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Tuesday, October 11, 2016

Mirroring the Indices

My portfolio has basically been mirroring the S&P 500 for the past 2 months. It's a pretty boring allocation, to say the least. 

I was pretty hesitant to give an update; really, nothing has changed. There are some interesting little things to look out for, however. Skechers has not yet gained positive momentum, and their price action over the past quarter has been relatively flat. Currently it's trading at below its 50 and 200 day moving averages. They might be able to bust out a really good quarterly report on October 20th, and although they currently have pretty solid growth projections, a beat might be a really good catalyst. Of course, the effect on my portfolio would be just about negligible, but it still would be interesting to see.

The project with the professor has gone very well. He has been quite impressed with my work, and I am now working for his research institute by compiling historical bond prices from old periodicals. I will definitely be keeping in contact with him. I have gotten to be quite interested in seeing how the academic side of finance and economics could play a role in helping portfolio and fund managers make better decisions. 

I have been pretty busy with schoolwork, college applications, and the institute research. But I am obviously pretty comfortable with the conservative allocation I have currently, so I don't anticipate significant changes coming soon.

Saturday, August 13, 2016

Slight Change

A change has been made. It won't really have that much an effect on performance, as it's pretty inconsequential, but I wanted to procure a stronger representation of large and mega cap companies in the mix with the new holding. It makes my overall position quite more defined, as currently I am not interested in holding positions in any more small caps other than what I am already involved in.

All the funds from SPY and XLP have been switched into VYM. With SPY, the entire S&P 500 was represented, meaning that I was still involved with some small caps. XLP was a sector-based ETF that focused on Consumer Staples; when I entered it I used it as more of a hedge against a selloff, as Consumer Staples temper them quite better than the overall market. Currently, it isn't a desire to put as much weight on that particular sector anymore.

VYM is a high dividend yield ETF, which again, has most of its holdings in large and mega cap companies that churn out consistent dividends.

Skechers, the only riskier holding, has been left untouched. Even though it already isn't a very significant position in itself, I did want to tone down the risk profile of the portfolio overall a bit with the change, however small the change is. 

It's currently a pretty boring composition, and has been for a while. I anticipate it will continue as well; I have a research project to work on that has required and will continue to require a significant amount of my time, even after the school year begins. 

I said before that I would hopefully get into more of some swing trading a portion of the portfolio over the summer for both increased risk and involvement, as to be fair, I am relatively young so my risk tolerance is definitely higher than what my current composition would suggest. That has not happened. I just haven't found a large enough block of time where I felt comfortable enough to enter short-term positions again, and to dedicate the fair amount of time towards planning and monitoring them.

Saturday, July 23, 2016

Inherent Risks

I was very busy yesterday, so I'll have to write this today.

Before anything is said, an important thing that needs to get across is the fact that I knew what I was getting into when I selected an individual company to invest a portion of my portfolio into. With positions like these, one is exposed to multiple tiers of risk. Instead of only being involved with overall market risk and/or sector risk through mutual funds and ETFs, I would have to deal with individual company risk as well. "Picking" a stock inherently is more risky, and making sure that the value of the position sizes dedicated to an individual stock compared to that of the entire portfolio is relatively small is necessary for proper risk management.

Now, how does this all relate to that of my situation? Where does this apply to me?

Skechers had an earnings report Thursday, yesterday night, after the market closed, and I kept holding it by market close of that day before the release came out for 2 main reasons:
  1. I had already clearly identified my holding period; I am not interested in selling prematurely.
  2. To try and predict and anticipate earnings releases is literally gambling; the company could very well have exceeded expectations today as well. I am not interested in trying to time the stock.
I guess unluckily, they did release an earnings disappointment. The company released a negative surprise of just under 6% in their EPS, and noted how higher expenses hurt their margins, as well as how fluctuations in forex prices (probably Brexit) negatively affected their bottom line. Their domestic wholesale business had a decline of around 5.4%. But I think that the most notable thing to consider is the history of their earnings reports. In the past four quarters they have either met or exceeded expectations. In Q2 2015 especially, they blew them away. There was likely the trend of this continuing that was heavily factored into the share price, and this recent quarter may have really let some hopeful people down.

Nonetheless, the stock dropped around 15% after-hours after the release came out, and dropped another 7% just right after the market opened today. It rose 0.8% after hours. That's a pretty significant fall. And although I believe overwhelmingly in the idea that these markets are pretty efficient in giving a relatively fair value at just about all times, let's just say I still have strong conviction in the longer term prospects of this company. They still increased gross profit by 11% YOY, increased their margins, and have an ever-increasing international presence with their stores, which for me is one of the main keys to the next chapter of this company's growth potential. I'm hoping it will be another Krispy Kreme.

I was thinking of averaging down and selling off some of my positions in my broader ETFs to increase my position in Skechers, but I really didn't want to mess with my underlying allocation percentages, so I did not and probably won't. However, I do not plan on cutting off the position anytime soon. 

But all in all, although this is a pretty significant drop in terms of the company's share price itself, because I don't have a large position in it currently, and this really is the only considerably "speculative" position I own, I'm not too hurt. Again, I have already clearly defined the holding period for this stock and have no interest in trying to trade it for short-term periods. The stock could very well trend downwards for a period of time, but it still wouldn't really be that big of an issue for me.

On another note, I mentioned before in a past entry that the Brexit was on everyone's minds, and that the markets were in a serious fear over impending collapse with it as the catalyst. Well, just 2 days ago, before this quarterly earnings report came out, Skechers was trading at a value even higher than it was just pre-Brexit. The major indices such as the S&P500 and the DJIA have already recovered their losses and more. Although I still think the Brexit still is a serious issue that will have significant repercussions on Britain's economy especially, I think it's fair to say that all of that talk of "imminent destruction" and "sell while you can" was definitely a bit overblown.

Monday, July 4, 2016


It turns out that there are more people than I thought who know about this and go to my high school. I thought I would write a post somewhat directed towards them to remedy some of the most important glaring misconceptions that I hear about all the time. However, I won’t necessarily be going over all of them; it won’t be a rant. Sorry in advance if this seems like a fluff post, because it is. If you’re looking for info regarding my portfolio, just keep scrolling through.

Just because a company is objectively good doesn’t necessarily mean it’s a good investment. The market is pretty smart; expected things are taken into consideration.

My most controversial of the statements. I like to refer to an incredibly profound quote that I found a long time ago, so long ago to the point where I don't even remember where I found it. I still printed out and it’s been with me since.

“When you place a bet in the market, you’re never just betting on the future of the company you’ve bought or shorted, although this is how it is often cast. Rather, you’re betting on the misalignment of the average investor’s perception of that company’s future with its actual future; that is, you stand to profit only to the extent that the current valuation of the company is “wrong”. As such, you’re really placing a double bet, in the sense that you’re betting on two very separate things, each of which is extremely difficult to predict at all, much less quantify. The first has to do with the future of the company: How will its revenue flow change over the next few quarters, or over the next five to ten years? How big can this company really get, and why? But the second, very separate aspect has to do with other investors: to what extent do people over and underestimate the potential of this company, and why?”

Companies can be priced for perfection, or even beyond it. One of the main examples which comes to mind is Tesla, which is trading at a negative PE (currently losing money) and a >60 forward PE. Although just about everyone can see that Tesla obviously probably has a very bright future ahead of them in continuing to expand their electric car sales and customer base, other people know that too. It will already be factored into the valuation.

Another glaring insight that is simply wrong is when insights are believed to be genuine and individual, that the rest of the market doesn’t know about it yet, even though it really is just an obvious connection to make that doesn’t require a particularly high level of intelligence to see.

Aside from the fact that one should already realize that when others’ money is on the line, they will be far more keen to research and know about a subject, one must realize that the markets are very up-to-date, even more so than what many may think. Others definitely already know that releasing a new iPhone will increase aggregate revenue and profits, or that Halloween will increase sales for confectioners. These aren’t breakthrough insights by any means, and it would be a fundamental error to try and trade on them. Like the quote says, it is the deviation from the past expectation that causes changes in pricing, not the expectation itself.

Price alone does not deem a stock expensive.

The price of a stock is simply the market cap of a company, or its net worth, divided by its shares outstanding, or amount of shares in circulation, which is a completely arbitrary value. Hypothetically, a company with a net worth of $1 million could be split up into two shares of $500,000 each, or into 1 million shares of $1 each. It’s not like each share in the former example is “more expensive”, as you are getting far more value per share in that example.

It’s like choosing to split a pizza up into 4 slices worth $2 each or 8 slices worth $1 each. You would still be getting the same net value amount of pizza if you spent your $2 on one slice sized at the 1/4th of the pizza for $2 or two slices sized at the 1/8th of the pizza for $1 each.

People determine if stocks are expensive based on other underlying factors, such as Earnings per Share (EPS, = Net Income/Shares Outstanding), EBITDA (earnings before interest, taxes, depreciation, and amortization), Sales revenue, Book Value, and Growth Rates. These figures are displayed through ratios, like the P/E ratio (Price to Earnings ratio, = Price per share/Earnings per share - basically asking, how much are each of this company’s shares generating in earnings?)

Basically, the most important thing to do is not see a lofty price per share and instantly think that the stock is expensive. It’s how the price per share is related to other underlying factors of the business which determines that.

Jordan Belfort was not a trader, a portfolio manager, a banker, or even a legitimate broker. Contrary to what that film’s title implies, his connection to “Wall Street” is marginal at most.

It doesn’t happen as much as before, but there used to be a palpable sort of idolization of this guy at least among the people I know, Jordan Belfort. I remember people saying that he was totally “raw”, someone who had mastered Wall Street, whose only mistake was getting swallowed up with the ideal lifestyle that is commonly associated with it.

He’s nothing but a con artist. His business was not affected if his clients lost money. And in fact, because he was pitching penny stocks, which are simply known to be crappy investments in general, the claim that he wanted his clients to lose money is justified.

And I mean, on a personal note, how can you really see this guy as some sort of role model? Dipping excessively into drugs, scamming others, abusing and eventually divorcing your wife, and causing havoc in your family isn’t a small deal. I mean, I get that he threw immaculate parties and became rich, and that’s something just about every high school boy thinks is cool and desirable, but there still is so much more to being an adult than living out the wild and rebellious teenager’s dream. Having a wife, family, and clients should be important. One should take care of the people who have entrusted him or her with the important things they have themselves. This guy hopelessly failed in the fiduciary and intimate aspects of his life.

It’s not that easy; nothing ever is.

Like I said before in the first section, the markets and the people involved in them are generally pretty smart. I wouldn’t say that they are always outright perfect, but they are smarter than many might think at first.

There is no magic money-making day-trading strategy where ordinary people can just “make $12,563 a week day-trading at home”, or a magic system which guarantees profits.

For the overwhelming most part, there is no magic, money-making stock that everyone else has ignored and that only you know about, or a certain event/concept/idea that only you have predicted. It is becoming rapidly increasingly difficult to gain an upper hand in the markets. I can cite examples of firms spending an exorbitant amount of time and or money in hopes to, but that list would be very long.

It’s not that hard; nothing ever is.

I want to leave you with a more optimistic note. With the advent of information technology and the internet, there is an ever increasing abundance of information regarding finance and the markets. Although the markets are becoming ever-increasingly competitive, everyone now has the means to learn much more than someone 50-60 years ago with an electronic device and the internet.

Again, there is no perfect system. There is no magic number of screens to have, or a magic trading software one has to pay for in order to invest successfully. One can get by with publicly available financial websites like Yahoo Finance, along with a spreadsheet application like Excel, and not be anywhere near as behind the professionals with Bloomberg Terminals as he or she may think.

Apps like Robinhood are specifically bringing commission-free trading to the masses, specifically young people. Couple that with the recent advent of ETFs that bring an unprecedented amount of diversification in an accessible tradable package, I think that everyone should get started, or at least involved, with the act of investing.

Saturday, June 25, 2016

Elaboration on Plans, Thoughts on News and Hysteria

In retrospect, the amount of information that was posted in the past entry was what I believe to be insufficient; I think that explicitly saying some of the concepts that I believe in and my action plan regarding the Brexit is necessary. Pardon the relative incompleteness of the last post; it was getting late and I had work to turn in the next day.

So let's get back to the subject at hand. The decision from the voting populace of the United Kingdom to leave the European Union, or the Brexit, however tacky that name may be, is making headlines and causing a large amount of worry in the markets, causing a 610 point, or 3.4%, drop in the DJIA.  In financial news websites, like Yahoo Finance for example, article headlines are riddled with the term. People are writing about how the Brexit will affect the economy, how Trump's policies will affect the Brexit, how the global markets have "tumbled", how it has affected Obama, Mexico, etc. 

At some point I was expecting these writers to talk about how their pets' livelihoods would be in jeopardy.

In an investing forum that I frequented when I first started getting into investing, there was a post with a list of suicide hotlines and their respective hotlines. Another post is titled, "Brexit is happening. Time to panic."

It really can't be denied; these people are sounding like drama queens. They have no backbone. It's not the end of the world. Take a walk. Before I posted yesterday's entry, I thought that I had over-dramatized the event, but little did I know what would happen on the internet the next day: Sensationalist articles with an undertone of hysteria.

I mentioned above that there was a 3.4% drop in the DJIA of 610 points, which came to fruition right as the opening bell rang for the trading day. Now, that may seem crazy, but one should remember that the effects of yesterday still only puts us at down merely 2% for the week and 3% for the month. Now, I am not saying that this is it, and that the market has nowhere further to drop due to this event, but now is not the time to panic. One should never panic, ever. If someone is already getting seriously scared and wetting themselves over today's drop, that speaks miles about whether or not he or she should actually be involved with the markets in the first place.

A second thing I want to touch on is that one should look at these news articles and headlines with serious scrutiny and never take the the things they say and implications they make at face value. There are multiple reasons for this.
  • Reported news is old news. By the time you are reading it, the implications that have been made (if they are based on legitimate reasoning and facts) have already been priced into the market. You are too late. You cannot win against these giant firms whose main goal is to process vast volumes of information in milliseconds and act on them in an even shorter time.
  • If there's one thing I have learned from my experience with financial news and analysis, or even just my entirety of political and academic experiences, it's that an overwhelming majority if not all issues and topics can be debated feasibly on both sides with facts to back them up. There is a virtually infinite amount of information on the internet alone. Nothing can be deemed a certainty.
  • There is also a huge conflict of interest between news corporations and the investor. The former wants views, clicks, ratings, or people to read their papers. The latter for the most part just wants to know how they will make money, how they might lose money, and if their investment is at risk. So what do the news outlets do? Sensationalism! They do not care if you act in the best interest of yourself and your portfolio, or better suited to after reading their posts and updates.
The third topic at hand is related to portfolio management.

I am a contrarian, and I especially enjoy the idea of growth at a reasonable price. Therefore, when the market goes down, when stocks have a bad day, someone with my outlook would be very ecstatic as that means stocks are cheaper. That's why I was sounding somewhat positive in the next post. Crises like 2008-2009 and 2000-2001 have always been fantastic buying opportunities in retrospect. Just wanted to clear that out of the way. This core concept has worked out for me many times before. If you would like to understand more of it, I highly recommend "The Intelligent Investor" by Ben Graham - one of the best.

I've been hearing about how people are dumping their shares, how people are looking to clear their holdings completely. They are trying to time the market. They anticipate that the market will continue to drop, and they are looking to buy back in at a lower price at some point in the future. Trying to time the market like this due to fear will never yield desirable results - it will more likely than not drag someone into the routine of buying high and selling low. It is a fool's game. No one knows what the market will look like in the future for sure. Nada. 

Now for this Brexit, I think it would be fair to say that it is pretty significant. This is a country with international exposure being planned to rewrite its relationship and stance in the global economy. But the degree to which it will impact the market can and will never be feasibly predicted accurately in advance. While following it, I strongly believed that in the end, they would vote to remain. My decision to maintain the allocation of my portfolio to my positions reflects my implied bet. But still, I don't believe that things will really get that bad with regards to the end result on this issue.

So here's my game plan. I am still holding my positions; I do not plan on selling them anytime soon. I believe in the long term prospects of my major holdings, and I would not have invested in them in the first place if I haven't. I'm not interested in trying to time the market - I'm sure I will hear stories of people who successfully will and do, but in my experience as well as conceptually I stand firm in my belief that it never works out consistently.

If things get bad, they will get better. One of the most palpable tells of if things are at their worst is if there is "blood on the streets". And honestly, I have been taken aback by the sheer amount of fear I saw online today. The F&G index dropped 24 points. 

When comparing this event to 2008, the biggest difference is that when the events began to unfold back then is that a vast majority of people were still claiming that the "economy was still strong fundamentally" and that there is "nothing to worry about". For me, today it has been the complete opposite. People left and right are saying that our world is about to end. And I've seen this pattern before; I've seen people repeat this exact same sentiment over recent events such as Greece's bailouts, the Chinese shadow-banking "crisis", and in response to various well-known pundits predicting collapse. None of their predictions came to fruition.

That's it - for what I mainly wanted to cover.

In addition, I have found out recently that a lot more of my classmates and friends than I originally thought know about this site; I'm thinking of writing a general misconceptions post for them. 

There are a lot of things they believe or think that I want to correct. 

Friday, June 24, 2016

Brexit Short Update

OThis will be a short post. What just happened is pretty groundbreaking - political and economic relations between the UK and EU will be drastically changed in the time to come. I anticipate considerable short-term volatility and turmoil in global markets, centered in the UK.

I am a contrarian. Depending on how bad things really get, and to what extent the market will take this news negatively, but at the very least I know they will, I may consider this a buying opportunity. It can already be evidenced by the 9% drop in GBP/USD in the past 6 hours. Nikkei also dropped 7%.  I may be looking to initiate a position in a FTSE-tracking ETF, or possibly scope out some overly-battered companies in the future. Positions haven't changed yet.

People, money, and products from UK corporations will now have a harder time moving around. Money flow through UK banks are going to be no exception, and that is especially significant given that currently 63% of UK exports are attributed to EU membership. Immigration policies will be rewritten. Too many things are now planned to change to feasibly list.

It is important to stay level-headed. Times of turmoil will end up being opportunities in retrospect. I am actually very excited and intrigued; this is a significant event, and the bounds of its repercussions are yet to be realized. But who knows? Maybe it won't really even be as big of a deal as many would think.

Monday, June 6, 2016


To begin with, before anything else, wow. Almost at 21,000 views. Pretty crazy. And trust me, those clicks definitely weren't all me. Thanks. I'm looking through my past posts and boy, some of them are really cringey. Still pretty interesting to read though. It actually is serving one of its main purposes as a trading journal where I can review successes and errors quite well, so I've got that going for me.

I've also got the fact that school ended quite a while ago, which is nice as now I will finally have some more time to dedicate towards finance. I'm really looking to really begin putting a lot more time in it, by writing more articles on Seeking Alpha at a much faster rate than during the school year, as well as seriously scrutinizing my personal portfolio for the coming months. Who knows? Although my current positions in ETFs have done pretty well for me so far, I might be motivated to liquidate them and make open more available funds for some short-term swings based on technicals for a short period of time, as mentioned before. However, I definitely am not in any hurry to dump them. Currently, I don't see any irrational exuberance floating around regarding the market, and the technicals regarding the S&P 500 (one of my main positions) don't show any sign of a short-term period of being overbought.

(click to enlarge)

In fact, analysis suggests that it's currently testing resistance and might even break out of 210. The market has been in a stagnant channel throughout this past year and hasn't moved over 4% over the past year or YTD, so this could be its time for that. There's also a possibility that there's a bullish inverse head and shoulders pattern with ~Dec 14 and ~May 9 as the shoulders, and ~Feb 8 as the head. I am highly skeptical of that happening, as a similar bullish pattern happened in the past (it's included in the chart) and nothing came of that. 

These chart patterns always for me are speculative observations in which a concrete strategy should be employed with clearly defined entry, cutoff, and exit points. But given that I am already in this position, with a longer holding period in mind, I'm not really paying attention to that. 

As evidenced by the performance of the SP500 and DJIA over the past year and YTD, it's not been a blowout bull-fest this year like in the past few. But still, performance has been positive. I anticipate will not be too easy for me to find what I believe are true deals on growth stocks or havens that have been beaten down by an over pessimistic market. My positions in these ETFs are a pretty conservative (and easy) way for me to get significant diversification and relatively okay results. Currently up 8.43% on SPY, and 4.75% on XLP. Not amazing, but I wanted to play this first part of 2016 pretty close to the chest.

(click to enlarge)

SKX after the post-earnings pop sunk down a bit, but over the past week and a half recuperated a significant amount of those gains. No relevant technical analysis can be found here. It's relatively stagnant, a horizontal price channel is forming, RSI is near middle-ground, and although there was a recent bullish MACD crossover, I don't think that will amount to much.

Although in their earnings statement they beat their projections for the past recent quarter, they also project slightly lower sales for the next. Mixed sentiment has come as a result but overall their overseas business is expanding and doing well.

Still pretty optimistic about this holding. Current valuation makes the company seem like an old horse with no more strength to run, but I think they still have quite a bit of room and conviction to grow within the US athleticasual market as well as the international shoe and athleticasual apparel market, and get rid of their general stigma of being untrendy.

Managerial effectiveness ratios are sufficient, the financial statements of the company shows a positive trend with on average just under 40% YOY EPS growth rate, and projections are still showing to be growing quickly. For me, that just doesn't show signs of deserving a mere 17.99x P/E, a 12.55x Forward P/E, and a 0.9x PEG ratio (taken from finviz on 6/6/16). My outlook is still mid-to-long-term here, and I really think over time people will see this company as a strong growth prospect. Currently sitting on an 8.1% gain on it. I don't plan on shaving off the position anytime soon.

Overall, I've been really enjoying the past week and a half of summer. It feels good to eat actual food, be lazy, and spend time with friends I normally don't have the time to see. But that's pretty unsustainable. I can't just spend my entire summer doing nothing and being blissfully bored.

I've got quite a bit of plans regarding finance for the coming times and this post for me is the gunshot to begin the race. Luckily, since I have two and a half months to work with, it's a marathon, not a sprint.

Sunday, May 8, 2016

5/8/16 Update on Positions and Mini-Recap

The school year is almost about to end, which is nice. I feel like I've spent an exorbitant amount of my time studying this year, and I haven't really been able to devote as much time as I would have liked towards things that I would really have wanted to do. Granted, it's not like studying and schoolwork is a daily death sentence that I have to push through, but it gets very exhausting. The only reason why I am saying this, however, is because I feel like the volume and strategies of my trades during this year weren't filled with much excitement, to say the least.

The level of mental effort I could allocate towards trading wasn't really to the level where I generally want it to be, and a commonly accepted principle that I believe myself as well is that if the lifestyle one is leading is too busy for disciplined and relatively constant management of his or her portfolio, he or she would be much better off simply putting his or her money in an index fund or not invest it at all.

So for me, what I managed to get across was generally mid-length swing trades in companies that I believed had a desirable cushion in sheer fundamentals alone. Very few plays based off of technicals and chart patterns were executed in unstable companies with an iffy outlook.

This yielded in an okay way. It definitely doesn't compare some of the years I've had before, in which I made aggressive small-cap value plays like REGI. I didn't really dabble in companies with market caps of under 10 billion. But I also exposed myself to much less risk, especially given that I allocated a significant portion of my portfolio to market-mirroring ETF funds like SPY and XLP.

I don't anticipate this changing much for my next year as well. There will be even more challenges down the line that will likely have to warp my strategy into a more mid to long-term holding period minded.

Anyway, this is how my portfolio has fared recently.

SPY has been doing okay. It pushed up to a higher level since I bought it and hit resistance at 210. It's currently sitting on a 6% gain. I don't really know if it will find support in a moving average or if it will shoot down, but I honestly don't really care. This is for the med to long term and no stop losses will be found here.

XLP has been performing in a much more stable way over the entire 52 week period and I am happy with it. This is a good position for tempering market downturns, and given the overall fear that was present this past winter I like its consistency. But who cares about all of that? I'm in this for the mid to long term, I don't really see any other investments that I would like to be in that much more, so no stops will be found here.

This is because my overall outlook on the market is neutral positive for the following year, and I don't want to single out a certain company to invest in and expose myself to unnecessary risk.

My only truly speculative position is in SKX. But again, I have established already that this is going to be a mid to long-term hold as well. I have a positive outlook on its performance for next year and playing its earnings release turned out well for me. They beat expectations, setting me up with around a 6% pop after the first week of holding. But I've been staying hands off for a while now. It has gone back down somewhat, but in the long term of what I expect from this stock, the events that have happened over the past 2 weeks are still what I would consider stagnation.

Overall, I'm sitting on positions I'm happy with, and I am closing out the school year with a conservative allocation at least in my view.

As the summer comes around I might start selling off some of the funds from my ETF positions to trade more single companies. I might even do the same with SKX, but that will be a decision for later. If I decide to do it then, I will monitor their charts and sell at a period of relative strength and then look for prospective investments, investing when they are in periods of relative weakness.

I haven't decided on what I'm going to be also focusing on over the summer, but that decision will come later.

Sunday, April 17, 2016

Two new entries in past post are closed. Going in on Skechers.

Exited out of the Sratasys position at around May 23rd. Caught a 4-5% pop up and was stopped out when it breached my trailing stop. Pretty good trade, I was hoping for better positive momentum.

Of course, not everything can go my way, but I think I set the trailing stop a bit too close as it did end up reaching 29 recently. However, given that it's been around a month now and the price movement has basically stagnated in the 23-29 range, I think it's fair to say that the opportunity cost of staying in the position would not have really been worth it.

The same thing happened with Barclays. I was exited out of the position at around May 22nd. Although I really would have liked to see stronger positive momentum in a longer term trade, again, the opportunity cost of holding onto it isn't really that satisfactory to me. Also, given that the reversal pattern I was hoping to happen isn't really panning out, as it is also stagnating at its current levels, I'm gonna move my money elsewhere. 

I still managed to also secure a relatively short term 5-6% pop from the trade, so I'm not too mad.

I'm still holding portions of SPY and XLP, which are going to be my benchmark market reflecting positions. They have done pretty well, the U.S. markets are again reaching stable footing and are trending upwards.

Tomorrow I will initiate a position on Skechers. Not only am I somewhat speculating on their earnings performance results on the 21st, which will be in 4 days at the time of this post, I really like their fundamental statistics and their growth projections.

Although I have my doubts about their ability to cement themselves as a market-leading athleticasual brand along the same level of prestige as NKE and LULU, they have gotten over some serious humps that have deterred many from investing into their business, like the cringe-worthy shape-ups that they used to market which would supposedly boost people's posture. (It only ended up yielding various lawsuits against them).

But in here, I like their relatively low PEG ratio, the strong EPS growth projected for next year, small Debt to Equity ratio, and moderate management effectiveness ratios. Margins are moderate as well.

Chart looks pretty decent for the next couple of quarters. My determination on the holding period I will pick will be determined by the market's reaction to their coming earnings release.

(click to enlarge)

It also doesn't take a genius to find that they are currently on track to boost their numbers and improve their business. Here's what the YOY performance of their statistics are.

(click to enlarge)

If you care about Analyst ratings, it recently was upgraded by Macquarie to a $45 target, a 55% possible upside, as well as "outperform".

The reasons they cited were

  • Growth domestically and internationally
  • Margins inching up
  • Scale bringing selling, general and administrative expense leverage
  • They said it was a "lean, mean, sneaker machine"
Now, their projections are nice, but I care about the numbers that get churned out. If the numbers over time don't fit the positive rhetoric of this post, I will drop it.

Probably not going to set a trailing stop for this one. I have conviction to make it at least a mid-term hold.

Sunday, March 20, 2016

Stopped out of AMRI. Stopped out of CS. Two new entries.

This will be a short update post.

The above image is able to be clicked in case it's too hard to see.

Basically, I got stopped out of AMRI. It didn't really follow the inverse head and shoulders breakout pattern that I wanted it to. No big deal. Stop level at 14.50, took a relatively shallow loss of around 300 basis points. This wasn't a big position in the first place anyways.

Credit Suisse wasn't moving up enough in terms of momentum for my liking. I set a 200 basis point trailing stop at around 15.40, and it got hit. Walked away with around an 11% gain, if I remember correctly. Pretty good.

Opened up two more positions.

BCS, Barclays PLC. I'm hoping that its situation ends up in a way similar to Credit Suisse's.

Also, Stratasys. Hoping for a cup and handle.

Both positions have trailing stops, since I'm going mostly off of the chart.

Still in SPY and XLP.

Sunday, March 6, 2016

3/6/2016 Update

Apologize in advance again. I've made some trades and have failed to document their occurrence on the time of their happening.

I have been churning out some more articles on Seeking Alpha, but my post frequency here might lead many to believe that I have been not doing anything with my personal portfolio, which is simply not true.

Let's get caught up.

It's been about two weeks since I've reallocated and moved my positions into what they are currently. I entered all three of them on the 22nd of February. 

I have ~1/3 of my portfolio in SPY.

Feeling pretty good about it. I'm sitting on around a 3% gain on that. I noticed that the Fear and Greed Index during the time was relatively low, there was a bit of weakness that showed at the time, and I am generally quite the skeptic when it came to the market pundits worrying about recession and a downfall in the economy.

It has recently shot up in quite a short time. The Full Stochastics is at an overbought level, the RSI is nearing the overbought level. However, I do like the fast increase in the MACD; I think it will reach Nov levels after a while. It has also shot past its 50 day moving average, which is a good sign for its regaining of positive momentum.

I'm also sitting on a third of XLP, which is a SPDR consumer staples ETF.

Now, this is following the same pattern as SPY, and I am sitting on around a 4% gain on that. The reasons why I bought this are detailed in my Seeking Alpha article, where I went over why I thought Consumer Staple ETFS were attractive. 

Also not mentioned in the article, however, is that I want this portfolio to be not deviate too far from the S&P 500 this year. So currently, I have funds dedicated to an ETF that tracks the S&P 500, another set of funds for an ETF that tracks a section of the S&P 500 which I think will perform better than the overall index, as well as the last set of funds set towards individual stocks. I'll probably keep this up for a while. I want to play it conservatively and relatively simply.

(Disclaimer: I said that I was not holding XLP at the time of the publication of the article. More specifically said in the details of the agreement of publication: I was not allowed to purchase stocks I had written about within 72 hours of its publication if I said I did not own the investments I was talking about. I published that article on the 16th of February, and I entered this position on the 22nd of February.)

My best going trade right now is Credit Suisse. I'm sitting on around a 17% gain on that. I saw that it reached a second support level of consolidation, as well as a new low. After the support seemed to steady after its earnings release, and the MACD was set to converge in a bullish manner, I wanted to pull the trigger on it. Basically my thought process is that it is too big to fail, and that it has gotten recently really out of favor. It should heal over the coming year or so. Best outcome is that it'll end up like HPQ during 2012. However, I have no hesitation to lock in my profits if this thing goes really south. I'll probably cut some of the position anyways, as I found another trade I would like to open.

(Click to enlarge)

I've found a new trade in AMRI. I'll probably sell some of the SPY position and the CS position to get it in, but the reasons for why are detailed above.

Don't want to read it? The summary is that it has recently broke out of its channel in a positive manner, is about to develop a positive inverse head and shoulders pattern, and the moving averages are converging to show a trend reversal. The lower indicators haven't really shown me much, so I'm going mostly off of chart patterns and movement.

Of course, this is a trade based on technicals alone, so I'll have to set some support levels as an objective way to tell myself when the trade has gone south. 15.00 is the first support level I'll expect if it goes down and 14.75 is where I'll cut the position. Sadly, I have to be in school so I can't monitor the trade, so I might do a trailing stop, but this is still going to be a 2 week trade at least, so that likely won't be necessary. I'm hoping to see a positive trend develop.

That's everything for now. Again, classes are hard as usual, so it's hard for me to do this as much as I would like.



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