On October 17, 2017, we executed the following transaction(s):
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
Performance Review: October 16, 2015
Below is the 2-year performance of our U.S. Dividend Watch List from October 16, 2015 to October 16, 2017 as compared to the Dow Jones Industrial Average.
Posted in Dividend Watch List, NLO analysis, Performance Review
Canadian Dividend Watch List: October 2017
Below is the list of Canadian dividend stocks that currently, or in the past, had a history of consecutive dividend increases that are at compelling prices or values. We include analyst estimates for the coming year.
Performance Review: October 14, 2011
Below is the 6-year performance of our Dividend Watch List from October 14, 2011 to October 13, 2017 as compared to the Dow Jones Industrial Average.
Posted in NLO analysis, Uncategorized
Performance Review: October 16, 2009
Below is the 8-year performance of our Dividend Watch List from October 16, 2009 to October 13, 2017 as compared to the Dow Jones Industrial Average.
Posted in BCR, BDX, NLO analysis, SHEN
Bitcoin: Upside Targets Achieved, Now What?
If anyone has managed to follow our work on the topic of Bitcoin, we can only lay claim to the October 7, 2014 call for “Speculators to Unite” when the cryptocurrency was priced at $334.09. At the time, we said the following:
“…bitcoin is worth the plunge. Based on the revised price peak of $1,147.25, bitcoin has a conservative upside target price of $723.34 and an extreme upside target of $1,446.68.”
Since October 7, 2014, we have issued revised upside targets and downside targets that have been generally within the range of expectation. Our last published upside target for Bitcoin was $6,260.91 as seen in the September 5, 2017 posting titled “Bitcoin: Setting the Stage.” The graphical representation of the price of Bitcoin since October 7, 2014 is staggering and worth a refresher view.
At this point, as Bitcoin sits within 7% of the last published target, we cannot take seriously the updated target that has been generated ($7,166.29) based on our Speed Resistance Line calculations. We are throwing in the towel on taking the $7,166.29 figure, and any future upside targets that go uncorrected to the tune of –50% or more, as something we can feel confident is worth the speculation.
Posted in Bitcoin
Bull Market Ranking
For anyone who claims that the current bull market is a Federal Reserve induced binge based on manipulated monetary policy, this market still has to exceed the bull market that followed the decline of 1852 before the non-central bank era bull markets could be legitimately ignored. For those willing to look at the history of stock market recoveries, we present the top ten market recoveries from 1835 to 2017.
Posted in cycle analysis, Federal Reserve Bank, Rank
J.M. Smucker Altimeter
It might surprise readers to know that we find fundamental analysis very useful. Leading up to the fundamental analysis is the technical analysis that is necessary to guide our overall perspective of a given stock. In the case of J.M. Smucker (SJM), the stock appeared on our watch list in June 2017 as the price reached a level which led us to pay a little more attention. One fundamental that we like to track is the Altimeter which is best analyzed using a chart.
The Altimeter was first described by Edson Gould in Barron's on February 21, 1968. Gould asserted that the relationship between the price and the dividends paid on that stock, or index, tell investors of under or overvaluation. It is important to make the distinction between Gould’s Altimeter analysis and his Speed Resistance Line [SRL] analysis. Altimeters are based on the dividend payment relative to the stock price while the SRL is based strictly on the price movement.
In the case of J.M. Smucker, the Altimeter appears clear with little need for interpretation.
The Intelligent Investor: 5-Year DJIA
Chapter 7 of The Intelligent Investor by Benjamin Graham offers up a “Portfolio Policy for the Enterprising Investors: The Positive Side.” In this chapter, there is mention of “The Relatively Unpopular Large Company” which is essentially a Dogs of the Dow investment strategy. Unlike the Dogs of the Dow, this approach does not focus on the highest yielding stocks in the Dow Jones Industrial Average.
The distinction of this strategy is the fact that it is based on the selection of the ten Dow Jones Industrial Average stocks with the lowest price to earnings (p/e) ratio. This group is contrasted with the performance of the 10 highest p/e ratio stocks and the entire index. The performance measures the price change over 5-year periods from 1937-1969 as shown below with our own 1-year comparison from November 4, 2016 to October 10, 2017.
Walgreens Altimeter
Below is the Altimeter for Walgreens Boots Alliance (WBA) with fair value (FV) overvalued and undervalued targets.
Coppock Curve: September 2017
It's been several months since we last updated the Coppock Curve. The reason was that once the indicator is in the positive territory, it provide no substantial value to long-term investor.
However, the indicator has reached an interesting level with strong resistance to the upside. We'll elaborate further after review of the chart below. Continue reading
Insurance Watch List: October 2017
Performance Review
The following is the performance of the Insurance Watch List stocks that we published in October 2016.
| symbol | name | 2016 | 2017 | % chg |
| THG | The Hanover Insurance Group, Inc. | 78.97 | 97.68 | 23.69% |
| HALL | Hallmark Financial Services Inc. | 10.25 | 11.59 | 13.07% |
| CNO | CNO Financial Group, Inc. | 15.67 | 24.04 | 53.41% |
| ORI | Old Republic International Corp. | 18.32 | 19.6 | 6.99% |
The average return for the four stocks was +24.29% as compared to the iShares Dow Jones US Insurance Index ETF (IAK) gain of +20.27%. The analysts called the performance of the stocks fairly well as indicated in the chart below.
Of the four stocks, only Hallmark Financial Services (HALL) was not able to exceed expectations (assuming the low estimate and the price of the stock maintained the same p/e ratio).
In our “Sell the Principal” section we outlined the stocks that we thought investors should consider selling the principal as the price of the stocks had exceeded all reasonable one year gains. Below is the performance of the list of stocks in the order as presented at the time.
| name | 10/16.2016 | 10/6/2017 | % change |
| Syncora Holdings Ltd. | 1.35 | 2.06 | 52.59% |
| Genworth Financial, Inc. | 5.05 | 3.63 | -28.12% |
| Crawford & Company | 11.68 | 11.89 | 1.80% |
| Hilltop Holdings Inc. | 23.15 | 26.08 | 12.66% |
| Lincoln National Corporation | 48.9 | 75 | 53.37% |
| Endurance Specialty Holdings Ltd. | 91.89 | 92.98 | 1.19% |
| Principal Financial Group Inc. | 52.33 | 66.65 | 27.36% |
| Kingsway Financial Services Inc. | 5.65 | 5.95 | 5.31% |
| National Interstate Corporation | 32.42 | 32 | -1.30% |
| Stewart Information Services Corporation | 46.36 | 38.01 | -18.01% |
| Unum Group | 36.37 | 52.54 | 44.46% |
The entire list gained an average of +13.76% as compared to the iShares Dow Jones US Insurance Index ETF (IAK) gain of +20.27%. Only four stocks exceeded the performance of IAK (UNM, LNC, PFG, and SYCRF). Meanwhile, the remaining list of stocks performed well below the +20.27%. More than half the list showed below average or negative returns. This month’s “Sell the Principal” list has refined how the data is interpreted with the stated goal of highlighting those stocks expected to register negative returns after a review in October 2018.
Transaction Alert
On September 27, 2017, we executed the following transaction(s): Continue reading
Posted in Transaction Alert
China Lodging Group Downside Targets
China Lodging Group (HTHT) is primed for downside action. The only issue is, will the stock really achieve the conservative downside target of $59.24 or –52.72%?
We can say with a high level of confidence that the $92.27 level is a certainty. While it is normal for a stock price to retrench –50% or more after a parabolic rise, there are potentially outside sources to mute the downside reaction. In spite of any effort to hold the stock up market realities will set in and bring the stock price close to the conservative downside target.
Posted in China Lodging Group, entropy, HTHT, parabolic
Should You Average Down?
This is an important concept and strategy which requires some self discovery. To answer this question, the first thing one must do is to determine if one is a long-term investors or simply here to speculate. The best quote on this topic can be found below.
Our opinion depends on the person and the situation. A trader should never average down, only averaging up. A long-range investor who feels the company is down steeply because of temporary factors, and is near Major Support, should certainly average down. But for near-term action, nothing beats averaging up. This philosophy of buy-high-sell-higher is based on the theory that if your original judgement was correct, you should put more money behind it, rather than throwing good money after bad, as you do when you average down.
James Dines. How The Average Investor Can Use Technical Analysis For Stock Profits, 1974. Page 141
Our strategy of observing companies at or near the yearly low implies that buy-high-sell-higher is out of our comfort zone. However, we respect the wisdom from other market observers and recognized the importance of speculation.
Posted in Buy Low and Sell High, James Dines