Archive through April 18, 2008

Chart Forum » Hilarius' Hall Of Fame » Our Daily Bread » Archive through April 18, 2008

«« « Previous Next » »»

Author

Message

lafee

Member

Post Number: 843
Registered: 04-2003

Rating: N/A
Votes: 0


Thursday, April 17, 2008 - 10:32 pm:

Ody,

I have greater exposure on the long side on the Dow than the short. So, I guess that is my bias ATM. But if there is a big move tonight I will make money despite the direction. The GBP strength must be looked at. There are probably more complex deals being done in the home of CFD's than in the US. One reason, perhaps, the GBP has performed poorly despite the US dollar weakness. It is for this reason a have a long equity bias tonight.

Cheers Lafee

Don't ask an academic if what he does is relevant

ody

Member

Post Number: 2370
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, April 17, 2008 - 11:22 pm:

US market threatening to slide again ...

No sooner does a really good day off the ground, or the next one threatens it again, on further bad news - and job numbers are, of course, important. The futures are not very negative, but neither are they minimally low:

http://money.cnn.com/2008/04/17/markets/stockswatch_ny/index.htm

ody

Member

Post Number: 2371
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 12:23 am:

More rubbish from the "captain"

I had not seen your PSS yet, Charlie. I am amazed how low a standard, even for you, you can sink to. Indeed, it is difficult to believe you can produce such garbage as this:
-------------------------------------------------------
PS You can tell your henchmen that I am not going away until they make sense
and
apologise to all the newbies that have been mislead in Bear Market conditions
----------------------------------------------------------

(1) I have no henchmen, could not tell them "to make sense" as though I have them in my pocket even if I wished to, etc. You obviously live in a fantasy world, at least on this matter. What I do know is that I come across few people who seem to be so incapable of UNDERSTANDING sense as you - who have so blinkered a view of the world and their own opinion of matters, without any openness to other views or any real interest in them. Your outlook is entirely dictatorial and intolerant, and it really does you no good. You may think you will succeed in intimidating people, but the opposite is the case: you provoke contempt for your posts.

(2) No "newbies" have been misled, either by me or anyone thinking or posting like me. I have received nothing but compliments from "newbies" for helping them to understand how not to lose money and to avoid unnecessary danger. Bear market conditions, for as long as they last, ARE dangerous, as many newcomers do not understand just how steeply stocks can fall, and how often individual stocks that they think they are "safe" with do NOT recover, or not for many years. Indeed, even people who have invested for years are often caught out by bear markets and lose money as a result.

It is as yet quite unclear how this bear market will actually play out, though I have ALWAYS insisted that some stocks (notably in resources) would probably do better than others, and also ALWAYS said that those who are agile and prepared to engage in short-term trading can make good money in bear markets. So it is not even the case that I have suggested that everyone ought to "stand aside", as I myself have done. It is YOU who want everyone to trade according to your ideas, whatever they are, whereas I have not in any sense attempted, unlike yourself, to impose my ideas on others, leave alone constantly harrassed and abused people. Your central idea appears to be that everyone must be in the market at all times. Well, that is your thought, and it is quite obvious that that is what you think, but it's merely what suits YOU. You have the right to say THAT, but NOT the right to shove your obsession down other people's throats, or to abuse them if they don't agree with you or don't want to do what you would like them to do. Especially if they have repeatedly made clear that they do NOT want to to what you tell them to do. We are not here to do your bidding.

ody

Member

Post Number: 2372
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 12:26 am:

LAFEE:

I am sure you have worked it all out very precisely, and I wish you good luck with your strategy!

Cheers.

ody

Member

Post Number: 2373
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 12:30 am:

SWAY

Thanks. And yes, it should be SWK! Sorry once again. I shall have a look at the others you list tomorrow. It is great to have your reactions - and so quickly, too. Well done.

sway

Member

Post Number: 219
Registered: 12-2005

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 07:53 am:

Ody
SWK doesn't quite make the list (yet) but it seems to be developing. I'd give it a borderline.

I stress that the above are only my interpretations of stocks that are in Weinstein stage 2, at this point in time. In 3 months, the conclusions could well be different. I am not recommending anything. You need to read Weinstein's book to appreciate the bigger picture. Those SD stocks NOT on the list (ie stage 4 stocks) could well be candidates for short selling. To have complete confidence in WS you need to disregard fundamentals, company statements, media etc to a large extent. Everything you need to know can be derived from the price and volume.

Sway

colin_twiggs

Member

Post Number: 3164
Registered: 09-2002

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 09:11 am:

Charles,

I do not like your jeering attitude towards anyone who does not agree with you -- and am sure that many readers feel the same. Please stay off this thread.

Regards,
Colin

rdumas

Member

Post Number: 1329
Registered: 11-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 09:52 am:

Hi Ody,

If you have read Colin's latest newsletter you will see that from a fundamentals perspective there really hasn't been much change in the seriousness of the problems facing the global economy so the real problems are still out there ready to bite investors in the proverbial at some stage. There is no doubt that our market has looked like it is making a bottoming pattern for some time and there is a fairly strong probability that we have already seen the bottom.

I can, and perhaps always have seen an argument for setting up a core portfolio for a long term strategy. Clearly in my case and yours, this would be a change from our normal medium term strategy. On this basis I respond to your post number 2366.

Re RIO and BHP I believe that they have years of solid growth ahead of them however they have always shown significant volatility in their stellar rise. So any investment in them needs to be done with the understanding that they will continue to experience drops of 20~30% into the future as they always have in the past. If you can live with that then there is no reason why they wont do well for many years to come.

I agree with your observation about the fact that there are many stocks with very strong financial health that are not star stocks. As an aside to Sway, he would have already realised from his latest analysis that on many occasions Star Stocks do not have good TA. Stock Doctor has a number of Golden Rules for investors and one of these is that the TA must be good before a stock should be invested in.

I will only discuss a couple of stocks that you mention as I have to carry out some non market activities today and hence will be away from the computer for most of the day.

The first is IPL. IPL has an excellent chart as can be seen below.

IPL's September 2007 annual report provided results that resulted in a financially 'strong' rating on Stock Doctor. Average investor returns for the last 3 years and 1 year were 122.39% and 239.06% respectively which by any measure is outstanding. It currently has a P/E ratio of 40.96 whilst the industry average is 14.19 which would appear to indicate that it is currently expensive however its PEG is only 0.24 which provides evidence that the current price is justified. Its September 2008 forecast earnings growth is expected to be 141.63% which would give it a future PEG of 0.12. Even if the earnings forecast was significantly reduced (say by 50%) it would still show IPL to be fairly prices on todays prices.

So from both a TA and FA perspective IPL is an excellent stock.

The second stock is UGL.

You may recall that both you and I have owned this stock in the past and admired the management.

Unlike IPL, UGL's chart is not a particularly good one even though it shows some promise. As can be seen from the chart below its 30 week EMA is still descending. The 4 week EMA has turned around and the 10 week EMA has flattened indicating that perhaps there may be a turn around in the wind. Weinstein recommends that you don't ever buy into a stock when it has a descending 30 week EMA or when it is trading below the 30 week EMA. For those more adventuresome souls however they would see that there appears to have been a base level support built up which hopefully would hold and assist the stock to use this base line as a spring board to greater heights.

From an FA perspective UGL is currently rated as financially 'marginal' by Stock Doctor. In fact it has been rated marginal since its June 2006 annual report. Both its ROA and ROE have dropped significantly over this period. Its average investor returns for 5, 3 and 1 year is 40.47%, 18.50% and -18.18% respectively. So you can see a declining rate of return over the 5 year period. Its forecast earnings growth for June 2008 is a mere 5.12% which would give it a P/E ratio of 14.81 compared to an industry group average P/E of 11.42 and a PEG of 2.89 all of which indicates that the stock is expensive. The 2009 forecast is slightly better but there's a lot of water to flow under the bridge till then.

So whilst the TA is bad but shows promise, the FA is pretty ordinary and not encouraging.

I hope that helps.

ody

Member

Post Number: 2374
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 10:43 am:

SWAY: Thanks

Thanks for yet more info and insight. I do know Weinstein's work and understand his approach. To my mind he is useful DESPITE some of his "anti-fundamentalist" thinking. I have found his basic scheme of stages in the development of share prices in practice very useful with stocks that I invested in primarily for fundamental purposes but ALSO wanted to be supported by market sentiment. Those are the stocks I am after. Rudy and I that way identified Imdex (onoe of Rudy's truly great finds), and I STS (Structural Systems - more erratic).

Using SD for the fundamentals and Weinstein for the T/A has often produced good results, except that SD tends to throw up stocks that are often already well and truly recognised by the market, so that you may come in rather late, from Weinstein's point of view. Indeed, this is a limit of SD: they admit as stars stocks those that already have a number of very good results under their belts. Often some of the most profitable stocks (if they "come off") are those that are "emerging" star stocks, as you can still catch these early enough, and in such a case Weinstein often works a treat in helping you to determine the right entry. However, a somewhat later entry with a stock that grows for a considerable time will still get you good money.

The idea that you must at all times invest in a stock at the very earliest time is a nonsense. There is nothing wrong with it, of course, if the stock goes well: Westfield and New were much better stocks (for an investor) when I had them years ago than they are now. But in neither case did I come in at the very beginning.

ody

Member

Post Number: 2375
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 10:54 am:

RUDY - ANALYSIS

That helps indeed. I had listed some of these stocks only VERY casually - mostly simply as a result of recent share prices - and what you show is just how little us that is, even if it helps to throw up some "possibles". No stock should be bought simply because the price is rising, I feel, and UGL looks as though it MIGHT be turning, it would be a hazardous proposition given its F/A.

I am glad that you like IPL: I can see only two reservations - that people MAY find it expensive, despite the low PEG (but it enjoys strong support), and that its fate will rather depend on where it can use its materials. HOWEVER: I think this is one to keep strongly in view. During all the time I have watched it (which has been for quite a while!)I have been impressed.

I think we should try to select a few more that may be SERIOUSLY worth considering, especially if the market were to go down a bit. Or else,those that don't seem to be bothered by the market at all! Worth CONSIDERING, I stress - neither you nor I would rush into buying without feeling a strong case exists.

I think your point about BHP and RIO is a good one: they ARE very volatile, and that is the chief thing I dislike about them. IPL has a much more consistent graph.

What if for some reason you actually HAVE to sell BHP when it is 25% down? (Not an exceptional event.)

eblode

Member

Post Number: 739
Registered: 11-2002

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 11:15 am:

Ody,

Amazingly enough I am holding a STAR SD share, SMX and it is going down,down,down,like a lead balloon. It has a great PE as well as a glorious PEG and in spite of great earnings it still is going down. I will not sell because I enjoy the pain.Must be, otherwise I would of dumped it long ago. I simply cannot believe the facts that I see. Perhaps this is why some Traders go broke.

Eugenio

rdumas

Member

Post Number: 1330
Registered: 11-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 11:21 am:

Hi Sway,

Just a quick comment about SWK before I disappear for the day. In my view SWK started into an early Weinstein stage 4 phase however the recent moves could turn this around.

The positives about the chart are as follows:

1) The stock has just broken through a descending trend line.
2) The 4 week EMA has turned and is on its way up.
3) The TMF is drifting upwards

The negatives about the chart are as follows:

1) The 30 week EMA is still falling and the 10 week EMA has only just flattened at this stage.
2) The RSI is approaching the 'overbought' level. It still has room to move before it gets to this level but when it does it will only pull the 30 week EMA into a Weinstein stage 3 or at the very best into an early stage 2 phase. I agree with your view that it is borderline as it could go either way in the next month or two.

cat_lady

Member

Post Number: 444
Registered: 10-2006

Rating: N/A
Votes: 0


Friday, April 18, 2008 - 11:21 am:

QGC is one I'd be interested in Stock Doc's analysis if anyone has the time.
I hold and am more than happy to hold

for the long term.

SWK has been a sore point of late, as I added to a month or so ago when it slipped to $1.50 only to see it go down to $1.15 (ouch) Seems to be coming back though. When I have time later in the weekend I'll add some "storyline" if anyone's interested.

cat lady

Without my morning coffee I might as well be a dog

eblode

Member

Post Number: 740
Registered: 11-2002

Rating: N/A
Votes: 0