State of the Stock Market

[DarterBlue]

On 8/31/2018 at 8:46 PM, ohio said:

Fair enough.  Since, you are still young, you may want to consider dollar cost averaging into an S&P 500 no load mutual fund, especially if the market has a strong pull back.  The two bottom charts show that even if pullbacks happen (generally they fall fast, and then slowly start climbing back) they always have rebounded.  Due to your age, you still have a 30 to 40 window of opportunity, and the DOW or S&P 500 never had a 40 year period where they didn't rebound from a major drop, even if you bought it at the top, even during Black Monday of 1929 you still were up by 1960.  And if you were able to dollar cost average back then, you would have been up a lot.

 

 

Regarding that approach, it has worked in the USA so far. However, there are countries in recent times where it has not. Japan comes most readily to mind. The NIKKI Index topped in December 1989, 29 years ago. It is still way off its all time highs a generation later. If a twenty something had first bought in at the very top and dollar cost averaged since, now in his/her mid fifties, while I am pretty sure they would be up, the rate of return would be nothing to write home about. But Japan has been a stagnant society since the late 1980s. If the USA ever has that type of stagnation the same thing would happen. 

Regarding HSFH Fan, this is not an attack on him, but an observation of his personality: he would have an almost impossible task committing  to a DCA program of investing. He just does not have the commitment or patience to do this successfully. 

[DarterBlue]

As of the close of business Friday the following is my status:

GRUB 371 shares purchased on April 24, 2018 for a price of $35,423.10 including commissions Unrealized Gain of $18,041.71

CRM 301 shares purchased May 8, 2018 for a price of $39,007.71 including commissions Unrealized Gain of $6,948.96

FND 850 shares purchased May 8, 2018 for a price of $39,852.20 including commissions Unrealized Loss of $8,606.20

The net of the three is an unrealized profit of approximately, $16,500 on gross purchase costs (basis) of approximately $114,000.

When evaluating results it bears one well to recognize that profits are both a function of price and time. As you can see, of the three remaining open positions, one is very profitable, up over 50% in a little over 4 months. One moderately profitable, up in the high teens in about three months and three weeks. The final position, FND, is down about 22% in the same three month and three week period. 

I normally never hold a losing position as long as I have let FND ride. The reason for the current situation is twofold. First, the stock was profitable until it gaped down through my mental stop on earnings in early August. That day it closed well below where I would have normally gotten out. Secondly, since the gap down, it has shown signs of drawing a line in the sand between its August 3 low just above 36 and its subsequent high of about 39.75 on August 9. I am familiar with the company, feel the growth story is great, and am willing to cut it some slack as long as it does not break $36. If it does so on a closing basis, then I will take the loss and cuss myself for being undisciplined enough to violate one of my key sell rules.  

In addition to the open orders I also have a GTC buy stop order to purchase 1,820 shares of MPX at 20.52. Should the stock trade up to that price, the order becomes a market order to be executed immediately at the best available price. The thinking here is that should MPX get through that point, it does into the high twenties in short order. 

[DarterBlue]

On 8/31/2018 at 7:57 PM, ohio said:

You called it on WMT.  I bought it before earnings because Jim Cramer was really bullish on it. He was claiming it was ready for a breakout.  Figured he knew something.  But it just kept going down after earnings.

First, Cramer: I don't have access to his performance record when he was a hedge fund manager, but I have to think it was less than stellar since he gave that up for a spot in the media. I do know that studies have been done of the stocks he has touted and that after factoring out gains made immediately after he mentions a stock (gains over the first hour), the returns have been average at best. I am not arguing that he knows nothing; but I am arguing that his advice, such as it is, is not particularly helpful.

Second, WMT: Company is a behemoth. Typically it is very difficult for such companies to be leading stocks unless they are in industries that are greatly in favor at the moment. Retail, has been reasonably strong this year; however, there are much better leading stocks than WMT in that space. To be honest, if I were going to play WMT any at all (I am not), I would actually take a small options position it in as the premiums on it are relatively cheap. 

[DarterBlue]

On 8/31/2018 at 8:17 PM, ohio said:

GE hasn't done much since Jack Welch stepped down.  Immelt screw up this wonderful company, and should have stepped down.  Totally incompetent CEO.  Flannery is trying to stop the bleeding, but has a long way to go.  GE just has too much debt, and still has not found a way to fix it.

To be honest, I think it was Jack Welsh that screwed up GE. He took it too far afield from its roots (ventures into Investment Banking with Kidder Peabody, Media, NBC, Entertainment, Universal theme park in Orlando, etc., etc., etc.). And to boot, he had his own private jet to travel around the world free of cost (shareholders' dime) while there. Immelt, was not able to turn the company around. However, in my opinion, Welsh was the one that destroyed GE. He just got out before most realized the depths of its problems.

Back near the beginning of the 21st century a work colleague was about to take positions in six or eight stocks for DRIP purposes (Dividend Reinvestment positions), with a view to securing his long term retirement goals. He asked me to evaluate each before doing so. After doing so, I gave him the green light on all but GE (MRK, JNJ, DRI, I forget the others). He asked what my beef was with GE? My response was simple: "Carl, I said, you and I have put together and analyzed financial statements most of our adult working lives. Well for the life of me, GE's financials in relation to the footnotes make absolutely no sense to me. I either can't understand many critical areas/transactions or they totally don't make sense in relation to other information within their 10Ks." 

He went ahead and included GE anyway. Through this week, I believe it is his only DRIP stock that's  still underwater 16 or 17 years later, even with the compounding effect of dividends reinvestment. 

[ohio]

On 9/1/2018 at 12:59 AM, DarterBlue said:

Not sure I would have sold it. You may want t consider repurchase if it pulls back in an orderly manner. If the market remains strong, LULU will probably be among the leaders. The really big money is finding a few 100%ters if you have the patience and fortitude to hold for six months or so to the completion of its run or a new consolidation. 

Thanks for the advice.

I bought LULU again at 200 @154.30 and 100 @154.09 in the premarket around 9:20 AM..  I''ll let it ride and see what happens.  Still regret selling CGC and CRON and not jumping back in.  Was hoping for a bigger pullback.

[ohio]

On 9/2/2018 at 10:48 AM, DarterBlue said:

Regarding that approach, it has worked in the USA so far. However, there are countries in recent times where it has not. Japan comes most readily to mind. The NIKKI Index topped in December 1989, 29 years ago. It is still way off its all time highs a generation later. If a twenty something had first bought in at the very top and dollar cost averaged since, now in his/her mid fifties, while I am pretty sure they would be up, the rate of return would be nothing to write home about. But Japan has been a stagnant society since the late 1980s. If the USA ever has that type of stagnation the same thing would happen. 

Regarding HSFH Fan, this is not an attack on him, but an observation of his personality: he would have an almost impossible task committing  to a DCA program of investing. He just does not have the commitment or patience to do this successfully. 

You're right about Japan and their market. But their market ran up too much.  1300s in 1965 to around 39000 in 1989. In addition, lack of population growth doesn't help their stocks either.   Could it happen to the US markets?  Maybe.  Who knows what the future holds. 

[ohio]

9 hours ago, DarterBlue said:

First, Cramer: I don't have access to his performance record when he was a hedge fund manager, but I have to think it was less than stellar since he gave that up for a spot in the media. I do know that studies have been done of the stocks he has touted and that after factoring out gains made immediately after he mentions a stock (gains over the first hour), the returns have been average at best. I am not arguing that he knows nothing; but I am arguing that his advice, such as it is, is not particularly helpful.

Second, WMT: Company is a behemoth. Typically it is very difficult for such companies to be leading stocks unless they are in industries that are greatly in favor at the moment. Retail, has been reasonably strong this year; however, there are much better leading stocks than WMT in that space. To be honest, if I were going to play WMT any at all (I am not), I would actually take a small options position it in as the premiums on it are relatively cheap. 

Cramer is a trend trader as well.  But what I noticed about him is that short term, especially on earnings.  It seems that he knows something.  He was bullish on WMT, so I figured he might have known they would beat on earnings. Not saying that he had info beforehand, but that he talks to CEOs and other company execs, and may be able to read their body language.  

Think I'll stay away from WMT.  Too many other growth stocks to play instead

 

[HSFBfan]

On 9/2/2018 at 11:13 AM, DarterBlue said:

As of the close of business Friday the following is my status:

GRUB 371 shares purchased on April 24, 2018 for a price of $35,423.10 including commissions Unrealized Gain of $18,041.71

CRM 301 shares purchased May 8, 2018 for a price of $39,007.71 including commissions Unrealized Gain of $6,948.96

FND 850 shares purchased May 8, 2018 for a price of $39,852.20 including commissions Unrealized Loss of $8,606.20

The net of the three is an unrealized profit of approximately, $16,500 on gross purchase costs (basis) of approximately $114,000.

When evaluating results it bears one well to recognize that profits are both a function of price and time. As you can see, of the three remaining open positions, one is very profitable, up over 50% in a little over 4 months. One moderately profitable, up in the high teens in about three months and three weeks. The final position, FND, is down about 22% in the same three month and three week period. 

I normally never hold a losing position as long as I have let FND ride. The reason for the current situation is twofold. First, the stock was profitable until it gaped down through my mental stop on earnings in early August. That day it closed well below where I would have normally gotten out. Secondly, since the gap down, it has shown signs of drawing a line in the sand between its August 3 low just above 36 and its subsequent high of about 39.75 on August 9. I am familiar with the company, feel the growth story is great, and am willing to cut it some slack as long as it does not break $36. If it does so on a closing basis, then I will take the loss and cuss myself for being undisciplined enough to violate one of my key sell rules.  

In addition to the open orders I also have a GTC buy stop order to purchase 1,820 shares of MPX at 20.52. Should the stock trade up to that price, the order becomes a market order to be executed immediately at the best available price. The thinking here is that should MPX get through that point, it does into the high twenties in short order. 

Yeah he bought my stock......I hope it treats you well

[HSFBfan]

On 9/2/2018 at 10:48 AM, DarterBlue said:

Regarding that approach, it has worked in the USA so far. However, there are countries in recent times where it has not. Japan comes most readily to mind. The NIKKI Index topped in December 1989, 29 years ago. It is still way off its all time highs a generation later. If a twenty something had first bought in at the very top and dollar cost averaged since, now in his/her mid fifties, while I am pretty sure they would be up, the rate of return would be nothing to write home about. But Japan has been a stagnant society since the late 1980s. If the USA ever has that type of stagnation the same thing would happen. 

Regarding HSFH Fan, this is not an attack on him, but an observation of his personality: he would have an almost impossible task committing  to a DCA program of investing. He just does not have the commitment or patience to do this successfully. 

Nope I dont......it was kinda fun while I was in it but too long of a process. I'd rather bet on sports or the horses. More fun and you know if you won or lost in 3 hours or less

[ohio]

3 hours ago, ohio said:

Thanks for the advice.

I bought LULU again at 200 @154.30 and 100 @154.09 in the premarket around 9:20 AM..  I''ll let it ride and see what happens.  Still regret selling CGC and CRON and not jumping back in.  Was hoping for a bigger pullback.

Also bough 100 shares of PLAY at 57.63, and 100 shares of PANW at 228.81.  See how it goes

[954gator]

2 hours ago, GardenStateBaller said:

I just sold all my stock in Nike. 

 

You sold after ir before it dropped?   If after...

[DarterBlue]

5 hours ago, ohio said:

Also bough 100 shares of PLAY at 57.63, and 100 shares of PANW at 228.81.  See how it goes

Both are interesting choices. The networking stock is very, very strong. While Dave&Busters is building the right side of a long base pattern. I will include them on my watch list. If I get more bullish on the market I may go fifty percent in. I don't see myself going more than that till we get a meaningful pullback or an overdue bear market. 

[DarterBlue]

6 hours ago, GardenStateBaller said:

I just sold all my stock in Nike. 

 

I think the news just gave me an excellent entry point. But I won't touch it or any other stock at this moment. Not till we get a correction at least. 

[ohio]

On 9/4/2018 at 7:53 PM, DarterBlue said:

Both are interesting choices. The networking stock is very, very strong. While Dave&Busters is building the right side of a long base pattern. I will include them on my watch list. If I get more bullish on the market I may go fifty percent in. I don't see myself going more than that till we get a meaningful pullback or an overdue bear market. 

PANW got beat up today as did NASDAQ.  Hopefully it will rebound, if it beats earnings.

Also, if Friday's Unemployment Report is better than expected, then interest rate hike fears may come into play again.

 

[DarterBlue]

5 hours ago, ohio said:

PANW got beat up today as did NASDAQ.  Hopefully it will rebound, if it beats earnings.

Also, if Friday's Unemployment Report is better than expected, then interest rate hike fears may come into play again.

 

All things tech got destroyed except AAPL and a few others. GRUB lost over $6 on the day and all three of my positions took a hit. Despite being less than a third invested, I lost close to 1% on the day. I think a big part of the tech hit was news driven. However, the day's action bears close scrutiny. Personally, I don't think the overall market can go much higher without the broad tech sector's participation. 

[ohio]

7 hours ago, DarterBlue said:

All things tech got destroyed except AAPL and a few others. GRUB lost over $6 on the day and all three of my positions took a hit. Despite being less than a third invested, I lost close to 1% on the day. I think a big part of the tech hit was news driven. However, the day's action bears close scrutiny. Personally, I don't think the overall market can go much higher without the broad tech sector's participation. 

Still going down on trade and Govt regulation fears.  You're right about the market not moving ahead without the tech sector.

Sold all CSCO, AMD, AND TTD stock.  Thinking about selling ETSY as well.

Bought QID  and UVXY.  May buy more of these.

[DarterBlue]

5 hours ago, ohio said:

Still going down on trade and Govt regulation fears.  You're right about the market not moving ahead without the tech sector.

Sold all CSCO, AMD, AND TTD stock.  Thinking about selling ETSY as well.

Bought QID  and UVXY.  May buy more of these.

You are a nimble man. Be careful with the UVXY (VIX). It can move faster than most options positions do.

[ohio]

56 minutes ago, DarterBlue said:

You are a nimble man. Be careful with the UVXY (VIX). It can move faster than most options positions do.

Ha ha.  I'll take that as a complement.  Yes, UVXY or any of its kin, is risky.  But when there is volatility in the market it's a good hedge, since I'm still long in Apple, Coca Cola, ETSY, ADSK, ADBE, NVDA, LULU, PLAY, BRKb and PANW.  And if the market starts to tank hard its good to build up positions in these ETF/shorts/VIX type stocks, but only for a very short term.

Didn't realize that options were so fickle.  Don't know much about them, so I'll leave them alone.

[ohio]

On 8/28/2018 at 9:45 AM, GardenStateBaller said:

I'm not even close yet to being bored with winning so much!!

OK, but what if the FED starts raising interest rates again, and all your investments tank?

[ohio]

4 minutes ago, GardenStateBaller said:

I have professionals who's jobs it is to be prepared to act if and when that day were to come. Until then, enjoy!!!! 

Be careful.  Many of these "so called professionals" can't outperform an S&P 500 index fund or an ETF like SPY.

[DarterBlue]

3 hours ago, ohio said:

Ha ha.  I'll take that as a complement.  Yes, UVXY or any of its kin, is risky.  But when there is volatility in the market it's a good hedge, since I'm still long in Apple, Coca Cola, ETSY, ADSK, ADBE, NVDA, LULU, PLAY, BRKb and PANW.  And if the market starts to tank hard its good to build up positions in these ETF/shorts/VIX type stocks, but only for a very short term

As of this minute, it looks like PANW will be up sharply in the morning. So, you will have a decision to make, albeit a good one!

[ohio]

Just now, DarterBlue said:

As of this minute, it looks like PANW will be up sharply in the morning. So, you will have a decision to make, albeit a good one!

Yep.  I think I got lucky on that one.  

Not sure what I"ll do with PANW tommorow.  If I see it climb, then I'll hold on, but if it starts going down I might sell.  Same with UVXY and QID.  Don't trust those two for more than a day or two, unless volitility really begins to spike.. Then I might add to my positions on them.

So, I'll play it by gut instinct.

[ohio]

12 hours ago, DarterBlue said:

As of this minute, it looks like PANW will be up sharply in the morning. So, you will have a decision to make, albeit a good one!

Sold PANW premarket at 234.70  Sold QID 37.545  Sold UVXY 9.27.   Can't look at the market anymore today, going to help a friend move.

[THS2011]

Just bought a lot of NTR stock.

[DarterBlue]

21 hours ago, THS2011 said:

Just bought a lot of NTR stock.

A Canadian fertilizer company recently taken public ... interesting.