Sunday, March 3, 2013

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.

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