November 08, 2009 –
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RELATED TICKERS: GLD
, SLV
I'll start by mentioning that this weekend was the Students for Liberty Conference at Harvard. I was lucky enough to be accepted to attend and hear some interesting talks about liberty, what it means, and why we need to make sure that those of us in the U.S. (and everywhere for that matter) should continue to implore to our leaders that our most agreed upon civil and economic rights continue to exist and be protected. Peter Schiff spoke and I got the chance to meet him. He was a pleasure to talk investing and economics with, and seemed like a down to earth person in general. I wish him the best in his 2010 Senate run, and hope everyone that has the chance to vote in the state of CT finds out who he is and what he stands for. His Senate campaign site has been under cyber-attacks over the past few days, so please be patient with the link and try again later if it does not work right away. [more]
September 27, 2009 –
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RELATED TICKERS: CHK
, EME
, JOYG
There was a minor snag in my data collection for CAPS/MFI Tracker last week, so uneventfully I think a day or two of data was lost. No harm done, I just decided to skip a weekly update so I could take the time to correct the issue. Judging by the sector breakdown, and comparing it to earlier this year, it appears the Capital Goods, Basic Materials, Energy, and to some extent Technology and Healthcare sectors are still the place to be in U.S. markets, but the CAPS community bullishness has faded slightly to a moderate bullishness. It is now somewhat bearish on Services and Consumer Cyclical. Financial stocks are eliminated from the MFI screen, so are left for debate outside of this analysis. I particularly think those are a gamble, but have heard short-term (1-2 year) recommendations to hold Financials from the likes of Marc Faber, so suit yourself on that bet. Speaking of Marc Faber, I'm just finishing up his book, "Tomorrow's Gold, Asia's Age of Discovery" written in 2002, and he is remarkably accurate in predicting the tremendous swing up in commodities and Asian stocks, as well as predicting the massive deflationary interruptions that would occur. His view seems to be that Asia is going to lead the way through the rising half of a commodity cycle that will likely last through 2025 or so. It's not all such a sunny picture though. I'd highly recommend reading this book, as well as "Economics in One Lesson" by Henry Hazlitt, which I've added to a reading list section on the site. I'll throw in a Marc Faber video here. [more]
August 23, 2009 –
This isn't complicated at all. Between healthcare, cash for clunkers, the housing bubble, the bailouts, and stimulus 1.0 and 2.0, there is one common thread... federal diversion of consumer capital. This diversion is created in different ways, but the outcome is always distortion of demand, and violent corrective forces from what little remains of a free market. [more]
August 03, 2009 –
Regardless of whether 100 stocks is a large enough selection to use CAPS scores as an additional discriminant, the top 100 stocks (as determined using a Magic Formula equivalent method) have been strongly outperforming the S&P 500 since August of '08. Although the U.S. Dollar Index is still higher than it was in August 2008, I think market outperformance for the Capital Goods, Energy and Basic Materials sectors, inversely correlated to the U.S. Dollar, will now drive this performance. Up to this point there has been a modest recovery in some of the Service sectors, but as the U.S. Dollar Index continues to fall, U.S. Service sector and Consumer sectors cannot perform well. This belief is further supported by the belief of well-rated CAPS members, showing a preference for Capital Goods, Energy, and Basic Materials sectors over the Consumer Cyclical and Non-Cyclical sectors. [more]
July 19, 2009 –
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RELATED TICKERS: FUQI
, VQ
, MTXX
I'm still updating the performance charts at CAPS/MFI Tracker every weekend. I decided to investigate why 3-stars have outperformed 5-stars by so much over the last 4 months, and I have no satisfying answer. The short term fluctuations have favored 3-stars more heavily on the way back up since March, so I sifted out which stocks were contained in the $100M monthly portfolio and checked their performance during these last few months. The performance of individual stocks, contained by each portfolio for a unique period of time, has had an enormous spread since March, ranging from -50% return (MTXX) to 400% return (FUQI). I was hoping to see a particular sector performing better, or maybe a few outliers that could have thrown the numbers towards favoring 3-star stocks, but instead I get the sense that with a subset as small as 100 stocks, there is no rhyme or reason to these performance differences in such a short period of time. [more]
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