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One to watch: URI United Rentals Inc

9 Mar


A stock that just lately has been popping up on many of the sorts and filters that I run on several different watchlists is $URI, United Rentals.

Last week, URI actually lost just a little bit of money, and it has certainly had a good run from the lows of last year.  It is now making multi-year highs.  If you look at a weekly chart of URI its ascent is almost parabolic, leading one to wonder if it isn’t due for a bit of a sell-off.

I’ve placed the basic review charts that I use below for you to check out.  On the daily charts that I’ve shown below, maybe you will come to the same conclusion I do — that this is a stock that has had a great run-up, and is currently taking a pause.  The indicators aren’t calling for a buy today, but with URI floating to the top of so many watchlists, it is  stock I am going to keep a close eye on.

If you look at a weekly chart you may come to a slightly different conclusion.

Should you have any observations on URI please share them in the comments section for this post.

 

 

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Excellent and revealing study on market timing

11 Feb

If you spend money on third-party services, you should read this comparison of market timing systems from our good pal Don over at Dark-Liquidity:

 http://www.dark-liquidity.com/2011MarketTimingPerformance.php

It’s an eye-opener.

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Market timing systems reviewed

29 Jan

The good folks over at Dark Liquidity have rounded up a great comparison of market timing systems, if you have an interest:

http://www.dark-liquidity.com/MarketTiming.php

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What does it take to drive a stake through the heart of Buy and Hold?

25 Aug

Do you ever have something you already knew reinforced to you with all subtlety of a whack across the back of the head with a Louisville Slugger?  I had such an experience last evening when I was perusing the pre-loaded chart library in the new V12 of TC2000. One of the charts is 100-year chart of the Dow.  Interesting, but it’s only thirty stocks.  So I changed it to the S&P500.  Almost immediately the bile started rising in my throat:

I cannot think of a clearer chart to cram down the throat of the next luckless financial advisor who tries to tell you that “You’re in it for the long haul.”  Essentially, if your entry was poor, you could have made no money, or next to no money for the last 10-15 years.  Maybe you got the dividends.  Well done.  On the other hand, could you have made money? Maybe quite a lot of it?  You bet, but it would have required a more active style of investment management than buy and pray.

As you know, I am a bit jaundiced after my experience with a wealth manager (sic) who cheerfully watched my portfolio halve in value in the 2008 debacle while congratulating himself that he was beating the benchmarks.  I had asked about stops, been told the manager used them….it never happened.  At the time I wondered I wondered if my advisors even knew what a stop was.  I concluded they didn’t.  Now I’m convinced of it.  Did you know that what you need to know about stops to pass the FINRA Series 7 (Registered Rep) exam can basically be achieved by learning three simple mnemonics?

Having been shown several “Don’t worry.  Be happy.  You’re in this for the long haul” letters that friends have received from financial advisors in the last few weeks I have become even further twisted around the axle.  The long haul?  More like the Bataan Death March.  Buy and hold may have been a very viable strategy if we go back twenty, thirty and even forty years.  But it hasn’t been for quite a while.

At a recent business mixer I struck up conversation with another upmarket advisor who in a sneeringly condescending way proceeded to patronize me about my “market timing”.  I will almost guarantee you that my self-managed portfolios are in way better shape than her clients’ portfolios are after the last couple of months.   What was particularly telling was that one of her friends and clients later told me that her advisory function was basically confined to charging a wrap fee and packing the money off to a national mutual fund firm to do whatever it is they do in a canned portfolio.

Take home:  A lot of financial advisors and wealth managers you will encounter are primarily salespeople who I wouldn’t trust to park my car, let alone manage my money.  You can get a canned briefing on your portfolios or investments but if you ask any deeper questions, do you get a blank look?  You know, dumb looks come free? Or do you get offered another product that might suit you better? I seriously question if many of these folk have more than First Grade understanding of what they’re selling you, let alone help you actively manage it.

Now, I will acknowledge that my polemic is not intended to tar all advisors with the same brush.  There are some really smart, diligent and hard-working folk out there.  You just have to root them out and differentiate them from the other lackluster mob.

In closing, if you needed any more cheering up, let me show you the NASDAQ chart if you still linger around the buy and hold fairy tale.  Put all your money in the OTC market back in 2000?  You’re still not whole:

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VectorVest MTI and portfolio movement as market indicators.

14 Aug

I’m going start this short article with my usual caveat: nothing you read here should be taken as investment advice, recommendations or a solicitation to purchase any securities.  What we offer here is for discussion, educational or entertainment purposes only.

That said, we’d all like to know with some certainty what the market is going to do in the coming days and weeks.  Then we will all be really, really rich.  Maybe.

A tool that I have noticed in the past marks bottoms quite well has been a joint reversal of the VectorVest MTI indicator and my Monthly IBD50 portfolio.  For those who don’t know, the VV Market Timing Indicator (MTI) is a proprietary VV indicator which combines broad market price movement, momentum and buy/sell numbers.  That’s a broad simplification, but you get the picture.  The reason that the MTI coupled with a move in portfolio value direction works for me is because the MTI corresponds to broad market measures while the portfolio reflects the types of stock I’m likely to buy and their price movements — so it’s pretty specific.

If you’ve read my posts on the performance of the IntersectioNx list and the Stocktwits 50 Top-10 from last week I doubt it will have escaped your notice that there was money to be made last week, and in some cases, a lot of money (e.g., larger Chinese Internet stocks).  So, what to do?

I am still very leery of this market in the intermediate and longer term.  We had a Death Cross in the S&P 500, which rarely if ever augurs well for the market.  And while current profits seem good enough, I do wonder if they will stay that way and if the overall weight of negative news will drag the market down for the next two to three months.  Certainly there are values to be had in the market, although I do not share the enthusiasm displayed in Barron’s this week and I most certainly not going to follow their recommendation to buy BofA.  I don’t the fat lady’s sung on their bad news yet.  You’re hearing this from one who generally tends to a bullish disposition, by the way.

But….. that does not mean we will not see bounce in the market, and if we are of a mind, we should try to profit from it.  Given the volatility out there and the inclination for the markets to move very fast, then this is not an undertaking to be taken lightly or with inattention.  The chart above plots the VV MTI and three portfolio values I track for last week.  You’ll see that the portfolio values led the MTI by generally heading North.  The MTI reversed last Wednesday.

Under normal circumstances I want to see five business days of a consistent move off a bottom of the MTI and my portfolio values.  If greed is your guide and you’re prepared to pull the trigger earlier than that, it may pay off for you, but I will wait and see, most likely.  My initial shopping list will come off the Stocktwits 50 Top-10 and the IntersectioNx.

“Wait and see for what?”, you might reasonably ask.  A solid move before I trade.  As I write this at roughly 8pm Pacific the US futures are in the green, but not anywhere near excitement levels.  That can change by morning, or even in the morning — intraday reversals have been fierce lately.  I will load some moderate-sized trial order and save them, basically so I am ready to go if the market indications are right.  But I am not planning for these to be long-term positions if they do trigger.

Understand that this is trading and is by no means investing.  Don’t fool yourself if you are an investor not a trader.  Being in cash for a few more days may not be a bad decision either.

Tread lightly until we see that the ground is firm. But be ready if the bounce continues and you’ll work for some short-term profits.

The Really Death Cross

14 Aug

10% discount code PROTECTME5

Well, I rather sniggered at how close we got on Thursday, but now it’ s here.  Can’t say I’m feeling warm and fuzzy despite a bounce in some stocks last week

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The nearly Death Cross

11 Aug

10% discount code PROTECTME5

 

In this wild ride that’s the stock markets this week we’re all looking for an indication of whether the market’s going to tilt up or down.  One event that has been absent from much discussion from the talking heads is a Death Cross — 50-day SMA crosses below the 200-day SMA.  Well, I have to tell you, it doesn’t get much closer than this without happening.  See above.  If the market tilts down tomorrow, we should have it.

It seems to me that the market is hugely over-reacting to any news right now.   The bulls will clutch to any straws and the bears stampede when scared by any shadow.  A comment on CNBC this morning had it, I think.  That we have seen the death of the investor and finally ushered in the age of the trader.  We will see.

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Why some wealth managers should be horse whipped (figuratively, of course)

8 Aug

My erstwhile wealth manager had the temerity or chutzpah (you pick) to send this to his clients this morning, basically explaining why he should be admired for doing nothing but offer a dumb look when asked what he is doing to protect his clients’ portfolios.

Why I am self-directed and this blog is here.  Question of the day: Are these folk

  1. Lazy?
  2. Stupid?
  3. Both 1 and 2?

 

A WORD OF REASSURANCE:  We have attached our Private Client Research Group’s Investment Rules to Live By.  We understand that it is normal to feel nervous during markets such as these.  However, it is important to remain rational as you react to current market volatility and to remember that most of your investments are designed for long-term, not immediate, returns.  This attachment reminds us of our core investment values which withstand the test of time.

GLOBAL INSIGHTS:  The European Central Bank has stepped in this morning and purchased Italian and Spanish debt in response to austerity measures and structural reforms announced by both countries.  The Eurozone debt crisis was the main culprit behind last Thursday’s heavy sell off and it is their hope that this move may calm the global financial markets.  We have attached the Weekly & Monthly Insights as well as provided links to our website which contains further newsletters addressing the current “correcting” trend.

MARKET COMMENTARY:  Last week, the S&P 500 fell 7.2% and the Dow Jones Industrial Average fell 5.8%.  Though Congress reached a long awaited agreement on Tuesday, concerns regarding U.S. economic growth weighed on the markets.  Friday evening, Standard and Poor’s (S&P) downgraded the credit rating of long-term U.S. government debt to AA+, one notch below the highest rating (risk-free) of AAA.  This news has further impacted markets in Monday’s trading sessions across the globe.

As a reminder, RBC WM analysts continue to focus on fundamental economic indicators.  In July, the U.S. raised its debt ceiling and the Eurozone avoided disorderedly Greek default.  Policy makers struggled to craft temporary solutions and political rhetoric amplified uncertainties.  It is clear that there are no silver bullets available to solve these entrenched, structural challenges.

Friday’s downgrade (which is being sternly rebuked by U.S. Treasury Secretary, Timothy Geithner, for ‘misrepresentation’ of the facts), in our assessment, simply tells investors what we already know:  The United States needs to shrink its deficit meaningfully. 

 As always, our team is here to answer any questions that you may have!   

 

 

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You should have held currency ETFs

29 Jul

On May 3rd I wrote an article Currencies for profit without tears.  On June 2nd I suggested compiling a D-I-Y currency ETF containg FXF, FXE and FXS.  Two of those ETFs are losers since then but you would still have a 4.8% gain to compare to the S&P’s 1.57% loss in the same period.

I have updated our performance maps which include the SPDR Sector ETFs (nothing exciting there) and our currency ETFs (which you should review).

For the year the S&P is carrying a 2.75% gain.  EVERY currency ETF I track would have beaten the S&P with the exception of the $US.  Some by a lot.  Swiss Franck FXF +18.39%, Russian Rouble XRU +10.34% and the good old Euro FXE +7.55%.  And that’s only the capital gains.  These ETFs pay interest every month, check them out at Currency Shares.

It gets even better in July.  S&P? Minus 2.15%.  Swiss Franc FXF? Up 6.86%  Japanese Yen FXY? Up 4.59%.

Are you guaranteed a profit in currency ETFs?  Of course not.  But with a bit of judicious background reading you should be able to figure out how to profit from the hard work our “leaders” in Washington are doing in their seemingly never-ending quest to destroy the Dollar.

New FINRA investor alert: The grass isn’t always greener

25 Jul

FINRA (the Financial Industry Regulatory Authority) publishes investor alerts.  They are actually worth reading, or, most of them are.  The FINRA site is also not a bad place for the beginning self-directed investor to poke around to gain knowledge.

FINRA’s latest alert is called The Grass Isn’t Always Greener—Chasing Return in a Challenging Investment Environment.  FINRA is concerned that given the challenging environment — trading ranges, vascillating market, etc., that investors may dig themselves into a hole and end up with investments that just aren’t suitable for them.  One of the issues of concern is leveraged products, a hot-button issue for me.  FINRA has an older alert on leveraged and inverse products that I honestly wish everyone would read.

I think of leveraged products as being rather the equivalent of a financial chainsaw.  If you know how to use one, and exercise all the proper precautions, a chainsaw can be an awesome tool.  But if you don’t know what you are doing you can cause some pretty serious damage.  And exactly the same is true of leveraged products and I am thinking ETFs here.

A number of stock-picking services, and I am thinking of one in particular, will blithely introduce their subscribers to leveraged and leveraged inverse products without ensuring that their subscribers, many of whom are pretty new to the investing game, know the caveats that should be applied.

I have done well from leveraged products, but I have also suffered pretty badly too, although in the latter case I also broke or ignored just about all my own rules.  Some lessons are paid for with real money, but it wasn’t the difference between hamburger or steak.  Others may not be so lucky.

A fool and his money are easily parted. Hmm.  And so might many an unwary investor to leveraged products.  I have a pretty simple test.  If you wouldn’t deal Forex, deal in Futures contracts or go short naked, you have no business thinking about leveraged ETFs.

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