2014 – Q3 Review

SYNOPSIS
All major indexes ended lower last week. The trends for Canadian small caps (S&P/TSX Small Cap Index and S&P/TSX Venture Index) remain negative. Nasdaq continues to perform best within our six-pack of benchmarks.

ProfiTrend Portfolio… Our PTP annualized growth rate is now at 46%, up a point from the previous week. That compares with -11% for the S&P 500 and -37% for the S&P/TSX Composite Index.

Seasonality… We continue our discussion of what October has in store as far as calendar effects go.

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Featured Video… Most of us either love or hate CNBC’s Jim Cramer’s Mad Money show. I guess I fall into the “contempt” camp; but mostly because of his bullshit, bells and whistles, presentation, as opposed to whatever research he may have done before offering his recommendations. Regardless, the man has a following, and he can talk fast. This week’s video has him covering about ½ dozen different topics in about 60 seconds. You may have to replay it a few times. And, it’s up to you to decide whether he’s making any sense!

Topic of the Week… 2014 – Q3 Review

It’s time to check in with the latest quarterly data, as September closed out Q3. The year-to-date results aren’t appalling by any means, but the trend picture going into Q4 is dismal. Lot’s more on that below.

Is Shorting Stocks Part of Your Investment Strategy? Maybe It Should Be!

SYNOPSIS
All major indexes ended lower last week. The trends for Canadian small caps (S&P/TSX Small Cap Index and S&P/TSX Venture Index) remain negative. Nasdaq continue to perform best within our six-pack of benchmarks.

ProfiTrend Portfolio… Our PTP annualized growth rate is now at 45%, down four points from the previous week. That compares with -10% for the S&P 500 and -32% for the S&P/TSX Composite Index.

Seasonality… We begin a discussion of what October has in store as far as calendar effects go.
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State Street Investor Confidence Index… We include the September results which are just in. The current global index up to 123.9 in September, up 3.8 points from August’s revised reading of 120.1. 100 is considered the neutral point in the balance between risky assets (i.e. stocks) and low risk assets (i.e. bonds). The regional breakdown continues to favour European equities, contrary to popular opinion. Note that this runs contrary to everything you’ll see below in terms of shorter-term outlook.

Topic of the Week… Is Shorting Stocks Part of Your Investment Strategy? Maybe It Should Be!

As the majority of stocks are now trending lower, it’s time once again to ask yourself this question… “Do I stay in cash on the sidelines, or do I try to profit from some consistent downward trends?” We review the process, the risks and the rewards of selling other people’s stocks now and replacing them them back at a lower price if current trends continue.

The Mobile Trader: Apps for the Road

SYNOPSIS
All major indexes ended lower last week. The trends for Canadian small caps (S&P/TSX Small Cap Index and S&P/TSX Venture Index) remain negative. Nasdaq continue to perform best within our six-pack of benchmarks.

ProfiTrend Portfolio… Our PTP annualized growth rate is now at 77%, down just one point from the previous report. That compares with just 4% for the S&P 500 and -5% for the S&P/TSX Composite Index.

Seasonality… We continue to include our discussion of what September has in store as far as calendar effects go. We’ll start discussing October and beyond in our next issue.

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Featured Video… S&P Capital IQ Chief Equity Strategist Sam Stovall discusses why he’s bullish on the S&P 500.

Topic of the Week… The Mobile Trader: Apps for the Road
For many of us our tracking and analysis of our investments is a big-screen process. The more information that can be provided on one “page” the better. But let’s face it. Lots of us are also on the go for part of every trading day. That doesn’t mean that we need to leave our “trading lives” at home. There are lots of smartphone and tablet apps that allow us to monitor and trade our accounts while computing, taking a coffee break or waiting for an appointment. This week we look at some of those, with a longer term goal of setting up a traders’ tools page at the web site. We’re interested in your feedback on the recommendations we offer today, and hope that you’ll tell us about your favourite apps too.

Sell in May and Go Away – Interim Report Card

SYNOPSIS
Canadian stocks declined last week, while US equities continued to show (albeit modest) gains. September is normally the worst month of the year statistically, but there are always exceptions.

ProfiTrend Portfolio… Our PTP annualized growth rate is now at 78%, down just a touch from the previous report. That compares with 21% for the S&P 500 and just 7% for the S&P/TSX Composite Index.

Seasonality… We continue our discussion of what September might have in store as far as calendar effects go.
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State Street Investor Confidence Index… The latest results for August were published here two weeks ago. As usual we keep that section intact for a month until the next report is issued. The current global index is at 122.8… up 7.2 points from July. 100 is considered the neutral point in the balance between risky assets (i.e. stocks) and low risk assets (i.e. bonds). The regional breakdown continues to favour European equities right now.

Topic of the Week… Sell in May and Go Away – Interim Report Card 2014
Over the last month or two, we’ve experienced more buying than selling in the ProfiTrend Portfolio, so we thought that it might be a good idea to objectively review whether the “Sell in May and Go Away” tactic may be valid this year. Our conclusions (with 1½ moths to go in the “worst 6 months” time period) aren’t so bad at all. We’re still net positive as you’ll see below.

Do You Really Want to Invest Like Warren Buffet? – Part 2

SYNOPSIS
The major market indexes improved again last week. Nasdaq continues to lead our 6-pack of indexes on a trend basis, followed by the S&P/TSX Composite Index and the S&P 500.

ProfiTrend Portfolio… Our PTP annualized growth rate is now at 80%. That compares with 20% for the S&P 500 and 18% for the S&P/TSX Composite Index.

Seasonality… We continue our discussion of what September might have in store as far as calendar effects go.
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State Street Investor Confidence Index… The latest results for August were published here last week. As usual we keep that section intact for a month until the next report is issued. The current global index is at 122.8… up 7.2 points from July. 100 is considered the neutral point in the balance between risky assets (i.e. stocks) and low risk assets (i.e. bonds). The regional breakdown continues to favour European equities right now.

Topic of the Week… Do You Really Want to Invest Like Warren Buffet? – Part 2
We were concerned that maybe we delivered more on Warren Buffet and Berkshire Hathaway’s performance than you really wanted to read last week. But apparently, we were wrong. There were a couple of requests for even more commentary on the man and his firm’s track record. Since we like to respond to readers who send us email, we’re going to share more on Buffet and BRK this week. Last time we stressed the fact that Berkshire’s long-term performance is in part a “charting illusion”, and that strategically chosen shorter-term perspectives tell a different story. This time we comment more on the tenets of value investing, and how, by virtue of scale, you can’t invest like Buffet any more than he can invest like you.