This weekly look back will probably be the more weighty of the work we do on the watchlists this weekend. Before we get to the numbers, we’ll look at what really differentiates the watchlists this week, and in general.
In his weekly ST50 commentary this week Ivan Hoff speaks of the difficulty that European banks are having in financing. Please remember that last week we pointed out that Christine Lagard, the head of the IMF, was calling for increased capitalization of European banks. She was rebuffed the following week. Ivan also reports negative Swiss short-term interest rates. If you remember our post “Fun with Francs” of a few weeks ago I said the Swiss would be working hard to get the value of their currency down. Hence the negative rates. Problem is, it hasn’t worked. So what are the Swiss to do? Declare war on Italy? The best suggestion I have heard is that they will have to peg the Franc to another currency, and for now the best candidate is the Euro. In the meantime the dickering between Greece and its reluctant lenders over collateral continues. Back home, we had the worst jobs report since 1945 this week. Who knows where the market will go, but I am still of the opinion that affairs in Europe continue to be the other shoe waiting to drop and the results could be quite nasty if it drops the wrong way.
However, there is still money to be made if you can pick your stocks. While the broad markets were flat to slightly negative the Stocktwits50 returned 2.18% (Fri-Fri) this week ably assisted by a 35% price hike from MITK. The IntersectionX list was second with a 1.23% average price rise.
However, particularly in the current market conditions it’s essential that we understand how the IBD50 and ST50 differ. This is a distribution of price changes from the two lists this week:
As you can see, the IBD50 has a much greater central tendency — twenty nine of its stock rose or fell 2.5% this week. The ST50 has significantly higher dispersal, this week skewed to the positive side with a very nice outlier, MITK. ALthough, even if one removes MITK from the result, the ST50 would still be #1 this week, just. The other take home is about the IntersectioNx watchlist. Because it draws on stocks that appear on BOTH the IBD50 and the ST50, it will always be confined to the tighter distribution of the two. Typically, I believe this will be the IBD50. Which is OK, because what I have hoped for this list is market-beating returns with lower volatility than either of the two parent lists. As time goes by we’ll see how my plan works out.
The numbers tell the story of the lists based on this week pretty well to:
Yellow signifies the highest value. We can see that typically, the ST50 has a greater dispersion of results and hence a wider range of likely outcomes. It also has the lowest average stock prices in keeping with the types of stocks likely to be found on the ST50.
I hope this gives some slightly better insight into the nature of these lists. I will re-run this comparison on an unscheduled basis. Now to the numbers:
When I updated the IntersectioNx and Stocktwits Top10 portfolios midweek, in the ST portfolio we would (again) have been better at that point sticking with the week earlier selections. I commented on this earlier in the week, please see the comments to that post as there are some updates.
- IntersectioNx portfolio: Last week $99,614, . This week $100,905.
- Stocktwits Top 10: Last week $102,703, This week $103,718. (BiWeekly update, $103,742, not much difference).
- IBD Top 10: Last week $52,409, This week $52,348
OK, our benchmarks have the following results this week (Friday to Friday):
- S&P 500: -0.24%
- NASDAQ Composite: +0.02%
- Wilshire 5000: -0.20%
- Russell 2000: -1.22%
I stil wonder if we have truly seen the bottom of this market. I hope so, but I am not too sure about it, personally.
Our watchlists performed as follows, Friday to Friday:
- IntersectioNx: +1.23%, 5W5L, JAZZ +9.88%, WCN -2.97%
- IBD50: +1.16%, 29W20L1E, JAZZ 9.88%, HIBB -5.28%
- IBD50 Top 10: -0.08% 4W6L
- ST50: +2.18% 28W22L MITK +35.26%, AUQ -12.79% Best watchlist this week
- ST50 Top-10: +1.22%