Stock Thread (45 Viewers)

[Cliff Clavin]

I wouldn't count Netflix out just yet. Their original content has been a hit and it's growing, their catalog of tv shows is huge, and they have a head start on everyone. If HBO, Showtime, Sony, etc start their own streaming services, am I going to have to pay for each one? HBO already said their streaming wouldn't be cheaper than adding them to a cable package. What's the incentive for the stream then?

I'd be the exec's at Netflix anticipated this kind of move by a studio and have plans to counter.

Cord cutters. Just to get HBO through cable it would cost you $50ish a month. It gets people like me, who pirate their stuff now, to sign up for their online service which I absolutely will.

$50 a month? Yikes....maybe $15 here in Va.

I wasn't clear. That's assuming you don't have cable which millions of people are doing nowadays. Maybe it is different in the US, but in Canada, a basic cable package is required before you can get HBO. A basic package is around $50 then you have to pay the $15ish for HBO on top of that.

 

[siffoin]

Could be priced at 0 in a few years. Seriously.

I have never been high on NFLX, unfortunately

But I don't know about the valuation of 0. The price point is still light years ahead of what these others are offering. Imagine a standalone HBO, then Showtime, then Skinamax... The costs for NFLX will still keep a loyal following.

They'll end up being like the MetroPCS of TV services. At some point when their stock is priced more into reality, somebody will prob scoop them up.

They will not exist in a few years. Period.

They rely on the studios to feed them movies. First HBO starts this streaming, then the studios realize they can just stream the stuff themselves and undercut HBO on everything but their originals. Studios charge higher rates, the ISPS (controlled by the studios) charge higher rates to pass through, plus competition from networks and other outlets content to give away programming for free, and boom. It's over. HBO was way out in front of this trend a decade ago with original stuff. Now, it's payday.

Think blockbuster. Because that's where they will be sharing a place with soon enough.

For a few sentences that must have been pretty compelling as the thought of shorting entered my head immediately after reading it.

I would be too scared though, getting caught on the wrong side of this is devastating. I've actually posted numerous times in the last few months about how I would love to short Tesla (although I think their future is different than what you outline for NFLX) just due to an insane valuation right now. But my feelings there are the same as this one and the end result of getting caught on the wrong side is devastation.

why don't you buy a put then?

The trader in me likes this idea:

I'd want a some kind of bounce towards $380ish. I have a target of $220-$270. Will have to see how they price the options in the morning and over the next few days if it does move higher- I'd be willing to risk $1 and hope to make $4+ - the pricing is key - the option game ain't what it used to be.

So if for example $NFLX moved to $380...and the Jan $350 Put was priced at $15 or less - I'm in at that point because my expectation of an $80+ move (price at $270 or lower) gives me a risk reward of $1 to make $5+ (my $15 put will be worth $80+)

Be looking at a Jan or March 2015 expiration.

I basing the $220-$270 target on support levels over multiple time frames in conjunction with a bearish trend for NFLX (which has been bearish since late Sept at around $440) and a bearish trend for the overall markets.

So that's the plan now we just need to exercise a little patience and see if the plan unfolds accordingly.

 

[sbonomo]

Could be priced at 0 in a few years. Seriously.

I have never been high on NFLX, unfortunately

But I don't know about the valuation of 0. The price point is still light years ahead of what these others are offering. Imagine a standalone HBO, then Showtime, then Skinamax... The costs for NFLX will still keep a loyal following.

They'll end up being like the MetroPCS of TV services. At some point when their stock is priced more into reality, somebody will prob scoop them up.

They will not exist in a few years. Period.

They rely on the studios to feed them movies. First HBO starts this streaming, then the studios realize they can just stream the stuff themselves and undercut HBO on everything but their originals. Studios charge higher rates, the ISPS (controlled by the studios) charge higher rates to pass through, plus competition from networks and other outlets content to give away programming for free, and boom. It's over. HBO was way out in front of this trend a decade ago with original stuff. Now, it's payday.

Think blockbuster. Because that's where they will be sharing a place with soon enough.

For a few sentences that must have been pretty compelling as the thought of shorting entered my head immediately after reading it.

I would be too scared though, getting caught on the wrong side of this is devastating. I've actually posted numerous times in the last few months about how I would love to short Tesla (although I think their future is different than what you outline for NFLX) just due to an insane valuation right now. But my feelings there are the same as this one and the end result of getting caught on the wrong side is devastation.

why don't you buy a put then?

The trader in me likes this idea:

I'd want a some kind of bounce towards $380ish. I have a target of $220-$270. Will have to see how they price the options in the morning and over the next few days if it does move higher- I'd be willing to risk $1 and hope to make $4+ - the pricing is key - the option game ain't what it used to be.

So if for example $NFLX moved to $380...and the Jan $350 Put was priced at $15 or less - I'm in at that point because my expectation of an $80+ move (price at $270 or lower) gives me a risk reward of $1 to make $5+ (my $15 put will be worth $80+)

Be looking at a Jan or March 2015 expiration.

I basing the $220-$270 target on support levels over multiple time frames in conjunction with a bearish trend for NFLX (which has been bearish since late Sept at around $440) and a bearish trend for the overall markets.

So that's the plan now we just need to exercise a little patience and see if the plan unfolds accordingly.

I like this idea as well. My problem is being able to watch the dang thing. I get busy and could miss my sell opportunity pertty easy.

 

[fantasycurse42]

Confused a little about puts and calls. As I have mentioned, I am a beginner with trading and the learning curve can be & at times has been painful.

My understanding of a put is betting it goes down and a call betting it goes up? For simple numbers sake, I'll give an easy example, curious how close I am to understanding.

This scenario is a fake hypothetical:

Apple is trading at $100, the March 2015 put for $70 is $10. I spend $1000 on these puts, so I have the option to buy at $70 and at risk is $1000. If it gets to $70, I exercise my options and make $3,000? If it never gets to $70 between now and then, I lose my $1,000?

 

[culdeus]

Confused a little about puts and calls. As I have mentioned, I am a beginner with trading and the learning curve can be & at times has been painful.

My understanding of a put is betting it goes down and a call betting it goes up? For simple numbers sake, I'll give an easy example, curious how close I am to understanding.

This scenario is a fake hypothetical:

Apple is trading at $100, the March 2015 put for $70 is $10. I spend $1000 on these puts, so I have the option to buy at $70 and at risk is $1000. If it gets to $70, I exercise my options and make $2,100? If it never gets to $70 between now and then, I lose my $1,000?

Suggest you go to youtube. There are hours and hours worth of videos out there that explain how those work.

 

[Bucks]

Confused a little about puts and calls. As I have mentioned, I am a beginner with trading and the learning curve can be & at times has been painful.

My understanding of a put is betting it goes down and a call betting it goes up? For simple numbers sake, I'll give an easy example, curious how close I am to understanding.

This scenario is a fake hypothetical:

Apple is trading at $100, the March 2015 put for $70 is $10. I spend $1000 on these puts, so I have the option to buy at $70 and at risk is $1000. If it gets to $70, I exercise my options and make $3,000? If it never gets to $70 between now and then, I lose my $1,000?

Without getting into strategies here's the basics of your scenario. You are "spending" the money which means you were the buyer, not the writer. The money you are spending only gives you the right to force the future sale of stock at a set price. It doesn't include the money for the actual purchase or sale of the underlying stock. That's additional funds or share holdings that you must separately have ownership.

As the contract buyer any time before the contract expires you can either sell your contract to someone else or force the option writer to buy shares from you at the set price. When you exercise you need to separately buy or already own the shares you are going to put to them.

So looking at your hypothetical if the stock falls to $70 and the contract put price is $70 then the put is not yet in the money. Meaning that there is no reason to exercise the option to force a sale because you can sell on the open market for $70. But if the stock falls under $70, say to $60/share, then you could exercise the option by selling above market price, 100 shares @ 70 = $7000. If you didn't already own the stock you were selling then you would simultaneously buy 100 shares @ $60 = $6000. So $7000-$1000-$6000 is just break even before commissions. You need the market price to fall under $60 to start profiting then for every $ under $60 you net $100.

 

[shady inc]

my only investment is $3K in VTSMX and its down to about $2,800 right now. i don't really know much about investing but that doesn't seem good.

 

[Mystery Achiever]

Confused a little about puts and calls. As I have mentioned, I am a beginner with trading and the learning curve can be & at times has been painful.

Lots of good educational material here.

http://www.optionseducation.org/en.html

Also, you need to be approved by your broker before you can trade options. There are four different levels (0--4; At least at Schwab) Your level determines what option trades you can make.

 

[siffoin]

my only investment is $3K in VTSMX and its down to about $2,800 right now. i don't really know much about investing but that doesn't seem good.

If that's all you got invested. Don't sweat it. It's possible/probable $VTSMX will drop further from here, but you don't have enough at risk here to make it worth your while doing anything but buy and hold..

 

[siffoin]

Could be priced at 0 in a few years. Seriously.

I have never been high on NFLX, unfortunately

But I don't know about the valuation of 0. The price point is still light years ahead of what these others are offering. Imagine a standalone HBO, then Showtime, then Skinamax... The costs for NFLX will still keep a loyal following.

They'll end up being like the MetroPCS of TV services. At some point when their stock is priced more into reality, somebody will prob scoop them up.

They will not exist in a few years. Period.

They rely on the studios to feed them movies. First HBO starts this streaming, then the studios realize they can just stream the stuff themselves and undercut HBO on everything but their originals. Studios charge higher rates, the ISPS (controlled by the studios) charge higher rates to pass through, plus competition from networks and other outlets content to give away programming for free, and boom. It's over. HBO was way out in front of this trend a decade ago with original stuff. Now, it's payday.

Think blockbuster. Because that's where they will be sharing a place with soon enough.

For a few sentences that must have been pretty compelling as the thought of shorting entered my head immediately after reading it.

I would be too scared though, getting caught on the wrong side of this is devastating. I've actually posted numerous times in the last few months about how I would love to short Tesla (although I think their future is different than what you outline for NFLX) just due to an insane valuation right now. But my feelings there are the same as this one and the end result of getting caught on the wrong side is devastation.

why don't you buy a put then?

The trader in me likes this idea:

I'd want a some kind of bounce towards $380ish. I have a target of $220-$270. Will have to see how they price the options in the morning and over the next few days if it does move higher- I'd be willing to risk $1 and hope to make $4+ - the pricing is key - the option game ain't what it used to be.

So if for example $NFLX moved to $380...and the Jan $350 Put was priced at $15 or less - I'm in at that point because my expectation of an $80+ move (price at $270 or lower) gives me a risk reward of $1 to make $5+ (my $15 put will be worth $80+)

Be looking at a Jan or March 2015 expiration.

I basing the $220-$270 target on support levels over multiple time frames in conjunction with a bearish trend for NFLX (which has been bearish since late Sept at around $440) and a bearish trend for the overall markets.

So that's the plan now we just need to exercise a little patience and see if the plan unfolds accordingly.

At $380 it looks like the Jan $350 Put would be priced at around $16. Price is moving towards $380 and if/when it gets there I will need to see if I think we nearing the end of this ST bullish move. If we are then I'll buy the put. If it looks like price is going to continue to move up, I'll hold off till the ST trend "peters" out. But the plan is in action right now.

The f'n option market makers are a bunch of criminals, and they are not in business to let pikers like us win.

 

[Mario Kart]

Good time to contribute to 2014 IRA or is this going to go a bit lower?

If diversifying, would buying commodities like oil, or index funds in commodities be the way to go?

 

[Drifter]

Back in the Black in October and almost made back September losses as well.

BIOYFT continues to behave like a small Biopharm - even though it's not. I've been able to make some money trading it on its fluctuations while holding some just in case the "big pop" comes (again much like I've played Biopharms in the past).

SWFT is rising in anticipation of Thursday's earnings. I'm likely going to dump my holdings at the current ~23 level for a ~2/share profit and will anticipate picking it or more if/when it dips on the actual earnings (pure speculation on my part).

COST has been my big win recently. Up 6-7% since I jumped on last month but I'm a long term hold on this one. I'll add more if it happens to get back down to around $125.

All my other plays have sucked or broken even recently.

 

[General Malaise]

Back in the Black in October and almost made back September losses as well.

BIOYFT continues to behave like a small Biopharm - even though it's not. I've been able to make some money trading it on its fluctuations while holding some just in case the "big pop" comes (again much like I've played Biopharms in the past).

Terrific earnings announced Monday morning.

 

[General Malaise]

up 9% today. ready to close this year out.....

 

[shady inc]

so do most people here do short term trading (hold an investment for a few weeks, months)? or what is the average length of time you (anyone reading this) holds an investment?

 

[culdeus]

so do most people here do short term trading (hold an investment for a few weeks, months)? or what is the average length of time you (anyone reading this) holds an investment?

Dunno, I just read what people post here and hold a mix of low fee index funds/etf stuff and rebalance things periodically.

 

[General Malaise]

so do most people here do short term trading (hold an investment for a few weeks, months)? or what is the average length of time you (anyone reading this) holds an investment?

Depends, really. If you hold a stock for less than a year and it's profitable, your tax rate will be of the short term variety, which is far less appealing than the long term tax rate, especially for those in the higher income brackets. So that's one consideration and for many of us, it's a big one. Personally speaking, I'm looking to invest in companies that I want to own, and I think that's a valuable lesson for people just starting out. An owner will be more patient with his/her investment than somebody just looking to trade or make a quick profit. One thing I like to look at is the insider buying/selling of a stock. If the insiders are major share holders and NOT selling shares regularly, I take that to mean that they believe in their business.

I tend to play in the small cap stocks and will never be an owner of Google or IBM or any of the behemoth market caps that trade millions of shares per day. I have no edge there. So when I identify a company that appeals to me, I'm looking for the long haul.

Now, if things work against me, I won't be afraid to sell and take my loss. But that's a lesson I've learned the hard way. Being stubborn with companies you believe in when they are slip sliding towards extinction is a recipe for failure. Cut your losses before it's too late.

 

[Drifter]

so do most people here do short term trading (hold an investment for a few weeks, months)? or what is the average length of time you (anyone reading this) holds an investment?

I do lots of things. I have various targeted investments, usually mutual funds, that I plan on holding and never touching. I have others that are companies I like over the long term that I plan on holding and there are those that I like for a Quarter or two at a time. Occasionally I'll play with something that I trade on ups and downs, but these are more limited.

That said, if I think my longer term holds are over-valued, I'll sell them and buy them back when/if they correct. The only thing I generally don't touch are some of my longer range index funds or target-year funds.

In general, I'm playing with my 6 month to 1 year "nut" cushion money that is up or down depending on where in the year we are and how well I'm doing in general.

 

[shady inc]

thanks for the info guys. any specific books you recommend reading for a novice?

 

[Drifter]

thanks for the info guys. any specific books you recommend reading for a novice?

Search the thread. I made some suggestions a little while back

 

[General Malaise]

thanks for the info guys. any specific books you recommend reading for a novice?

Money Masters by John Train. Oldie but a goodie.

Money Game by 'Adam Smith'....same deal, oldie but a goodie.

Market Wizards by Jack Schwager is another good one.

 

[siffoin]

thanks for the info guys. any specific books you recommend reading for a novice?

If you want to learn about stocks and the stock market that is one set of books. If you want to learn how to be a successful investor that is another.

In the way that most people would rank themselves in the top 50% of drivers, or in the top 50% of attractiveness. Investors are also plagued by cognitive bias - thinking they are better than they actually are. The psychological term is Illusory Superiority.

Truth be told- the average investors annualized return stinks. ("Average investor= the universe of all mutual fund investors whose actions and financial results are related to a single investor. This includes small and large investors as well as professionally advised and self-advised investors.") **

1) 10 year annualized return from 2003-2013= 2.6%

2) 20 year annualized return from 1993-2013= 2.5%

3) 30 year annualized return from 1983-2013= 1.9%

Why do investors stink? Because they get caught up in the EMOTION of the game.

If you truly want to be successful the main thing you will want to master is emotional control and risk management. There is a "sport psychology" to investing. Sure you need to learn the fundamentals of how to value a market. And sure you need to learn about trend and momentum. But without the emotional discipline to execute and a method for managing your risk- you will be just average. No one rings a bell at tops or bottoms. Most think the they are smarter than the crowd...when in reality they ARE the crowd.

Read "Trading for a Living" or "Trading in the Zone". Heck there's a lot you can apply to investing from Rotella's "Golf is not a Game of Perfect".

**http://www.forbes.com/sites/advisor/2014/04/24/why-the-average-investors-investment-return-is-so-low/

 

[Mario Kart]

What is the story on Coke and McDonalds?

Was always interested in buying some Coke stock due to its "stability" but will it remain stable?

 

[dschuler]

If you guys are looking for stock that carries risk with some serious upside, I would recommend BBRY (Blackberry). John Chen is a genius and is quietly and quickly turning this company around. They are getting closer and closer to the point of turning a profit again, and he has a proven track record. Not to mention there is a real possibility that a major company could buy them out at any moment for double their market cap and not blink an eye. I'm no expert, but definitely a stock worth taking a look at if you are bored.

 

[Mario Kart]

If you guys are looking for stock that carries risk with some serious upside, I would recommend BBRY (Blackberry). John Chen is a genius and is quietly and quickly turning this company around. They are getting closer and closer to the point of turning a profit again, and he has a proven track record. Not to mention there is a real possibility that a major company could buy them out at any moment for double their market cap and not blink an eye. I'm no expert, but definitely a stock worth taking a look at if you are bored.

Eminence alias?

j/k

 

[General Malaise]

Here's another one for you gamblers....

Vogogo Inc: VGGOF Thing was up 53% today. I don't know too much about this one, but my PM/Trader jumped into this a few weeks back. Payment processing and something to do with bitcoins.

What a year for the little guys in Tualatin, OR....we are up over 100% gross for the year.

Did he jump out after the 53% gain today?

I'm way too skeptical all things bitcoin to gamble here...

No staying with it. I know more about ballet than bitcoins, but I think they are here to stay.

Up 14% today.

 

[fantasycurse42]

Nice bounce on the S&P in the last couple of sessions...

 

[mquinnjr]

AMZN - wait...

http://www.thestreet.com/story/12924632/1/amazon-plunges-after-earnings-missbeat-because-they-suck.html

 

[Drifter]

Looks like BABA is going to have a sweetheart relationship with news for a while. Any news or rumors of news are good news for the stock.

Kind of makes me wish I'd picked up a bit more.

 

[Drifter]

For the Goldmember's among us:

http://www.peakprosperity.com/blog/88268/why-gold-undervalued

 

[Sand]

For the Goldmember's among us:

http://www.peakprosperity.com/blog/88268/why-gold-undervalued

The macrotrend of a strengthening dollar is having me lose all interest in gold and salivate over some of the deals coming around in integrated oil and gas stocks.

 

[Brony]

AMZN - wait...

http://www.thestreet.com/story/12924632/1/amazon-plunges-after-earnings-missbeat-because-they-suck.html

####ing Amazon. BOOO!

 

[tommyGunZ]

For the Goldmember's among us:

http://www.peakprosperity.com/blog/88268/why-gold-undervalued

The macrotrend of a strengthening dollar is having me lose all interest in gold and salivate over some of the deals coming around in integrated oil and gas stocks.

SRE is a great company.

 

[Drifter]

For the Goldmember's among us:

http://www.peakprosperity.com/blog/88268/why-gold-undervalued

The macrotrend of a strengthening dollar is having me lose all interest in gold and salivate over some of the deals coming around in integrated oil and gas stocks.

With you there. Just thought it was an interesting take on Gold

 

[fantasycurse42]

In the black for sector rotation...

After the start of the month, I am very pleased to be slightly above even right now.

 

[siffoin]

In the black for sector rotation...

After the start of the month, I am very pleased to be slightly above even right now.

NO ####! Who'd a thunk it 2 weeks ago.

Personally I'm considering closing the position out prior to the Fed. Pretty much guaranteed there will be a rotation into Bonds on Friday and you know what they say "a bird in hand..." For the charted portfolio - it will be measured as per the rules.

Good Luck and Glad you are sticking with it.

 

[fantasycurse42]

In the black for sector rotation...

After the start of the month, I am very pleased to be slightly above even right now.

NO ####! Who'd a thunk it 2 weeks ago.

Personally I'm considering closing the position out prior to the Fed. Pretty much guaranteed there will be a rotation into Bonds on Friday and you know what they say "a bird in hand..." For the charted portfolio - it will be measured as per the rules.

Good Luck and Glad you are sticking with it.

I almost closed it out when the S&P was tanking... I decided I was going to stick with it as it was intended though for 12 months. Last month was kinda an anomaly as ADRE was tanking and I thought I needed to just take a profit.

 

[kevzilla]

I put in a limit order for TWTR at $40, but it didn't sink that far. I'll watch it for a while.

 

[sbonomo]

In the black for sector rotation...

After the start of the month, I am very pleased to be slightly above even right now.

NO ####! Who'd a thunk it 2 weeks ago.

Personally I'm considering closing the position out prior to the Fed. Pretty much guaranteed there will be a rotation into Bonds on Friday and you know what they say "a bird in hand..." For the charted portfolio - it will be measured as per the rules.

Good Luck and Glad you are sticking with it.

Considering i got in last turn this has worked out very well for me...i am fully committed to the 12 month plan here....thanks Siff

 

[siffoin]

Regarding the SH Monthly Sector Rotation Strategy - and anyone following along.

The month of October has been one of 2 extremes. At this point the strategy is positive for the month. In addition, I have about a 95% confidence that there will be a rotation out of the current selection, $IVV, for November. This rotation will occur on Friday which is the last trading day for the month of October.

In the "laboratory" we'd just sit here for a couple of days and then make the rotation.

But we're playing in real life here. We've got a unique situation that can impact the position over the next couple of days and that is the Fed. Now maybe they go ahead and take the training wheels off QE...or perhaps they surprise us and announce another form of QE. My concern is what we face from the Fed is a coin flip - and I don't like coin flip odds - especially when I KNOW I will be making the rotation right afterwards.

All of the short term charts are lined up suggesting more upside from here. But with that said - I think it you should consider closing the position out with a small but guaranteed profit prior to the Fed announcement today. I'm sure with me suggesting this only means that the market will roar higher afterwards. But in this circumstance I feel that we've been fortunate enough to climb out of a deep hole, and would rather just take what we've been given, breathe a deep sigh of relief...have no regrets and look to make the next move on Friday.

I know this is something "outside" the rules - but I think this is one of the most unique situations faced in this strategy...something that would occur less than 1% of the time. In addition, if there wasn't such a high possibility of a rotation for the month of November, we wouldn't do anything.

For practical purposes, I will ""chart" as per the rules. For my portfolio, I'm looking for a spot to exit as I type.

I hope that is reasonable and understandable. If you have a question please don't hesitate to ask.

Edit: It's 7:44 MST - I closed the position at $200.18.

 

[sbonomo]

Thanks siff. I will do the same.

 

[tommyGunZ]

Good for you siff. Part of being a good investor is not being so tied to strict rules that you ignore the obvious.

 

[Ted Mullins]

Just got in on the rotation starting last month, thanks for the guidance Siff! Hope you are doing better btw.

 

[siffoin]

This is an example of why I say "I don't know the future." I'm sorry to have left anyone's cash on the table, but I hope folks realize I'm just trying to be protective of your gains. Hindsight being perfect, I should have just kept my yap shut. What I will take from this month is a great example and data point of why you stay invested into the strategy throughout. Sometimes the strategy will post a losing month. That's not unexpected. The goal is OVER TIME success.

With that said there will be a rotation today from October's $IVV and into $IJR (small caps). Had you asked me even yesterday morning - and I would have said the rotation would be into Bonds. Nope. $IJR it is. BTW: IEF (bonds)is now ranked 4th out of 6th - oh what a difference a day makes.

Remember: the strategy rotates out/in near the close on the last trading day of the month. For Oct->Nov that would be today.

Anyone following along- good luck.

 

[Drifter]

This is an example of why I say "I don't know the future." I'm sorry to have left anyone's cash on the table, but I hope folks realize I'm just trying to be protective of your gains. Hindsight being perfect, I should have just kept my yap shut. What I will take from this month is a great example and data point of why you stay invested into the strategy throughout. Sometimes the strategy will post a losing month. That's not unexpected. The goal is OVER TIME success.

With that said there will be a rotation today from October's $IVV and into $IJR (small caps). Had you asked me even yesterday morning - and I would have said the rotation would be into Bonds. Nope. $IJR it is. BTW: IEF (bonds)is now ranked 4th out of 6th - oh what a difference a day makes.

Remember: the strategy rotates out/in near the close on the last trading day of the month. For Oct->Nov that would be today.

Anyone following along- good luck.

I've actually been wondering why you weren't talking about IJR as it seemed to be pretty strong on my (no doubt simplistic) analysis. As with ADRE from August into September, my concern is that historically it does not seem to follow strong months with more strong performance, but I do agree (not that my agreement means anything) that it seems to have the most momentum right now.

From a purely speculative point of view the announcement today out of Japan has me wondering if EFA isn't about to go into an extended rally. What are you seeing there based purely on the action today in that sector?

 

[siffoin]

This is an example of why I say "I don't know the future." I'm sorry to have left anyone's cash on the table, but I hope folks realize I'm just trying to be protective of your gains. Hindsight being perfect, I should have just kept my yap shut. What I will take from this month is a great example and data point of why you stay invested into the strategy throughout. Sometimes the strategy will post a losing month. That's not unexpected. The goal is OVER TIME success.

With that said there will be a rotation today from October's $IVV and into $IJR (small caps). Had you asked me even yesterday morning - and I would have said the rotation would be into Bonds. Nope. $IJR it is. BTW: IEF (bonds)is now ranked 4th out of 6th - oh what a difference a day makes.

Remember: the strategy rotates out/in near the close on the last trading day of the month. For Oct->Nov that would be today.

Anyone following along- good luck.

I've actually been wondering why you weren't talking about IJR as it seemed to be pretty strong on my (no doubt simplistic) analysis. As with ADRE from August into September, my concern is that historically it does not seem to follow strong months with more strong performance, but I do agree (not that my agreement means anything) that it seems to have the most momentum right now.

From a purely speculative point of view the announcement today out of Japan has me wondering if EFA isn't about to go into an extended rally. What are you seeing there based purely on the action today in that sector?

When we're talking about the SH Top Sector Rotation Strategy - it's a 6 horse race trying to outrun the $SPY. That's the sole objective. Though returns on the Strategy has been positive for the past 3 years - it has not out-paced or bettered the $SPY over that time. The Strategy's real strength is how it manages through a bear market [SIZE=14.3999996185303px](From 2002-Present the Strategy has never had a losing year)[/SIZE]. If/when there is another bear market remains to be seen. But if one ever occurs that is where the real strength will shine.

Regarding $EFA - When you have violent moves within a matter of days (10% move in 10 trading days for instance). The technicals get askew. So you have to take a look at a wider view. Pull the charts out to the WEEKLY time frame would be a good first start.

When you do that what you see is this:

1) EFA is in a weekly bearish trend BUT

2) Price support on the 200 Weekly Moving Average held and $EFA bounced right there at $58.75ish. That's a real good sign.

3) Right now the bounce is moving towards resistance which I have pegged at around $65-$68 - which is further supported with resistance levels on the daily chart time frame.

4) So I want to see IF $EFA can push through those levels of resistance ($65-$68). The way those weekly charts look - I'd be surprised if it could. A move above $70ish would likely invalidate the Bearish case imo, and a move to all-time highs. How high? ALL-TIME highs= infinity and beyond...no one knows how high. A move below $58ish would suggest a much deeper decline is likely in store- $45ish then $30ish would be targets- adjusted if/when that were to ever occur.

5) Though there is a very real chance that the bottom is in- imo the charts have not confirmed this and both Daily and Weekly chart still lean bearish. I'd exercise caution with a long and have a stop below $58 (about a 10%stop/loss). More conservative would be to wait for a break above $70, but that is leaving a lot of juice out of potential gains.

 

[Eminence]

Siff, how do you feel about EXXI? It makes up the bigger portion of my portfolio. If I can get a bounce back to $9.00 over the next 6 months I would be happy.

I also have positions in:

ONVO

ICEL

MDBX

WAG

I just sold off what I had invested in GALE to buy up more EXXI because it's at a near historic low. I am eyeballing WATT as well as I think the hype for wireless electricity will boom in the coming years.

Open to feedback from everyone, trying to make some smart investments. Going the stock portfolio over savings account route.

Edit: My portfolio is only worth a little over $3,000 so the stakes are low. Just trying to see modest growth with a potential home run or two over the next 1 - 2 years.

 

[siffoin]

Siff, how do you feel about EXXI? It makes up the bigger portion of my portfolio. If I can get a bounce back to $9.00 over the next 6 months I would be happy.

I also have positions in:

ONVO

ICEL

MDBX

WAG

I just sold off what I had invested in GALE to buy up more EXXI because it's at a near historic low. I am eyeballing WATT as well as I think the hype for wireless electricity will boom in the coming years.

Open to feedback from everyone, trying to make some smart investments. Going the stock portfolio over savings account route.

Edit: My portfolio is only worth a little over $3,000 so the stakes are low. Just trying to see modest growth with a potential home run or two over the next 1 - 2 years.

A couple of things I would commit to memory:

1) Just because a stock is at an historic low doesn't meant it is "cheap."

2) When a stock is in a down-trend - why buy today when it is likely to be cheaper tomorrow? Meaning you want to WAIT for price to reverse a down trend - BEFORE committing to buying it.

3) In general you are better off buying stocks at all time highs when the market is at all time highs vs buying stocks at all time lows when the market is at all time highs.

Now of the stocks you have:

EXXI; ONVO; ICEL; MDBX and WAG - all of these with the exception of WAG are high risk "home run or strike out kind of plays. Now I don't know how much you have committed to those 4 speculative stocks but I'm pretty sure it is way to much. At MAX you would want 10% of your total portfolio to be committed to a home run:strike out portion of your portfolio. For you that would be a total of $300 spread throughout those 4 stocks.

Home runs are great. But there is huge risk. Main issue is you cannot set a narrow stop loss because the volatility is too high. So in order for you to get risk management under control you have to set the risk reward to: risk $1 in an effort to make $2+. Even with that you'd need to have a win rate above 50% (meaning 1/2 of all those plays return 100%+ AND you exercise discipline with a stop loss on the losers at 50%). Now I'm not sure what the historical home:strike out ratio is among all Major League Baseball players throughout history, but I'd guess if it were 1:2...you're looking at a hall of famer. Home runs are not easy to hit in MLB, and they are equally as difficult in stock trading. Sure...give a monkey enough pitches and he's going to hit one over the fence...doesn't mean he's Hank Aaron- though the monkey may think he is.

 

[Drifter]

Siff - thanks on the insights on EFA. Also appreciate that thoughts on the sector rotation performing better in a Bear market. I likely just missed that but I had not seen you say that before (or I'm just dense).

 

[fantasycurse42]

Anyone interested in Gold?

Thinking about purchasing some GLD shares.