Thursday, July 31, 2014

Update – The IBD Top 50 Stocks Strategy

Here is the latest on the IBD 50 stocks investing strategies vs. $SPY (only monthly model today).

image The IBD monthly strategy continues to lag the SP500 as July comes to a close. 

The total returns for all monthly models continue to trail the SP500.  It probably isn’t a shocker that trying to pick just the winning stocks lags a more diversified index.  Especially since the winning stocks are often added to the IBD 50 list after a huge move is already in a stock.  The idea is that stocks that have gone up will continue to go up.  Hmm.

BITA led the monthly IBD 50 models with an 11.6% return.  On the downside, AFOP fell 26.1%.

For the month of July, the IBD 50 had 17 gainers and 33 losers. 

Trading costs $89.65.

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.

Fox Business Block Gurus Update

Hey, how are the Saturday morning Fox Business Block gurus performing against the indices?  This represents taking the same amount of money and buying their stock picks as of the friday night close before the Saturday morning shows vs. just buying an index ETF.


Not surprising.  It’s hard to beat an index fund.

(Note: Larry Glazer has made only one stock pick for 2014, Ford).

Wednesday, July 30, 2014

Tesla stock rises ahead of earnings

$TSLA - Tesla reports earnings Thursday. It's the next stock most likely to gap up or gap down after they announce.  Casino action at its finest!

I've often remarked that I haven't seen a Tesla car on the road. I finally did last week!

Tesla motors shares are climbing in anticipation that quarterly earnings report Thursday will test whether the electric car maker can keep its hot streak alive.

Tesla shares closed Wednesday at $228.92 a share, up $3.91 or 1.74%.

Sent from Surface Pro

Wednesday, July 23, 2014


$FB – Facebook earnings after the closing bell. I still believe this will be a huge growth stock over the next 10 years and I am long. The stock has had a great run recently. I always get a little worried when I see enthusiasm and a stock run ahead of an earnings date. I do expect volatility. There are a lot of non-believers and skeptics, which are also needed.

(I remember of being skeptical of $AAPL – Apple stock as it made its huge run over the years.)

Thursday, July 17, 2014

International Turmoil

$RBL $ERUS $RSX - Forget the earnings reports! The market is being driven by international news headlines! The Russian ETFs took big 7% hits today!  The Malaysian Airlines plane shot down and the US imposing sanctions on the Red Bear today was enough to make investors skittish on Russian stocks, and also sent the US market down.

This could get interesting.

If you have Windows 8, open this in Finance.

Sent from Surface Pro

Wednesday, July 16, 2014

‎Technology Dividend ETF

$TDIV - Dividend growth, tech style!

"One ETF that is set to benefit from both of these announcements ($INTC, $AAPL and $IBM) is the First Trust Technology Dividend ETF (NASAQ: TDIV). This fundamentally weighted ETF tracks approximately 90 stocks in the technology and telecommunications sector that are focused on returning value to shareholders through dividend and share repurchase strategies."

I think this is an interesting way to play dividend growth.  The expense ration is a little higher than I like at .5%, but it does hold a big basket of tech stocks.

I am adding TDIV to my watch list!
Technology Dividend ETF Gets Earnings Season Boost

David Fabian

Benzinga - Benzinga - ‎Wednesday‎, ‎July‎ ‎16‎, ‎2014

Earnings season in the technology space received a welcome surprise from Intel Corporation (NASDAQ: ...

If you have Windows 8, open this in Finance.

Sent from Surface Pro

‎Economy Heating Up During Summer‎

$SPY - Usually, the in-between election year sees a significant stock market correction.  Usually, the market is weakest from May to October and the phrase "sell in May and go away" was also a prudent investment strategy.

Not this year.  At least not yet.  The news is almost nothing but positive.  Even Fed Head Janet Yellen was talking about lofty stock valuations (aka "bubble") in some social media and small biotech yesterday while she was up on the Hill.

Buy. Buy. Buy.

Economy Heating Up During Summer

Alan Zibel

The Wall Street Journal. - The Wall Street Journal. - Thu Jul 17 00:21:21 UTC 2014

Economic activity in recent weeks got back on track after a rough start to the year, with the labor ...

Sent from Surface Pro

‎Corporate Tax Inversions

#taxinversion - Well, President Obama wants to do something about the US corporate tax rate: Make companies pay it!  Companies have the responsibility of making profits for shareholders, and are trying to reduce expenses by merging with companies overseas where there are lower corporate tax rates.

Say, Mr. President, why not lower the US corporate tax rate to make the US more attractive to companies?  Hmm?

Corporate Tax Inversions Will Cost U.S. Billions — and We'll All Pay

By Phil Terrigno

Fiscal Times - Fiscal Times - Wed Jul 16 20:45:00 UTC 2014

The hottest trend in corporate America could prove to be extremely costly for the United States. ...

If you have Windows 8, open this in Finance.

Sent from Surface Pro

Tuesday, July 15, 2014

Tuesday Randomosity

  • $SPY - The stock market reversed early gains today after Fed Head Janet Yellen indicated that some equities may be in a bubble. Hey but the economy is fine, the Fed will continue stimulus but still plans on ending it by October. Oh, and rates will remain low. 
  • $MSFT - Microsoft to announce job cuts this week.  
  • "Tax inversions" still in the headlines as US companies try to avoid the high 35% domestic tax rate for lower rates abroad.  Why not lower the US corporate tax rate?
  • $INTC - Intel beat earnings today. That was good for about a 4% pop after hours. 
  • $YHOO - Yahoo down around 2% after reporting earnings and lackluster ad revenues. Hmm.  Are folks going to pile into this for Alibaba or is the best way to play Alibaba just to buy Alibaba?  
  • Still long the market with a little cash.  Not much.  Market valuations measured by PE is right near historical averages.  It would be good to see profits grow rather than PE multiples to continue to expand. 

Wednesday, July 02, 2014

John Maynard Keynes Investment Strategies

$DIS $JNJ - Investing lessons from John Maynard Keynes. This is pretty good - just think about it.  Think of stocks like Disney and JNJ and wonder why the heck those should be "buy and hold forever" in the portfolio.

The Best Investing Lessons from a Legendary Economist

John F. Wasik

Fiscal Times - Fiscal Times - Thu Jun 12 12:00:00 UTC 2014

When it comes to the great economist John Maynard Keynes, there are few agnostics. Americans either ...

If you have Windows 8, open this in Finance.

Sent from Surface Pro

‎Portfolio Sabotage!

Here's a good article on why investors underperform the $SPY or market.  It's amazing that this happens year after year, even though these kinds of articles come out frequently reminding us that sometimes we are our own worst enemy.

(I need to watch that short term one).

7 reasons why you made less than the market

By George Sisti

MarketWatch - MarketWatch - Tue Jun 17 15:45:00 UTC 2014

Each year, Dalbar publishes the Quantitative Analysis of Investor Behavior. This study analyzes mutu...

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

Sent from Surface Pro

‎Summer Jobs?

Isn't there almost always a job surge at the beginning of summer, as employers add part-time workers for the summer?

Hot dog sellers for ballgames. 

Folks to watch kids go down waterslides.


Just thinking out loud, Summer.

Survey: US companies added 281,000 jobs in June

Josh Boak

Associated Press - Associated Press - Wed Jul 2 12:45:00 UTC 2014

WASHINGTON — A private survey shows U.S. business hiring surged in June, a sign of stronger economic...

If you have Windows 8, open this in Finance.

Sent from Surface Pro

Tuesday, July 01, 2014

Back From Vacation as Market Rips

$SPY - market rips higher! An amazing market run. Just letting things ride for now.  


Back from sunny and humid Florida. Saw alligators, Mickey Mouse, the Rays at Tropicana Field beat the Pirates, Kennedy Space Center, and the Florida Key Lime Pie Company. 


Now back to work.