Monday, December 28, 2009
Saturday, December 26, 2009
2010
* Employment should improve
* Interest rates = Fed might keep rates down for first part of year, till employment recovers. The Treasury needs to refinance $2 trillion worth of short-term debt in 2010, in addition to $1.5 trillion of new debt. That's a recipe for higher interest rates. TLT has been falling like rock from $119 in Dec08 to $89.9 in Dec09 = 25% drop. Because of anemic interest rates, tonnes of side liners are being forced to clobber up bonds, high quality stocks, dividend paying stocks, xlu, ....
* Inflation should rise before fed will raise interest rates.
* Home depot/ Lowes will benefit from Obama's handy man tax credit plan
* Real estate = mortgage rates continue to remain low.
Fed extended first time buyer credit to Apr 2010. Fed is expected to pull out of mortgage business in 2010. Fed is expected to stop backing up mortgages in March 2010. This should prices of mortgage backed securities by a lot! Jim cramer/ Warren Buffet is getting interested in real estate. It might be really good time to buy.
* Some of TARP money has been returned. What is impact on future debt now? How will US pay off debt?
* Double dip = several pundits expecting first half of 2010 good but second part bad.
* What is impact of Health bill on Health insurance companies?
I am tempted to invest as follows:
Stocks:
PFE: chatter on pharmas valuations
New York Stock Exchange: Focusing on growth, CFR talked about it
HD: Obama incentives for home repairs
Germany: stabilizing economy - bill gross likes fiscal policies
icf: recovery
vbr: lagged others in 2008
eem: where growth is
* Interest rates = Fed might keep rates down for first part of year, till employment recovers. The Treasury needs to refinance $2 trillion worth of short-term debt in 2010, in addition to $1.5 trillion of new debt. That's a recipe for higher interest rates. TLT has been falling like rock from $119 in Dec08 to $89.9 in Dec09 = 25% drop. Because of anemic interest rates, tonnes of side liners are being forced to clobber up bonds, high quality stocks, dividend paying stocks, xlu, ....
* Inflation should rise before fed will raise interest rates.
* Home depot/ Lowes will benefit from Obama's handy man tax credit plan
* Real estate = mortgage rates continue to remain low.
Fed extended first time buyer credit to Apr 2010. Fed is expected to pull out of mortgage business in 2010. Fed is expected to stop backing up mortgages in March 2010. This should prices of mortgage backed securities by a lot! Jim cramer/ Warren Buffet is getting interested in real estate. It might be really good time to buy.
* Some of TARP money has been returned. What is impact on future debt now? How will US pay off debt?
* Double dip = several pundits expecting first half of 2010 good but second part bad.
* What is impact of Health bill on Health insurance companies?
I am tempted to invest as follows:
Stocks:
PFE: chatter on pharmas valuations
New York Stock Exchange: Focusing on growth, CFR talked about it
HD: Obama incentives for home repairs
Germany: stabilizing economy - bill gross likes fiscal policies
icf: recovery
vbr: lagged others in 2008
eem: where growth is
Tuesday, December 8, 2009
TLT Charting
12/26: TLT is clearly in down trend, that too big time. Fibo shows that TLT could touch $70 in next year or two. AVOID TLT even if it looks "easy" to buy. All indicators are pointing downwards.
Strategy: We are in 2-3 leg down, wait for price to reach ~$86 level, sell 6month-1year put for same price, as wave 4 &5 will bring price back to same levels.
Overall avoid urges to buy TLT yet!
Strategy: We are in 2-3 leg down, wait for price to reach ~$86 level, sell 6month-1year put for same price, as wave 4 &5 will bring price back to same levels.
Overall avoid urges to buy TLT yet!
Saturday, December 5, 2009
GLD Charting
GLD Charting:
wave theory reversal to uptrend happened at 68.81.
Based on 68.81->98.99 1st leg up move, We have reached first fibo peak @ ~118, Wave theory Pt3 reversal happened. GLD should fall to ~100
If GLD falls below 98.99, it has broken the trend, get out!!
Other wise buy more around $100 range. It should go to $145 in next wave (which will be final wave)
Thursday, December 3, 2009
DCA studies
* DCA requires lots of patience. Strategy is to keep buying no matter what market is doing & MUST sell all at the place you think is top. best is to keep buying small amounts in distressed assets. wait for 3-5years & then sell when asset class recovers. this is similar to buy low sell high strategy except DCA gives a better place to stash your cash.
* it doesn't help to time getting in & out long term returns are same as keep dca'ing & waiting to sell lumpsum at peak
* when to start dca in particular class - look at monthly returns through out the year of a class & decide on when to put lumpsome in play.
DCA when you bought at high price might help you recover your money faster, but don't deploy DCA for ever esp when markets are high.
* accademia is correct that you can't time the markets, so its pretty hard to say when you are at peak or valley
Here is data I ran & found SPY hardly made any money for last 16 years. Pundits will argue that you should do it with asset allocation, doesn't work either. They will recommend international should have been part of your port. Investing in internationals became popular only in 90s/00s
ROR from Jan - 93 till date held
ROR from Jan - 93 till date held
December-93 9.13%
December-94 2.94%
December-95 20.39%
December-96 21.01%
December-97 24.84%
December-98 25.90%
December-99 24.68%
December-00 16.94%
December-01 11.06%
December-02 4.60%
December-03 8.07%
December-04 8.46%
December-05 7.99%
December-06 8.83%
December-07 8.41%
December-08 2.23%
December-09 4.50%
Look at EFA after huge run, returns are near 1% if you kept buying in 2005-7 after runups in 2008!
December-01 2.5%
December-02 -13.7%
December-03 23.1%
December-04 27.6%
December-05 23.9%
December-06 25.1%
December-07 21.7%
December-08 1.0%
December-09 9.4%
FFNOX, buying at lows was good but should have sold at high!
December-99 85.48%
December-00 -6.94%
December-01 -7.78%
December-02 -12.08%
December-03 3.46%
December-04 5.96%
December-05 6.20%
December-06 8.36%
December-07 7.85%
December-08 -1.78%
December-09 2.73%
Here is rolling DCA returns for large number of portfolios. In this study, I assumed investment of $1000 per month from Jan of particular year till date (Dec5, 2009). Investments are made at end of month prices.
I added returns from Madsinger as well, not sure if methodology used by madsinger matches with mine or not. Anyhow, here are results:
* it doesn't help to time getting in & out long term returns are same as keep dca'ing & waiting to sell lumpsum at peak
* when to start dca in particular class - look at monthly returns through out the year of a class & decide on when to put lumpsome in play.
DCA when you bought at high price might help you recover your money faster, but don't deploy DCA for ever esp when markets are high.
* accademia is correct that you can't time the markets, so its pretty hard to say when you are at peak or valley
Here is data I ran & found SPY hardly made any money for last 16 years. Pundits will argue that you should do it with asset allocation, doesn't work either. They will recommend international should have been part of your port. Investing in internationals became popular only in 90s/00s
ROR from Jan - 93 till date held
ROR from Jan - 93 till date held
December-93 9.13%
December-94 2.94%
December-95 20.39%
December-96 21.01%
December-97 24.84%
December-98 25.90%
December-99 24.68%
December-00 16.94%
December-01 11.06%
December-02 4.60%
December-03 8.07%
December-04 8.46%
December-05 7.99%
December-06 8.83%
December-07 8.41%
December-08 2.23%
December-09 4.50%
Look at EFA after huge run, returns are near 1% if you kept buying in 2005-7 after runups in 2008!
December-01 2.5%
December-02 -13.7%
December-03 23.1%
December-04 27.6%
December-05 23.9%
December-06 25.1%
December-07 21.7%
December-08 1.0%
December-09 9.4%
FFNOX, buying at lows was good but should have sold at high!
December-99 85.48%
December-00 -6.94%
December-01 -7.78%
December-02 -12.08%
December-03 3.46%
December-04 5.96%
December-05 6.20%
December-06 8.36%
December-07 7.85%
December-08 -1.78%
December-09 2.73%
Here is rolling DCA returns for large number of portfolios. In this study, I assumed investment of $1000 per month from Jan of particular year till date (Dec5, 2009). Investments are made at end of month prices.
I added returns from Madsinger as well, not sure if methodology used by madsinger matches with mine or not. Anyhow, here are results:
| Return Since | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| XLF | -7.73% | -8.60% | -9.50% | -10.99% | -12.88% | -14.10% | -14.80% | -12.22% | 1.94% | 64.05% | |
| FSNGX | 8.07% | 7.90% | 7.67% | 5.68% | 1.62% | -2.71% | -5.55% | -6.98% | -1.55% | 35.36% | |
| ICF | 6.19% | 4.97% | 3.59% | 1.64% | -1.11% | -3.35% | -4.60% | -1.59% | 13.77% | 90.46% | |
| Hot Hands | 10.87% | 8.27% | 5.46% | -3.70% | 20.75% | ||||||
| SPY | 1.02% | 1.46% | 1.60% | 0.92% | -0.39% | -1.23% | -1.90% | -1.05% | 8.40% | 46.18% | |
| XLU | 4.92% | 5.19% | 5.70% | 4.89% | 2.58% | 0.09% | -1.67% | -3.43% | 1.06% | 25.43% | |
| EFA | 5.44% | 4.34% | 1.96% | 0.21% | -1.50% | -0.70% | 10.93% | 56.77% | |||
| VFINX | 0.63% | -0.31% | 1.70% | -1.24% | 24.07% | ||||||
| ffnox | 2.77% | 3.17% | 3.21% | 2.53% | 1.27% | 0.47% | -0.28% | 0.40% | 8.95% | 41.49% | |
| Newsletter G-IND | 2.89% | 3.26% | 4.27% | -0.19% | 28.30% | ||||||
| Sheltered Sam | 5.27% | 4.35% | 4.66% | -0.11% | 26.69% | ||||||
| LS G | 2.64% | 2.05% | 3.35% | 0.25% | 23.35% | ||||||
| Newsletter G | 7.68% | 3.56% | 5.14% | 1.10% | 30.10% | ||||||
| Newsletter CG | 5.67% | 3.32% | 4.35% | 1.16% | 25.30% | ||||||
| Newsletter Inc | 3.43% | 3.53% | 3.30% | 1.32% | 20.80% | ||||||
| OAKGX | 9.16% | 8.34% | 7.52% | 6.12% | 4.04% | 2.77% | 1.63% | 2.66% | 14.17% | 56.57% | |
| LS MG | 3.50% | 3.09% | 3.86% | 1.76% | 19.74% | ||||||
| XLV | 2.43% | 2.34% | 2.16% | 1.82% | 1.71% | 1.81% | 2.94% | 10.93% | 37.62% | ||
| s&d | 5.98% | 5.16% | 5.58% | 1.84% | 23.60% | ||||||
| 3 fund | 3.79% | 3.40% | 5.08% | 2.32% | 24.51% | ||||||
| STAR | 5.22% | 4.38% | 4.79% | 2.46% | 23.40% | ||||||
| LS CG | 4.05% | 3.74% | 3.96% | 2.83% | 17.11% | ||||||
| coffeehouse | 5.89% | 5.47% | 5.24% | 2.88% | 18.44% | ||||||
| FGBLX | 6.83% | 7.25% | 7.23% | 6.62% | 5.39% | 4.56% | 3.80% | 4.00% | 9.92% | 33.55% | |
| Wellington | 6.00% | 5.70% | 5.84% | 4.28% | 21.75% | ||||||
| oakbx | 7.62% | 7.06% | 6.80% | 6.27% | 5.42% | 4.94% | 4.32% | 4.06% | 7.74% | 27.13% | |
| QQQQ | 4.54% | 5.42% | 4.85% | 4.09% | 4.12% | 4.40% | 5.84% | 16.92% | 53.34% | ||
| Wellesley | 5.94% | 6.04% | 5.45% | 5.42% | 16.04% | ||||||
| PRPFX | 10.35% | 10.34% | 10.10% | 9.65% | 9.21% | 9.05% | 8.76% | 9.50% | 13.29% | 31.56% |
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