Whether you laugh at this week’s cartoon or not, there is no doubt that cannabis stocks have been equity market leaders lately, with some of the strongest trend values. But this is almost totally a Canadian story. Don’t waste your time looking for US pot stocks, when the biggest and best opportunities are north of the border. Most Canadian marijuana stocks are cross-listed in the US, so American investors can buy them too.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rose to 352% from 343% a week earlier. The S&P 500 APAR gave up 7 percentage points, while the S&P/TSX Composite Index APAR lost 5 points.
Last Week in the Major Indexes… One week changes were fairly small last week in both directions. The S&P/TSX Small Cap Index had the largest decline over the week. The ranking of the trend values continues to favour US equities.
Last Week in the Sectors… With the exception of the Canadian Health Care sector (a very small group of stocks), the sector trend numbers generally favour US equities. The TSX-based Materials and Energy sector trends have turned negative.
PTA Perspective… Fairy Tale Stocks Rarely Have Happy Endings!
As a long-term critic of the media, especially business and investing media, Trump’s obsession with “fake news” is very annoying. We take our criticism seriously and have always pulled together facts and figures and academic research to support our arguments that current media coverage is poor, and often harmful to investors. Trump, on the other hand, glibly claims that any media coverage that doesn’t flatter him is “fake news”. No evidence. No rationale. Just a claim that he can’t be wrong, because he is president. That’s sad, but more importantly, it undermines those of us who take our critique of the media seriously. This week we do our best to simply lay out some of our arguments for rational media criticism, and hope that you’ll see the difference between that and Trump’s meaningless phrase, “fake news”. We specifically focus on “fairy tale stocks”… the media darlings that capture the imagination of long-term investors.
And, from other sources…
- Elected US congress reps & used car salesmen are tied for most distrusted professions in the US… according to US voters!
- As of the most recent polls last week US congressmen have even lower confidence ratings than Donald Trump!
The US system is broken, and it will take it’s toll on the US economy, in spite of a tentative tax cut that just might be turned into law. For this season at least, Santa offers coal to congress.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rose to 343% from 268% a week earlier. The S&P 500 APAR gained 9 percentage points, while the S&P/TSX Composite Index APAR lost 8 points last week.
Last Week in the Major Indexes… There were lots of one-week gains, but not among the Canadian indexes. Nasdaq finally pulled back from its #1 trend position, to let the DJIA taken over.
Last Week in the Sectors… Information Technology and Materials have slipped quite a bit week-over-week, while other sectors have edged up to fill the gap.
Investor Confidence… The November results for the State Street Investor Confidence Index have just been posted this past week. The Global Investor Confidence Index decreased to 97.1, down 1.0 point from October’s revised reading of 98.1.
As usual we provide more detail on the regional ICI’s in the full edition of TrendWatch Weekly.
Seasonality… We review the results of the US Thanksgiving trade for this most recent instance, and the outlook for the remainder of December and into the new year.
PTA Perspective… Year-End Considerations
As an extension of the Seasonality section, we discuss other year-end considerations that go beyond picking your Xmas stocks to put under the tree. Investors need to be aware that while December is a great month in terms of average returns on equities, there may be some speed-bumps due to tax selling and window dressing. One or the other may apply to you. More in the full edition of TrendWatch Weekly.
Continuing with the high risk and (potentially) high reward topic of niche markets, we’re adding one more this time… robotics & artificial intelligence. There are lots of reasons to avoid “fad stocks”, where the companies involved have little or no profits, but high expectations. But that was said about auto stocks in the horse-and-buggy era, and again with Internet stocks in the early 90s. In the latter case there were 10 years of enormous stock price gains, before the shake-out started happening in 2000. Would you want to miss out on another one of those?
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rose to to 268% from 237% a week earlier. The S&P 500 APAR gained 1 percentage point, while the S&P/TSX Composite Index APAR added 2 points last week. In this tortoise-and-hare story, the rabbit always wins!
Last Week in the Major Indexes… All major indexes had US Thanksgiving gains last week, except the S&P/TSX Venture Index. All trend values are still positive.
Last Week in the Sectors… Health Care (notably the S&P/TSX Health Care Index) holds the top trending position, while Information Technology stocks (US & Canada) are a solid #2. Telecommunication Services equities are at the bottom of trend rankings, but there’s a tug-of-war going on. The US Telecommunication Services companies are trending lower in a big way, while Canadian Telecommunication Services stocks are performing almost as well as Information Technology. All other sectors have positive trends between those two extremes.
PTA Perspective… Another Walk on the Wild Side: Robotics & Artificial Intelligence (AI) Companies!
We’ve been spending some of our research time on popular themes lately… first cannabis stocks, then cryptocurrency equities, and this week we add Robotics, Automation and AI (RAAI). We introduce that theme and the kinds of companies that are included under that label this week; and we’ll be working towards a comprehensive database for the Data & Charts Workbooks over the next few weeks (similar to our Marijuana Stocks workbook). There are already at least two RAAI ETFs, and we discuss those as well. They’re both outperforming the S&P 500 by a wide margin without leverage.
Investing in cannabis stocks is our featured topic this week, since many of them have share prices as high as that horse in the cartoon. Forget about publicly-traded pot companies in the US… Canada is where all the action is!
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) rose to to 237% from 226% a week earlier. The S&P 500 APAR gained 2 percentage points, while the S&P/TSX Composite Index APAR lost 6 last week.
Last Week in the Major Indexes… There was a mixed bag of gainers and losers last week among the major indexes… with a net loss overall. However, all trend values remain positive.
Last Week in the Sectors… The two standouts are Health Care in Canada (to the upside) and Telecommunication Services in the US (to the downside). In both cases one or two stocks within a small list of companies in each is swaying the sector results. All other sectors have low, but generally positive trend values.
PTA Perspective… Canadian Cannabis Company Consolidation is Driving Stock Prices Higher!
We revisit the marijuana sub-sector once again, as we promised to do, once we found that share prices started improving in a significant way. We have some overall data to share, a few case studies, and some comments on what might lie ahead.
Investing via chart patterns has always been an alien concept to us. It’s like tea leaf reading, or examining the entrails of a sacrificed goat. Yet this has been an investment methodology for probably a century or more. If you believe that your success in the markets is due to identifying chart patterns, we’d love to hear from you; because we think that we can identify something else that you’re doing that explains your success in a more parsimonious way.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) declined to 226% from 254% a week earlier. The S&P 500 APAR lost 9 percentage points, while the S&P/TSX Composite Index APAR fell 6 points last week.
Last Week in the Major Indexes… Most of the major indexes declined on a one-week basis, dragging the trend values lower. S&P/TSX Venture Index bucked the trend with a 0.6% gain over the week.
Last Week in the Sectors… There wasn’t much rotation among the sector rankings relative to last week. The notable exception is a strong boost in Health Care within the S&P/TSX Composite Index.
PTA Perspective… The Coming Boom in Cryptocurrency-Related Stocks?
In spite of huge volatility, the price of Bitcoin, Ethereum and other cryptocurrencies keep climbing exponentially. Yet many investors (like us) in the general equities space are unwilling to participate, since cryptocurrency is a complicated concept, and we understand stocks and ETFs much better. Besides, we’d have to open another account with a cryptocurrency dealer that we know nothing about. This week we explore a few opportunities, where you might profit from the cryptocurrency craze by buying common shares in a cryptocurrency-related company with a typical stock listing.
Investing in stocks can certainly feel like online dating at times. You tend to keep it a secret, until you’ve had some success; and even then, you don’t want to brag about it, until you’ve had a lot of success. You probably want to diversify a bit, for the sake of variety; and, after all, not every dating (or stock buying) experience is going to be a winner. And, the most fundamental rule of all… don’t fall in love with either one! It clouds your judgement, and throws a wrench into your long-term profitability!
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved big time to 254% from 175% a week earlier. The S&P 500 APAR lost 7 points, while the S&P/TSX Composite Index APAR gained 3 percentage points last week.
Last Week in the Major Indexes… There weren’t any one-week losers among the major indexes that we follow this past week. US indexes continue to trend higher faster than the Canadian ones.
Last Week in the Sectors… Energy displaced Information Technology as the best trending sector. Consumer Staples, Consumer Discretionary and Telecommunication Services are all trending lower in the US, while their Canadian counterparts are trending upward.
PTA Perspective… ’Tis the Season for Seasonal Stocks
It’s time to revisit the calendar effects. We lay out the best performing sectors and niches for the best three months of the year for most major indexes (based on historical averages)… November, December and January. Get ready for good times ahead, if history repeats itself.
Investor Confidence… The October results for the State Street Investor Confidence Index have just been posted this week. The small dip was mainly due to a large decline in confidence in North American equities.
As usual we provide more detail on the regional ICI’s in the full edition of TrendWatch Weekly.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved again to 175% from 144% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both fell a few points from where they were last week.
Last Week in the Major Indexes… It was a quieter week in terms of one-week changes in the indexes than last week. The Dow is still on top by trend rankings. Nasdaq has picked up some trend points, while the Russell 2000 continues to lose ground. The Canadian small cap indexes continue to be weak.
Last Week in the Sectors… Information Technology is once again at the top of the sector rankings, with Industrials and Financial Services not far behind. As usual there are some differences in the sector performances between the S&P stocks and those in the S&P/TSX Composite Index.
PTA Perspective… Currency Considerations
For many, Canadian/US exchange rates only come up when planning a vacation or doing a bit of cross-border shopping (in person or online). A stronger Canadian dollar means you can buy more when you’re south of the border. The same applies to stocks, but you generally keep merchandize, and watch your trip to Florida expire. With stocks, you need to sell them eventually… at a profit or loss. With US stocks that means that you may have some good news or bad news over and above your nominal capital gain or loss. If the Canadian dollar is stronger when you sell, you lose; if it’s weaker, you may get a nice bonus. This week, we walk you through just how much difference trading US stocks (as a Canadian) can mean to your bottom line.
There was a time when we earned amazing profits from companies who shovelled coal out of the ground. There are two kinds. The softer stuff is great for burning to generate electricity. There was a time not long ago when 75% of all electricity in the US came from burning coal. That meant that every electric car was in fact a coal-powered car! The harder variety of coal is used to make steel worldwide. Demand for coal for electricity has fallen dramatically since less environmentally threatening sources have come online, but coal is nonetheless still a profitable commodity. Should you invest? No, probably not. The leading coal ETF, VanEck Vectors Coal ETF (KOL), has a trend value of just 0.3% with 23% consistency. There is an underlying message here, however. Ethical issues should not play a role in your investments. If coal were the best place to invest your money right now, you should take advantage of that.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved again to 144% from 123% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both rose slightly from where they were last week.
Last Week in the Major Indexes… The Russell 2000 Index finally lost it’s leading spot in the major index rankings to the good old Dow Industrial average again. Both the S&P/TSX Small Cap Index and S&P/TSX Venture Index declined over 1% last week, while the other indexes had one week gains.
Last Week in the Sectors… Health Care declined from the top of the trend rankings to #9, while #5 Industrials took on the #1 trend position. Utilities improved from #10 to #5.
PTA Perspective… Fall 2017 ETF Update
While we’re inclined to be stock pickers rather than ETF investors, the same relative trend analysis™ (RTA) methodology can be applied to both. This week we review the state of the ETF industry and offer some guidelines on how to use them. We stick with equity ETFs this time, rather than the more esoteric exchange traded products (ETPs), but with 2000+ of them available in North America, that should be enough!
This cartoon may be too scary to make you laugh out loud, but it is worth considering. How are the “make America great again (MAGA)” voters assimilating the fact that their president has done absolutely nothing in almost a year now to improve their financial situation? In fact he’s accomplished nothing at all on any front! But I understand that he’s still golfing regularly. There are still reasons for the stock markets to continue higher, but that’s in spite of the worst president in American history, not because of him. Meanwhile most of the stock markets worldwide are outperforming US equities. We worry that the MAGA folks won’t accept the fact that they were wrong, and seek violent means to express themselves instead. We’re not sure the markets would shrug that off.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) improved again to 123% from 86% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both dropped a few points from where they were last week.
Last Week in the Major Indexes… The Russell 2000 Index finally pulled back a bit on a one-week basis, but still leads the other major indexes on trend. All other major indexes had modest one-week gains last week.
Last Week in the Sectors… The bottom line is to avoid Telecommunication Services, Consumer Staples and Utilities within both the S&P/TSX Composite Index and S&P 500. Beyond that you’ll need to look at the differences between sector preferences in Canada vs the USA.
PTA Perspective… Crash Course — Remembering October 19, 1987 (30th Year Anniversary Edition)
This is indeed the 30th anniversary of the worst crash in stock market history. On October 19th, yes, a single day, the DJIA plunged 23%. If you thought 2008 was a stock market, crash you have absolutely no idea what a stock market crash is. And I doubt if any of our readers were active investors in 1929. If so, we congratulate you on trading well into 100+ years of age. So, for all practical purposes, there really was only one stock market crash, and we walk you through it. All investors need to know what a real market crash is like; and hope that you’ll never, ever see one for real in your lifetime.
It’s totally hilarious how so many are attributing the continuing stream of new highs in the major American stock indexes to Donald Trump’s presidency. I can understand how this delusional president would make that claim himself, but why would anyone intelligent do that? As you’ll learn today, the vast majority of stock markets around the world are outperforming the major US indexes, since his election. It’s a “Trump Curse”, not a “Trump Trade.. But then, the US biz media never look beyond US borders. End of story.
PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) shot up to 86% from 55% a week earlier. The S&P 500 APAR and the S&P/TSX Composite Index APAR both stayed within a few points of where they were last week.
Last Week in the Major Indexes… The Russell 2000 Index has been the trend leader for the past few weeks. US small caps are apparently back in vogue. Small caps generally offer higher returns, albeit with higher risk. Perhaps that’s exactly what investors want right now.
Last Week in the Sectors… Among S&P/TSX Composite Index stocks, Consumer Discretionary and Health Care stocks are now the leading groups. Among the S&P 500 sectors Energy, Financial Services, Industrials, Materials and Information Technology are almost tied for leading performance.
PTA Perspective… 2017 Q3 Review – Global Perspective
The second part of our Q3 2017 review takes a global perspective. We introduce you to the largest stock markets in the world, then provide a tour of the best performing markets regardless of size… year-to-date, and based on current trend values. And, finally, we remind you how to profit from foreign markets with the ETF and ADR trend data in our Data & Charts Workbooks.