Below is the watch list of Canadian stocks and the top five stocks for each category: Continue reading
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
Author Archives: nlo-admin
TSX in Review: 2020-4
The following is the breakdown of the Dogs of the TSX 60 (found here) in week one, compared to other fundamental ratios. Continue reading
NLO in Review: 2020-4
The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios. The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading
DJIA in Review: 2020-4
The following is the breakdown of the Dogs of the Dow (found here) in week four, compared to other fundamental ratios. Continue reading
Palladium Downside Targets
In reviewing the price history of Palladium and in light of the most recent parabolic increase, we have outlined the current increase in the price and compare it to the 1996-2003 rise and decline.
1996-2003
In the period from 1996 to 2004, the price of Palladium increased +837% and subsequently declined from the peak by -86.05%.
The chart above includes the Speed Resistance Lines (SRL) based on the work of Edson Gould. In this specific instance, the price of Palladium declined through all of the downside targets. In addition, the continued until it reached a low of approximately $150.50 or -58% below the $359.67 Speed Resistance Line.
In the following review of the most recent increase in Palladium, we’ll compare the 2016-2020 run-up to the increase from 1996 to 2001 to identify the signs of what might come in the price going forward.
Then v. Now
Technically Speaking
When looking at the price of Palladium in both periods, we have identified the most important points contributing to our analysis.
The start to our review is the first intermediate peak after the low. In the case of the 1996-2004 period, that first peak was at $397.50. For the period of 2016-2020, that peak was $1,119.90. The subsequent lows that followed, $272.20 and $877.80, helped to establish the downside targets.
Worth noting is the decline from the initial peaks to slightly below the mid-range downside targets before a continuation of the rising trend to the second intermediate peaks at $718.50 and $1,520.35, respectively. In both cases, the decline from the second intermediate peaks are situated around the conservative downside targets at $631.87 and $1,627.93.
In both cases, the parabolic move ensues after the second intermediate peak, which is a considerable distance from the level of the conservative downside target.
Conclusion
Because of the precedent set in the period from 1996 to 2001, we expect that the conservative downside target of $1,627.93 will be achieved.
We could consider it luck if the price of Palladium were to decline to the mid-range level of $1,189.03 or the extreme target of $750.13. However, if the period from 1996 to 2003 is truly a precedent setting period then it would not be surprising to see Palladium decline to $750.13 as a normal reaction to the parabolic increase.
Posted in downside, Edson Gould, palladium, parabolic, Speed Resistance Lines
Palladium Goes Parabolic
The price of palladium has increased significantly since 2016.
Naturally, parabolic peaks mean that the price is nearing a top. The downside prospects are the only clear consideration at this point in time. Below are the downside targets for the Aberdeen Standard Physical Palladium Shares ETF (PALL) that we have generated based on the most recent peak. Continue reading
Posted in Edson Gould, palladium, parabolic, Speed Resistance Lines
U.S. Dividend Watch List: January 17, 2020
U.S. Dividend Watch List: January 3, 2020
Before we progress with the current watch list, let’s review how things panned out from last year’s list. The average return was +17.20% while the stock market rose +24.70%.
The best strategy, which yielded a return of +30.80%, was to buy the top 5 companies with the highest price-to-book ratio. Buying top 5 companies with low P/E lost -2.70%.
Buying the top 5 companies closest to the low yield generated a return of +22%. Our most recent research has indicated that purchasing the top 5 companies with either high P/E, high P/B, or low dividend yield provides the best chance of beating the market. We’ll continue to keep score going forward and be as transparent to our readers on our findings.
| January 18, 2019 (Top 5 Companies) |
||
| Strategy | High | Low |
| Yield | 13.9% | 15.8% |
| P/E | 16.4% | -2.7% |
| Payout Ratio | 12.1% | 27.7% |
| P/B | 30.8% | 9.9% |
| Closest to Low | 22.0% | |
| S&P 500 | 24.7% | |
U.S. Dividend Watch List January 17, 2020
With the market at an all-time high, one has to be a little cautious establishing new positions. However, it seems that we have been saying the same thing week after week. Below is the current watch list. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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DJIA in Review: 2020-3
The following is the breakdown of the Dogs of the Dow (found here) in week three, compared to other fundamental ratios. Continue reading
The Houston Astros and the Curse of Enron?
Does anyone have a thing against Houston? Can Houston catch a break?
Here at the New Low Observer, we have two passions, financial markets and baseball. As a refresher, the Houston Astros were the World Series Champions in 2017. The team was lauded for having mastered the art of Sabermetrics.
More recently, we’re finding that the art of deciphering digital data was really analog signals from a garbage can.
What struck us as most fascinating is the fact that biggest scandal in baseball was committed in a ballpark originally known as Enron Field.
Is it time to call it a curse? We don’t know. In an era of big data in baseball, it seems ironic that banging on a trash can helped define the success of the Astros in 2017. As with all sports, superstition runs deep. Which only makes us wonder about the connection between a ballpark once called Enron Field and the recent cheating scandal of the Houston Astros.
Posted in Enron
TSX 60 in Review: 2020-3
The following is the breakdown of the Dogs of the TSX 60 (found here) in week one, compared to other fundamental ratios. Continue reading
NLO in Review: 2020-3
The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios. The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading
GDP versus the Market
Below is a popular comparison of gross domestic product (GDP) and the stock market, using the Wilshire 5000 Index.
Below is the percentage change on a year-over-year basis for both the GDP and the Wilshire 5000 Index.
Below is an expansion of the GDP relative to the Wilshire 5000.
Perception versus Reality
In the first example, it appears that GDP run on a smooth incline from left to right with marginal variability while the stock market gyrates wildly. In the second example, the smoothness of the GDP is no longer present. In addition, the GDP appears to be in a relative declining trend as time passes. In the third example, there is more of a sense of the relative change between the two indicators.
Worth noting is the fact that in periods when the year-over-year data on the stock market went negative, as last shown in Q1 2019, the following recovery exceeded 20%, at minimum. Currently, as reported by the Federal Reserve Bank of St. Louis, we’ve seen an increase of approximately +12% from the Q1 2019 y-o-y low.
When comparing two disparate data sets, it makes sense to convert the data to the closest comparable numbers so that the comparison is as relative as possible.
Posted in GDP, Wilshire 5000
Columbia Sportswear Co. 10-Year Targets
Below are the valuation targets for Columbia Sportswear Co. (COLM) for the next 10 years. Continue reading
Penultimate Profit Prospect
According to the book Beating the Dow by Michael O’Higgins, the Penultimate Profit Prospect:
“…is not, strictly speaking, a portfolio, but rather a single stock, the second lowest priced high-yielder [among the ten lowest yielding stocks in the Dow Jones Industrial Average] (O’Higgins, Michael. Beating the Dow. 2000. page 199.).”
The first step in determining the second lowest priced stock of the high-yielders is to rank all of the Dow Jones Industrial Average stocks by their dividend yield.
After ranking these stocks, you then re-rank the ten highest yielding stocks by price from lowest to highest. The second lowest priced stock was Pfizer (PFE) based on the year end 2018 price and dividend yield.
When ranked by yield, from highest to lowest, and then selecting the second lowest priced stock from among the top ten highest yielding stocks we arrive at a change in price that is pegged at –10.24% for Pfizer (PFE).
Again, our spectrum analysis attempts to find the opposite scenario to determine if it would result in an outcome that confirms the assessment or arrives at a different conclusion. To keep the process as simple as possible, we’ve elected to choose the second lowest yielding stock (Nike), regardless of price, to see if it would perform any better than O’Higgins Penultimate Profit Prospect stock.
When we contrast the performance of the Penultimate Profit Prospect with the second lowest yielding stock, we find that the returns are –10.24% versus +36.65%, respectively. This seems unusual to us but consistent with the data that we’ve run on the Dogs of the Dow in the period from 1996-2019. The low yielding stocks routine outperform the high yielding stocks.
So, in order to stretch the concept even further, we’ve ranked the 30 stocks of the Dow Jones Industrial Average from highest yielding to lowest yielding in the period from 1997 to 2019. Then, we compared the individual ranks for each year to determine the average rate of change for that specific ranking. Below is the graphing of the individual performance with the stock ranked number 1 being the highest yielding while the stock ranked 30 being the lowest yielding from 1997-2019.
Based on the ranking of the data, the true penultimate profit prospect would seem to be the stock with second lowest dividend yield. In this case, the 2nd lowest yielding stocks gained +13.68% in the period from 1997 to 2019.
NLO in Review: 2020-2
The following is the breakdown of the Dogs of the NLO based on our January 3, 2020 watch list, compared to other fundamental ratios. The purpose of this work is to confirm or deny the claims proposed of the Dogs of the Dow theory as outlined by Michael O’Higgins in his book Beating the Dow. Continue reading