On January 2, 2014, we carried out the following three transactions:
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
2013 Performance Review
Below is a chart of how our investment portfolio performed against the S&P 500 index and the 30-year Treasury based on the January 3, 2013 rate (found here).
Our portfolio exceeded the guaranteed rate (30-yr treasury) by almost six times. However, the S&P 500 exceeded our 2013 return by nearly double.
Below is the cumulative performance of our investment strategy since 2006 when we codified our investment approach in the last quarter of 2005. We have compared our performance to the indexes indicated, based on $10,000 invested over the subsequent period of time.
|
Year
|
Dow Indu. | $10,000.00 | S&P 500 | $10,000.00 | Nasdaq | $10,000.00 | NLO | $10,000.00 |
| 2006 | 16.29% | $11,629.00 | 15.74% | $11,574.00 | 9.52% | $10,952.00 | 18.30% | $11,830.00 |
| 2007 | 6.43% | $12,376.74 | 5.46% | $12,205.94 | 9.81% | $12,026.39 | 19.80% | $14,172.34 |
| 2008 | -33.84% | $8,188.45 | -37.22% | $7,662.89 | -40.54% | $7,150.89 | 14.35% | $16,206.07 |
| 2009 | 18.82% | $9,729.52 | 27.11% | 9,740.30 | 43.89% | $10,289.42 | 36.65% | $22,145.60 |
| 2010 | 11.02% | $10,801.71 | 14.32% | $11,135.11 | 16.91% | $12,029.36 | 7.14% | $23,726.79 |
| 2011 | 5.53% | $11,399.05 | 0.00% | $11,135.11 | -1.80% | $11,812.83 | 6.20% | $25,197.85 |
| 2012 | 7.26% | $12,226.62 | 16.20% | $12,939.00 | 15.91% | $13,692.25 | 7.80% | $27,163.28 |
| 2013 | 26.50% | $15,466.67 | 31.90% | $17,066.54 | 38.30% | $18,936.38 | 19.00% | $32,324.30 |
Posted in Performance Review
Gold Stock Indicator: December 29, 2013
This week, gold increased +1.54% while gold stocks, as represented by the Philadelphia Gold and Silver Index (XAU), increased +4.56%. Our Gold Stock Indicator (GSI), is indicated in the chart below:
U.S. Dividend Watch List: December 27, 2013
Below are the 18 companies on our U.S. Dividend Watch List that are on our radar. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Canadian Dividend Watch List: December 27, 2013
This is a list of Canadian dividend stocks that are currently on our radar. For those wishing to find the most complete fundamental information on these companies, we recommend visiting one of Canada’s leading financial websites, the Financial Post (found here). However, Yahoo!Finance probably has the better long-term charts and historical dividend data.
U.S. Dividend Watch List: December 20, 2013
Below are the 21 companies on our U.S. Dividend Watch List that are on our radar. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Bitcoin: Downside and Upside Targets
On November 19, 2013, we provided our best estimates of what the downside and upside targets were for Bitcoin (found here). In our assessment, we said the following:
“Our conservative downside target for Bitcoin, based on the peak closing price of $785.50 is $384.83. The extreme downside target is $261.83. The worst case scenario is for Bitcoin to fall as low as $152.83 as indicated by the red line on the chart.
As we’ve written many pieces on the topic of Edson Gould’s Speed Resistance Line, we’ve made some observations that we think should be highlighted at this time. For the first time, we’re going to provide what we believe might be an upside target. In the case of Bitcoin, the next conservative upside target is $1,154.49 if the most recent peak of $785.50 is exceeded. This is a tentative estimate based on observations of the many successful downside SRLs that we have run in the past. We’ll be on the lookout for what may come next.”
The most updated Bitcoin chart demonstrates the value of Edson Gould’s Speed Resistance Lines’ ability to give informed estimates of upside and downside targets. In the case of Bitcoin, The upside target was achieved and exceeded by 7.23%. After achieving the upside target, Bitcoin has declined from the recent peak of $1237.96 down to the conservative downside target of $535.65. The conservative downside target is based on the updated peak in the price for Bitcoin using the guidelines for Gould’s Speed Resistance Lines.
With the conservative downside target being achieved, the extreme downside target of $412.65 and the worst case level of $152.83 are all that remains. However, in the last 24 hours, Bitcoin has declined as low as $455. This suggests there there could be a significant appreciation from the current level as the conservative downside target has been achieved. Our revised upside target is now $1,606.95.
Those willing accept the extreme volatility and political risk should seriously consider Bitcoin at or below the $412.65 ascending line with a willingness to see a decline of –62.96%.
Posted in Bitcoin, Edson Gould, speed resistance line, SRL
Gold Stock Indicator: XAU and Barron’s Gold Mining Index
In this post, we’re going to review our Gold Stock Indicator from two perspectives, the Philadelphia Gold and Silver Stock Index (XAU) and the Barron’s Gold Mining Index (BGMI). We were curious about how closely the XAU Index and BGMI would look when applying our GSI formula. We’ve never had the BGMI data set until yesterday. The BGMI data goes back to 1973 while the XAU data goes back to 1983. Based on the charts that we’ve drawn below, we believe that our prior analysis, based on the GSI for the XAU, is confirmed and correct using the last 40 years of data for the BGMI.
Transaction Alert
On December 12, 2013, we SOLD the following stock(s) with an annualized gain of +64%:
Update: Sysco Corporation (SYY)
On September 26, 2013, we purchases a 19% position of Sysco Corporation (SYY). Since that time, SYY has gone from near a 1-year low to a 1-year high all within three months. Today it was announced that Sysco Corporation would merge with U.S. Foods. The fair value target in our transaction alert on September 26, 2013 (found here) has been achieved but we expect that the stock will close below the fair value level on the day. Dow Theory suggests that SYY should re-test the fair value level at least once more.
Our upside targets for SYY are substantial from a fundamental standpoint. However, we’d rather draw your attention to an article that we posted about companies in the industry and how Warren Buffett is utilizing similar companies as a hedge on the coming inflation. The article, titled “Warren Buffett Leverages Up on Inflation Hedge” (found here), outlines a longstanding thesis we have that if you believe inflation is coming then food processors, producers and distributors is the best way to take advantage of this trend going forward. We recommend considering related stocks once they hit our watch list as SYY at current prices are not as compelling as when we purchased the stock.
Posted in Uncategorized
Nasdaq 100 Watch List: December 6, 2013
Below are the eight Nasdaq 100 companies that are on our radar. Also, we review analyst estimates for the stocks on our list, the altimeter of an individual stock and the exceptional performance of our top five stocks from one year ago.
Posted in Nasdaq 100 Watch List
U.S. Dividend Watch List: December 6, 2013
Below are the 23 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Gold: Conservative Downside Target Met
On March 3, 2013 (found here), we posted the conservative and extreme downside targets for the price of gold with the following commentary:
”According to Edson Gould’s Speed Resistance Lines (SRL), gold has as a minimum decline of -25% from the closing price of Friday March 1, 2013 to the conservative downside target of $1,179.25. From our experience with Gould’s SRL, the minimum downside target is often achieved, especially when the price experiences an almost parabolic price move to the upside.
The extreme downside target of $681.75, which seems outlandish from the current level. Therefore, we’ll split the difference with an initial extreme downside target of $930.50 until proven otherwise. Already, the $1,179.25 level seems extreme in our minds.”
On December 6, 2013, the update to our downside targets for gold is depicted in the chart below: