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Tech ETFs: VGT, RYT, IYW, XLK. The Apple question.

10 Mar

I subscribe to several for-pay services.  Some I like more than others.  Ones that consistently rank high with me are Marketclub/INO,  Zacks and Bespoke Investment Group (“BIG”).  BIG is rather different to the other two.  If you like data-driven analysis, you’ll like BIG.  BIG is invariable professional.  You may see them frequently quoted in the financial press.  They recently reported the results of their first voluntary members’ survey, which is what piqued the impetus for this article.  The survey covered both individual and institutional investors.  Self-serving it may be, but I happen to think the paying customers of BIG are smarter than the average bear.  Key point for this article is that both the individual and institutional investors liked Technology as the best sector for the next six months.

As an investor with my own money, I tend to using ETFs, although I will take individual equity positions.  It depends on the term and portfolio I’m investing in.  I considered four broad-based technology ETFs to play a possible positive ride in the technology sector (click on the chart to enlarge):

techs

tech etfs

The Rydex equal-weight ETF has romped away from the others, due largely, one supposes, because it has way less exposure to that laggard du jour, AAPL.  The AAPL percentages, BTW, are at 3/8/13 for RYT and 12/31/12 for the other ETFs.  The latter percentages may have changed some since 12/31 due to AAPL’s sell off and and increase in other portfolio stocks.  Be that as it may, some folk might think that with AAPL changing hands at a P/E of about 9, that as it hovers at a price somewhat above $400 it may be worth considering.  In which case, depending on your loving or loathing for all things AAPL, you may wish to consider which tech ETF best suits your purpose.  If you think AAPL will continue to be a loser then RYT is the way to go despite a healthy expense ratio of 0.5%.  Were I to want some AAPL exposure I would probably lean to VGT.  An alternative approach, trading costs be damned, might be to blend the two ETFs depending on how you love or loathe AAPL.  Your intended holding period would impact your decision, too.

The BIG members offered pretty mixed insight.  AAPL was the biggest long position in the portfolio of by far the most respondents.  On the other hand, it was also the stock that by far the most respondents were most bearish on.  Go figure. But, that probably sums up market sentiment on AAPL too.  You can check out free stuff (and there’s a lot of it) from BIG HERE.


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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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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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HSBC Hedge Fund Scorecard

7 Nov

This post from the excellent, if morose, Zero Hedge, is well worth your time to pick through.  It has a readable copy of HSBC’s EOM hedge fund scorecard.  Some of the lads at the hedge funds haven’t been doing too well: http://www.zerohedge.com/news/swing-and-miss-complete-hedge-fund-october-performance  

If you follow the line of thinking that the boyz in the quantz will need to pick it up some before year’s end, their less-than-stellar performance in October might augur well for a pickup in market action between now and 12/31.

 

 

 

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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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Webinar resource from Worden Brothers

24 Aug

Last night I viewed a great webinar from Worden Bros on creating indicators on the fly in TC2000 V12.  Whether you are a TC2000 user or not, I believe you would find this webinar to be interesting and educational.  If you click on the link button in this post you will be taken to the page listing the webinars.

The Worden Bros website has a lot of free webinars that you can view.  If you visit their home page you will see that some of the webinars are specific to their products, however most of the webinars relate to subjects that you can use whether you use Worden products or not.

IBD entrants, removals and movers updated

13 Aug

Our page containing this weeks entrants, removals and ranking changes is up to date here: IBD UPDATES

Our IBD monthly portfolio closed at its low for the year (other than when we made our initial purchases) at $50,127 on Monday night.  By Friday’s close it had clawed back a respectable gain to close at $54,813.  We will have some comments on how we incorporate this portfolio’s moves into our prognostications of market moves tomorrow.

It was not lost on me that BIDU is in the IBD Top 10, NTES is the biggest upward mover in the IBD50 and SOHU rejoined the IBD50 this week.  My Big-5 Chinese Internet group (BIDU, CYOU, NTES, SOHU, SINA) gained roughly 16 1/2% from Monday morning to Friday night with individual gains ranging from 10% to 21%.  Nice move.  Let us hope they can keep it up, NTES looks to have recovered best from a quick look at the graphs.

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IBD50 and Stocktwits 50 weekly review July 15th 2011

15 Jul

10% discount code PROTECTME5

PLEASE NOTE that with the exception of our IBD top-10 portfolio, all performance numbers are from Tuesday’s open, on the inescapable logic that that was the first time you could have duplicated any of these lists.

A description I have used before is that it was an interesting week, punctuated with a couple of sucker draws first thing in the morning, I suspect driven by overenthusiastic retail investors.  Using a 15-minute chart of the US total stock market index we can see quite clearly that overall, stocks were down. (As always, click on images to view them full-size)

Mind you, if you take a look at the DJ-UBS commodity index for the same period you might begin to get some idea where there is money to be made:

Here is how the benchmark equity indices performed this week:

  • DJIA -0.67%
  • Nasdaq Comp -1.42%
  • Nasdaq 100 -1.07%
  • SP500 -1.31%
  • W5000 -1.29%
  • R2000 -2.79%

The IBD50 had 15 winners and 35 losers for an overall loss of 1.66%. Winners and losers were:

  • ACOM +5.42%
  • NTES +5.35% (my watchlist of Chinese Internet stocks averaged +0.49% this week, QIHU leading at +9%.  Report on these tomorrow)
  • BPI +4.63%
  • INFA -10.97%
  • ALTR -8.32%
  • TIBX -8.07%

The Top-10 IBD50 members per IBD’s rankings had 3 winners and 7 losers however the leaders lost more than the list as a whole shaving 2.12%.  LULU, FOSL and CMG — all retail/High St — led.  Of the IBD “newcomers” — returnees would be more accurate, JAZZ aand TZOO were the only winners returning 4.19% and 2.87% respectively.  The list lost a paltry 0.27% overall, though.  Our Intersection list of IBD and Stocktwits stocks had 6 winners and 11 losers for a loss of 1.53%.  Best winners were ACOM, JAZZ and LULU.  Losers INFA, ULTA, TPX.

The Stocktwits50 gave up 1.16% for the week with winners and losers.  Winners and losers of note were:

  • MPEL +5.93%
  • PTEN +5.64%
  • DK +5.61%
  • INFA -10.97%
  • PRIM -8.11%
  • NTGR -7.9%

Outside the “50s” it was notable that silver (SIVR) was up 6.88% on the week, gold (IAU) 2.53%.  I increased my positions in both these ETFs this week.  Mind you, GOOG put it all into perspective witha 12.91% lift on the week closing at $597.62.  Hopefully there will be enough momentum to put GOOG well into the $600s.  I saw hopefully, since I went long GOOG on July 7th at $542.12.

 

VectorVest confirmed calls 2011

11 Jul

This post repeats my part of a conversation on the VectorVest users’ group list which does not permit posted images.  It pertains to the suitability of confirmed calls (a proprietary VV indicator) in range-bound or choppy markets:

………..my point is, it’s horses for courses.  The confirmed calls just aren’t the best VV indicator in a range-bound market.  Were I in a mood for jesting I might say that I wasn’t surprised by yesterday’s retreat either, there was a Confirmed Up the day before J.

In the case of this reversal, the MTI bottoming on 6/17 and reversing was perfectly timed – “prudent” buyers could have waited to the first green light on 6/21, after which, by the way, the MTI never retreated even though the market did.

I have attached a picture of the SPX graph from VV for six months, with those points drawn in and some lines linking the confirmed calls.  In every confirmed call round trip this year the confirmed up came higher in the market than the confirmed down.  This is what I think frustrates people.   As a newcomer to VV, I joined for the confirmed calls but was similarly frustrated.  VV quite rightly says the confirmed calls have never missed a downturn and I 100% believe them.  However, one might ignore the confirmed call if one thinks it has cried “wolf” too often.

This does not mean that the confirmed call is a “bad” indicator.  If one learns and appreciates how it works then one can decide how to integrate it into one’s investing and trading decisions (or not).  This also requires an understanding of the nature of the market one is working with – i.e., trending or range-bound.  I have developed my own timing system for long-term decisions simply because I don’t care for how the confirmed calls behave.  I don’t ignore confirmed calls, I have just made them part of my indicator suite.

In this case, as I wrote (VV form) here earlier, I decided to re-enter the market on 6/27 based on the MTI and the behavior of a model portfolio I follow based on the top-10 members of the IBD50.  Had I been using the confirmed calls in this case, once again I would have been better off staying in the market than following the confirmed calls.  Now, we are talking about a 6-month period here.  Where the confirmed calls win over time, if you follow them consistently, is by capturing the long up and down market trends.  So, you just have to take the rough with the smooth. (click on image to view full-size)

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IBD50 and Stocktwits50 review week ending July 8th.

8 Jul

10% discount code PROTECTME5

An interesting week in the markets with something of a retreat today but the markets recovered from their initial lows so it will be interesting to see what Monday brings. Earnings start next week.  PLEASE NOTE that with the exception of our IBD top-10 portfolio, all performance numbers are from Tuesday’s open, on the inescapable logic that that was the first time you could have duplicated any of these lists.

Benchmarks performed as follows with an interesting spread of results:

  • NASDAQ composite:  +1.53%
  • NASDAQ 100:  +1.86%
  • S&P 500:  +0.43%
  • Russell 2000:  +2.15%
  • Wilshire 5000: +0.67%

The IBD50 barely eclipsed the NASDAQ composite returning + 1.8% overall with 37 winners to 13 losers.  A newcomer was the best performing stock this week.  TNAV really was fresh into the IBD50, not a retread like so many others.  I wonder how much its inclusion led to this uplift, although most of its lift came Tuesday and early Wednesday.  Winners and losers were:

  • TNAV +12.94%
  • NFLX +6.4%
  • PCLN +5.28%
  • AH -4.43%
  • ABV -3.45%
  • HUM – 2.87%

The IBD50 newbies were, as noted above, led by TNAV.  There were two winners and two losers.

Of the top-10 rated stocks in the IBD50 (by IBD) all were winners with an average return of 3.09%.  Top three winners were:

  • NFLX +6.4%
  • ULTA +4.58%
  • TIBX +3.85%

In our Intersection 50 watchlist (stocks in both the IBD50 and Stocktwits50) we had eleven winners and two losers — BIIB and HANS — for an overall lift of 2.34%.  Top three winners were:

  • NFLX +6.4%
  • VMW +5.24%
  • ULTA + 4.58%

In the Stocktwits 50 itself we saw 38 winners and 12 losers for an overall lift of 1.7%.  Like the IBD50, the ST50 had a stand-out winner in the shape of Pricesmart, which announced results this week:

  • PSMT +12.68%
  • NFLX +6.4%
  • GMCR +6.3%

Our monthly-adjusted portfolio based on the top-10 stocks in the IBD50 gave us a 4.93% lift this week measured from last Friday’s close.  This portfolio started with a $50,000 investment on January 23rd this year and is currently worth $66,952 adding $2,467 this week.  That is a gain for the year so far — actually since inception — of 33.9%.  I will take that number from a portfolio that is fully invested all the time:

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