging Market Bond Fund – Bonds are a bit safer, but just like stocks, emerging market bonds should outperform USA. On 8/15 this ETF was way too overextended to buy. (Too far above 50 DMA) Another market basket of different countries.
TUR - Turkey – Outperforming USA & almost all outhe major markets. Bridge between west and oil rich Middle East. Problems with Israel developing which could hurt both countries.
EIDO -Indonesia (very thinly traded) Rich in oil, Muslim dominated democracy. Ties to many other emerging markets.
EZA – South Africa – good growth. Rich in natural resouces.
EWA – Australia – rich in natural resources.
USO - Oil comodity ETF – Because of the Peak oil trend and the growth in emerging markets oil is going to get more valuable over time. Also acts as a hedge – If Israel or the USA bombs Iran everything else is going down, but oil prices will explode higher. Intrade in an internet betting company that offers odds on this bombing occuring On 8/21 the odds were bid 10.6% ask 14.4% by 1/1/11 & bid 25.0% & ask 28.9% by 1/1/12.
UCO Proshares 2x oil ETF – More for traders rather than investors. Same as USO only 2X
*YOUR Stock List*
These stocks are chosen on their technical basis first. They must also have a fundamental growth story that would make investors want to buy in the future. Many are more influenced by major mega trends than others. YOU have sent in these stocks and both Paul R & I have gone over them, weeded out some and added a few. Explanations are purposefully very short and assume you have some knowledge of fundamentals and technicals. Paul will probably have additional information in comments section. I have tried to make this as simple as possible.
Additional notes
- Ideal conditions to buy would be when the MO is overbought (@=60 or greater).
- Ticker Symbols are linked to charts. DMA = Day Moving Average.
- All stocks chosen must be outperforming major US indexes.
- This is a traders market and NOT safe for buy & hold investors (It’s possible some trades might turn into longer term trades)
- If you buy any stock you need to know when you’re getting out & how to use stops
- Updated 8/23
BIDU – [Baidu]
- Fundamentals (F) – China’s Google.
- Technicals (T) – Broke out to new high 8/1 and currently fallen to back to breakout point. Not overextended from 50DMA. Has potential.
AAPL – [Apple]
- F – The innovative top dog of American Tech companies
- T – Closer to bottom of 4 monthlong consolidation pattern
- T – More comfortable if AAPL was above its 50 DMA
PCLN – [Priceline]
- F – You’ve seen the Captain Kirk adds. Great earnings report
- T – Breakout gap higher in big volume and still climbing. Too over extended right now from 50DMA.
F – [Ford]
- F – Didn’t take bailout $. Good but #2 to GM in China.
- T – Fallen back recently and is directly at support/50DMA.
- T – Probably will build a base at this level
SAM [Boston Beer Company]
- F - Great Beer – Barr’s favorite. (Wish I knew what beer Chinese drank because they just surpasses the USA as the world’s overall #1 beer drinking nation)
- T -After major rally run near the bottom in a three month consolidation pattern.
- T – Another stock that would be in a better position to buy if it was above its 50 DMA
GMCR [Green Mountain Coffee]
- F – Great tasting Vermont based Coffee
- 3 month rally to new high in moderate volume and has just pulled back into consolidating pattern. Now somewhat over extended from 50DMA,
HMIN [Hotels Inns & Hotels Management]
- F – China based hotels
- T – 5 month long rally. Near new high. Just a bit over extended from 50 DMA.
SWKS [Skyworks Solutions]
- F – Leading semiconductor company that benefits from trend to high end multi band width mobile phones
- T – Since 2009 in an uptrend. Last 3 months higher highs and higher lows with big volume up days. Dipped and is now moving along its 50 DMA
- Like to see upward some upward movement before buying
RADS [Radiant Systems]
- F – Global provider of innovative tech to hospitality, entertainment and retail industries (China penetration?)
- T – After 4 month consolidation big break out with volume on earnings report. Has dipped & now at new high. Bit overextended right now.
- Paul will have some interesting posts on this
VCI [Valassis Communications]
- F – Market and media services in America’s & Europe. Think coupons
- T – Had a great 6 month run,but for last three months just marginally better than US Indexes and echoed their performance.
- Too volatile/risky to buy now
UPS [United Parcel Service]
- F – Huge package delivery service with exploding growth in emerging markets.
- T – Not a major mover, but solidly outperforming US Indexes. After move higher looks to be consolidating over last month. A bit overextended from 50DMA
IMAX [Imax Corp]
- F - Innovative 3 D technology & moving into China market.
- T – Big drop from May to July. Reached short term high on 8/1 and since formed lower high and Friday a lower low.
- T – Wait for it to form a base.
UFS [Domtar]
- F – Paper producer /packaging
- T – After rally has formed a three week base. Has potential
AS ALWAYS, DO YOUR OWN RESEACH BEFORE INVESTING
