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What Are You ... Buying ... Selling ... and/or Pondering? (Summer 2017)
There has been news of late that centers around possible war with North Korea and its effect this is currently having on a richly priced stock market. No doubt, my thinking is, big money has the markets levered up and with this recent news of possible war money is being called home to delever their exposure in the stock market.
Over the past three weeks Old_Skeet's barometer has move from a reading of 143 to 146 to 152 for its weekly close. The barometer measures certain elements of the S&P 500 Index. A barometer reading of 150 represents the mid point of fair value. A reading of 143 would indicate that the Index was about 5% overvalued and now with a reading of 152 just slightly undervalued. The barometer has three feeds. An earnings feed, a breath feed and a technical score feed. With this, it combines both fundmentals and technicals to produce a numerical reading. Generally, a higher barometer reading indicates there is more investment value in the 500 Index over a lower barometer reading.
So, what is Old_Skeet doing? At this time absouetly nothing as the barometer drives an equity weighting matrix that assist me in setting my equity allocation weighting within my portfolio. Since, I am currently conseratively invested at this time I can not get excited about increasing my equity allocation until I see a barometer reading somewhere around 160.
Remember, I am a retail investor who shares my thinking on the board with others for information purposes only; and, this information should not be taken as investment advice.
So, stay tune for next weeks barometer reading and report.
Added to HQL on Thursday on weakness. WSJ reported outflows from health funds and it seems HQL was affected. While I did not get to take advantage, the price dropped to $19 on Friday AM, then recovered to 20.12 at the close. The difference between the one-month high of 22.43 and 19.00 is really extreme during a period when the biotech indices have been generally on the upswing.
Hi guys! Last Friday, added to FTIPX and PARWX. Have been waiting to add to Parnassus for a while. Finally, the pullback gave me a chance. I don't remember who plays Fidelity......I know Slick does. I remember the transfers. I say that to say this: the webinars on Fidelity are very, very good. I have been listening in since I retired. I will say those who can should sign up for the ones of interest. Duke says have pencil and paper handy for notes. Tomorrow they will have one on international ETFs from 12:00pm to 1:00pm. They are very good. Sorry, I said that before. Also, on August 22nd, they have one: Fundamental Tech Ass. Have signed up for that. Listened to one today. They said healthcare and small caps on pullback.....best time for pullback is end of September. Things look good through mid-2018 on the charts and earnings. That's what they said. Just saying.......also, Smart Money says rates go up by year's end. God bless the Pudd
Hi @Puddnhead You noted: "also, Smart Money says rates go up by year's end." Would that be short term or long term rates, or both? Fido is an okay place. You should enjoy "your portfolio" pages. Quite a bit of stuff, of value, to look through.
Hi Catch Your question shows your wisdom, my friend. They were talking generic....the 10-year. Some were from 260 to 3. Again, Smart Money....it's the way they are positioning themselves. God bless the Pudd
Hi guys! I listened to the International ETF webinar yesterday. It was great. Duke took some notes. Going to invoke the longneck rule. I don't know and I don't remember so don't ask any questions....i.e., did not download it. Digital property rights, ya know. It was held by the VP of the I-shares investment team. Is he important? Hell, I don't know.....he might be the only one who's not on vacation right now. Slow global growth---it's all good. The best first half of the year. Asia -x- Japan, EM, US.....we are not at cycle peak. This could go a long time yet. US.....low volatility, it's hard to break out of it. We've been it 80% of the time since 1872. Stocks over bonds---stocks not expensive. Overseas is better choice. 2nd half: Japan, EM, Euro zone. Weak dollar....could be big this year. China not a worry....this year risks Central Bank's draining money from system. Also we don't see leverage being a problem. In US, debt and healthcare could be a problem. No UK or Italy could be a problem in US. They say also bitcoin is very much a side show.....it's too small to matter. God bless the Pudd p.s. Thanks to Duke for his notes. p.s.s. It's all good .... party on....lol! Again, watch September.
Hi MikeM! Saw the Bills on Thursday playing the Eagles. Your 3rd string quarterback made some great throws. Eagles played a lot of first team players, so don't feel too bad. As far as acting on anything, that would be a "no" ..... not 'til boo time.....i.e., Halloween will be when I start to look. The Dukester and I will huddle up first. Then, line up and look at the defense first with audibles ready. Things aren't that bad really....just need to get past September. With the debt ceiling and budget to see the sun shine ...!!!! God bless the Pudd
Always optimistic about the Bills in preseason @Puddnhead . Rex Ryan and his group destroyed the defense over the last couple of years, but I can already see improvements with this new coaching staff. Big problem, the passing game sucks. I will always have my 2nd favorite team to cheer for though. That would be any team playing the Patriots!!!!
For the past three weeks the barometer has had rising readings (146, 152 & 155). Generally, a rising reading indicates more investment value is coming into the S&P 500 Index. A reading of 155 falls between fair value and undervalue. With TTM earnings improving along with the improved outlook for forward estimates should the barometer reach a reading of around 160 Old_Skeet most likely will become a buyer in equities as I am currently a few percentage points short from what my equity weighting matrix is calling for. During the month of August I have moved some money left within my portfolio into more conservative positions from the equity side. The strategy is to go light equities in a falling market while go heavy in a rising market. I also employ a seasonal investment strategy where I go light equities during the summer. As we entered June (summer) my data shows the 500 Index with a reading of 2416 and we were at 2426 with Friday's close. With this, I wonder how we will close out August and end summer?
I have been following the charting of the 500 Index through the Elder Impulse System that Tony brought to the board a while back. Based upon my code settings the weekly chart provided a red reduce position signal this week.
Interestingly, I am about 2% underweight equities at this time based upon my equity weighting matrix's recommendation. So, when the direction turns upward I plan to load equities (in steps) and go heavy by a couple of percent through Fall, Winter & Spring unless the barometer indicates different. Generally, by the seasonal strategy, the better returns in the stock market historically come during the fall, winter and spring while the markets tend to go soft during the summer.
@Old_Skeet Thanks very much for posting your market update including the barometer reading and the Elder system. I always enjoy your weekly posts and find them informative. Thanks for sharing. This is the first I've heard of the Elder impulse system. Can you provide a little background? Based on your discussion it appears that the barometer reading plays a bigger role in your evaluation of the market.
I use the barometer as my key driver to adjust my equity allocation along with the calendar concerning seasonal trend strategies. A poster named Tony appeared several months ago after reading about the barometer and suggested that the Elder Impulse System might be worth a look.
He suggested using the green bars for accumulate position signals, blue bars as hold position signals and red bars as a reduce position signal in throttling the equity allocation. I use the 13 EMA for the short term and the 65 EMA for the intermediate term trend line. Thus far I am only following the system to observe its signal generation and how this might be used to be interfaced into the barometer. Currently, for the barometer the technicals I use are a blend of the RSI and MFI.
Remember, the barometer has three feeds. An earnings feed, a breath feed and a technical score feed to produce it's reading. The Elder Impulse System keys off price movement.
You can Goggle ... Elder Impulse System ... and read more than I can write. Seems a good number of traders are using it because it seems to build a position slowly (in steps) and then exits the position more faster than most other systems. It gets one in slower and out faster.
I am more of an investor than a trader and I am looking at this trading concept as it might be used to assist in throttling my equity allocation. I have it only under study ... and, have not moved any money based upon its signal.
I developed the barometer to help determine when there was value in the 500 Index and also to drive my equity weighting matrix within my portfolio to determine how much equity I should hold within my equity allocation range, (45% to 55%). Currently, the matrix is calling for me to load equities within my allocation by a couple of percent. Normally, I'd start an average in process once a pullback crossed a threshold. Now, I'm going to watch the Elder Impulse System to see how it might aid me in loading my equity allocation as we move towards November. I'm thinking there is no great rush to do this. After all we are currently only off the 52 week high for the 500 Index by about 2.2% as I write. And, you'd think based upon the news services we were down much more. Thus far the current dip has not reached pullback range.
For me, a dip would be a decline of up to 5%. A pullback would be a decline in the range of 5% to 10%. A downdraft would be from a range of 10% to 15%. A correction would be from a range of 15% to 20%. And, a recession would be a decline of 20% or better.
I'll be watching the coming week with great interest ... and, I'll write more on this as the set up takes place and I begin to move.
Pondering simplifying my portfolio (20 funds), which consists or 65% Equities and 35% Bonds. I ponder (ask myself) am I doing an equal or better job than a single asset allocation fund that has a similar (65/35) asset allocation. Judging my collective efforts against individual asset allocation funds that I own in my portfolio the comparison goes something like this.
I hold very little cash independent of my funds. I find it interesting that two of the three asset allocation funds I own have significant cash position.
YTD this is how I fared on a monthly basis:
This equated to a YTD performance of 9.34% (including today's strong results). So a little better than VWELX and BRUFX, not as good as PRWCX.
Why don't you do an Instant Xray analysis on your portfolio and then do one on the three funds (trident) you have referenced. Thus far this year small caps and value have trailed growth. If you portfolio has a value tilt (as mine does) it will not have the performance of one with a growth orientation. Also, don't forget to compare how much foreign you have vs the trident you reference. In addition, you might wish to do a lookback on the one, three, five and ten year returns. I'm thinking, at times, some funds will lead while others will trail.
In addition, you might compare it to a 65/35 Indexed portfolio as well as to the Lipper Balanced Index.
I could cherry pick three hybrid funds form my portfolio and they would year-to-date beat my portfolio as a whole. However, I have no desire to go to only three funds.
Hi @bee. I think I know exactly how you feel about simplification. At a certain point I had to admit to myself (maybe age has something to do with it) all my efforts towards building the perfect "team" of funds, though fun at the time, the effort was really not value added. Over the last few years, I've kept a nice mix of 2 well managed balanced funds accompanied by another 10 supporting cast funds, both equity and bond funds. I still like to "try" and add alpha, so I have taken a small portion of the portfolio and played with a few individual stocks. BABA and V have been big hits for me this year. But also bought into VRX that ytd is just trending water in a most volital way. All and all, up around 10% for the year.
That is just with my self managed portfolio. Half my money is in Schwabs inteligent portfolio. Easy as it gets. As I look today, it is up about 8.8% for the year.
But anyway, I will let you know from my perspective that simplification just feels better. It feels like I have more control of holding good funds and an understanding how I'm diversified and knowing exactly what I hold, instead of diluting my choices with manager diversification or trying to take foot holds in the best funds at the time. That just didn't work for me.
Good luck to you bee. I think you are one smart cookie.
P.S., some might ask why I would invest in VRX, Valeant. Well, I work for one of their subsidiaries, and I know the new management is on the right track. The company has moved from an acquisition and shady pricing company to a company paying down debt, selling off poor performers and investing in "research and manufacturing", at least in it's most profitable businesses.
Yeah, I am a little surprised at the degree to which I feel more content from having gone for equity funds all into DSENX (12% ytd) plus handfuls of 2-3 others.
Longest stretch I can recall (last couple decades) with no changes in allocation. May 9 I opened a small position in OPGSX (my last trade). Gold was near the end of a short term price funk and I took a bit of a gamble on a rebound. A very dubious distinction. However, 3.5 months with no changes is pretty good by my standards.
There were some proceeds from the sale of a real estate parcel in late May. About half was put into short-term bonds pending some planned home renovation in the late fall and the other half was easily spread out among the existing investment sleeves.
Not sure why I haven't traded more. But it probably relates to being on the cash-heavy end of my allocation model since early in the year plus the fact there haven't been any major market corrections over the past 3-6 months which would entice me to let loose on some of the cash.
Have been contemplating PARWX and reading all related comments... anyone know what M* is alluding to here regarding Dodson in their PARWX description: "If past is prologue, Parnassus Endeavor could be the best fund there is. But uncertainty regarding its lone manager, Jerome Dodson, and average fees limit its appeal."
Hi Karaald! I cannot speak to what "M*" means. I say this: there is $4.5 billion in the fund and only 1 manager. These funds get very little love for as good as they are. God bless the Pudd p.s. Maybe it's his age??
Comments
There has been news of late that centers around possible war with North Korea and its effect this is currently having on a richly priced stock market. No doubt, my thinking is, big money has the markets levered up and with this recent news of possible war money is being called home to delever their exposure in the stock market.
Over the past three weeks Old_Skeet's barometer has move from a reading of 143 to 146 to 152 for its weekly close. The barometer measures certain elements of the S&P 500 Index. A barometer reading of 150 represents the mid point of fair value. A reading of 143 would indicate that the Index was about 5% overvalued and now with a reading of 152 just slightly undervalued. The barometer has three feeds. An earnings feed, a breath feed and a technical score feed. With this, it combines both fundmentals and technicals to produce a numerical reading. Generally, a higher barometer reading indicates there is more investment value in the 500 Index over a lower barometer reading.
So, what is Old_Skeet doing? At this time absouetly nothing as the barometer drives an equity weighting matrix that assist me in setting my equity allocation weighting within my portfolio. Since, I am currently conseratively invested at this time I can not get excited about increasing my equity allocation until I see a barometer reading somewhere around 160.
Remember, I am a retail investor who shares my thinking on the board with others for information purposes only; and, this information should not be taken as investment advice.
So, stay tune for next weeks barometer reading and report.
I wish all good investing.
Skeet
Actually, I raised a wee bit of cash post election and went a bit more conservative - but not much. Just now added DIS and TSLA. Nothing fancy.
and so it goes,
peace,
rono
Some of my largest holdings are in closed funds and if I sell them I can't get back in, so I'm raising some cash by selling some other things.
Last Friday, added to FTIPX and PARWX. Have been waiting to add to Parnassus for a while. Finally, the pullback gave me a chance. I don't remember who plays Fidelity......I know Slick does. I remember the transfers. I say that to say this: the webinars on Fidelity are very, very good. I have been listening in since I retired. I will say those who can should sign up for the ones of interest. Duke says have pencil and paper handy for notes. Tomorrow they will have one on international ETFs from 12:00pm to 1:00pm. They are very good. Sorry, I said that before. Also, on August 22nd, they have one: Fundamental Tech Ass. Have signed up for that. Listened to one today. They said healthcare and small caps on pullback.....best time for pullback is end of September. Things look good through mid-2018 on the charts and earnings. That's what they said. Just saying.......also, Smart Money says rates go up by year's end.
God bless
the Pudd
You noted: "also, Smart Money says rates go up by year's end." Would that be short term or long term rates, or both?
Fido is an okay place. You should enjoy "your portfolio" pages. Quite a bit of stuff, of value, to look through.
Your question shows your wisdom, my friend. They were talking generic....the 10-year. Some were from 260 to 3. Again, Smart Money....it's the way they are positioning themselves.
God bless
the Pudd
I listened to the International ETF webinar yesterday. It was great. Duke took some notes. Going to invoke the longneck rule. I don't know and I don't remember so don't ask any questions....i.e., did not download it. Digital property rights, ya know. It was held by the VP of the I-shares investment team. Is he important? Hell, I don't know.....he might be the only one who's not on vacation right now. Slow global growth---it's all good. The best first half of the year. Asia -x- Japan, EM, US.....we are not at cycle peak. This could go a long time yet. US.....low volatility, it's hard to break out of it. We've been it 80% of the time since 1872. Stocks over bonds---stocks not expensive. Overseas is better choice. 2nd half: Japan, EM, Euro zone. Weak dollar....could be big this year. China not a worry....this year risks Central Bank's draining money from system. Also we don't see leverage being a problem. In US, debt and healthcare could be a problem. No UK or Italy could be a problem in US. They say also bitcoin is very much a side show.....it's too small to matter.
God bless
the Pudd
p.s. Thanks to Duke for his notes.
p.s.s. It's all good .... party on....lol! Again, watch September.
Saw the Bills on Thursday playing the Eagles. Your 3rd string quarterback made some great throws. Eagles played a lot of first team players, so don't feel too bad. As far as acting on anything, that would be a "no" ..... not 'til boo time.....i.e., Halloween will be when I start to look. The Dukester and I will huddle up first. Then, line up and look at the defense first with audibles ready. Things aren't that bad really....just need to get past September. With the debt ceiling and budget to see the sun shine ...!!!!
God bless
the Pudd
Giant side trade.
A barometer reading update.
For the past three weeks the barometer has had rising readings (146, 152 & 155). Generally, a rising reading indicates more investment value is coming into the S&P 500 Index. A reading of 155 falls between fair value and undervalue. With TTM earnings improving along with the improved outlook for forward estimates should the barometer reach a reading of around 160 Old_Skeet most likely will become a buyer in equities as I am currently a few percentage points short from what my equity weighting matrix is calling for. During the month of August I have moved some money left within my portfolio into more conservative positions from the equity side. The strategy is to go light equities in a falling market while go heavy in a rising market. I also employ a seasonal investment strategy where I go light equities during the summer. As we entered June (summer) my data shows the 500 Index with a reading of 2416 and we were at 2426 with Friday's close. With this, I wonder how we will close out August and end summer?
I have been following the charting of the 500 Index through the Elder Impulse System that Tony brought to the board a while back. Based upon my code settings the weekly chart provided a red reduce position signal this week.
Interestingly, I am about 2% underweight equities at this time based upon my equity weighting matrix's recommendation. So, when the direction turns upward I plan to load equities (in steps) and go heavy by a couple of percent through Fall, Winter & Spring unless the barometer indicates different. Generally, by the seasonal strategy, the better returns in the stock market historically come during the fall, winter and spring while the markets tend to go soft during the summer.
Updates are schedule to be posted weekly.
Thanks for stopping by and reading.
Old_Skeet
Thanks very much for posting your market update including the barometer reading and the Elder system. I always enjoy your weekly posts and find them informative. Thanks for sharing. This is the first I've heard of the Elder impulse system. Can you provide a little background? Based on your discussion it appears that the barometer reading plays a bigger role in your evaluation of the market.
I use the barometer as my key driver to adjust my equity allocation along with the calendar concerning seasonal trend strategies. A poster named Tony appeared several months ago after reading about the barometer and suggested that the Elder Impulse System might be worth a look.
He suggested using the green bars for accumulate position signals, blue bars as hold position signals and red bars as a reduce position signal in throttling the equity allocation. I use the 13 EMA for the short term and the 65 EMA for the intermediate term trend line. Thus far I am only following the system to observe its signal generation and how this might be used to be interfaced into the barometer. Currently, for the barometer the technicals I use are a blend of the RSI and MFI.
Remember, the barometer has three feeds. An earnings feed, a breath feed and a technical score feed to produce it's reading. The Elder Impulse System keys off price movement.
You can Goggle ... Elder Impulse System ... and read more than I can write. Seems a good number of traders are using it because it seems to build a position slowly (in steps) and then exits the position more faster than most other systems. It gets one in slower and out faster.
I am more of an investor than a trader and I am looking at this trading concept as it might be used to assist in throttling my equity allocation. I have it only under study ... and, have not moved any money based upon its signal.
Old_Skeet
Thanks very much for providing this info
I developed the barometer to help determine when there was value in the 500 Index and also to drive my equity weighting matrix within my portfolio to determine how much equity I should hold within my equity allocation range, (45% to 55%). Currently, the matrix is calling for me to load equities within my allocation by a couple of percent. Normally, I'd start an average in process once a pullback crossed a threshold. Now, I'm going to watch the Elder Impulse System to see how it might aid me in loading my equity allocation as we move towards November. I'm thinking there is no great rush to do this. After all we are currently only off the 52 week high for the 500 Index by about 2.2% as I write. And, you'd think based upon the news services we were down much more. Thus far the current dip has not reached pullback range.
For me, a dip would be a decline of up to 5%. A pullback would be a decline in the range of 5% to 10%. A downdraft would be from a range of 10% to 15%. A correction would be from a range of 15% to 20%. And, a recession would be a decline of 20% or better.
I'll be watching the coming week with great interest ... and, I'll write more on this as the set up takes place and I begin to move.
Skeet
YTD:
VWELX= 7.43% (65/35)
PRWCX= 9.93% (62/26/12 cash)
BRUFX= 9.08% (53/34/13 cash)
I hold very little cash independent of my funds. I find it interesting that two of the three asset allocation funds I own have significant cash position.
YTD this is how I fared on a monthly basis:
This equated to a YTD performance of 9.34% (including today's strong results). So a little better than VWELX and BRUFX, not as good as PRWCX.
So in two words I am...Pondering Simplification.
Why don't you do an Instant Xray analysis on your portfolio and then do one on the three funds (trident) you have referenced. Thus far this year small caps and value have trailed growth. If you portfolio has a value tilt (as mine does) it will not have the performance of one with a growth orientation. Also, don't forget to compare how much foreign you have vs the trident you reference.
In addition, you might wish to do a lookback on the one, three, five and ten year returns. I'm thinking, at times, some funds will lead while others will trail.
In addition, you might compare it to a 65/35 Indexed portfolio as well as to the Lipper Balanced Index.
I could cherry pick three hybrid funds form my portfolio and they would year-to-date beat my portfolio as a whole. However, I have no desire to go to only three funds.
Something, to think on.
Skeet
That is just with my self managed portfolio. Half my money is in Schwabs inteligent portfolio. Easy as it gets. As I look today, it is up about 8.8% for the year.
But anyway, I will let you know from my perspective that simplification just feels better. It feels like I have more control of holding good funds and an understanding how I'm diversified and knowing exactly what I hold, instead of diluting my choices with manager diversification or trying to take foot holds in the best funds at the time. That just didn't work for me.
Good luck to you bee. I think you are one smart cookie.
P.S., some might ask why I would invest in VRX, Valeant. Well, I work for one of their subsidiaries, and I know the new management is on the right track. The company has moved from an acquisition and shady pricing company to a company paying down debt, selling off poor performers and investing in "research and manufacturing", at least in it's most profitable businesses.
There were some proceeds from the sale of a real estate parcel in late May. About half was put into short-term bonds pending some planned home renovation in the late fall and the other half was easily spread out among the existing investment sleeves.
Not sure why I haven't traded more. But it probably relates to being on the cash-heavy end of my allocation model since early in the year plus the fact there haven't been any major market corrections over the past 3-6 months which would entice me to let loose on some of the cash.
I cannot speak to what "M*" means. I say this: there is $4.5 billion in the fund and only 1 manager. These funds get very little love for as good as they are.
God bless
the Pudd
p.s. Maybe it's his age??