‎Dow Hits Record

The Dow hits a record it what seems like a hated bull market.  For all the moaning and groaning about growth and biotech, look at the stodgy old Dow!

Next up… Sell in May?

I lightened up a little today.  No reason to panic out and hope the market goes down over summer, but nothing wrong with ringing the register on some extended names and look to redeploy on any weakness.

***

Dow Hits Record as Fed Trims Stimulus as Economy Improves

By Joseph Ciolli and Lu Wang

Bloomberg - Bloomberg - Wed Apr 30 20:15:00 UTC 2014

U.S. stocks rose, with the Dow Jones Average closing at a record, as the Federal Reserve said it wou...

If you have Windows 8, open this in Finance.

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U.S. Homeownership Rate

Even with the US "recovery," home ownership is at mid-1990s low. I remember at the time, there were lots of military base closures hitting local neighborhoods.  Fast-forward to today, and the unemployment rate is still high, wages are stagnant, and loans are tougher to qualify for.

But interest rates are low!

***

U.S. Homeownership Rate: Lowest Since Mid-1990s

Conor Dougherty

The Wall Street Journal. - The Wall Street Journal. - Tue Apr 29 22:52:56 UTC 2014

The U.S. homeownership rate hit its lowest level since the mid-1990s, a reminder that despite two years of recovery there is still a way to go before the housing market is back to normal.

If you have Windows 8, open this in The Wall Street Journal.

http://online.wsj.com/article/SB10001424052702304163604579532080447027674.html?mod=rss_front_total_headlines?a=1&m=en-us

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‎Twitter Earnings

$TWTR - Twitter was up big early and then crashed in after hours trading after their earnings report showed slowing growth.  Personally, I spend way more time on Twitter than anywhere else on the web these days.  I don't plan on touching the stock until the lock up period, though. Then I will re-evaluate.

***

Twitter User Growth Slows as New Products Fail to Excite

By Sara Frier

Bloomberg - Bloomberg - Tue Apr 29 22:15:00 UTC 2014

Twitter Inc.'s (TWTR) slowing user growth pushed the stock to the lowest since last year's market de...

If you have Windows 8, open this in Finance.

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‎Who’s Losing in the McDonald’s-Taco Bell Breakfast Battle‎

$MCD vs $YUM at breakfast: Just a casual observation at the few places I pass by on the way to the office, is that there are cars at the McDonald's and not that many at Taco Bell.

Just an observation.

***

Who's Losing in the McDonald's-Taco Bell Breakfast Battle

By Suzanne McGee

Fiscal Times - Fiscal Times - Mon Apr 28 16:30:00 UTC 2014

The battle between Taco Bell and McDonald's that's been playing out on your TV screen and across soc...

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‎Toyota moving US base from California to Texas��

$TOY - Toyota is another large employer taking jobs from CA to TX.  The company specifically mentioned the high cost of doing business in CA as a reason for the move.

***

Toyota moving US base from California to Texas

GILLIAN FLACCUS

Associated Press - Associated Press - ‎Monday‎, ‎April‎ ‎28‎, ‎2014

TORRANCE, Calif. — Toyota delivered a surprise pink slip to California on Monday, announcing the com...

If you have Windows 8, open this in Finance. Otherwise, open in the browser.

http://www.bing.com/r/1E/rp5Rx?a=0&m=en-us

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Monday Randomosity

· $SPY – It was a “Tower of Terror” day in the stock market. I hope you were smiling when your photo was taken. Please pick up your photo when you exit the ride.

· A “reversals” day in the market!  Started strong, and then WHOOSH down.  Then WHOOSH up.  Then uh oh, here we go again. 

· If you like low-wage jobs, then this economic recovery is for you!  “The National Employment Law Project reports that that low wage industries employ 1.85 million MORE workers now than at the start of the recession while mid-and higher-wage industries employ 1.83 million LESS.”

· Remember $SOCL, the social media ETF?  9-month lows.  That was one folks were buying to “get a piece of FB” last year.  I don’t know if it’s a bad investment for the long term, but I’d rather own a few specific tickers I believe in.  There seem to be a lot of tickers in that ETF that makes me wonder if they’ll even be around ten years down the road. 

· Advertisers backing out!  Used car dealership chain CarMax, airline Virgin America, and the Chumash Casino Resort said Monday that they are ending their sponsorships of the Clippers in the wake of comments allegedly made by the team's owner, Donald Sterling.  What an idiot.

· See, Chris Paul? Should have signed with the Lakers!

· $AMZN – Amazon down another 3% today.  I find it all rather shocking, since the company has a UPS truck on standby for deliveries to my house.  (I buy a lot from ‘em!)  I think it’s just a case where everything in growth land is being sold off right now.  No mercy.  Nowhere to hide.

· Except in $AAPL – Apple, as investors bought it up another 4% today.  The reason Apple shares are up is that because today if you own Apple it’s like owning a pie with 10 slices.  And in June, they’re going to take that same pie and carve it into 70 slices.  Who doesn’t want more slices?

· $MSFT – Microsoft moving ahead with XBOX original programming.  As in TV shows.  Hmm.  More competition for NFLX and just about everyone else.

· $DIS - Including Disney, by the way.  Don’t they have a deal with NFLX to make some Marvel mini-series soon?

· By the way, I was tired of constantly fixing my Windows 7 virus problems.  So I upgraded to Windows 8.1.  No more problems.  For now.  (The new Windows 8.1 OS is not as good without a touch screen, though.  But okay and actually seems faster than Windows 7).

· The Los Angeles Dodgers are struggling, but still near the top.  Not bad, because when the sticks and arms do start to click, that will be No Mercy on MLB, too.  *wishful thinking*

Disney is a Money Printing Machine

$DIS - Disney has made over $1B in Frozen. The merchandise is so hot that the Disney stores are having lotteries to deal with the large crowds. People are lining up in front of stores early in the mornings!

This means sequels. More DVD sales. Games. More merchandise.

Oh, and then there are all the Star Wars movies and Marvel movies and Pixar movies and more more more. Oh, ESPN. And Disney still has theme parks, right? $99 to get in and wait in long lines all day long.

Buy what you know, Peter Lynch.


http://www.cbc.ca/m/news/#!/content/1.2621483

Update – The IBD Top 50 Stocks Strategy

Here’s a late update on the IBD Top 50 stocks investing strategies vs. $SPY

The IBD weekly strategy ending 4/25/2014 came in slightly worse than the SP500 for all models.  The market continues to see growth stocks sold off, and that doesn’t bode well for the IBD50.

For the week, there were 19 stocks up and 31 stocks down for the IBD 50. 

The IBD models are performing exactly the opposite from when the market was advancing.  When the market was advancing, the IBD 50 stocks easily led the SP500.  But even though these are the top ranked growth stocks, they are also leading on the way down.  Being in the high-quality growth names has not been a safe haven!

The total return since 2/8/2014 is underperforming the SP500.  None of the IBD models has a positive return for 2014.  The more diversified model (with 50 stocks) is performing better than the less-diversified models.

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.

Trading costs $208.95.

The IBD monthly strategy heads into the last week of April with negative returns for all of the models. Many of the growth stock darlings from the beginning of the month have been sold off hard.

The IBD newspaper frequently updates the IBD 50 holdings, but this portfolio remains with the top 50 as of the close March 31st.  The portfolios rebalance this week!

Only 11 stocks in the IBD 50 have had a positive return, while 39 are losing money.

IBD often mentions that the stock list and updates to the stock list are not to be used as a buy or sell list.  Wise words!

Trading costs $29.85.

As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed.  Going forward, I will list the “in and out” rebalancing costs for each strategy.  I will assume a $9.95 cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif.  Note that Motif limits the size of portfolios to 30 stocks).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered. 

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

IBD 50 Model Portfolio Update

IBD 50 model portfolio update: Oops. Been dealing with computer virus and then Easter. The next thing you know, the week got away from me.

Back next weekend.  With the SP500 up 6 days in a row, we could see quite a comeback for the IBD strategies!  Stay tuned!

$FB - WhatsApp tops 500 million users

More on $FB and WhatsApp (messaging app) from today:

Messaging service WhatsApp, acquired earlier this year in a mammoth deal by Facebook, announced Tuesday it topped half a billion users worldwide.

In a brief statement posted on its official blog, WhatsApp co-founder Jan Koum says the service's 500 million users share more than 700 million photos and 100 million videos each day.

From http://www.usatoday.com/story/tech/2014/04/22/whatsapp-500-million/8012787/

Facebook has been both praised and ridiculed for spending $19B on WhatsApp.  But FB does have a growing WhatsApp user base to work with.  #thatsagoodthing

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JetBlue Pilots Vote to Unionize

$JBLU - JetBlue pilots vote to unionize.  Uh oh:

JetBlue's share price fell on news of the move, which could eventually increase costs at the discount airline. JetBlue said in a recent securities filing that unionization was one of the biggest risks to its business.

Unionization "could result in demands that may increase our operating expenses and adversely affect our financial condition and results of operations," the airline said in the filing.

***

JetBlue Pilots Vote to Unionize

Jack Nicas

The Wall Street Journal. - The Wall Street Journal. - ‎Tuesday‎, ‎April‎ ‎22‎, ‎2014

The pilots at JetBlue Airways voted to unionize, ending the carrier's status as one of the final nonunion airlines in the U.S.

If you have Windows 8, open this in The Wall Street Journal.

http://online.wsj.com/article/SB10001424052702304049904579517911131169286.html?mod=rss_front_total_headlines?a=1&m=en-us

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Messaging Apps

$FB - Facebook raised eyebrows on the $19B price for Whatsapp. But other messaging apps are out there competing for eyeballs, too.

"…Line is a contender—along with the U.S.'s WhatsApp and China's WeChat—in a global struggle to dominate smartphones."

I think Whatsapp is helped out by $FB money and social media dominance, but other companies could come along and decide to back one of these other messaging apps to get in the ballgame.

***

Messaging App Line Gains Traction Abroad

Eric Pfanner

The Wall Street Journal. - The Wall Street Journal. - ‎Tuesday‎, ‎April‎ ‎22‎, ‎2014

Japan-based Line generates more revenue than rivals WhatsApp and WeChat combined, as the three messaging apps battle for the top spot on phones world-wide.

If you have Windows 8, open this in The Wall Street Journal.

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AT&T Earnings

$T - AT&T earnings tidbit:  "AT&T's profit for the quarter fell 1.3% to $3.7 billion, largely because of higher taxes."

Remember that when your TV, Internet, and monthly phone bills go up!  If $T has a bigger tax bill, it's YOU who gets to pay it for them.

***

AT&T Revenue Rises, Profit Slips

Thomas Gryta

The Wall Street Journal. - The Wall Street Journal. - ‎Tuesday‎, ‎April‎ ‎22‎, ‎2014

AT&T's sales rose to start the year, as the carrier added more subscribers and increasingly sold mobile devices like the iPhone at full price.

If you have Windows 8, open this in The Wall Street Journal.

http://online.wsj.com/article/SB10001424052702303825604579517870780724460.html?mod=rss_marketplace_and_tech_total_headlines?a=1&m=en-us

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Obeying Sell Rules Saves Portfolios

I hate to take losses, but looking back on 2014 trades so far, I am glad I have had “some” discipline following sell rules.  Many (almost all) of the stocks I sold that were down 8-12% have continued to slide further into the abyss.  I have rotated into other things, some have worked, some have not.  But better than just holding and hoping the old things come back.  If the market does continue to rally, hopefully the new things are better performers than the old things.

Dollar Cost Averaging Into ETFs

How would an investor do if starting at the close on every Friday in 2014, they added $1000 to an ETF?

I have the numbers.  (As of close 4/14/2014).

What’s “funny” is how the media warned everyone not to go into the Emerging Markets.  Right?

Update – The IBD Top 50 Stocks Strategy

Here’s a late update on the IBD Top 50 stocks investing strategies vs. $SPY

The IBD weekly strategy ending 4/11/2014 had another bad week.  The market has been seeing rotation out of the high beta and volatile names into the big cap value names.  But even the larger cap stocks started getting hit this last week.

For the week, there were 3 stocks up and 47 stocks down for the IBD 50.  Only 1 of 4 in the top IBD 5 stocks was positive for the week.

The IBD models are performing exactly the opposite from when the market was advancing.  When the market was advancing, the IBD 50 stocks easily led the SP500.  But even though these are the top ranked stocks, they are also leading on the way down.  Being in the high-quality names has not been a safe haven!

The total return since 2/8/2014 is underperforming the SP500.  None of the IBD models has a positive return for 2014.

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.

Trading costs $169.15.

The IBD monthly strategy is also having a rough April.  Diversification into more stocks has cushioned the blow compared to more concentrated holdings.

The IBD newspaper frequently updates the IBD 50 holdings, but this portfolio remains with the top 50 as of the close March 31st.  If the the high-beta stocks continue to get sold off, it’s going to be a long month for these models.

IBD often mentions that the stock list and updates to the stock list are not to be used as a buy or sell list.  Wise words!

Trading costs $29.85.

As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed.  Going forward, I will list the “in and out” rebalancing costs for each strategy.  I will assume a $9.95 cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif.  Note that Motif limits the size of portfolios to 30 stocks).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered. 

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

Virus!

I was fighting a PC virus over the weekend is unable to blog. Will be back later with the IBD update after what was a horrible week for stocks. 

Bouncing today - for how long?

The Fed Tightening Pace

So much ink has been spilled over the Fed tapering, dovishness and hawkishness - $SPY

"Several participants noted that the increase in the median projection overstated the shift in the projections," the minutes of the March 18-19 Federal Open Market Committee meeting showed. Some expressed concern the rate forecasts "could be misconstrued as indicating a move by the committee to a less accommodative reaction function."

Several Fed Officials Said Forecasts Overstated Rate-Rise Pace

By Jeff Kearns and Craig Torres

Bloomberg - Bloomberg - Wed Apr 9 18:00:00 UTC 2014

Several Federal Reserve policy makers said a rise in their median projection for the main interest r...

If you have Windows 8, open this in Finance.

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Stock Market Thoughts

$QQQ and $SPY – High flyers continuing to be sold.  Money flowing into the dividend paying large caps for “safety.”

The SP500 is right at the 50dma, so if we were going to bounce like we have the past year or so, this is where the bulls should make their stand. 

I was looking at the QQQ at $85.55.  The 200dma is $81.78, which isn’t far away.  The 50dma is now above the current price at $88.43, and could act as resistance to any bounce if the trend is now down.  The problem using the NDX is that it is more volatile and tends to overshoot in both directions.  At least in my black box model.

The black box doesn’t have a buy signal, and is still on a sell signal from QQQ $91-ish.

Anyway, I’m guessing bounce here but I’m thinking the election year correction is here.  Of course, I have been wrong about market corrections for the past year.  I actually hope that I’m wrong again.  Bull markets are better than bear markets (and also better than scary corrections).

***

I decided not to renew my Audioboo Pro account.  I can still do the podcasts for 10 minutes per audioboo.  Which I think is plenty, right?  They increased their price and I just don’t audioboo consistently enough these days.  I can always re-up later.

Update – The IBD Top 50 Stocks Strategy

Here’s a late update on the IBD Top 50 stocks investing strategies vs. $SPY

The IBD weekly strategy ending 4/4/2014 had another bad week.  While the SP500 remains near all time highs, the more volatile stocks that make up the Nasdaq and the IBD 50 are getting hit with institutional selling.

The market has been seeing rotation out of the high beta and volatile names into the big cap value names.  Many large institutional investors have to be invested 100% of the time, and when the high beta names stop working, money flows into the names that are more highly liquid and that pay dividends.  These big cap stocks are often seen as “safe,” although they eventually get sold off should the market go into a bigger correction. 

For the week, there were 22 stocks up and 28 stocks down for the IBD 50.  Only 1 of 4 in the top IBD 5 stocks was positive for the week.

The total return since 2/8/2014 is underperforming the SP500.  None of the IBD models has a positive return for 2014.

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.

The IBD monthly strategy has had a rough April so far.  What’s interesting is that the portfolio was rebalanced after the close on March 31st, so the difference between the weekly and monthly strategies excludes the very positive last day of the first quarter.  What a difference!  (Of course, that day was included in the previous monthly returns, so all is not lost…).

The news media often says that the market hasn’t had a 10% pullback in quite awhile, but if one is following the monthly or weekly IBD holdings, there is more volatility here than in the more widely followed indexes.

 

As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed.  Going forward, I will list the “in and out” rebalancing costs for each strategy to demonstrate the impact these costs would have on returns.  I will assume a $9.95 cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered. 

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

More Pain?

I started to blog and audioboo a few times last week and never finished.  (Birthday stuff got in the way - hooray).  Anyway, the comments at the beginning of the week would have painted a different picture than comments towards the end of the week.

Basically, we are seeing some ugly action.  When the high flyers get sold in the midst of IPO-palooza and wild stock speculation, it usually doesn't mean good things going forward.

In addition, the market has a history of having a nasty election year correction.

Anyway, I have been rotating out of some of the losers and trying to find things near support, while still maintaining some cash.  But honestly, I have taken a hit in the more speculative names the past couple of weeks and wish I would have watched more basketball and bought less stocks!

***

Momentum names may see more pain

BY ANGELA MOON

Reuters - Reuters - ‎Sunday‎, ‎April‎ ‎6‎, ‎2014

After their worst week in several years, high-flyingstocks that defied gravity throughout 2013 look ...

If you have Windows 8, open this in Finance.

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