... Gains.
It seems there was no place to hide this past week unless you were invested in .... not sure really, I have to research that!
Markets are gyrating with greater force as buyers and sellers attempt to digest rising oil prices, a weak dollar, and consumer sentiment more pessimistic than it's been in years. Meanwhile, Federal Reserve Chairman Ben Bernanke says the centralbank is concerned about both inflation and recession. Stock market volatility is nothing new, but we all seem to forget when euphoric new highs are being formed and everyone is practically falling over themselves by the party punch-bowl.
As of yesterday (Friday) the Dean Jones Trader Portfolio (DJT) was no exception in becoming another victim to the mad Wall Street free-fall. Just one month ago we were sitting on +28% gains for the year. Today we are fortunate our DJT remains up +21% based on realized gains established in the first half of the year.
Thanks mainly to our premature financial positions we eagerly established back in October with Citigroup (C), and American International Group (AIG), (which seemed to have formed a short term base at the time and a buying opportunity), it further proves you simply have to cut your losses no matter what. In a (DJT) back-study over time, it became evident that using a -6% "sell rule" seems to be the threshold in keeping gains in tact and losers out from possibly further deteriorating a portfolio.
That said, come Monday the following stocks would need to be SOLD:
AIG
C
DIS
GE
(Side Note: Plain sloppiness or lack of time, is no excuse for mediocre management of what should be a fine tuned stock portfolio, but I personally have a darn good excuse for being M.I.A. in the last few weeks -- negotiating the purchase for a new California home at -30% below last year's selling price, is quite the dramatic event in this sub-prime age of frenzy. Now that's a whole other market and story for other blogs to rationalize!)
In the last post we established a BUY in Wal-Mart Stores (WMT), which by the way never made it in our overall portfolio screen shot(!) since it was SOLD within 10 days following a quick reversal and downtrend.
Last month we also increased our BUY position in Altria Group (MO), (which I still prefer to call Philip Morris, or as the Street calls them; 'Big -MO'). The stock is clearly enjoying support in this time of market turmoil, as it is a defensive play and best of all, it also pays a fat dividend to boot.
(... or is it P-H-A-T?!)
2 comments:
Excellent work! I like it....
I think it would help to have a couple of comments on the basics of the weekly charts and MACD technical analysis explained for those people who read this stuff and say "huh?" Just the basic definitions, and maybe a chart that shows it.
Can you put links in here to charts as examples?
That would also be cool because then people could self-educate and realize the brilliance of the author and the discipline (and time) it takes to make this stuff work.
Finally, this is a LONG position (buying for price gain) porfolio. Given that we are heading into a possible recession, how about keeping track of the DIA, which is a stock index that invests only in the Dow 30 stocks, as a SHORT position(selling the stock and then buying back the shares at lower price for profit) whenever the MACD crosses down?
It would only add one more stock to the entire portfolio so it would not complicate things too much, no?
Keep up the good work!!
BP
Thank you for your comments. I will definitely consider this proposition as it surely would add another layer of facts to the dynamics of this blog.
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