The Social (Media) Side of Money

SYNOPSIS

While many equity indexes remain near record highs, there are reasons for caution that have nothing to do with geopolitical risk or central banks. Historically, September is the worst month of the year to be invested in stocks, and the latest consumer confidence index for August is now down for a fifth month in a row. We’re not throwing in the towel yet, but maintaining a higher cash position, as sell-signals are triggered for individual holdings, is not a bad idea.

Last Week in the Indexes… All of the major market indexes retreated last week, except for a tiny gain for the Russell 2000. The S&P/TSX Venture Index and the S&P/TSX Small Cap Index took there biggest one-week hits, since they took over the leading spots among the indexes we track weekly on a trend basis. That was many months ago.

PTP… It was clearly time for our ProfiTrend Portfolio APAR (annualized price appreciation rate) to come back down out of the stratosphere. Imagine that you’re a race car driver comfortable with going 100mph, and don’t feel too stressed out at pushing it to 200mph. But then something strange happens; and as you press on the accelerator you’re suddenly up to 300mph, 400mph, 600mph. Your car suddenly feels very fragile at those speeds, yet the adrenaline keeps you going. But for how long before your vehicle crashes or flies apart?

Too colourful a metaphor? Maybe, but as our PTP score (“speed”) stayed at record levels for seven weeks, there was a real sense of anticipation of hitting a wall any day now. But that didn’t happen. As usual, one-by-one, our best performers reached a peak in their trend and pulled back far enough to be sold via one of our sell signals. Those big profits are now sitting in cash for the time being. Meanwhile, we’re still growing the PTP capital gains at twice our average pace and some 16X faster than our two benchmark indexes. We can live with that, and will find a way of deploying that excess cash, when it seems appropriate to do so.

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We sold just one position (our biggest) last week, and otherwise stayed on the sidelines to watch all of the major indexes reverse course for the week.
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Investor Confidence Index for August 2016… SSICI Drops Again

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The August 2016 State Street Investor Confidence Index (SSICI) decreased to 89.7, down 8.3 points from July’s revised reading of 98.0. The largest regional drop was in the North American ICI. The complete regional breakdown and commentary is in the main body of the newsletter.

Seasonality for September… September is the worst month of the year to be invested in equities… based on historical data for the S&P 500, DJIA, Nasdaq Composite Index and the S&P/TSX Composite Index. Only Telecommunication Services and Health Care tend to outperform the S&P 500 on average with a reasonable degree of consistency. More detail in the main body of this week’s edition.

PTA Perspective… The Social (Media) Side of Money

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Do you talk to other investors regularly about your investment strategies and results, or do you prefer to keep that part of your life’s activities to yourself? There are pros and cons to both sides, but a case can be made for talking to your investing peers now and then for some different perspectives from the so-called experts. Most of those “experts” in the BizMedia have financial products to sell, so their advice is normally a sales pitch. Your buddy at the bar or wherever you meet up, doesn’t have that bias. This week we look at extensions to that “bar buddy investor” concept. There are numerous web sites where investors commiserate about success and failures and offer their best tips based on personal experience. You can do the same. There are also sites that monitor these social media discussions and report summary results about how many people are praising or bashing Apple, or making an argument that we need higher interest rates. We talk about a few of those… the common ones and the not so common.

Summer 2016 Q&A

SYNOPSIS

So, who else is getting fed up with the media calling the equity stock price appreciation since mid-February “The World’s Most Hated Stock Rally!”. Do any of us hate the fact that our portfolios have exploded in value over the past few months? Are we begging for it to stop, because we’re running out of room to store our profits? Would we feel more comfortable, if we could just start losing money again? No, I think the media are hating this rally because they’ve been drinking their own cool-aid. They sold all their stocks long ago and kept telling us that stocks are over-valued and will come crashing down any day now. Then, they selectively talk to guest analysts who agree with them and repeat that message.

But this time investors have ignored the classic “sky is falling” message, and stock prices keep rising. Investors are calm, cool and collected, as is evident from the near-record low VIX numbers. There is no “fear factor”. But let’s be a little cautious here. It just could be “media hate” that is driving stock prices higher. If that’s the case let their hysterical rage continue until they all die of heart attacks, strokes or exhaustion!

Last Week in the Indexes… All of the major market indexes took a breather last week, with one-week changes being slightly positive or negative or practically zero. But the trend values of all seven indexes remain decidedly positive, with S&P/TSX Venture Index and S&P/TSX Small Cap Index retaining their leading positions.

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We were fairly active last week… selling four positions and adding three new ones. No panic selling… just rotating out of highly profitable positions with trends that have become tired into some new ones where the trends are just getting started.

PTA Perspective… Summer 2016 Q&A

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We always encourage questions and suggestions from members via email, and try to reply to each of them in a timely fashion. When our replies to some of those questions look like they may be of interest to other readers as well, we set them aside to include in an occasional Q&A session. This week we’re running one of those as our PTA Perspective Feature.

Seasonality in Perspective

SYNOPSIS

The Dow, S&P 500 and Nasdaq keep hitting new highs, although we haven’t seen any big moves upward in a while. The big question is who is buying? We’re told that the money managers consider stocks over-priced, and the retail investors are sitting on cash. Meanwhile there is no volatility, which means no one is scared about impending declines in equities. Very mysterious indeed! So, what’s an investor to do? Why not just sit back, watch the profits roll in?

Last Week in the Indexes… Canadian small caps as tracked by the S&P/TSX Venture Index and S&P/TSX Small Cap Index continue to charge ahead and increase their trend values, while US and Canadian large cap indexes lose ground.

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) has retreated to 471% from 524% in our last report. The S&P/TSX Composite Index APAR is down a point from last time at 27% , and the S&P 500 APAR has dropped 4 points to 22% from 26% a week earlier. In the chart below, you can also see the five-year median results for these three measures. All readings are still above the long term averages. Since the PTP score is so far beyond where we’ve ever seen it (since tracking the PTP this way), we’re totally contented with our profits to date, and the potential for more of the same.

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One stock sold last week; two new ones added.

PTA Perspective… Seasonality in Perspective

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Although seasonality effects are a recurring feature in TrendWatch Weekly, we’re making it the featured topic this week. We have no doubt that the success rates of various recurring patterns are real, but are the sizes of the effects big enough to really make a difference? And, assuming that there was an easy way to take advantage of all of the major calendar effects, would you real beat the market benchmarks? Well, there is actual ETF that implements seasonal gains, and we’ll tell you all about it!

Foreign Investing: Case Study – Brazil

SYNOPSIS

Since the Brexit bro-ha-ha, volatility in the equities markets has been virtually nonexistent, and several major indexes keep hitting new highs. We get the usual “stocks are over-valued” blah-blah-blah in the media; but even if that’s true, stocks can stay over-valued for a very long time, before reverting back to long-term averages (or below those). Also, there seems to be no shortage of opinions on just what “over-valued” means. And, finally, with no way of earning profits in the bond markets, where are you going to invest?

Last Week in the Indexes… Canadian small caps as tracked by the S&P/TSX Venture Index and S&P/TSX Small Cap Index are still at the top of the trend rankings. It’s been a phenomenal run, yet S&P/TSX Venture Index (just the average performance in stocks in that composite) is still rising at 1.7%/week… about 88% annualized!

PTP… Our ProfiTrend Portfolio APAR (annualized price appreciation rate) has retreated to 524% from 601% in our last report. The S&P/TSX Composite Index APAR is unchanged from last time at 28% , and the S&P 500 APAR declined slightly to 28% from 30% a week earlier. In the chart below, you can also see the five-year median results for these three measures. All readings are still above the long term averages.

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There is definitely a viagra free sample strong link between heart disease and erectile dysfunction. This is a powerful anti-impotency drug and it is as effective as genuine Pfizer made viagra generic wholesale . This medication should be purchase generic levitra greyandgrey.com consumed once in a while cause a delayed (e.g. more than 4 hours) or excruciating erection. After you’re done, make sure prescription order viagra without that you dispose of the used cucumber properly lest your wife finds it and includes it in arriving at decisions. We sold one PTP holding last week and added two more. We’re still heavily weighted in precious metal mining stocks (the driver of record-breaking PTP performance), but are also dabbling in Health Care and Information Technology stocks in the US, which are favoured sectors right now (in addition to the long-standing Materials success story in Canada).

PTA Perspective… Foreign Investing: Case Study – Brazil

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All eyes are on Rio these days as the Summer Olympics 2016 are now underway. But that’s not the only reason to set your sights on Brazil. If you’ve been following our quarterly summaries and the Regional ETF chart in the Data & Charts Workbooks, you know that Brazilian stocks are as hot as the Brazilian women in those string bikinis! One ETF based on Brazil stocks was already up 30% by the end of the first quarter of 2016. That same ETF is now up 65%. Also, the currency, the Brazilian Real (BRL), has been climbing which means that any investments earlier this year using the local currency will get an extra boost when the stocks are sold and the cash repatriated to the US or Canada. We have lots more on this topic in this week’s full edition. We use Brazil as a case study of how the contents of our Data & Charts Workbooks can help you identify and capitalize on foreign investments when the opportunities present themselves.

Bullseye Profits without Seeing the Target!

SYNOPSIS

The North American markets have slowed their advance a bit, but there’s certainly no cause for concern just yet. Gold stocks have pulled back relatively sharply this past week as the advance in the price of bullion has stalled. The stocks are far more volatile than bullion, so small moves up or down in the precious metal result in large moves up or down in the stocks.

Last Week in the Indexes… The large cap indexes (S&p 500, DJI, S&P/TSX Composite Index) all had losses on a one week basis, while the small cap indexes (Russell 2000, S&P/TSX Small Cap Index and S&P/TSX Venture Index) all had gains. Nasdaq was also improving as tech stocks are gaining some momentum.

PTP… We expected our ProfiTrend Portfolio APAR (annualized price appreciation rate) to pull back further from its 337% reading last week; but it turned around and set yet another new 5-year record high of 601% instead. The S&P/TSX Composite Index APAR eased back to 28% from 33% last week, and the S&P 500 APAR declined to 30% from 37% a week earlier. In the chart below, you can also see the five-year median results for these three measures. All readings are well above the long term averages.

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We sold two stocks last week and added two more. We’re still really heavily weighted in precious metal mining stocks (the driver of record-breaking PTP performance), but are also looking at the improving Health Care and Information Technology stocks in the US for future opportunities.
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PTA Perspective… Bullseye Profits without Seeing the Target!

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Dozens of academic research papers have been published with evidence that the biggest problem that investors face that limits their profit potential is selling too soon, when their holdings are advancing, and holding onto losers with hope that they’ll come back up. This is true of brand new equities investors, those who have been in the game for quite a while, and even professional money managers. The ProfiTrend Advantage framework contains provisions for dealing with both. We’ve tended to emphasize and repeat our strategy for cutting losses short and feeling rewarded for doing so; but this week we’ve set aside some extra time to convince you that you shouldn’t be fearful of letting your profits run. The first thing to do is throw your own profit targets out the window, and ignore any that you find in the media and analysts’ reports.

Seasonality in August… Overall, August is among the worst performing months of the year… often attributed to peak holiday season, and minimal investor interest in trading. Although four sectors outperform the S&P 500 in August on average (Utilities, Consumer Staples, Health Care and Information Technology), only Utilities has an average gain (+0.6%) vs a loss in that month. More detail in the main body of this week’s edition.