DJIA Update: February 2018

Below is the performance of the individual Dow Jones Industrial Average constituents from December 29, 2017 to February 21, 2018.

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The latest update on the performance of the respective categories demonstrates, in part, the quality of analysis that we provided on the Dogs of the Dow investment theory.

Interest Rate Monitor: February 2018

In all of our postings on interest rates, we have made the claim that the Federal Reserve follows the markets when it comes to setting policy.

Recently there has been a low rumbling that rates might need to be increased faster than expected.  In a USA Today posting on February 19, 2018, it was suggested that faster hikes might be needed.

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In a Reuters posting dated February 20, 2018, the Bank of Korea Governor Lee Ju-yeol said that  “If (the Fed moves) faster than expected, it will immediately impact international financial markets and also domestic markets as well, so we’re prepared to respond to such a scenario.

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If you’re wondering why there is any discussion of rapid rate increases then the story is all in the data that we’ve been tracking below.

Precious Metal Considerations

For anyone that is interested in investing in precious metals, there are two article that are required reading.  The first article is titled The Definitive Dow Theory of Gold dated March 18, 2017.  The second article is titled The Hidden Story of Gold dated February 15, 2018. 

The March 18, 2017 article is instrumental in outlining where exactly we are in the cycle of gold.  The February 15, 2018 tells us that regardless of what most analysts think, the current market is no different than when gold was not freely traded on the open market in the U.S.  These articles are instructive because they put context around the idea that this isn’t the first rodeo and all change in the price of gold is relative.

Applying the context and relative themes should result in some very obvious questions that all precious metal investors need to ask.  However, there are two very basic questions precious metal investors should be asking themselves right now.  First, are we headed for an extended trading range before the price of gold skyrockets?  Second, what is a reasonable upside targets?  This posting will demonstrate the rationale for these questions and present possible answers to both.

Coppock Curve: Helmerich & Payne

On Monday February 12, 2018, we kicked off the Coppock Curve series with one of the largest oil field service company, Halliburton. Today, we continued on that oil sector review with a drilling company, Helmerich & Payne (HP).

One aspect that we like about Helmerich & Payne is its long history. Because of that, we are able to extract the data going back as far as 1982. The chart below displays HP's Coppock Curve from 1982 until now. Such a long history allows us to study the effectiveness of this strategy. Continue reading

Canadian Dividend Watch List: February 2018

Below is the total return performance of the Canadian Dividend Watch List from February 27, 2017 to February 16, 2018.

symbol name 1-YR TR
ACD.TO Accord Financial Corp. -5.41%
PJC-A.TO The Jean Coutu Group 24.91%
KEY.TO Keyera Corp. -9.89%
BEI-UN.TO Boardwalk REIT 1.29%
REI-UN.TO Riocan REIT -3.88%
D-UN.TO Dream Office REIT 21.46%
AX-UN.TO Artis REIT 15.54%
CUF-UN.TO Cominar REIT 4.74%

At the time, we thought that The Jean Coutu Group (PJC-A.TO) was likely to do better than an investment in REITs.  While PJC-A.TO did generate the highest total return, the REIT stocks did much better than we anticipated. 

Below we have ranked the performance by selecting the top three stocks from the respective fundamental categories.

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The Toronto Stock Exchange was relatively unchanged over the last year while the entire watch list averaged +6.10%.