3 hour investor newsletter incorporating the “newsletter portfolio … · 2017. 5. 6. · 3 hour...

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Week 49- 2017-Apr-28


Current Portfolio Valuation.

Portfolio Valuation 2017/May/06 is $288,253 According to Lincoln the portfolio is increasing at a

rate of 16.7% per annum. Cash invested in securities have returned 28.66% per annum, however

the total portfolio performance is lower as there have been times when we’ve had few or no

investments…and instead were sitting on cash (which I’m assuming has a nil return)


Comment. We currently have 10 securities and about $11k in cash

Losers >10% -

Losers 5.1%-10% -

Losers 0%-5% 1

Gainers 0%-5% 5

Gainers 5.1%-10% 1

Gainers10.1% - 20% 2

Gainers 20%-30% -

Gainers 30%-40% -

Gainers >40% 1

Portfolio comment.

9 out of 10 stocks closed green for the week. Our star performer is ALL which has provided a

45.9% return since we bought in on 20 Dec 2016

ANZ had a bit of a horror week, dropping from about $32.70 last week to $30.65 current (a

bit over 6%).

All stocks are still in hold territory….including ANZ…although it’s getting close to “SELL”. If it

doesn’t start to track in a different direction we’ll be selling soon

We gained over 0.15% for the week…

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Week 49- 2017-Apr-28 Status of US Markets on 2017-04-26 (thurs for Lincoln charts and Friday for non Lincoln charts.

Dow. Closed Green for the week (Up 0.26% on Friday) Futures Strongly Green (Saturday) Looks firmly above the line.

S&P 500 was Green week to thurs. (note up 0.41% on Friday) FUTURES strongly Green on Saturday Above the line

Nasdaq. Green for Week to thurs Friday was Green 0.42% Futures Green. Short term moving average above longer term moving average (Green)

Russell 2000 Red for week to thurs, Was Up 0.59% friday Futures Sharply Green Saturday Short term moving average below longer term moving average…(a RED sign)

Vix…. Continues down over past weeks (which I’ll take to be a Green signal for our portfolio) Roughly at lowest levels for a looong time

3 Hour Investor Newsletter incorporating the “Newsletter Portfolio” Week 49- 2017-Apr-28 Status of Australian Markets

XAO All Ordinaries Index. Red + above the line. Positive Gap formed in MMA, ROAR a tick under 20%.

XMD Midcap 50 RED and above the line Positive Gap formed in the MMA. ROAR trending Close to 20%

XSO Small Ords RED… Below the buy line MMA not open… ROAR 4.34%

XVI Volatility Index was GREEN (a RED signal for us) HAVROAR trend is well below Zero (a Green Signal)

In summary the main US Markets were Green and futures were also GREEN (on Saturday). As a

counter…the VIX is near multi year lows

ASX markets were slightly RED…and volatility index is slightly up…but still hovering near lows

All the action seems to be in mid and large caps…small caps have not been a happy hunting ground

for active investors overall in the past year

My Conclusion. If the market is up on Monday AND US futures continue to look ok on Monday

afternoon I’ll be using the remaining cash in the newsletter portfolio to buy something


Allow me to add a new index to this newsletter.

Let’s call the value index. How it works: Filter stocks with the following criteria

1. Financial health = strong or satisfactory

2. Dividend yield >2.5%

3. PE <15

4. Price to NTA per share above zero and under 5

5. Enterprise value above $500m

6. Excludes mining stocks and most financials (as advised by Alan Hull)

So what we’re looking for is strong stocks that seem cheap. Each week we’ll count the number of

stocks that fit that criteria. In a high priced market…there will be few of these. In a low priced

market…there’ll be more of these…so perhaps this will allow us to better understand where the

market is. Why do this? In a low price market…(down market)…we’ll be looking to buy dividend

stocks….in turning market or increasing market…we switch to growth stocks…so perhaps this will

assist us to understand where we are.

Still no comments this week…To me this indicator has remained flat and needs more time and data

to provide any meaningful insights

We search for (a) sharp increase or (b) decrease in stocks found by this filter.

If there are many stocks here then “buying value stocks might be a good strategy”….

If there are few perhaps it indicates we’re at the top of the market?

0

2

4

6

8

10

12

14

16

18

4/02/2017 4/03/2017 4/04/2017 4/05/2017

Search for Value count


Comments on Star and Borderline Stocks.

Stocks in Sell Territory. If I had these stocks I should have sold out.

Stocks that closed Green for week AND are rising at above or close to 20% per annum (based on ROAR) AND are ‘above the line’. In other words worth assessment for possible rating as a buy.

Star Stocks APX, BAP, BBN, HSN, PMV, RCG RFG, RRL, SAR, TPM

Star Stocks ALL**, AMA** (a bit under 20%), COH, CTD**, FPH, NCK, NHF**, PME, SSM,

Borderline Stocks CKF,

Borderline Stocks CSL, REA, WEB, ,

10 Red 12 Greens

Charts worth thinking about.

Last week we said “Check out CSL. It’s grown from a week low of about $95 in December

2016 to current 132.55. ROAR is about 60%. PE is a little high at about 33.2 historic and

about 32 prospective. 5 year return incl divs is 32% per annum. Nice work if you can get it”

This week it’s gone up another dollar or so.

RCG has had a disastrous run. It’s fallen from about $1.85 (July last year) to currently about

65c. It hit it’s sell signal at about $1.59 in October last year and since then has dropped like

a stone. A really good example of why small investors need both fundamental and technical

thinking with agile responses to changes in order to survive

BBN’s chart looks interesting. Whilst still below the line it jumped about 10% during the

week. A quick check indicates buying by majors including HEST, Australian Super and Ausbil

who together have bought about 15million shares over the past 4 or 5 months. No selling by

Majors. Personally I’d watch this stock…but wouldn’t buy until the charts confirm an

upswing. Unfortunately we rarely get to buy at the bottom and similarly rarely get to sell at

the top. Perhaps I need to ponder on that


Selling Report.

RFF** Hit its sell signal during the week and was sold on Thursday. The market looked good to me so I immediately re-deployed the capital (see below in the buy section) SOLD 18,000 @1.72 fees 19.95 on 4/5/2017

ANZ** (might be a sell next week) ANZ’s market announcement during the week was followed by an immediate and sharp price reaction…the stock fell for several days in a row, however didn’t hit our sell signal. The chart is still trending up….will buyers emerge to keep the uptrend growing…or will the sellers win? Who knows…we sit ready with our thumb over the “sell button” The stock has a 7.5% approx grossed up dividend with some growth expected over next 2 years!

Buying Report.

IEU** On Monday we bought 500@$58 fees $19.95 On Monday the markets looked good and IEU was up …so we bought some What a week…up 3.55% and futures point to more growth on Monday

NDQ** On Thursday when we sold NDQ, we immediately recycled the capital buy buying NDQ. So far we’re up 0.24% and again futures seem to indicate more upside on Monday


Stocks worth assessing as suitable for

purchase if conditions are right this week

After a “full review” this week. I nominate the following stocks/ETPs in our short list

A2M**, AGL**, ALL**, CGF**, CHC**, CPU**, CTD**, GDI, IAA**, IEM, IEU**, IKO, IOO, IVC, IVE, IXI,

NDQ**, NHF**, SDF, TWE

All closed green for the week…I’m wondering what their futures are. Some will win and some will

lose. I disclose that I don’t know…but I hope that some will increase for a long time


Bonus Charts:

In this section I’ll sometimes list a chart that catches my eye and provide a brief comment.

If you want a stock reviewed, perhaps email me and I might include it (no promises)

Chart Comment

A2M**. A2 Milk

Strong stock

Gross Dividend Yield 0%

Average daily turnover over $13m

Return over 1 year 99%

Prospective PE 33x

Prospective PEG 0.25

Expected growth to Jun 17 134%

Will this keep running like Blackmores did or BAL? I own this stock and I watch carefully for a sell signal, however I’m enjoying the upward elevator like ride.

IKO**. South Korea ETF

1 year return inc divs 27%

Div yield about 1% What’s happening in South Korea, perhaps the threat of war or attack is spurring the locals to be industrious. Who knows…I just see that this ETF is heading for the ceiling.

IVC. Invocare

1 year return inc divs 21.6%pa

Forecast PE 27

Gross div yield 4%+ IVC is expected to feature EPSG of close to 20% to Dec 17. The share price has hit an annual high (all positive). As a RED signal a major shareholder has offloaded all it’s stock…perhaps that’s now a green signal as they finished selling at 30/3/2017. I’m interested


Parting comment

International weekly charts

Weekly charts above. Take a close look…everything seems to be moving in the right direction.

Looks to me like Monday should open strongly and yet who knows

But Oil Prices are headed Down

Copper, Gold and Silver all seem to be headed down

What does it all mean?

Keeping track of the world of fundamentals is very very very very difficult. Think of all the

things that affect any given company. Management, suppliers, customers, substitutes,

competitors, governments/taxes, the economy, commodity prices, disasters and more.

Large institutions and hedge funds can afford to hire the best and brightest. They keep tabs

on all sorts of statistics and build models of companies and can even have direct contact

with the CEOs and CFOs to help them with their understanding. Even so most active fund

managers are beaten by the market. What chance do I have?

Personally I believe we should stick to our plan. Look for stocks with acceptable

fundamentals. Buy those that the market likes. Cut our losses quickly and hold on to

winners as they run up…even if they get to nose bleed territory (be quick to sell if they turn

down)

This means I won’t get out at the top of the market…I’ll likely take part of the downward

trend on any stock I hold (yes this will hurt)…and yes I’ll be in mostly cash sometime after

the peak of the market and I’ll still be in cash all the way down to the bottom. After the next


turn upwards…I’ll miss the very bottom of the market and might tentatively start buying

back in when the whole market has started to move up. Hopefully this means I’ll survive

with most of my capital intact to fight another day

Comparison of portfolio returns

Newsletter portfolio . Since inception 10/6/16 16.67%pa

Buffett’s Widow passive portfolio. Since inception 1/7/16 13.92%pa

Star Stocks Portfolio: Since inception 17/11/2016. -(10.92%)pa (horrible)

I wish I’d started all portfolios on the same date…sorry I didn’t

Have a good week

Warning. This newsletter is provided for your entertainment only, I’m not a financial adviser, I have not taken account of your objectives, financial situation or needs. You should therefore consider the appropriateness of any descriptions of my Newsletter and its newsletter portfolio in light of your objectives, financial situation and needs, before taking any actions.

All views and information expressed in this newsletter are not the views of Lincoln and or its directors, agents, representatives and employees.

Many of the graphs and screen shots are taken from Lincoln services and are fully credited to them. I’m a paid up licensee to L incoln, otherwise all IP in their system and graphs belongs totally to them. I recommend that you consider signing up to their service…it’s a great service and I feel great value for money!

I do invest and trade in shares, I’ll mark the ones that I own with (**)…however it’s safe for you to imagine that I’m either buying or selling just about any stock in the market, particularly and especially if mentioned here.

3 hour investor newsletter incorporating the “newsletter portfolio … · 2017. 5. 6. · 3 hour...

Documents