Today's Market
by Dr Invest

Sunday evening, I began to pour over investment opportunities after the dramatic increase in consumer spending over Black Friday. I'm already invested in WMT (Walmart), but there is a great ETF that gives me some diversity called, RTH.  Market Vector's Retail holds a number of great consumer stores like Target, Home Depot, Walmart, Amazon, CVS, Lowe's, Walgreen's, Costco, TXJ compaines, and Mc Kesson Corp to name a few. Following RTH in a downtrend for several days, I placed a STOP-BUY on RTH set at $44.45. Eventhough RTH fell today .22%, my position still remains positive. At this time, we have 2/3s of our stock position purchased.

For those uninitiated to this blog, I am using $10,000 as an experimental portfolio. In May, I moved 1/3 of my $10,000 portfolio into BONDS, buying equal shares of TIP and BND with $3,333. In August I purchased $1,111 of IAU, a gold trust, for my CASH position. In mid-November, I was seeking a STOCK position and made a $1,111 purchase of WMT (Walmart) which fell 5% and tripped by STOP-SELL. Convinced that WMT (Walmart) would regain its position, I placed a STOP-BUY on WMT, following the falling price of WMT with a BUYING STOP. (This means that if the price stops falling and begins to climb, WMT would be re-bought.) Walmart did climb and was purchased with the STOP-BUY at $70.00 a share. WMT now sits at $70.83. Desiring a stronger position in retail stocks this Christmas, I placed a STOP-BUY on and ETF called RTH as mentioned above, so that WMT and RTH reserve $2,222 of my STOCK POSITION.

REGRETS

My original intention of purchasing the DOLLAR STORE STOCKS like FDO, DG, and DLTR was a mistake on my part. These stocks have performed with great strength. Part of learning is admitting when you missed such opportunities. Once a stock has risen so strongly, when you buy it, you can't be sure if it has already peaked; so instead of chasing stocks, you need to capture them when they are oversold. FDO, DG, and DLTR still have some momentum, but my gut feeling is that it is too late to join the party.

BUYING OPPORTUNITIES

So I am looking for BUYING OPPORTUNITIES. CATM (Cardtronics) was beaten down by investors when it missed its target for the 3rd quarter, and missed it only by pennies; still the investors punished the stock for failing them. CATM is still a solid company with great growth both in the U.S. and abroad. Since mid-October CATM has fallen 23.70% and with truly no reason excepting investor disfavor. Now CATM is begining to move side-ways and to consolidate. These are signs to me that a significant buying opportunity is presenting itself.

Remember, you can't time a stock! So if you buy CATM, be prepared for a loss as well as a gain. I will continue to watch the market, but over the next few days I will watch closely CATM. Likely, I will set a STOP-BUY at around $23.00. If CATM is going to restrengthen before the end of the year, it will likely break through $23.00, continuing its climb to much higher. If CATM is to continue a decline, it will likely do that as well and no purchase will be made of CATM with the STOP-BUY. CATM can often move 3% to 5% per day. This means it is quite volatile, but if in an uptrend, you can see strong gains.

As always: Protect your gains with a STOP-SELL; If you buy a stock, determine how much you are willing to lose and sell the STOP-SELL below your purchase price; you are the sole determinate of how much you lose, so chose wisely. Finally, understand that we are in the worst of economic times; never in the history of our economy have the indicators been worse. Conservative economist believe that we are presently in a recession, hidden only by quantitive easing. The QE will continue but a collapsing economic situation can out pace the FEDS will to buy us out. All this debt will turn into INFLATION and we are likely seeing an inflated and bloated stock market .... climbing not because of profits but because of inflation already figured into the market. If you have more specific questions ask me by writing *#drinvest@mail.com and remove the first two characters from the email address.

(note: the above information is for entertainment purposes only and not to be used in anyway as investment advice.

Today's Market
by Dr Invest

Perhaps it is only speculation, but Walmart has been beaten down for the past week and posed a buying opportunity. WMT had fallen to a low of $68 and then began to climb higher. I placed a STOP-BUY on WMT for 69:25 on Thursday evening. The theory here, is that WMT had began an uptrend after being beaten down and the upcoming BLACK FRIDAY sales would boost Walmart's profits.

As predicted, WMT was purchased today as Walmart surged in price, ending at $70.20 and gaining .95 in price. Gain was 1.37% interest. At least for Friday, the newly acquired position in WMT paid off.

The next stock position will be a return to CATM. You will remember that I have already lost 5% on my purchase of CATM when Cardtronics fell to the STOP-SELL. Like Walmart, I will use a STOP-BUY to purchase CATM if it moves up. I think it will move up and having been severely beaten down, its climb could be quite dramatic.

That's about it. I'm looking for a stock position before the end of the year and need at least gains of 8% or more on each position. I have been using a $10,000 portfolio as my example, investing 1/3 in a BOND POSITION, 1/3 in a CASH POSITION, and 1/3 in a STOCK POSITION. In the bond position I have purchased BND and TIP; in the cash position I have purchased IAU, a gold trust, and I am keeping the remaining 2/3rds of the cash position in cash; in the stock position I am presently holding $1,111 in WMT and wanting to invest the remaining $2,222 in other stock positions.

What has complicated investing in 2012 is a failing economy, propped up by government stimulus. Clear signs point to a recession with business slow down and the world economy in a slump. Bernanke admitted that little remains in his tool box to fix the economy, especially if politicians push the economy over the fiscal cliff.

Let me make this clear, this is an economy you can loose money in. The data remains the most negative in recent history and though the public continues to spend as though they are rising out of a depression, business are recording record slow downs in sales. Think with me for a moment... this is the reality of stagflation, that there seems to be both positive and negative economic events occurring at the same instant. We are beginning to hire once again, but there is not enough real growth to sustain the new hiring. Do you see the odd juxtaposition? We are building new houses once again, but banks are making it too hard for people to get loans. Again, a juxtaposition in which housing starts are putting people back to work, but no one can qualify for a loan... so the building can't be sustained.

All of 2012 has been filled with record breaking events...12% gains in the market by April, then almost all the year's gains erased by the end of May... then 13% gains by September with the DOW falling to a little more than 3% gains for the year. Good news... then bad news. By the time we reach the end of 2012, I predict we will not have achieved the spectacular gains that the more liberal economists had predicted. If you had kept to a buy and hold methodology, you will have been disappointed. Even though we may see a short Christmas rally, there will be some difficult days in the near future. Keep your STOP-SELLS in place and be prepared to lose some money. A 3% gain in 2012 will be good, a 6% gain will be considered fantastic.

So 2012 is no ordinary year and will prove to be a big let down for most investors. Those on a buy and hold track have already lost money and those investing by seasonal trend also are losing money...most of these losses can be attributed to government intervention.

(Note: the above information is for entertainment purposes only and not to be used as investment advice.)

Today's Market
by Dr Invest

"Don't count you chickens before they hatch" is the old saying. Sadly, this market just isn't hatching much. You will remember another saying: "The trend is your friend." If the trend is going down, it is not the time to buy stocks. We just haven't seen the trend turn upward.

In the previous blog I pointed out that we are approaching a "perfect storm", Europe continues in a recession,  the U.S. continues to teeter on the verge of their own recession, China is in a slowdown and the U.S. also is in a slowdown, war looms over Israel, Obama's policies are counterproductive for business, and investors are selling their positions to avoid the increased capital gains taxes begining in 2013. As of today, any small variation in the economic/political climate could move stocks down even more dramatically.

First, note the bottom right hand corner of the above chart. The DOW JONES sits at a 3.15% gain for 2012. The market could rebound if Christmas sales are significant. We will know soon, how well people are buying on Black Friday. Disappointing sales on Black Friday will surely depress stocks further and will hurt the market the rest of 2012.

I do see a buying opportunity for DLTR (dollar tree) but I have been reluctant to make purchases until the market trend is clearer. Many investors are taking a defensive position at this time. Strong Black Friday sales could mark a seasonal uptrend and bring buying opportunies for the year's end.

(Note: the above information is for entertainment purposes only and not to be used as investment advice.)

Today's Market
by Dr Invest

Man shall not live by bread alone! So what will we do now that we no longer have Hostess Twinkies. It really isn't the Twinkies I'm mad about, it is the mind set that people think they are owed more and more by the corporation that pays them. The old saying is: "Don't kill the cow who gives you milk."

Corporations live by a bottom line. They account for their profits, they subtract their costs to produce a product, and they count their profit. Now if if costs rise so much that profits no longer exist and they are going into debt to keep the corporation viable, they have no choice but to close the business. The Texas based company, Hostess will be closing their doors because union negotiations killed the cow who gave the milk.  When Hostess finally came to an agreement with the union, their investors agreed that the corporation could not continue with a negative balance and wisely closed the doors.

The result of the union's efforts is 18,500 employees immediately being laid off and a 85 year old company closing it's doors. Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.

Now this is a major bakery in the U.S. The union simply dismisses the problem as the corporation just wanting to make more money, while those they represent face the on-going tragedy of paying their bills without jobs. It is this attitude that "we are gonna get our fair share" regardless of the financial decline, that is killing business in the U.S. and is a primary reason that businesses are moving their companies abroad. The average median annual salary in India, $736; the average median annual salary in the Philippines, $1032. And these people would be glad to have a job making hostess Twinkies all day... and night too!

Lest I sound too calloused, I know that people need to be paid in a fair and equitable way, but you can't expect a business to deliver health care, retirement benefits, and remarkable salaries during a season in which all business are struggling to remain in business.

MY STOCK  POSITIONS

Though I am not happy with my WMT bombshell, I am looking for further investments in stocks before the end of the year. There are some opportunities with the dollar stores.. GD, FDO, TGT.

WMT was a drag, but should be seen as a buying opportunity. Setting a STOP-BUY at .50 to $1 above the closing price will capture the buying opportunity when WMT is seen as oversold. You can look at my chart above to see how WMT ruined my bond gains. The season is not over yet and we will try to recapture some of our losses.

Today was a bit dicey, but with new alliances between Obama and the Republicans, we should see a positive market on Monday.

(Note: the above information is for entertainment purposes only and not to be used as investment advice.)

Today's Market
by Dr Invest

Occasionally we all get a good spanking by the stock market. Today was my spank-down. Here is the way it played out.... WMT (walmart) reports earnings to the positive and projects continued earning through the end of the year. WMT falls over 4% this morning and when combined with the 2.38% previous fall, it trips my stop-sell set at 5% below the purchase price.

Well the world has not ended. My investment in WMT was only 11% of my total portfolio and 1/3 of my stock position. I never want to lose money, but investments have risks. It is time to make lemonade from the lemons. Here's how we can do that.

Let's look at the chart for WMT:

Since mid-October WMT has fallen 11%. The expectation was that WMT would rebound after the election, instead it fell over 5% and was sold by my stop-sell. The three yellow lines represent support. Typically WMT would have found support at $73, but it fell through that support line. I suspicion that WMT could continue falling for several reasons: 1. Obama's continued stimulus policies, 2. Obama's tax plan, 3. Obama's continued war against business, 4. The fiscal cliff, 5. The capital gains bottle neck to sell off stock positions and move into cash positions to limit higher capital gains tax rates.

Please note that I didn't even include the ominous clouds of war and bankruptcy of Greece, Spain, Portugal, and Italy. All of the above may be creating an inescapable contagion which could lead us further down, instead of plodding on the flat-line growth we have been maintaining.

STRATEGIES

One way to deal with the loss on WMT is to set a STOP-BUY $1 above the closing price. A STOP is the price you want to BUY WMT. WMT closed at $68.72, so I would set my STOP at $69.72. Should WMT rise in price to $69.72 my STOP BUY would purchase SHARES of WMT. The magic of this strategy is that WMT will likely continue on its journey downward if the market is crashing. On the other hand, if the downtrend is temporary, a sudden rise by 5% would trigger the STOP BUY and you would enjoy the gains.

The second strategy is to simply buy another stock that is moving upward.

The above chart shows DLTR, TGT, DG, and FDO rising even as the DOW declined. Any of these should be buying opportunities. I got smacked pretty good by my purchase of WMT, but nothing ventured is nothing gained. I will be interested in these stocks as we look at the week coming to a close.

(Note: the above information is for entertainment purposes only and not to be used in any way as investment advice.)
 

Today's Market
by Dr Invest

Where will the market go? In front of a real market success are a series of hurdles. Will Greece evade its financial storm? Will Spain find relief for slip further into indebtedness? Will Italy find its financial footing? And how about our own looming financial cliff? Obama successfully navigated the political pitfalls, retaining his presidential position; but question now is will Obama show us the money, will he show us that he can turn the market around? I speculate that the ingenious ideas of taxing the rich and implementation of the rules and regulations surrounding Obama Care will continue to create negative economic outcomes.

Milton Friedman, Nobel prize winner in economics, talks about economic outcomes as government seeks to manipulate markets and tax to fund their agendas. I think some of the things said by Dr Friedman are so essential that I want to give you some links on www.youtube.com.

• Free Lunch Myth - https://www.youtube.com/watch?v=YmqoCHR14n8
• Robin Hood Myth - https://www.youtube.com/watch?v=5Wx5PYZIWcQ&feature=relmfu
• Myth of Social Security - https://www.youtube.com/watch?v=rCdgv7n9xCY&feature=relmfu
• Stimulus & Inflation - https://www.youtube.com/watch?v=6W_9I0nk8uI 

I encourage you to find every video you can on youtube with Milton Friedman and consider the principles in today's economy.   

A Look at My Investment Positions

All of my investment positions are slowly improving but we remain in a threatening market. Even should we make leap over the fiscal cliff, most economist believe that 2013 will slip into a recession. Go back and re-listen to Milton's Stimulus & Inflation on You Tube. We are drunk with stimulus and it take more and more stimulus to keep the economy high. Now that the market has considered that each month 40 billion will be used to stimulate the market, there is no further expectation of stimulus from the Federal Reserve. If the market sours, the stimulus will already be discounted. A market decline will be a market decline. Please note....a new bubble is being created in the housing market because the 40 billion monthly is being used to by mortgages. So what will happen when all this money being poured into the economy stops?

All I can do is hope that my positions continue to climb and that WMT (walmart) catches fire over the next two months. I am reluctant to move into stocks when I see people selling their stock positions. The fear is tax related... thank you Obama... so the very wealthy are selling their stocks to pay taxes at a lower capital gains rate before they rise to a higher rate after the end of the year.

This creates a kind of "perfect storm" in which there is a stock market bottleneck; everyone must sell their stocks by the end of the year. Even if this is only 25% that sell-off their stocks for a tax benefit before 2013, we are talking about billions of dollars exchanged. This will prove to be a very tricky situation. My recommendation is to prepare to make some gains, but also have STOP-SELLS on all your trades to protect yourself if there is a major market sell-off.

 Our gold position (IAU) was as low at 5.53% two weeks ago. It has regained some momentum. The gold position is a LONG-TERM position of 9 months to 12 months. I hope for a 20% gain or more. If the market turns sour in 2013, IAU could prove to be a valuable position.

WMT will report earnings this week. I think they will meet their earnings and WMT will be a hot stock to be holding. I hope for 6% or more from WMT before the end of the year.

BND has not performed well because of competition with the FED. Twist continues and diminishes the returns on bonds.

TIP has performed well but not as well as I had expected. I am hoping for a 6% return by the end of 2012, but even the Treasury Inflation Protected product is being influenced by government manipulation.

So I am prepared for the market to continue a solid uptrend over the next five years, but I am also prepared to sell everything immediately. This is a sad day in American economics when you can't depend on the market to act in predictable ways, instead; we are seeing volatile rises and falls, the gain of billions and the loss of billions. This odd contradiction remains in the market and will not resolve itself until politicians in the U.S. are committed to a "balanced budget" and the reduction of national debt. Though these actions may be painful over the short-term, these actions would bring prosperity to our children in the years ahead.

(note: the above article is for entertainment purposes only and not to be used in any way as investment advice.)






 

Today's Market
by Dr Invest

Ouch! That smarts! We continue in a downtrend and the problem in a downtrend is that you DON'T know where you will find the bottom. Once the market turns negative, it is hard to get investors on buy back in. Now previously Bernanke could promise a QE-3, but he is already doing the QE-3 and the Twist buy back. As you can see, he really has nothing now to promise. He is doing everything he can do... and if the market goes down it is inspite of Bernanke's best efforts.

As I sit here and watch the close of the Markets, they are hammered yet another day. Eventhough my losses are low, I'm wishing I was out of the market.

I recently purchase IAU (a gold trust ETF) and saw a decline of over 5%. Presently IAU sits 2.73% below my purchase price of IAU. Gold prices seem to be slowly climbing higher in this chilling market, rising 1.8% today.

I also purchase WMT (Walmart) on election day. WMT would be a great purchase at anytime and should perform well over the Christmas season. WMT lost .85% today, with my total loss at 1.45%. I had hoped that WMT would have moved the other way and I would have sitting on a 1.45% gain. I have WMT set to sell at 5% below the purchase price. (called a STOP-SELL) I have toyed with CATM, setting a STOP-BUY at $25.20 should CATM suddenly rise. CATM continues to decline some, not finding a clear bottom.

Anytime you add new positions, it will make your averages lower on percentage gained because you are adding more money invested to the gains already achieved. So apart from the red figures of recently acquired positions, the green positions have already performed adequately.

BREAKING RULES

Never buy stock in a downtrend. I should have followed the advice, but I had thought that we would have had a new president and a trending market. I was wrong! This is why you have rules. Where any market drops 3% over two days, even the best stocks will also drop in value. The WMT stock could have risen 1.45% or higher, but now I will pay for being impetuous. Down 1.45%, WMT may not begin it's recovery until Monday.

Typically when you have 1% downturn in the stock market or several days of 1% drops, the market will rebound. Likewise, when you have several days that the market turns up 1% each day you will see a RETURN TO THE MEAN. This means market prices drop after strong rises in price.

An EXCEPTION to the "return to the mean" is when entering a BULL MARKET or BEAR MARKET. A BEAR MARKET can continue for weeks, even months when market negativity arises. In this market, however artificial it is, the worst has already happened, so we hum along caught in some kind of weird economic malaise. It can't get much worse because the government is propping up the market, but it certainly can't get much better because the free market is manipulated.

Still, I want to be careful not to buy stocks where there is a LONG-TERM downtrend; and everything seems to point to a "stable market" that is coerced by the FED. Given no major economic impacts by wars or failing central banks, the stocks that have been returning profits are going to a rise in their price.

My expectation is that WMT will rebound on Monday and my other selected stocks could be purchased at that time. DOL.TO and DG are performing the best and both deserve a look.




(Note: the above information is for entertainment purposes only and not to be used as investment advice.)