Spring 2018 Update on the Pot Patch

SYNOPSIS

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Canada’s finance Minister, Bill Morneau, said the federal government is willing to compensate the pipeline’s backers for any financial loss due to British Columbia’s attempts to obstruct the company’s Trans Mountain pipeline expansion. We think this is a bold but correct move for Canada’s economic future. Pipelines are the safest way to transport oil and gas, and Canada’s energy sector has suffered far too long from not being able to get its oil to market efficiently enough. As a consequence, investors suffer, because without pipelines, earnings and revenues are capped for all companies in that industry. Also, consumers suffer from higher heating and gasoline costs.

Day by Day… Here’s how last week played out on a daily basis. US stocks took a bit of a hit, but the S&P/TSX Composite stocks moved smoothly high

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PTP… The S&P 500 APAR (capital gains speedometer) slipped 5 percentage points last week but the S&P/TSX Composite Index counterpart gained 3%. Our PTP score rose to 311% from 216% the previous week.

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We added two two more holdings late last week… but it’s too early for them to affect the overall APAR score.

PTA Perspective… Spring 2018 Update on the Pot Patch
Although we still don’t have an official date for the legalization of recreational marijuana in Canada, the industry is growing by leaps and bounds. This week we bring you an update on pot stock performance, and the quick way to invest in that theme sector without doing a lot of homework… cannabis ETFs.

SCHEDULE NOTE: We will not be publishing TrendWatch Weekly next weekend, due to some much needed downtime. All the same, we will make every effort to update the Data & Charts Workbooks, so you can be ready to trade the following week.

Buy in May?

SYNOPSIS

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And so it goes! Fortunately, investors are finally realizing that a totally retarded US president can’t pose much of a threat; so the equities markets have been recovering and volatility has fallen. Still, you might want to think twice about investing in US companies that will suffer from his policies.

Day by Day… Here’s how last week played out on a daily basis. Good week overall… especially for the first week of the scary “Sell in May” months. S&P 500 stocks performed particularly well.

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PTP… The S&P 500 APAR (capital gains speedometer) and its S&P/TSX Composite Index counterpart both gained last week. And, so did out PTP speedometer.

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We added two new positions on Friday… so too early for them to affect our 216% score.

PTA Perspective… Buy in May?
Although we just covered our periodic review of seasonality effects a few weeks ago, including the classic “Buy in May and Go Away (for 6 months)” strategy, we’ve had requests for more info both for and against that tactic. After all, if it’s typically more profitable to be invested in stocks for just six months instead of 12, why put in the extra effort? So, we’ll follow up with a bit more detail, but ultimately you’ll have to make your own call.

Investing with Perspective

SYNOPSIS

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And so it goes! Tax breaks for the US filthy rich do not lead to booming stock markets. It just means that the US filthy rich pay less taxes. The blame game works both ways.

Day by Day… Here’s how last week played out on a daily basis. A modest gain on the Canadian side. A modest loss in the US.

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PTP… The S&P 500 APAR (capital gains speedometer) dropped to almost zero last week, and the TSX counterpart was up a few points. The PTP score advanced a few points, but once again you have to consider the small pool of stocks in the portfolio right now. Ups and downs could be quite severe, until some stability returns to the markets, and we can start building up the portfolio again. We did add two more holdings towards the end of last week, but those have minimal impact on our speedometer so far.

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PTA Perspective… Investing with Perspective
This week we review the importance of perspective in all of your investment decisions. That’s the “relative” in relative trend analysis™ (RTA) . You want to assess your holdings in the perspective of global trends, sector trends, and simple stock-to-stock comparisons on trend and consistency. We put special emphasis on temporal perspective this time, and why you should focus more on the present more than the past.

Tale of Two Markets: US vs Canada

NEW SUBSCRIBERS: Please visit the Visitor Guide at our web site to gain a better understanding of what relative trend analysis™ is all about. It’ll help you understand the contents of TrendWatch Weekly.

SYNOPSIS

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This is an old cartoon, and I think that’s supposed to be former PM Stephen Harper behind the wheel of that car. Harper spent a lot of time destroying the Canadian economy, but we can’t actually blame him for declining commodity prices. That’s an international issue that comes down to nothing more than supply and demand. After the US single-handedly caused the Great Recession of 2007-2009, the comeback has been a struggle. Stock markets moved higher yet again (and sooner than anticipated), but commodity prices didn’t. And, Canada is still a natural resource economy.

Day by Day… Here’s how last week played out on a daily basis. 1.2% over the week for TSX stocks. The S&P 500 finished unchanged.

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PTP… The S&P 500 APAR (capital gains speedometer) rose to +10% over the past week, and the TSX counterpart also gained a few points. The PTP score advanced nicely, but once again you have to consider the small pool of stocks in the portfolio right now. Ups and downs will be quite severe, until some stability returns to the markets and we can start building up the portfolio again.

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PTA Perspective… Tale of Two Markets: US vs Canada
There’s a common misperception that the Canadian stock market behaves just like the US equities market, but on a smaller scale. This week we remind you of some of the fundamental differences, and what those differences might mean in terms of the mix of US and Canadian stocks, that you might consider for your portfolio.

Investor Confidence… The April 2018 results for the State Street Investor Confidence Index arrived last week. This is not an opinion poll. The SSICI is a measure of actual money flows between equities (higher numbers) and safer income securities orchestrated by institutional investors (the “smart” money). The Global Investor Confidence Index increased to 114.5, up 3.0 points from March’s revised reading of 111.5. The “smart money” has been buying more stocks, not less, each month since the December low.

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As usual we provide more detail on the regional ICI’s in the complete Investor Confidence section of TrendWatch Weekly.