More Risk

Last week I noted “The market has demonstrated great resiliency” and that continues to hold true. The Cyrus banking issue now seems to be old news and it appears they join the ranks of those countries saved and “allowed” to continue their participation in the European Union.

Rails and rail related stocks are strong. Perhaps this could be a forecaster of the economy. KSU, bought a few months ago for a long term holding based on its great dividend growth rate, has a beautiful chart. 

It only pays .8% dividend now, but if the growth rates holds true for the next 5 years it could be ridiculous a 78%

So I am thinking it’s time to take on more risk. I will be adding to long term holdings of  CHD (I like to say that everyone should own Church and Dwight as a long term holding ) and MCD (also a good long term holding). Here is a chart showing these as compared to SPY an ETF of the S&P 500.

I would love to add more AAPL to my long term holdings, but want to see some upward momentum

What did I see in my weekend review?

The 10-yr Treasury yield is at 1.85

IBD (Investor Business Daily): Confirmed Up Trend

Copernicus Systems: Long IMHO

Moneys Flows:  All positive, but trending down …will keep a watchful eye on this

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)
RGR +.69
GILD  +12.99% will continue to hold for another week
JCOM  +6.96%

ETF’s for a trade are:

GLD  -4.06%

EWA  +1.06%

IWM  +.87%

EFA  +.14%

IBB   +2.92%

EWJ .79%

What will I do?

I did not sell EWA (Australia) last week, I decide to hold it as for another week as it pays almost 5% dividend and this could be a consolation if something bad happens.

I did pick up EWJ (Japan) and IBB (Biotech)

I will look to add to IBB

I hope you have a great week

The Market Seems Resilient

The market has demonstrated great resiliency…but what will happen on Monday?

Cyprus apparently has a Monday deadline to avoid collapse of its banking system. If this goes unresolved “financial meltdown” may occur for Cyprus and it could become the first country to leave the euro zone.

The French Finance minister has stated that the Cyprus is a casino economy that was on the brink of bankruptcy. So what should happen? It seems reasonable to let it go down financially and rebuild from zero, start anew. This would hurt the foreign investors and the Cypriot people, but it should lead the people of Cyprus to seek a more stable protection of their money in the future, hopefully by demanding a more realistic banking system. I have read that once all of the chaos clears, Singapore may replace Cyprus as a magnet for cash from Russia. I would hope this would motivate the Russians to try create a safe banking system.

One would assume some intervention would occur to prevent collapse, but with most of the bloated Cypriot banks being used by Russia it may not. Even Russia does not seem sympathetic to a bailout
Perhaps the bigger concerns are will depositors in Italy, Spain and Greece also panic? ….one would assumed they should have already

So in my brief analysis, I would assume Monday should only be another brief bobble, but that is mostly speculation.

What did I see in my weekend review?

The 10-yr Treasury yield is at 1.91

IBD (Investor Business Daily): Confirmed Up Trend

Copernicus Systems: Long IMHO

Moneys Flows:  Trending Up …now in two out of three portfolios

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)
RGR +4.44%, down once again this week
CSC   sold
GILD  +5.07%
JCOM  +2.54%

ETF’s for a trade are:

GLD  -3.39%

EWA  +1.25%

IWM  +.59%

EFA  +.78%

What will I do?

For ETF’s I did pick up the ETF’s:  EFA,  EWA and IWM  this week, will likely sell EWA this week in favor of EWJ which is rated better. 

I also like IBB and would like to take a position in the SPY

For Stocks I sold CSC  and picked up JCOM . BAC and SANM look interesting, but will likely wait on further stocks at this point.

I will be looking at these things at noon on Monday, but Tuesday will likely be a better day

I hope you have a great week

You Can’t Fight the Fed

This week I heard both Jim Cramer and Randy Beeman report on how the Fed’s actions were propping up the US market. 

My interpretation of what these men have said is based on Ben Bernanke’s ongoing actions of buying Treasuries and Mortgage Backed Securities. This intended action keeps interest rates low. Likely this will continue until unemployment drops to some lower number. If an actual number has been cited I have missed this, but my understanding is that the current plan will continue into at least 2014…so will this truly keep the market trending upwards?

Having low interest rates helps the housing market…it helps businesses also, assuming they can get the loans they need.

Being a Momentum Investor I like it, but have to keep reminding myself that a correction of the run-up is overdue and could happen any day. 

However, since many investors have been waiting for the correction it can’t really happen until we are no longer expecting it can it?

What did I see in my weekend review?

The 10-yr Treasury yield is at 2.00

IBD (Investor Business Daily): Confirmed Up Trend

Copernicus Systems: Long IMHO

Moneys Flows:  Trending Up …now in two out of three portfolios

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)
RGR +7.96%, down this week
CSC +1.00%
GILD +4.29%

ETF’s for a trade are:

GLD  -4.35%

What will I do?

I did not pick up the ETF EFA, now looking at EWA and IWM .

For Stocks I am looking at picking up  JCOM but will likely be selling CSC   as it has dropped a notch in the rankings I follow

I hope you have a great week

A Nice Week It Was

With the Dow topping the all-time high set back in 2007 and closing at 14,397 it was a good week.

Being a Momentum Investor this is what I like to see and I benefit from the rising tide that lifts all ships.

However, I was reminded that it was essentially this high all the way back in 2000 …so a good reminder that we have no assurance that it will continue up or if it has simply once again reached a top.

I did take positions in CSC and GILD and they are off to what is hopefully a good start

What did I see in my weekend review?

The 10-yr Treasury yield is at 2.06, up once again

IBD (Investor Business Daily): Confirmed Up Trend

Copernicus Systems: Long

Moneys Flows:  TrendingUp …in only one out of three portphlios

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)

RGR +12.09%
CSC +3.43%
GILD +4.89%

ETF’s for a trade are:

GLD  -5.15%

What will I do?

The market is encouraging. I am looking at the Internationals EFA, perhaps a little late, but looking nonetheless

I hope you have a great week

No System, No Plan …Works All of the Time

This week it seems strange to see the IBD’s Market Outlook Citing: Market in Correction.

This is with the DOW being in spitting distance (closing Friday at 14,089.66) of topping the all- time highest close. This high was 14,164.53 set at on October 9, 2007.

My interpretation of IBD's efforts is they are stating what is happening now based on the “rules” they have developed over time to understand the current market conditions. 

They also recently observed “Looming automatic spending cuts in the federal government's budget stirred up the media, but the market seemed to shrug off the news.”  This observation does seem to be quite true....but the acknowledgement of it seems a little contradictory to the Outlook.

So it’s just a good reminder to me that nothing works all of the time....but tools are helpful

I completed my review of the Dividend Payers, which is a basket of stocks I acquire with the intention of never selling (at least that is the plan).

I do sell them if they are no longer are profitable or no longer growing their dividends…or just no longer meeting expectations. 

I also look for price growth that beats the S & P 500 for either a one year or five year term, or ideally both. I have to exclude from this part of the criteria Utilities and a few stocks such as LEG (Leggett & Pratt) that are desirable just for their dividend and dividend growth.

I have a homemade but somewhat rigorous review that does lead to very little selling and it has led me to some great companies that are consistently good performers and grow their dividends over time.

My first step was to sell stocks that were not meeting expectations.This year it was time to say adios to DE and BDX. These are fine companies, but the stocks were just pale in comparison to the others in the fold.

I added: CHD, MCD, KSU, and TGH which scored well in my review for both dividend and price growth.

I added CTL for a pure dividend play.

I added JWN just for balance, thinking I needed a retail stock and my expectations of it performing well in the future.

I likewise added DPS , which offered a nice entry point (thanks for mentioning this one Jerry). I was looking for a beverage and neither KO or PEP scored well, so likely something is wrong with my scoring when it come to this type of stock.

What did I see in my weekend review?

The 10-yr Treasury yield is at 1.85…a little drop this week

IBD (Investor Business Daily): Market in Correction

Copernicus Systems: Mixed …IMHO

Moneys Flows:  Trending Downward 

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)

RGR +11.38% 

ETF’s for a trade are:

GLD  -5.32%

What will I do?

I sure don’t feel comfortable being 100% invested but I will be looking at positions in CSC, JCOM and GILD…I like what all of these are doing and it may be that the momentum continues.

I hope you have a great week.