Bucket #1 - Every international conglomerate is saying infrastructure is booming but the infrastructure stocks continue to be ignored (we touched on this yesterday in Infrastructure Stocks Still not Understood or Appreciated) So how can every multinational talk about how great things are in infrastructure but these stocks continue to trade listless? It makes no sense, and the charts of these names are finally starting to firm up - I added to Chicago Bridge & Iron (CBI) yesterday - I am going to add more to these stakes
- Chicago Bridge & Iron (CBI)
- Jacobs Engineering (JEC)
- Fluor (FLR)
- Foster Wheeler (FWLT)
Bucket #2 - it is ridiculous I am buying these stocks but the herd believes so I don't want to be left in the dust if the "early cycle" hoax continues
- Homebuilder Lennar (LEN)
- Homebuilder DR Horton (DHI)
Bucket #3 - things I actually like
- Blackrock (BLK) - this is a weak chart right now, but if I have to own a financial, this is the one I want
- Apple (AAPL) - hey they have a lot of international sales - with a weak dollar you know what that means....
So this is all I will be buying for now... I will need to see a move higher in the indexes to jump in with more. I still have too much cash - 34%. If we start moving over 1390 the more I close my eyes tight and blindly buy stuff... (that's what all the cool kids are doing)
Long all names mentioned in fund; long DR Horton in personal account
13 comments:
all right! Long JEC in personal account :)
Looking at Financials, what do you think about ING. I've started using ING and I'm normally a little "late to the game". But, I see them everywhere and especially as bloggers promote on their sites. I just have to believe that this is going to be a very good stock. But, I would appreciate your take on it.
BTW, is it by design that the "comments" link below your posts is all but invisible
I'm confused by the 2nd comment; if you click on the "comments" it should pop up. On my browser it is in blue ink on a white background so it should be visible?
I dont follow ING so I can't give you any solid view. I dont own or follow financials that closely because I am a growth investor and very few financials offer growth. Plus most of them are a black box, meaning unlike a normal company I cannot follow their income statement. They somehow make money but we cannot really see how. That is why there is no trust in banking now - no one knows what the other is hiding. I do have Blackrock and Mastercard as "financials" but they are not like banks ...
Probably the easiest way without individual stock risk to play financial is ETF XLF
I am just using Morgan as a proxy on the group; frankly they could have a lot of toxic things on their balance sheet just like Goldman, Lehman or Merrill Lynch does. But its a proxy for the group so I am using it as such.
Just speaking purely technical, the ING chart is very solid for a financial.
hey mark,
question on your strategy. of course your goal is to outperform the market. but these series of trades, or other ones you have executed in the past seems to indicate you are trying to outperform in the near term (like weekly). i mean if the fundamentals of some of the names you are buying stink, and you are proven correct, these things will go down. having most of the portfolio in cash seems a better option than going with the herd cause in the longer term (more like monthly) the fund will outperform. remember TMA?
Sometimes I guess, you gotta take a swig of kool-aid.
The individual isn't running a mutual fund, so we have the luxury of waiting things out. Right now, I can honestly say, im pretty confused. All I know, is that the big gains in ag, coal, iron ore have just been made, I dont want to add any here. In fact, I've sold down to an uncomforable low level. But I'll be patient right now. As for the rest of the market - the early cycle stocks... I dont see a legitimate reason for them to be rising, other than the momentum of beating lowered earnings and to work off oversold conditions on the daily charts. And technically speaking, 1400 or so should be providing alot of technical resistance. But it is so pronounced on the chart, I dont think it would be too hard for it to make its way to 1450. I'm feeling alot of cross winds, where I think the good stocks are going down, and the bad ones are going up. And earnings are just going to add to the chaos. This particular set of earnings is going to be particularily important on a go forward basis in terms of which sectors are really going to get hit, and if the US consumer really is going staight to the toilet.
Yeah.. quite confused in this market. I think I like cash more and more. I'm glad I dont have to beat the S&P every week Mark ;)
Nope, I am not trying to outperform each week. That is literally impossible, and you'd have to change the focus of your positions 180 degrees some week. The "early cycle" plays could work for weeks or months for all I know. Until reality returns.
I am approaching a more barbell approach... i.e. have things that work when early cycle works and have things when commodities work. Right now commodities are VERY overbought so I don't want to add them except on a pullback. When they reverse it will be severe - but of course it could come from a much higher level. I just don't like buying stocks up 30-40-50% in a few weeks no matter how much I like them. Other people with shorter time frames don't mind doing it.
The fundamentals can stink but as long as the herd believes they will improve, they can go up, I can get 10-15% gain and cut back. Just like I do with the commodities etc.
I checked Money Magazine last night and through March 20, if my fund was in the 1 year category for mid caps I'd only trail 1 fund, Heebner, and if I was in the large cap I'd only trail Janus Focused Twenty. So I'm happy with my results and frankly I am a bit too hard on myself because I go home upset on Fridays when I don't beat the market that week :) But over the long run it is working out. I am trailing by a huge margin this week...
My main process is the same regardless of names, I try to buy stocks breaking out or pulling back. Not chasing stuff up nowhere near support. All my favorites that make up the top of my portfolio much of the past 3-4 months are in that area where you have to buy with hope someone else will buy from you even higher (with no support nearby) so if I want to apply cash, I need to buy other things. I don't like buying things so extended but it does work for others.
This is why I am buying the infrastructure names today, most are just now breaking out or CMI or MS.
I am still 1/3rd cash.
re: TMA - obviously that one stunk but literally if I had bought any other stock in the same space I would of been fine over time. It was just a terrible luck to get that one.
I also agree with the previous poster and I think I mentioned this to yor before. It is very hard to see the "comments" line down below. Its almost invisble....so can you try a different color? Black?
Thanks
pjk, I don't have any control over it
I am using firefox and I see medium blue ink on a white background. What do you see? I am confused because for some reason we seem to be seeing something totally different
One more comment for above - I am not adding anything direcly tied to the consumer other than housing which has been in a 2 year bear... i.e. I am not adding retailers - an investment bank I can at least understand the Kool Aid since they are doing business to business. When JCPenney starts ramping, there is no amount of Kool Aid that will sway me. So there is a difference in what I am buying.
Again the 2 housing stocks are about 2.5% of my portfolio - not like I am going 15% allocation ;)
p.s. I don't see anything where I can change it, this platform is based on blogger.com which is for "newbies" like me, not technically proficient at html coding and things like that... if anyone can email me a screen shot I'd like to see what is causing the issue. Then I can shoot an email to blogger.come and see if they can fix it. On my side I don't see any issue, so hence my confusion. Under each post is a big white box and all the labels and comments are in blue ink so it stands out. Let me know, and send me a screen shot if you can and I'll see if there is anything that can done - also what browser are you using? Me = Firefox = no problem?
I sent you an email earlier (30 mins?) Check the email address you have on your profile.
I think there may be a difference in what you see as the author vs. what we see as mere readers.
Go to "customize" then "layout" and "edit html". Select all of the text within the editor box and email it to me. There is a style sheet within that can be modified to fix the problem. I'll see what line needs to be changed and email it back to you so you can make the change.
Hi, I did not get an email, the email is correct - many people email me daily. Might just be slow today, maybe try 1 more time - I'll send you the code once I get your email address -thanks.
speaking of financials, have you considered AXA? Maybe more of a longer term financial play holding than what you are looking for but I see good value at these levels.
Hi Jim
Honestly I am more of a growth investor guy. 98% of financials have 8-10-12% growth in good times - good and dandy but I prefer higher growth which is why I generally stick with the Mastercard, Blackrock type of names. Finding the growth I like in financials is pretty difficult. So I normally wouldn't own them, but we have a beat up sector that people are believing the worst is behind them and the stocks are ignoring bad news. Sort of like how homebuilders started acting about 3 months ago. Outside of Goldman and Morgan, there is probably not much I'd own in "true financials" notwithstanding some excellent companies in the group i.e. Wells Fargo, USB, et al. Just not my stylistic taste but again, we have a relatively unique opportunity here with a tortured sector that could provide some bounce.
If I were running a large cap "value" fund I'd probably be loading up on financials and checking back in 3 years. Many ways to skin a cat. Just need to do what fits your style the best.
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