Market Summary: The market continues to be volatile as even today the model was stopped out of DXD when the market was going up strong and then it turned around in the last hour and I picked up again some QID to offer a little hedging protection for the model, but cash is probably a lot better. The rally looked good yesterday for the DOW but failed to carry the Nasdaq or the Russell 2000. There was a rumor that the oil crises commission might recommend against a moritorium against drillers (could it be that election money is needed for November by the ruling party to retain power and who received millions from the oil companies before the last election?). DIG and oil drillers rallied most of the day on the rumor. Hamas was given $400 million today (of course none to be used for weapons) and a "photo op" handsake with President Obama. All the president of Israel got was to be ushered in through servants quarters and left sitting while Obama went out to dinner and not "photo op". That is not a very good way to treat our Isaeli friends. God promised Abraham and affirmed in Isaac that He would bless those who blessed Israel and curse those who cursed Israel - one day God will settle the score. From what I gathered the market dropped on comments from someone in Europe that was used to rile the market once again and the sell off in the last hour. Cash remains king if you were able to get there before the big drop. The DOW hit a new recent low yesterday of 9757 before rallying and needs to hold above that.
"No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffusd and Virtue is preservd. On the Contrary, when People are universally ignorant, and debauchd in their Manners, they will sink under their own weight without the Aid of foreign Invaders." --Samuel Adams, letter to James Warren, 1775"
"[W]e ought to deprecate the hazard attending ardent and susceptible minds, from being too strongly, and too early prepossessed in favor of other political systems, before they are capable of appreciating their own." --George Washington, letter to the Commissioners of the District of Columbia, 1795
CHAT SITE: The chat site is available for Poormans Investors on this website and I won't always be there, but I stop in regularly and then moderate if necessary. At this time all you need is to submit a "name" and your own password and upon confirmation of valid information - enter the room. It restarts new each day and at this time any one can access it. It has lots of "bells and whistles", etc and one of the best around. It was designed from scratch by Brad@wickett.net.
Some good looking charts (STOCKCHARTS.COM): Interesting charts: CATM, ENS, KBR (Not listed on target page)
Here are some indexes found on stockcharts.com:
$BPNYA - Bullishness chart .
$OSX - energy index chart $SML - S&P 600 small cap $SOX - Semis - usually do better in fall/winter, but nothing did good this past fall since August. $VIX - Volatility index was 33.73 at close - over 28 indicates a sign of bears trying to control the market and push it down and 24 is a positive for bulls!
Note (repeat): I waited for 5+ years for IBD/DGO to provide industry pe averages and in the process I came across HighGrowthStocks.com (HGS)which has similar groups as IBD and all the information I need for doing my ratings. It is complex software and I am just scratching the surface thanks to the help from my friend Jerry. I mostly use the industry pes from HGS, but made some adjustments or estimates in a few cases. They have 151 Industry Monitors and have given me permission to use a certain amount of their data (vice Vector Vest and IBD who allowed nothing to be used). In case you want to try it for 60 days, here is the link. http://www.highgrowthstock.com/referral.asp?id=3349
STRATEGY for using Poormans model:
1. This year we carried all 17 of the 2009 model stocks into 2010 without changing any quantities and only a little cash. If you plan on following the 2010 model in whole or in part, and haven't bought in yet, it is an attractive time when indexes maintain support over their 50 DMAs. I suggest taking your time and watch the marked stocks below and keep an eye on the nightly comments in the "MODEL TRADING STRATEGY". It is updated each evening and mostly considers stocks that are planned for any model changes. Some investors buy some of the model stocks and also some off of the shopping list. You can consider the bold/underlined prices for chart buys or pull back buys, especially if market holds and shows improvement. HOLD means I am holding the model and not considering buying until conditions improve. Chart buys (c.b.) and break out buys are very risky when the market is going down and not recommended.
2. If you allocate 50K for following the model stocks, just buy half the model quantities. If you have $10k or less, then I suggest you pick and choose 4-6 stocks and you can do that by leaning towards the ones with higher ratings (as they tend to out perform lower rated stocks) or just take the first ones that fill your orders. If my p.b. price is shown as $12.02 and it comes back to 12.10, you might want to grab it anyway if it has good upside potential. I provide near term and longer term (1 year away) targets. You can easily calculate the 1 year target (for example) by multiplying next year's estimate times the industry pe (Yahoo profile - industry - Indus pe). A full position is 6-8% of portfolio for $50k and larger.3. I am more conservative (less recommended bold buys) in front of earnings and until we see what happens in the early part of the earnings season. The non-bold prices are secondary levels of information for more aggressive traders and are considered higher risk. Be careful when buying within 2 weeks of earnings release. I tend to depend on support points and fundamentals as opposed to an "8% stop" for example. If you have had success with them and market looks weak - then go for it. Some times I use a stop when a stock has hit my target area and I want to lock in profits, but mostly I have mental stops (reviewed at end of the day). Trailing stops also work well for stocks that ran up hard like BOOM and a favorite of momentum players.
Stk = Stock; Rtg = rating; #Sh = # shares purchase(d); Purchased Price Initial(in model); Sup = Support; C.B. = Poormans Chart Buy (new high or PB); P.B. = pull back; investors Fair Value targets (near/long term); Loss (courtesy 8% sell); Industry PE average; Analysts Estimates: c.yr = calendar year; n.yr = next year; Earn date = estimated report date. Favored trades for new investors to consider: bold. (limited buying interest in front of earnings).
NOTE: Annual Estimates changed since the last update are shown with an underline. Bold => up. Bold numbers are first consideration for possible buying. Target calculations for any Industry pe over 40 are adjusted to 40 maximum. * Targets are based on INDUSTRY AVERAGE from HSG (highgrowthstocks.com). Add 10% if #1 in their SECTOR. * Earn date watch: when they are expected to report within 2 weeks and buying is very risky. * Days short interest (ref: HGS). Red/flag: 4.0 days or greater - updated 6/1 a/o 15 May monthly reporting. * HGS targets/ratings sent out 6/2(a few differences with this list - priority to these targets first). * 5/29 Updated ratings. 6/09updated buy points and some earn dates. 6/15 UPDATED Anal. Estimates. * Targets come from stoxline.com - last updated 6/09.
MODEL 2010 PurchBuy Pts Targets DAYS Anal Est Earn Stk Rtg #SH Price Sup C.B. P.B. Near Long S.I. c.yr n.yr Date
Poorman$ information is obtained from data sources which I believe are reliable; including Highgrowthstocks.com, Quicken, Yahoo and Stockcharts.com. I am not a broker nor do I provide specific investment BUY/SELL advice to individual subscribers; rather, I am only authorized to provide information to assist individuals to make their own investment decisions. However, I am a registered Investment Adviser licensed in the State of Idaho. Past performance is no guarantee of future success. No retransmitting of this update is authorized without permission from the author.
NEW SUBSCRIBERS ONLY: Just tell me "checks in the mail" (or soon will be)and I'll provide a password and add you to the distribution list. SUBSCRIPTION :$65 Subscription fee for 3- month (MAY - AUG 10) based on $25 per month; OR $115 for up to 6 months to end of OCT 2010. (Includes $10 credit for family vacation time for 3 month or more subscriptions/renewals.)
Mail check to: Bruce Brotnov, 1111 Richardson Ave, Lewiston, ID 83501
