Weekly Update, May 28, 2018

The Actions Taken (last week’s plans)

  • Covered 3/4 of my short position in MWA for minimal gain – did not want to hold the full position over the long weekend.  The resiliancy of MWA run after earnings has been a surprise,
  • Traded in and out of ACBFF and CRON for ~10% gains; still hold small position in each as in my ‘big 4 Canada Weed’ stocks
    • One comment on ACBFF – my sale was really broken up into small lots (<100) … for most of the day, this and its cousin, APHQF, trade in small lots with larger trades coming in the last 10 minutes or first 5 minutes of market.  Taking large positions >500 seems like a liquidity risk and i will focus mostly on CRON and CGC to see if liquidity is better.

The Clues this Week

  • Equity / Stocks
    • A couple of posts on Canada Weed companies this week here a bit helpful, especially the second on on the different province-level legal structures for retail distribution
    • https://seekingalpha.com/article/4176516 – From one of the better technology analysts on Seeking Alpha, a review of AAPL.  While his take on AAPL is worth the read, his methodology is even better.  Thinking of DCF as a floor for some companies is an interesting approach, but for me i would want to include a larger set of DCF methods like https://finbox.io provides.
    • https://seekingalpha.com/article/4175850-american-gridlock – an often read author posted something that is a bit political and may distract people from the key message – the next cyclical downturn in US economy will be different than anything post WWII given the structural changes to demographics, economics, jobs and government social safety nets.
      • Actionable take-aways include:  a) Non-US investments (Canada, China and India are my current targets); b) high quality corporate debt (Apple, Berkshire, Microsoft); and c) multinational companies w/ global product / services reach, and d) small US companies with superior products / services (IOTS is an example).
    • https://seekingalpha.com/article/4176193-pattern-energy-group-go-wind-blows#alt1 – A good valuation study on PEGI.  I am over extended on PEGI in several accounts.  My goal is to collect the dividends for the intermediate term as i do not see material downside risk to capital ($17.00 would be an extreme macro event imho), and closer to end of year can make better tax management decisions on the range of positions.
    • S&P week was quieter than last week
    • A very busy ‘news and data’ week; ISM and jobs will be the ones most likely to spark irrational movements 
    • Jeff Miller’s weekly indicator set is interesting – look at 10yr, SP and inflation expectation 
    • https://seekingalpha.com/article/4177534-bristol-myers-squibb-one-stock-ignore – Here is an example of why i cannot confidently invest in Pharma companies (even though i have small positions in JNJ and PFE)
      • This is NOT to knock this author.  This is to suggest that i just do not understand the Pharma business well enough to form strong opionions (that can drive investment decisions).  I have also yet to find a Pharma author that simplifies this sufficiently.
      • While BMY may be a great investment, i just cannot bridge my ignorance to make that call w/ conviction.
    • https://seekingalpha.com/article/4177567-place-like-cone – Brad Thomas on CONE – while the data center REITs fit within my IOT narrative and i was once interested in them as growth vehicle (ala Brad), i find that risk to that assumed growth is greater than i want to take on w/ REIT investment.
  • Debt / Bonds
  • Automation and Robotics

The Plans for Next Week

  • Specific Analysis
    • Water component makers is next deep dive for possible new (revisit) narrative – XYL, PNR, ITRI, BMI and MWA are the current list
  • Actions Set Up
    • Weed Trades – CRON (holds support @ $5.90), ACBFF (holds support @ $6.20), CGC (unclear on patterns after NYSE listing)
    • Tech Trades – CLDR, FEYE, IOTS and CY
    • Investments – TU, RCI (value entry points not fully discerned – patterns still being understood)

Weekly Update, May 20, 2018

General Reads

Credit, Rates and Bonds

S&P and other equity

Jeff Miller’s WTWA https://seekingalpha.com/article/4175654-weighing-week-ahead-will-higher-interest-rates-lead-lower-stock-prices

  • From Doug Short – the weekly S&P view; look at the volume patterns at the bottom.  The greatest yield by far (from visual) is in the closing hour – does that closing hour direction set the ‘morrow, too?
  • Rail Traffic is usually interesting and this table is great … the key for me was the ‘accelerating’ labels  
    • Port traffic as well  – quote:  Port traffic improves on both imports and exports. Steven Hansen’s (GEI) analysis suggests that the implications are stronger for global economic growth than for the U.S.
  • Weekly indicators … seems quiet and stable other than the 10yr  
  • And the big indicators … the green trends are holding
  •  
  • Jeff points to this article as a ‘should read’ https://seekingalpha.com/article/4171190-want-see-bears-go-zoo
    • Stay calm, stay focused
    • I add – always understand the business (profit) motivations of the people sending you information – few are doing anything for your benefit alone

Actions and Analysis

Weekly Update, May 13, 2018

Plans and Clues Blog – a personal investment journal, not advice

More General / Macro Oriented Weekly Reads 

  • General Reads
  • Stocks
    • One of 3 Canada Week stocks i hold (very, very small position) … These are swing, high risk intermediate trades and long term speculations (TWMJF, APHQF and CRON).  CRON being the largest position and the most ‘trade-like’.  The upcoming countdown to recreational legalization is going to be key for these stocks, as well as export opportunity.
    • More up-side w/ S&P?  http://seekingalpha.com/article/4173102 … i will take it; keep selling covered calls and upping my stop loss orders accordingly on positions that i want to trim or capital i want to protect
      • I am selling into the rally, not buying into it
    • Brian Gilmartin’s latest on S&P earnings http://fundamentalis.com/?p=7784
  • Rates / Bonds
    • REIT investments are closer to rates / bonds than stocks imho.  While this overemphasizes the retail segment, the sentiment is consistent it seems and contrarian views suggest adding to REIT exposure that can ride through economic cycles  https://seekingalpha.com/article/4172245-trouble-reit-land 
    • A Data Center REIT specific deep dive  http://seekingalpha.com/article/4172113
      • I only hold Data Center REIT preferred (DLR.Pr.C) after exiting QTS before its dive
      • While the data center is a key element in my IOT narrative, my view is that the risk in the REITs exceeds the reward on a grwoth or income basis – just think there is easier money to be made in other parts of the IOT value chain
      • I like the tower REITs better at lower entry points (e.g., CCI <$101)
      • The hyperscale buiness is going to be interesting in intermediate term … i would not want to be negotiating leases / prices w/ major CSP
    • A rational voice on bonds and their role in portfolio … regardless of the opinions and commentary http://seekingalpha.com/article/4172053
      • I agree and continue to both nibble at shorter term treasuries, as well as hunting for ~10 year corporates when 10yr rates exceed 3%, i.e., Berkshire, Apple, Microsoft quality
    • Treasuries are doing just fine even after this last week’s huge auction … there continues to be some supply / demand fears (supply will outstrip demand pushing rates higher) … maybe not, but all continues needed watch items  http://www.seekingalpha.com/article/4173291
  • Jeff Miller’s WTWA  https://seekingalpha.com/article/4173344-weighing-week-ahead-stocks-benefit-trump-policy-changes
    • https://static.seekingalpha.com/uploads/2018/5/12/55431-15261830686069257_origin.png
      • an easily observable trend this week – will it continue is the key question
    • This quote on ease of credit came as surprise, as ancedotal feedback locally is that credit is tough for small business.  Quote:
      • Bank lending is getting easier. New Deal Democrat notes that an ongoing criticism of the economy has been the deceleration of commercial and industrial loans. The Senior Loan Officer Survey tends to lead lending by about six months. He concludes, “Credit remains loose, and indicates continuing economic growth over the next 12 months”.
    • On inflation … “Inflation remained tame. The PPI increased 0.1% with the core up 0.2%. The CPI increased 0.2% with the core up 0.1%.”
    • A great pointer to China trade framework … if this is accurate, there will be little progress in short term.
      • This shows the segments that will be impacted w/out real progress  
    • Here’s where policy gets in the way of stated growth objectives for no other reason than rhetoric. Quote:
      • Economic growth. Looking a bit better with current “nowcast” results of 3-4%. Worries? Immigration limitations hit potential growth as do trade restrictions. In total, these may reduce GDP by more than 1%. [We are still headed for solid growth, but it will be less than it might have been].
    • Weekly indicators  
    • Jeff’s closing worrying statements ring true to me:  Iran and China
      • Iran. It appears that the European allies may split with the US. The chance for retaliation is higher. Most experts question whether bilateral negotiations are possible.
      • Deterioration in the tariff and trade talks. The high-level meetings have produced no progress on an issue of great economic significance. The market rates this as a bigger threat than do economic analysts. I agree with the market.

Specific Actions, Plans, & Analysis

  • Key summary point this week – confounding indicators and data increasing and keeping pulse on investments is getting harder …
    • will novice folks lose big?  employ professionals?  I’ll take Andy Grove’s advice – “Only the paranoid survive”
  • Per last week’s update, I added to my T position by almost 50%; cost basis $31.65.  Regardless of Time Warner outcome, the yield and capital risk to T @ 31.65 was just too hard to pass – i consider the position now complete (though would add more for intermediate trend trade if opportunity surfaced)
  • I traded in and out of IOTS before / after earnings for small profit.  I still hold 10% position but was greatly disappointed by the market’s reaction to earnings and strategy execution.  I expect this to drop in price unless surprise news surfaces – M&A in close proximity or new major deal – i still love this small cap investment – earnings conference call transcript
  • Sold a couple of $80.00 June ’18 calls on BMO stock that i would be ok w/ trimming at $80+/share … this is not a reflection of BMO quality, but position balancing
  • Worked through Canada telco analysis this last week, and found TU the favored risk / reward company within my IOT narrative – target <$35.  Risk low = $30, valuations ranged from GuruDCF $34.10 and SimplyWall.St $39.42.  ROE above my 15% guardrail and ROIC close to 10% target.
  • Next segment on deck for deep dive = water component manufacturers:  BMI, PNR, XYL and MWA (i shorted MWA ~$11.50 for a swing trade as the price is ahead of itself after earnings imho)
  • In retirement account, i also add 50% position to VGSH to compliment positions in VGIT and VCSH
    • I was a bit early on VGIT and VCSH and carry small unrealized losses
    • I am not yet ready on the longer end … e.g., VGLT

Weekly Update, May 6, 2018

Plans and Clues Blog – a personal investment journal

More General / Macro Oriented Weekly Reads 

  • Company Specific News
    • HASI earnings release and the market’s reaction to the facts were odd imho and the second consecutive quarter where the company delivered pretty much what they said they would and there’s a sell off.  Just baffles me.  Seems like there’s a group of investors who are always thinking that the company will delivery beyond what the company predicts (tells investors), and when the upside surprise if missing, a sell-off.  HASI management team seems to be executing their strategy just as described https://seekingalpha.com/article/4169663-hannon-armstrong-sustainable-infrastructures-hasi-ceo-jeff-eckel-q1-2018-results-earnings
    • AAPL is the case study for cash flow to net earnings ratio over time … i think a great read, not so much for the APPL example, but how we may use this to evaluate other companies, e.g., i might have sold my terrible GE position before my capital gains evaporated to near 0.  http://fundamentalis.com/?p=7760
  • Good Reads in General (Macro Focus)
    • This author gets a bunch of crap from readers (just browse the comments), but i think this is one of the better articles to really get your head around some of the interconnectedness and interdependencies and virtuous cycles that are going to continue to influence our investment success (or failure)  https://seekingalpha.com/article/4170152-flashpoints-risks-word-gandalf
    • Same author with a warning about reading only those articles (data sets) that supports your bias; i try to constantly challenge my bias and deliberately read opposing views (my own choir can be my very worst enemy) https://seekingalpha.com/article/4169674-just-tell-want-hear-ok
    • Labor seems to be one of the key variables behind further rate increases (inflation and investor demand from Asia are others).  Rates of growth on productivity, workforce inclusion / exits, and wage growth, i find much more important than a summary unemployment rate.  It surely seems that the desired growth to support continued rate increases is decelerating  https://seekingalpha.com/article/4168516-viewing-employment-without-rose-colored-glasses
  • Rates: — A panel discussion on rates that was hard for me to find an actionable outcome, but the dialogue was interesting when you focus on the variables they discuss https://seekingalpha.com/article/4170251-bond-yields-headed-major-breakout
  • S&P: — The always insightful market update from Lance Roberts https://seekingalpha.com/article/4170383-market-hangs-onto-support – my perspective is there is tension in the momenteum / direction at a ‘market level’ and this sets up exaggerations of price swings to news or events — opportunities on both sides to play back the regression to mean/norm.
  • Jeff Miller’s WTWA – https://seekingalpha.com/article/4170358-weighing-week-ahead-stocks-stuck-neutral
    • First … look at Jeff’s headline and mashup w/ the above bullet:  “Why are stocks stuck in neutral?”
      • Another S&P roller coaster to nowhere?
    • This is chart i do not remember seeing before, and if it accurately maps smart money sentiment, this follows my perception of news / blogosphere sentiment -> decidedly negative relative to not too long ago
    • Here’s a version of everybody’s favorite employment view, but wait for Jeff’s follow-up bullet (first the chart) 
      • now the bullet (quote): “Unemployment falls to 3.9% but wage growth remains weak (Dean Baker).”
      • Wage growth and productivity are the variables that i am now thinking are most important to infer rate direction acceleration
    • Of the small set of Jeff’s ‘The Bad’ this is the bullet that caught me:
      • “ISM manufacturing and services indexes both missed expectations, although the readings remain high. (Bespoke).”
        • Missing expectations on such a widely followed index is perplexing … what are analysts missing is my question?
    • Weekly Indicators

      • Unchanged 10yr (materially)
      • S&P unchanged
      • Anticipated inflation unchanged
      • Technical health falls
      • … stuck in neutral
      • I agree w/ Jeff’s 2 fear bullets (quote):
        • “Iran. The deadline for US withdrawal from the agreement is nearing. There are still no signs of progress. Estimates suggest that Iran sanctions could move oil prices higher by $10 bbl.
        • Deterioration in the tariff and trade talks. The high-level meetings have produced no progress on an issue of great economic significance. This is the most significant issue for the market, and it remains a rhetorical playground for world leaders.”
  • ESG Investing / Proactive Investing

Specific Actions, Plans, & Analysis

  • T – Still on my ‘should buy more’ list, but could not pull the trigger.  https://seekingalpha.com/article/4168476-t-sky-falling … Somewhere between 31.50-31.75 is sweet spot for position adds at this point
  • PFE – Last week i thought i would increase my position in PFE; then i started poking around.  This article helped me form one view that pushed back my urgency in taking additional positions https://seekingalpha.com/article/4169013-pfizer-buy-dip
    • While the author does a great job of describing the value of PFE core competency of late stage trials and marketing / sales, i find that insufficient capability with a limited moat to bet really big on the company.  This is part due to my superficial understanding of big pharma R&D risks / benefits.
    • I will continue to dig into PFE, but am expanding my search parameters in the healthcare product segment before jumping in more
  • FEYE – been on my watch list for almost 2 years and i have yet to pull trigger in any meaningful way (only swing trades).  This post is more positive than i am but conceede i have not dug to the bottom of the well https://seekingalpha.com/article/4170299-fireeye-turnaround-track i will also not take position with ‘hope’ of buyout / M&A.  (on DCF basis FEYE is ~15% overvalued – so there has to be a big cashflow breakout to support higher values)
  • IOTS – still have my position w/ cost basis of $6.75.  With earnings coming up, i looked very hard to best guess to buy more before / after earnings.  Reading thru as much as could find on company, i have no better view … 5 analysts cover the company and estimates are tightly bound.  Price action Monday and Tuesday will determine my play.  Here is a 5-day chart w/ pivots.  I may take another 25% position or so between 8.30-8.00 if possible – else, will wait for earnings.  I have stop-loss at $8.00 (graph from https://www.barchart.com/)

Weekly Update, April 29, 2018

More General / Macro Oriented Weekly Reads  (a journal of my thinking and reading, not intended for investment advice)

  • *** Here Ends Morning Reads***

Specific Actions, Plans, & Analysis

Weekly Update, April 22, 2018

Weekly Reads  (a journal of my thinking and reading, not intended for investment advice)

Actions, Plans, & Analysis

  • General positioning:  a) resist buying dips without strategic confirmation of entry points (regardless if trade or investment), b) watch the earnings reactions for flashes of inefficiency (really low or high prices), c) preserve capital and d) build higher cash flow rates on invested capital
  • Stop-loss analysis -> i went thru all my equity positions and created detailed stop-loss targets to both preserve capital and lock in gains.  I am not planning on eliminating core holdings, e.g., INTC, CSCO, T, VZ, UMPQ … BUT, i may reduce positions
  • VTR – hit the stop loss mark and is now a 0 position
  • Problem Children
    • WELL 
      • positions are so negative that i am just going to claw my way up w/ DRIPs
    • LTC
      • a very small position but similar to WELL – relying on DRIPs to help, BUT due to my admiration of LTC management team (and value) i may double down here – in taxable account
  • Took profits in speculation trades this week:  CRON (my account) and ACBFF (daughter’s account) … will go back in at validated support levels
  • Favorite watch items for new positions unless adding:  SWKS, MDT, ETSY, TCEHY, PFE(adding)

Weekly Update, April 16, 2018

Posts and readings of note from the week

  • Chuck Carnevale (Fast Graph Wizard) published a series of 3 posts on dividend growth stocks (posts 2 and 3 this week).  Again, the methodology is more important than the specific recommendations. Here are some of the common analyses done between us and i am not a fan of the specific company
    •  CAH and OMI – the distribution business has too much risk to margins given the disruption that i see coming from autonomous machinary in supply chain and the every present Amazon threat – too much risk for me given the narrow profit margins in the segment
    • WBA – i am avoiding almost all retail given both the Amazon risks (not specifically Amazon across all things but similar supply chain disruption that will risk these retailers margins beyond the risk calculations being used, and the top of the economic cycle) – one would have to have confidence that WBA best margin is in non-discretionary high margin vectors.
    • TGT – punted on the retailer over a year ago … no returning
    • OHI – way too much risk in the SNF area – i have sold all my OHI and minimized my LTC position which i think is the better company … i MAY increase LTC if bargain basement prices surface
    • Here are the companies Chuck recommended that i do own and my view
      • PFE – buy more around $34 for nearly 4% dividend – could double current position with cost basis $33.01
      • VZ – full position
      • RY – full position w/ its cousin BMO
      • T – full position – though could extend it if Time Warner deal crashes the stock
  • There were several posts on Healthcare REITs that have increased my angst and hence why i upped my stop loss w/ WELL (below)
  • TCEHY is one of my favorite nonUS companies regardless of the China government risks … getting my head around the valuation and a good entry point is still baffling, and this author’s attempt did not help much https://seekingalpha.com/article/4162861-tencent-holdings-ltd-americans-finally-ready
  • Jeff Miller’s WTWA – https://seekingalpha.com/article/4163039-weighing-week-ahead-stock-prices-already-reflect-strong-earnings
    • My key view of this last week – the distracting noise is deafening and hard to focus on strategy and rational investing, but these times may provide similar opportunities as 2008/09 for entry points, but one will have to be very nimble imho
    • Watching the details rather than simple aggregates and averages is growing in importance for me  – looking thru the details in the recent CPI report out  shows that growth above the top level numbers is very narrowly placed:  Housing, Energy and Transportation … bad side of those = non-discretionary
    • Jeff pointed to Brookings report on debt https://www.brookings.edu/blog/up-front/2018/04/11/the-fiscal-picture-is-worse-than-it-looks-and-it-looks-bad/ … i share people’s angst on debt and the short and long term risk the constant build up of debt (government, personal and corporate)
      • a key quote:  “Under current law, CBO projects that the debt—currently 77 percent as large as annual GDP—will rise to 96 percent of GDP by 2028. And that’s if Congress does nothing. If instead, Congress votes to extend expiring tax provisions—such as the many temporary tax cuts in the 2017 tax overhaul—and maintain spending levels enacted in the budget deal (which is called the “current policy” baseline), debt is projected to rise to 105 percent of GDP by 2028, the highest level ever except for one year during World War II (when it was 106 percent).”
    • The weekly indicator board
      • 10 yr is back up to last month’s level
      • Equity risk premium is down but not to last month’s levels
      • Anticipated inflation ticked up
      • Technical health is degrading … any question why i continually to raise cash w/ capital preservation stop-loss orders?
  • Lance Roberts posted a good summary around why hold cash https://seekingalpha.com/article/4163050-8-reasons-hold-cash
    • Lance thinks (at least in his writings) very close to my own models, so i have to be careful to not find too much support for my own thinking
  • Another good post on the decelerating rate of consumption and the growth of debt  http://www.seekingalpha.com/article/4163082
  • Blackrock’s Q2 advice took some effort to get enough details to make sense of it  https://www.blackrock.com/investing/literature/whitepaper/bii-global-investment-outlook-q2-2018-us.pdf
    • I was paying the closest attention to the bond proxies section … the advice is a bit late if you ask me; this would have been best to have heard and implemented in early January. Blackrock’s disdain for RUST is easy after the drubbing received in March

Actions and Plans

  • WELL – Stop loss executed in taxable account – position is now 50% with greater unrealized loss.
  • CRON / ACBFF – took new speculation positions at recent lows – @$5.35 and $5.49 respectively – both have stop loss orders in place that keep moving up
  • Still haning on to 2/3 of the position in June 250 SPY puts … the next up/down cycle will offer some profit
  • Watching
    • ZBH – as close to $100 as possible for a good value entry
    • ETSY – still working the right entry point, but i love the business in future ($26-$27 is where i am interested, vs current $29.87)
    • CLDR – was watching this for speculation, but the recent jump took my risk tolerance off the table … will watch for another momentum trade
    • Water Equipment – BDI, MWA, XYL, ITRI … the list is just getting started, but smart water infrastructure is going to be a non-discretionary expense, investment across the globe in the next 5-10 years. (my opinion)
  • ILP.pr.d – added another portion to this preferred position.  This is only 1 of 2 preferred stocks that i own outside of an ETF (PGX and PFF); the yield rose to my comfort / low risk zone, so grabbed a bit more to up the cash flow (taxable)

 

Weekly Update, April 8, 2018

After a short vacation and a small bout with a gastro bug, i have the focus to post.  Just a reminder.  I write this blog to help me understand, plan and make investment decisions.  This is NOT any semblance of recommendation or advice.  Just my way of holding myself accountable for sound, data-based investment planning and execution … using the best Plans and Clues I have!

Weekly Reads

  • Doug Short put together a good look at Treasury yields – worth the read for additional historical context.  https://seekingalpha.com/article/4161348-treasury-yields-long-term-perspective
  • Lance Roberts posted on debt and inflation … i am WAY more anxious about debt than inflation.  There is a narrative that can be built that depcits debt as the method being used to prevent disinflation.  Sooner or later unless there’s a major jubilee, the debt must be paid.  https://seekingalpha.com/article/4160453-ballooning-debt-really-inflationary
  • A short’s perspective on Canada Weed https://seekingalpha.com/article/4161019-aurora-canopy-time-sober-90-percent-downside
    • This guy may be fueling his own position – short, so a bit overly negative perhaps
    • The one big retort I have on the author’s position is using the average production cost from areas (WA, OR, CA, CO) where growers can actually grow outside.  It’s rational for me to see how outdoor farming will be lower cost as well as higher capacity
    • I do agree, however, that these companies are NOT investments yet.
  • Brian Gilmartin posted on S&P earnings yield and where that indicator sits going into Q1 earnings season.  I totally share Brian’s opinion / anxiety in one of the comments.  I will paste both the question and Brian’s answer as it’s spot-on.  https://seekingalpha.com/article/4161628-s-and-p-500-earnings-yield-remains-elevated-good-thing
    • Q:  Looks like we are approaching earnings season with market weakness… could be good for the market
    • A:  Market weakness but earnings season optimism. Dont like to see all the bullishness headed into earnings season
    • I have read several posts / articles that sugggest earnings will create the floor in market over the next few weeks … i think misses will be severly punished, and there may be collateral damage with competitors and / or suppliers to those punished.
  • Jeff Miller WTWA  https://seekingalpha.com/article/4161614-weighing-week-ahead-trump-trade-reached-tipping-point
    • A perfect quote from Jeff on this graph; as i was surprised when i reviewed as i was expecting Friday’s close below Monday’s.  Quote:  “The loss this week was only 1.4%, but the dramatic daily moves made it seem like more. The trading range was 4.8% including 3% in a single day.”  -> it felt much worse than it was … 
    • Interesting that both Rail and Trucking are up —
    • Weekly Indicators  – Earnings Yield over 6, 10yr down from last month, technical health declining … Here’s  Jeff’s summary:  “I have increased the 9-month recession probability to the 18% range. I am monitoring, but not yet especially worried. The long-term technical health is 1.5, but I rounded it up to reflect the change.”
    • Jeff, like many of us, is keeping eye on Trade War consequences, and has a great summary:  Quote:  “What is the worst case from a trade war? Estimates suggest it would lower world GDP growth from about 3.5% to 2.5% in China and the US – a reasonable level, but not the fuel for a big rally in stocks.  Since none of the US or China proposals will take effect for two months, there is plenty of time to negotiate and modify positions. On the US side there is evidence that this is already happening with close allies.  But there is a reason for additional worry – the loss of business confidence.” My bold on where i agree strongly.
  • One data point a trend does not make … but i also negatively react to analysts who parse out a report to point out how things are not what they seem.  https://seekingalpha.com/article/4161585-suspiciously-pessimistic-march-jobs-report
  • This is a great post and i walked away w/ 2 key points https://seekingalpha.com/article/4161625-trade-wars-just-beginning-war-fight-indefinitely-shrinking-pie
    • Helps explain some of the motivation behind the huge China infrastructure investments into Africa / India – that’s where consumption growth will be in long term
    • Fits as well into the debt-driven consumption that many of us are concerned about … where is the next debt wall, and what will be the fall out
  • From the folks at Fast Graphs, the first in a series of posts of potential value investments https://seekingalpha.com/article/4161426-dividend-growth-stocks-remain-expensive-50-part-1-5
    • As always from Chuck’s posts, the methods and tool usage are more important than the specific content
  • REIT master, Brad Thomas, posted on VTR https://seekingalpha.com/article/4161244-ventas-inc-grand-slam
    • The comment section is equally valuable
    • I share Brad’s interest in VTR and am looking to add to position
  • A short post on Friday’s job reports … this points out that the March numbers while below expectations are maybe not as important as the downward adjustments to January and February http://www.crossingwallstreet.com/

Plans and recent actions

  • Sold off portion of PEGI in taxable account to preserve capital – sold for nominal gain after x-Div.  This bring PEGI position into more rational size and increases the cash position – target reinvestment is VTR with a target around $49.50
  • Sold my full CRON position in my speculation trading account for loss of ~10% which was my stop target.  (see above Weed pointer).  I will continue to look for trades in the large 4 TMWJF, ACBFF, AHPQF, and CRON, but the winds need to shift to more positive sentiment after the bears make some money.  These are NOT investments yet, IMHO.
  • Bought several SPY June puts, and sold 1 for decent profit – holding the remaining puts for the next big swing
  • My investment discards at today’s valuations:  CY, SQ, and HBAN … both CY and SQ have solid business plans and fit within my narratives, but valuations (Risk / Reward) are just too high
  • My investment ‘watch’ for rational entry point within today’s ranges are:  PFE, ZBH, and VTR.
  • My speculation trades are focused on:  ETSY, IOTS, CRON, ACBFF and APHQF … no positions today

Weekly Update, March 18, 2018

Random Reads

A bullet to itself … the risks presented here are making me start to lose sleep https://seekingalpha.com/article/4157393-fed-hike-set-collide-mccabe-firestorm-trying-week

Actions and Plans  

  • For the most part, i am still in capital preservation mode and anxiously waiting for the political fallout and FOMC update to see what new opportunities and risks will surface
  • I sold 2 of my 3 SPY June 242 puts … i sold right around $8.00 after buying at $6.09 … i will continue buying / selling SPY as a much easier income producing method than individual stock calls / puts.  (at least given current market behavior and my confidence)
  • Problem Children
    • PEGI – watching carefully – may still take some losses to offset gains elsewhere in taxable account
    • WELL –
  • New ideas
    • SQ – Square … what is not to love about this except the valuation – more diligence required here too
    • ETSY – here is a recent post https://seekingalpha.com/article/4157327-etsy-solid-growth-path
      • I have not done due diligence here yet but it is now on my list
      • I see two longer term drivers for ETSY business – a) gig generation is getting stronger and better at it, and b) if economy / jobs falter, more will resort to self-sufficiency, e.g., Etsy

Weekly Update, March 11, 2018

Random Weekly Reads

Actions and Plans

  • last week was without any transactions or trades …
  • Problem children remain WELL and PEGI (recent article about PEGI) … plans are fluid, with PEGI being priority watch; top risks include new capital creation and dividend reduction
  • Re-evaluating stop loss orders and triggers
  • Watching for ~10-12 yr high grade corporate bonds to go on sale
  • Wathing for small trend trades – especially in retail, banks and tech setting up for Q1 ER based trades

Weekly Update, March 4, 2018

Random Weekly Reads

  • A fairly simple technical view of stocks from Lance Roberts https://seekingalpha.com/article/4153046-bearish-action-emerges
    • Have to agree on the selling pressure weighing on advances
    • There’s that old ‘hate uncertainty’ and we have a huge dollop of that right now
  • S&P earnings keep growing and estimates are not sliding post ER https://seekingalpha.com/article/4153035-big-dispersion-ytd-s-and-p-500-sector-returns-s-and-p-500-forward-estimate-continues-march (Brian Gilmartin)
    • i think that one of the key metrics moving forward should be revenue growth / earnings growth – any wide divergence from 1.0 is a ghost?
  • Bond Bear thoughts  https://seekingalpha.com/article/4153025-bond-bear-growls
    • Great quote or at least it echos my view:  “The secular arguments for low interest rates have been well documented. Globalization, aging demographics, faltering productivity and the mammoth debt overhang have relentlessly pushed the equilibrium level of rates lower. These forces have been persistent for decades and are not about to vanish. Sustainable, rapid growth will require stronger credit creation. Yet, the buildup in debt, both pre-and post-crisis, makes this route unlikely.”
    • Then the always present ‘vision hedge’:  “Bear market or not, yields are unlikely to shoot sharply higher from today’s levels. Cyclical forces are likely to push rates higher, but powerful structural factors will act as an upper bound and preclude a return to pre-crisis levels. Equilibrium 10-year yields are not far north of 3% but a more convincing pick-up in wage inflation or credit creation is needed to move to a 3.5% level. And a move to 3.5% to 4.0% at this late stage in the cycle would require strong global economic acceleration and a regime shift in fiscal policies. You can call it whatever you want, but these outcomes do not spell impending doom. A bond bear market is not the equal of an equity bear market.”
  • Jeff MIller’s WTWA  https://seekingalpha.com/article/4152987-weighing-week-ahead-will-u-s-launch-trade-war
    • The S&P week … what should easily surface is the range this week – there were some good traders that made a boatload of money this week  … i did not trade at all (no dedicated time)
    • Weekly Scorecard

      • Lots of motion up and down during the week, but small moves wtow
    • I agree w/ Jeff that the trade policy uncertainty is a large lead balloon on rates, equity and $ flows.  His comments:
      • “Please read my post on this subject, which reflects my “final thoughts” for today. Undoing free-trade policies would also undo much of the foundation for economic growth over the last twenty years. The support for these policies is nearly universal among economists, business people, and most of the GOP. For example, see this opinion piece from Larry Kudlow, Arthur Laffer, and Stephen Moore. The authors accept that Trump honestly believes in the benefits of these policies, but that he is mistaken.”
  • the admiration of the current FED paradox is getting more and more digital ink … the paradox is pretty well understood; the most probable resolution is the needed analysis imho https://seekingalpha.com/article/4152985-united-states-debt  (make sure you read the comments)
  • Blackrock on bond positioning  https://www.blackrockblog.com/2018/02/23/factors-behind-rising-bond-yields/
    • Quote:  “We see steadily steeper curves and higher rates improving the outlook for short versus long maturities. We particularly like two- to five-year bonds for their yield-duration ratios. Floating rate and inflation-linked instruments are attractive for their potential buffer against rising rates and inflation. We prefer an up-in-quality stance in credit, favoring investment grade over high yield.”
  • This graphic got my attention (from Schwab https://www.advisorperspectives.com/commentaries/2018/03/02/schwab-market-perspective-getting-back-to-normal) – i am not a good technical anlayst but this chart tells me that if 10ry stays above 3%, it’s a new baseline  
  • This was a pretty good post on REITs http://www.seekingalpha.com/article/4152657

Actions and Plans

  • Took new position in VTR in IRA – could have doubled down w/ WELL, took the mini-diversification route.
  • Grabbed more PEGI with great trepidation (low conviction buy with plan to sell higher priced positions after 30-day wash)
  • Passed on more HASI – want to see where consolidates into a bottom first
  • Sold SPY put for >20% gain – very, very small position
  • May start looking at more active option strategy if swings continue

Weekly Update, February 25, 2018

Weekend Reads

Actions and Plans

  • Traded in and out of QTS with almost a $2/share profit – not ready to take position here but could take another look w/ >5% yield
  • Added to my HASI position below $18 (now my third largest individual holding)
  • Sold out of my very, very small CY trade @ $17 w/ cost basis of $14.55
  • Problem children really remain PEGI and HCN
    • HCN – have not decided if VTR is better for additional capital or add to HCN – decision WIP
    • PEGI – waiting for ER for additional data – PEGI is large position so adding to it will be an exception type decision
  • Bonds – watching for 3.7-4.2% yield in investment grade and in select market / industries … only fire-sales will be considered