Below are the valuation targets for Atmos Energy (ATO) for the next 10 years. Continue reading
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
Coppock Curve: March 2021
Below is the Coppock Curve data for the following indexes as of the end of October 2020:
-
Dow Jones Industrial Average
-
Dow Jones Transportation Average
-
Dow Jones Utility Average
-
S&P 500
-
Nasdaq Composite
-
Philadelphia Gold and Silver Index
-
Russell 2000
-
Philadelphia Semiconductor Index
-
iShares Nasdaq Biotechnology ETF
-
Toronto Stock Exchange
If you’re interested in a index not listed, let us know.
Coppock Stock: February 2021
The Coppock Curve has proven to be a reliable indicator for certain equities. We started tracking individual stock performance using the Coppock Curve since May 2020 and the performance since then can be seen below.
| Years | Purchase Month | # of Companies | Average Total Return % |
| 2020 | May | 4 | 48.0% |
| Jun | 1 | 38.2% | |
| Aug | 10 | 38.3% | |
| Sep | 2 | 22.8% | |
| Nov | 6 | 31.0% | |
| Dec | 18 | 25.1% | |
| 2021 | Jan | 9 | 15.3% |
| Feb | 2 | 1.8% |
At the end of February 2021, only one company reached a buying indication based on the Coppock Curve. Continue reading
YoY: Northwest Natural Holdings
Below is a chart of Northwest Natural Holdings (NWN) from 1973 to 2021 reflecting the year-over-year (YoY) percentage change.
U.S. Dividend Watch List: February 26, 2021
It was a choppy ride for the market this week as some gains were given back from prior weeks. Looking back one year ago, February 28th was the first sign the market was beginning to crack.
There were 195 companies on our watch list last week. In addition to that, the Dow Transports broke its support line and pushed our Dow Theory Indicator into negative territory on March 3rd (more on this indicator).
The best strategy was low Payout Ratio stocks which produced +22.90% return with the best performing stock being WSFS Financial (WSFS) with gains of +54%.
In the same group, Vornado Realty Trust (VNO) lost nearly -20% in a year. Vornado Realty Trust had the lowest P/E ratio at 3.3 on our list. The company earned $16.21 per share at this time last year but those earning evaporated as Vornado is now losing –$1.83 per share. Below is a breakdown of various strategies.
U.S. Dividend Watch List: February 26, 2021
The spiked in bond yields could be contributing to the recent market sell-off. We started February at +1.09% on the 10 years note and closed the month at +1.44%, a 32% increase. As people start chasing fast money with penny stocks, one might find better values from companies on our watch list below. There are plenty to choose from as a starting point for your research. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
On This Date: Richard Russell
On this date in 1980, Richard Russell said:
If You Leap, You Will Fall
“Let’s trot out an old but very useful market adage. It is that a trend is taken to continue in force until proved otherwise. We can be suspicious, we can hate the market, we can be out of the market, we can talk the market down to our friends and neighbors, but brother, we better not put out shorts until we have hard evidence that the bull trend is over and the bear is firmly in command-that is if we want to stay solvent (Russell, Richard. Dow Theory Letters. Letter 777. February 27, 1980. page 1.).”
Another way of saying the above is as follows:
“The wish must never be allowed to father the thought (Rhea, Robert. The Dow Theory. 1932. Barron’s Publishing. page 26.).”
Obviously staying solvent should be the primary goal. However, you need not invest to “stay solvent.” For all intents and purposes, even a person who “saves” in the traditional sense loses money by way of inflation and taxes. However, the fact that someone would chose to invest requires accepting that some or all money invested can be lost.
Most investors seem to get into the stock market or a specific stock because they think their investment will do well. Seldom does an investor buy a stock hoping that it will lose money or languish. Warren Buffett is among that rare group of (successful) investors who could make that claim. In his annual report to shareholders, Buffett said the following:
“Our quiz for the day: What should a long-term shareholder, such as Berkshire, cheer for during that period? I won’t keep you in suspense. We should wish for IBM’s stock price to languish throughout the five years (source: 2011 Berkshire Hathaway Annual Report. page 6).”
Maybe Buffett can “afford” to have such a cavalier attitude about a technology stock like IBM after not buying any tech stocks which has cemented him as the world’s premier investor. However, we believe that having Buffett’s thought process could help in dealing with not allowing the wish to father the thought. Otherwise, the concept of investing and hoping becomes a feedback loop that ends with inaccurate conclusions such as, “I’m never investing in stocks again, it is a scam run by manipulators and thieves. I’m going to put my money with an advisor and let her deal with the headache when I start ‘losing’ money.”
Posted in Letter, On This Date, On This Day, Richard Russell Review
SSE Plc 10-Year Targets
Below are the valuation targets for SSE Plc (SSE.L) for the next 10 years. Continue reading
Posted in 10-year Targets, Altimeter, SSE.L
Transaction Alert
We executed the following transaction(s):
NLO Market Indicator – Dow Theory Indicator February 2021
The market's recent run-up coupled with volatility may cause some concern for market participants. As recent as last Monday, February 12th, we received a confirmation of the rising trend based on Dow Theory. Both the Dow Jones Industrial Average and Dow Jones Transportation Average closed at their all-time high.
To that point, we want to discuss a proprietary market indicator which shows the state of the market. We will reveal the details of the indicator but the essential components are the Industrials and Transports which provide us with the longest history of data to back-test.
The chart below shows the S&P 500 in blue plotted against the indicator which we will call Dow Theory Indicator. The one million dollar question is how do we know when a substantial market correction is coming. This isn’t an exact science but this is our best attempt. Typically, we see that the market (S&P 500) fails to break above the high and Dow Theory Indicator drops into negative territory. Continue reading
Posted in Dow Theory, Dow Theory Confirmation, NLO Market Indicator, NLO Market Score
Tagged members
Severn Trent 10-Year Targets
Below are the valuation targets for Severn Trent Plc (SVT.L) for the next 10 years. Continue reading
Posted in 10-year Targets, Altimeter, SVT.L
1870-2033: Real Estate Cycles
The history of real estate cycles should inform how to analyze the market. However, there is an abundance of analysis without a review of the history, which generates conclusions that are unrelated to how the real estate market works. Additionally, symptoms are given more prominence than the causes leading investors, speculators, buyers, and sellers down a path of misunderstanding.
Below is a chart of the real estate cycle from 1870 to 2033. Continue reading
Posted in cycle analysis, Cyclical Trends, Market cycles, real estate, Wenzlick
YoY: iShares 20-Year Treasury Bond ETF
Below is a chart of the iShares 20+ Year Treasury Bond ETF (TLT) from 2003 to 2021 reflecting the year-over-year (YoY) percentage change.
Bitcoin Saturation Point is Here
Recently the price of Bitcoin has increased to a market cap above one trillion dollars. This had generated tremendous excitement both for, and against, the continued increase in the crypto currency.
For those hoping that Bitcoin will increase in price, achieving a market capitalization of $1 trillion is a testament to the future viability of crypto currencies. Meanwhile, for those in disbelief of the value of cryptocurrencies, the $1 trillion level highlights the extreme that the bubble has managed to attain.
Because we only follow the price, we were struck by a point made by Charlie Munger of Berkshire Hathaway in 2018:
The question has arisen, “When will ‘they’ create more Bitcoin?” As, Charlie Munger has said, if you have the incentive, new coins will emerge. In our view, that creation of more Bitcoins has already taken place in the form of the thousands of “alt coins” that are free-riding on the concept but have zero value. Some of the alt coins, ranked in the range from 451-500 (by market cap), have a combined market capitalization of over $2 billion dollars. Does anyone believe that the coin ranked 499th will amount to anything down the road? We don’t.
When we run down the numbers for the total value of all the coins with market caps ranked from 3-1,000, which excludes Bitcoin and Ethereum, the total market cap is approximately $484 billion dollars.
As with all new innovations in their early stage, there will be hundreds of competitors lining up to become number one. However, as the cycle for cryptocurrency evolves from the start up phase to the growth stage (can you believe it, we’re only in the start up phase), there will be many “currencies” that will die along the way.
There is a stock market investing theory that says that if you buy and sell only the two leading stocks in a specific industry you will be able make a considerable amount of money. The thinking behind this theory is that the industry will generally do as well or bad as the leaders. Therefore, by using the two leading stocks to confirm a rising or declining trend, you will have the stocks that will thrive in the good time and not die off in the bad times. Almost all the other participants will be gone or become absorbed in the process.
As with most mature industries, there are 5-6 companies that have a meaningful impact on the direction of the business. We don’t have a clue about the other 3-4 crypto currencies that will emerge as the leaders. However, for now, the top two in terms of market capitalization, Bitcoin and Ethereum, are the contenders to be around if central banks don’t take over the concept.
The potential $400 billion (and growing) waiting to be destroyed by willing participants, who either hope the ride will continue or are unaware of the probabilities, will suffer greatly from this creative destruction. The Bitcoin saturation point is here, however, it isn’t in Bitcoin and Ethereum, instead, it is the alt coins.
See Also:
-
Bitcoin Archive (our price analysis since 2013)
-
Bitcoin Cycles, 2010-2021
-
Ethereum, (price analysis/references)
National Grid Plc 10-Year Targets
Below are the valuation targets for National Grid Plc (NG.L) for the next 10 years. Continue reading
Posted in 10-year Targets, Altimeter, NG.L
Berkshire Hathaway 13F: Q4 2020
Can you spot the classic “value” purchase?
Below are the shares that Berkshire Hathaway added to their portfolio and the lowest price within the fourth quarter of 2020. The last five years are shown for the relative value for the respective stocks. The stocks are shown in order of largest increase to Berkshire Hathaway holdings.
Verizon (VZ)
T-Mobile (TMUS)
The Kroger Co. (KR)
Merck & Co. (MRK)
Marsh & McLennan Co. (MMC)
AbbVie Inc. (ABBV)
Bristol-Myers Squibb Co. (BMY)
Chevron Corp. (CVX)
RH (RH)
Posted in BRK, BRK-A, Warren Buffett