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Monday, August 3, 2020

   We continue to publish our findings on the best stocks to own based on the value principles of Benjamin Graham and Warren Buffet, but these are being ignored in favor of momentum based on whim alone.

   As published in The Credit Strategist August 1, Michael Every of Rabobank piles on: “[A]s repeatedly stressed of late, markets are, almost across the board, totally divorced from reality. Facts no longer matter to them as if t hey were not facts.”... may think we can all hide from fundamentals, but fundamentals are nothing more or less than truth, and in the end everything comes down to truth.

   So what to do? Go with momentum strategies until the economic bubble pops, the nationalization of industry subsides, and the currency manipulation ends. It may take a while.

Monday, July 27, 2020  

   We have made an analysis of the methods and strategies described in the books "Rule 1 of Investing"1, "The PowerX Strategy"2, and Hedgeye.com. With the demise of value investing, we must investigate the new paradigm of momentum investing. In future weekly commentairies, we will explain what is going on and what to do about it, with a strategy combining all these inputs.

(1)   https://www.turnercapitalinvestments.com/

(2)   https://www.rockwelltrading.com/

Monday, July 20, 2020  

   We are holding comments while investigating the implications of the economy being distorted by governments worldwide. It may be impossible to predict stock market trends with certenty.

Monday, July 13, 2020  

    We are holding comments while investigating the implications of the economy being distorted by governments worldwide. It may be impossible to predict stock market trends with certenty.

Monday, July 6, 2020  

   We are holding comments while investigating the implications of the economy being distorted by governments worldwide. It may be impossible to predict stock market trends with certenty.

Monday, June 29, 2020  

   You know, these value stocks represent the few companies that have retained their financial balance through all the chaos of this year. As others have said, investors have thrown investing to the winds and are gambling with momentum and buying the latest craze. Well, we can't fight the market and have to stay with the herd for now. But, when you're ready to invest for the long run, consider value.

   For now, we are moving to Very Cautious; selling puts and calls out of the market as we near the giant drop many are predicting. However, a new trillion dollar paper money gorge before the election would boost prices even further. Keep on your toes in the daily ping pong game.

Monday, June 22, 2020  

   OK, here is the list of value stocks. But, it seems that nobody wants to invest for the long run. After all, the future is unpredictable and without confidence. If you want to invest in solid companies, look no further. If you want to speculate and go for quick profits, good luck!

Monday, June 15, 2020  

   Once again, we take a hiatus this week. Flying blind, we hesitate to make an observation or a prediction. We are studying the principals of RockwellTrading.com

Monday, June 8, 2020  

   You know, our List is that of the most balanced companies and therefore are Value stocks. So far this year, only Momemtum stocks are gaining price because of te extreme volitility. What to do? Wait and let your portfolio shrink? Or, go with the flow? The Rule 1 of Investing book we recommended is for Momentum investing, albeit one week at a time. Of course, we try to apply Momentum primcipals to Value, but you would still have to sit out the market because there are so few stocks to own.

   Lately, we are looking at the RockwellTrading.com PowerX Momentum strategy. It looks very promising and we shall have an analysis in the near future.

   Meanwhile, the New Orleans Investment Conference, the premier educational gathering of Qualified Investors, may or may not be held again this year at the end of October. We will keep you posted.

Monday, June 1, 2020  

    We are going to take a psss on this week. The riots, virus, feds, and wild economy make it difficult to draw any conclusions. Let's just wait it out.

Monday, May 25, 2020  

   Another fearful week in a sick economy. Thankfully, the volitility is taking a breather. The commentaries generally agree that a big drop is coming, so keep you finger on the trigger and sleep with one eye open. The Fed seems to want to keep the stock prices up at January levels, but when the free money to the unemployed and small businesses run out in another month, confidence might drop hard. For now, we are more long than short.

   Our list of balanced companies has grown this week These are, of course, value companies, and many think value is moving ahead of momentum.

Monday, May 18, 2020  

   The list of the most balanced companies is back! Notice that the list of companies with good financials is getting very small. But. we feel a bit more optimistic this week because the economy and the market is more stable. Teetering, but stable. That means we can better predict which stock prices will increase or decrease.

   Our equity in the last two weeks got well squeezed because we were trying to stay ahead of the ups and downs by selling calls and puts, trying to maintain a neutral position. If the stability holds, that will not be a problem. We will also be more conservative by staying further "out of the money".

Monday, May 11, 2020  

   The market continues to rise for no reason beyone sentiment and hope. This makes our value analysis moot until the ignorant volitility calms down. Therefore, we do not update the analysis this week. You may observe the figures from last week. That may be after the enevitable crash of assets and the dollar. One can only guess whether the market goes up or down each day.

   That being said, we are making slight profits through selling options, staying neutral on each stock by covering with another option if the stock rises or falls. This soaks up capital but makes a profit nibble on each transaction.

Monday, May 4, 2020   

   Don't take Buffett's advice! His message Saturday was to hold and wait for the price to come back up, but he is doing just the opposite. By selling a lot of stock, he is gaining capital for a big buy when companies go broke for need of loans. You should do the same.

   We took his same advice at the Great Recession, holding leveraged value stocks as they dropped. Can you say "value trap?" Having to cover at the lows, we were not in a position to ride the recovery. He made very profitable loans to distressed companies in the form of warrents. Keep in mind that he is going to eat well no matter what the market does. "Trick me once, shame on you. Trick me twice, shame on me."

Monday, April 27, 2020  

   Sure, stock prices are up and everyone is optimistic. "We'll soon be open again!" On the other hand... The big bad news is yet to hit. Remember people, the bubble is burst. The debt is a lead weight on the leg of production. More pundants are predicting another Great Depression than renewed prosperity. Stay agile.

   However, my 94 year old aunt said today that America always prevails. Did they say that about Rome?

Monday, April 20, 2020  

   Still, our analysis is meaningless because stock selection and price are motivated only by the uncertain future and government interference. What do do? Again by the book, be long what's going up. In that light, we include in the List, stocks that show green in the Safe Zone as well as those we find solid. Curiously, those solid have none in the green Safe Zone.

Monday, April 13, 2020  

   We still cannot predict up or down. Some   analysts believe we will recover as we come out of the virus danger and some that a Great Recession or Depression is imminent. For out strategy we try to maintain a neutral balance; selling puts and calls as the market and individual stocks rise and fall, each producing a premium. We can't give you a recommendation on trades because they must be done each day. However, maintaining long gold (GLD) has been a winner.

Monday, April 6, 2020  

   I am very sorry. This stock analysis is not useful while the markets flail wildly on panic fears. We must wait until normal trends and emotions allow superior company management to be rewarded.

   Stay tuned for next week

Monday, March 30, 2020  

   I am very sorry. This stock analysis is not useful while the markets flail wildly on panic fears. We must wait until normal trends and emotions allow superior company management to be rewarded.

   Stay tuned for next week

Monday, March 23, 2020  
   What a week! Almost all our options expired Friday leaving almost no stocks in the portfolio. There remains 3 month treasuries (VGSH); British Pound (POU.AX); gold (GLD), and silver (SLV). Some stocks skipped the liquidation, but they will be sold today with options. I know, these were not part of the plan, but they were profitable. Our list of worthy stocks, by the way, is invalid during this turmoil; everything is down and the new quarter's report will probably re-classify them all.

   We planned to stop our in a bear market with a 5% loss in each stock. But, the drop was so  quick it zoomed past the stop. So, we are down 16% for the year to date compared to the Standard & Poors 500 (SPY) at 29%

   So what to do? Follow the plan and wait to buy when the market crosses back into the green zone. Cash is king. There could be a quick recovery, so be alert and ready to buy. Or, there could be a long recession/depression. For this, consider that with a predictable return: agriculture, long term leases with government or essential companies, gold, silver, and essential companies. What's essential? Toilet Paper! Kimberly-Clark (KMB).                                                      Stay Healthy!

Monday, March 16, 2020  
    We now sit with negative exposure. If you have been following the plan, you should have stopped out, too. If the market continues to drop, you can wait for the buying trend to begin. Regrettably, the plan was to stop out gradually with about a 5% loss, but because prices dropped so quickly, we could not keep ahead of it, so we have a greater loss. If the prices should jump back as quickly, we will be behind the increase and probably not reach the previous heights. If the continue to drop, we could wind up with a profit. Remember, the goal is to be out of the market while it is down, not waiting years for it to get back.

   Yes, these listed stocks are way down, but they still are the best of the field based on fundamentals.

Monday, March 9, 2020
   It looks like there will not be a snap-back return to February price levels. In fact, it looks like the beginning of the recession 20% or more drop. Hopefully, you have been following the plan to stop out at about a 5% drop and are now almost all cash. If not, it not too late. If there is a snap-back, buy as prices rise into the safe zone.

   I was at a computer dealer conference this past week. The major topic was Ransomeware, the taking over your computer by someone asking for money to release it. The best defense against this is to have several backup copies of your computer files with previous dates. Then, restore the computer completely with the latest backup that was not taken over. There are many programs that do this. We use Laplink DiskImage and Cloudberry Bare Metal. There are others for larger systems.

   That should be the last airline trip until the virus vaccine is available.

Monday, March 2, 2020
   What can we say? It's been a disaster and may jump back up and may drop like a rock. What to do? Follow the plan. Sell when the Safe Zone band is lost and buy when the price climbs back above it. There is a problem. Should you buy back immediately if there is a sudden turn around, or wait the two weeks? This commentary will be short this week because we are in a conference in San Antonio. Travel this week is an acceptable risk but next month will probably be not.

Monday, February 24, 2020
   The week was a bummer and our gains for the year were wiped out. 'Barrons' suggests the bull market is intact and should rebound. It looks like the drop was the reaction to the virus hurting commerce and production. If it is the beginning of a general decline our stop-loss setting should limit the pain. Several of our stocks hit this line this week; notably luxury goods.

   Now with the treasury real yield below inflation and contango popping several times, we must be even more worried about the Big Drop. On the other hand, many are predicting the treasury nominal yield dropping below zero. We are holding our bonds a bit longer waiting for a further price increase. Then what? Hard assets: gold, agriculture, minerals, and commodities.

   Regarding electric vehicles, we believe Tesla will only be one of many and therefore not worthy of its extreme valuation. We attended an EV ralleye in Germany last September where every car manufacturer participated. They were all in production and looked very good. There were even delivery vans and busses.

Monday, February 17, 2020
   The saga continues, except we now must factor in the possibility of a pandemic. That means, for investments, for now, get out of vulnerable companies and gather some cash. Personally, stock up on products you will need that are made in China, lots of food in case you need to isolate, and products to live off grid for a while.
You may wonder how we started this web site. Many years ago, someone at a AAII meeting presented the Buffett method of picking stocks using discounted future projection. Until then, we were modestly affective in using intuition, but now we had an analytic system to predict future success. Exploring it to the fullest, we extablished the web site Buffett.com and offered a service to analyze your stock picks to show the company quality. It got nowhere, probably because there was no marketing. We used it for years with some success, but it always seemed that the 'herd' didn't care about quality and seemed to be randomly finicky, although we believed the long run would prove out. That was fine until the Great Recession. Buffett kept saying all would recover and we doubled down as the prices dropped. Until we were forced to cover with a hugh loss. Now, I see that Buffett could afford to wait, but smaller investors could not.
Hence, with the revelation from "Rule No. 1", that problem is explained and dealth with, and we put up this web site to show the light.

Monday, February 10, 2020
   Well, the bear market big drop didn't happen. Yet. We hanged in there because none of our investments hit the stop point; but were close. Incidentally, more than our picks here, we buy  ETFs, metal, bonds, and stocks that are recommended in 'Barrons', as long as they remain in the green zone.

   When I say 'buy', I mean 'sell put'. Then, if we are assigned the stock, we 'sell call'. Some have no options, so we buy the stock.

   So far, this system is working very well. We'll see what happens in the abyss.

Monday, February 3, 2020
    Here we sit on the fence; the bull resumes after the virus scare is digested, or the apogee of the bull market and finally the inevitable recession. We lost about 5% and closed several positions that dropped below the stop. Remember, even if the market moves back up, we can't buy those back for two weeks. Now is not the time to put more money into the market.

   At some point, investors will start to factor in the possibility that one of the communist candidates will win the white house in November. If we recover from the virus danger, that might trip the turning point. Keep that in mind.

Monday, January 27, 2020
       A tough week, dropping enough to retrace the last two weeks. Many say it was because of the virus scare with money transferring to bonds. If so, the stock prices should recover. If not, it may be the start of a significant drop. What should you do? Perhaps not increase exposure more for a while and wait. We should be protected by the automatic stops, but that would still be a big disappointment. Bonds, no way. Gold, perhaps. Oil, not yet.

Monday, January 20, 2020
        And the beat goes on. We remain fully invested and will do so as long each stock's price remains above the Safe Zone, in green. But, as soon as the price drops, we will sell.

   Again, the lines of buy and sell are described in the book, "Rule 1 of Investing". To summize, we use the Bollingerbands using a 200 day moving average and a standard deviation of 1 over a 1 year range.

Monday, January 13, 2020
    We had a great week. Does this mean the bubble is about to burst? Should we ride the wave as long as possible? That's what we're doing.

    I must admit that we are investing in other stocks and ETFs that are in the green Safe Zone. That is working pretty well. Perhaps that's all you need to know. Of course when the market turns down, there will be no green. We are also mostly using the sale of puts to go long. If you do that, watch that you don't bite off more than you can chew.  

Monday, December 30, 2019
   Yawn. The week between Christmas and New Years. Where are all the investors? Partying. But what better time to drop the bombshell on the upper middle class; SecureAct, taxing 1/3 of IRAs and 401(k)s. Albeit over 10 years, but just in time to continue Social "Security". I'm referring about the abolition of the "Stretch IRA" that many hoped to pass on to their grandchildren. Submitted to and passed by Congress in one week, but they had to do it. Some are suggesting that next will be a tax on Roth IRAs. Happy New Year!

Monday, December 23, 2019
    Yes, there was some tax selling. However, most investors are very hopeful for the coming months. We stay fully invested, but you see how few the number of companies that qualify for our screen. In the past it was thirty or so; the number gets smaller.

   The same factors that show the companies with the best prospects can also be used for any small business. Everyone should strive to fit the narrow qualifications to operate at the maximum efficiency. Try it; pick a local small company, analyze it, and see how it could improve.

Monday, December 16, 2019
     Don't expect a December loss sale. There were few losers this year. Further, with all the good news, it looks like increasing prices  until the end of the year. However, the coming election might bring caution, with the slowing economy. We shall see.

   It was a big job to view all the thousand booths at the International Workboat show. A workboat can be one for comercial fishing, oilfield servide, tourism, or military. As always, the show was a success offering meeting old friends seeking new and innovative products. Autonomous tug boats anyone?

   Upon seeing the variable-pitch propeller featured by a Norwegian company, the question popped up, "Why isn't everyone using it?" Airplanes had it in the 1930s and the company said one boat saved a couple million dollars in fuel cost; the payback time is one to one and a half years. Asking a couple of naval architect friends, they said most boats stay at the same speed for the entire journey. It also may be that adding cost to a boat might put it out of reach and the profits are great enough to ignore fuel savings.  Operators may also be afraid of change and extra maintenance.

Monday, December 09, 2019
     We are trudging on to Christmas like to Polar Express. Everyone is banking on the Santa Claus rally and hoping it keeps going into next year. However, there are mixed results and anticipation of Black Friday reports. Will this be a strong retail season? Are online sales so strong that it shows brick-and-mortar stores are doomed? Stay tuned.

   Our belief is that the market continues to rise, albeit slowly.

Monday, December 02, 2019
     Of course a slow holiday week. The optimism continues with a growing fear of a big drop. As noted in Barrons, investors are plotting the odds of a Democrat win in the presidency and congress. Overall, mathematics tells us there will be a giant crash sometime in the future. Don't miss it! Keep Pearl Harbor in mind!

   Our program is paying off nicely. Let's see when the market sours.

Monday, November 18, 2019
Last week saw the 45th year of the New Orleans Investment Conference. Whereas the new competing MoneyShow conferences are aimed at upper middle class, the New Orleans show still draws the billionaires and "acredited investors". Those are with 1 million dollars free or earning 200,000 per year. However, it may be that the competition is having some effect. Or, it may be that the most important figures on today's scene are laying low due to the impending election and recession. The conference, as usual concentrated on mining and the gold industry. A new wrinkle this year was the cannabis potential.  We shall see. Fortunately, there are always new opportunities to keep us optimistic.

   The outlook for this week is looking up and optimism reigns. How much of that is seasonal?  Ok, let's go all in with momentum this week. But only those companies with solid fundamentals or the broad market funds.                                                                                                                                                        Monday, November 11, 2019
  We attended the national Pool & Patio Conference for swimming pool professionals today in New Orleans. The expo was smaller than in years past, as are many these days. Notably absent was Pool Corporation (POOL), the largest worldwide distributor with a majority of the market, even though they are locally based. This has happened in other industries and changes back and forth. Could it be that they need to save capital? Or have they such a market lock that that they needn't be bothered?
   The major emphasis was above ground pools and spas, probably because the cost is much lower than permanent concrete, but much was aimed at producing a backyard landscape environment. Nevertheless, as always, there were a number of innovations.
   SolarAttic.com has devised a lightweight house attic radiator to transfer heat to the swimming pool through water pipes. Only $15 per month is needed by the electric pump.
   Fafco.com offers a rooftop electric solar panel with water tubes to heat the pool and produce electricity at the same time. This saves space on the roof.
   FAICWatersports.com sells a full dry face swim snorkel for unabstructed viewing.
   NikuniAmerica.com displayed a glass bathtub full of air micro bubbles in water that clean out your skin pores like an untrasonic cleaner. However, the bubbles are pump produced.
   Although most of the guests were tradesmen, we didn't see anyone wearing a business suit or even a tie; not even the salesmen. Welcome to the new millenium. The conference is only held in New Orleans every few years, so we will compare the next one then.

   The outlook for this week is again mixed and the consensus is confusion. While there is a slight positive bias in the market, we advise committing only 15% of resources positive.

Monday, November 14, 2019
The outlook for this week is mixed and the consensus is confusion. While there is a slight positive bias in the market, we advise committing only 15% of resources positive.