Birchtree's Account Talk

[CountryBoy]

Re: Birchtree's account talk

Darn we backed off the 300 to close up 259 - we'll get the 300 points on Monday.

Country Boy,

Birds are really good at picking individual stocks - simply place the stocks tables at the bottom of their cage and presto - they do all the selections. No paper work necessary on the Roth - isn't that great.

TSP elective deferral limit goes up to $22,000 in 2009 for me - I'll never get to quit. Those serving in a tax-free combat zone are allowed up to $49,000 in annual contributions for 2009.

The charts point to a retest of the Nov. 30th high of 897.50, a break above which should trigger a move that projects to 940.60. A break of 1008.50 certifies the November 20th low as the absolute low. Time to get on the train - it's leaving the station.

Birch,

With the stock prices the way they are now, they probably could, but I'd have to see that they did pick good divvies, since I want to keep my portfolio manageable, from my POV. When you have limited funds, you want to build positions quickly, so a manageable number works best for me.

With my daughter graduating college and leaving home next spring, I'll actually see another bump in take home pay, so I'll either add another stoc or 2 ar just increase my existing positions quicker. Plus I can increase the cash buried in the back yard.

CB

 

[ATCJeff]

Re: Birchtree's account talk

I'm in Birch's camp next week....anything short of a auto bailout failure and we'll get another 10% rally.

I'm also looking for a very positive week. The question is when do we exit?

 

[alevin]

Re: Birchtree's account talk

I've got GE in our ROTH's, plus PCU, Southern Copper, and BHP, for mineral stocks. I considered FCX also, but settled on PCU, which I consider my one spec stock in my portfolio. I think BHP's divvie will be ok. all I buy for our ROTH's is divvy payers and just let them auto re-invest like Birch, though I'm nowhere near the size of the Tree. I also have T, BP, KMR, DUK, JNJ, UTX,PG, and NUE. Eleven is enough for me to keep track of right now, plus I can add to them quicker, soI can increase the free shares annually and a couple quarterly from Divvies. Birch helped me get started buying my own just over 2 years ago.

Just my $.02 and Good Luck,
CB

Thanks Birch, thanks CB. I'll take a look at PCU as alt to FCX, PCU hadn't shown up in my list of prospects yet. I anticipate having maybe a total of 6-8 divvy-stocks by this time next year, that's all I'll be able to afford, cash-flow wise, now that I've bumped up my TSP to 10% (G for now ) after paying off my house last spring. Tightening down the budget so I can fund both Roth and an every day account next year. Of course if the gov collapses, I may need to dig up the money in the backyard and get serious about whether I'm right or left-eyed. :nuts:

 

[CountryBoy]

Re: Birchtree's account talk

Thanks Birch, thanks CB. I'll take a look at PCU as alt to FCX, PCU hadn't shown up in my list of prospects yet. I anticipate having maybe a total of 6-8 divvy-stocks by this time next year, that's all I'll be able to afford, cash-flow wise, now that I've bumped up my TSP to 10% (G for now ) after paying off my house last spring. Tightening down the budget so I can fund both Roth and an every day account next year. Of course if the gov collapses, I may need to dig up the money in the backyard and get serious about whether I'm right or left-eyed. :nuts:

Hi alevin,

I'm in the sme boat that you are, when it comes to cash flow, between the TSP (G also), College Costs and everyday living, that's why I keep my portfolio limited in size, but you'll be suprised on how quickly it will grow and I've already figured out I'm right eyed. :

But as Cramer says, just stay diversified, especially since we're limiting the sizw of our portfolios, I'm spread out among 6 sectors roughly,though there is some overlap, JNJ and PG for example. He does have some good advice, you just have to ignore what doesn't apply to us, though lately in this down market, he has suddendly discovered the value of divvies. :laugh:

Have fun and good luck,

CB

 

[Birchtree]

Re: Birchtree's account talk

I fell $8K short of breaking even on the week and I'm appreciative of the come back. My DIN was up over $3.00 on Friday so it goes on the list for more share purchases - gotta chase the momentum all the way back to 1380 on the SPX. I believe within the next year, many smaller and medium-sized financial institutions will lose their independent identities to buyouts - I own about 40 of those cookies that I bought on the July 15th lows so we'll see how many I have to give up. Ah the beauty of toxic waste.

I did find a silver lining in the -533,000 jobs report. The tally of 1.9 million jobs pared thus far in 2008 surpasses the losses of the past two recessions, signaling that the current downturn could be the worst since the years immediately following WW II. Unfortunately, figures for November are also likely to be pulled down when the final numbers are released. The final figure could rival the 602,000 jobs lost in December 1974. Wait for it here it comes - but the overall labor market is about 75% larger today, so the job cuts now represent a smaller share of the work force. It would appear from looking at graphs of the previous damage that the deep spikes down appear to come near the end of the recession time period. Planned moves by the Fed and Treasury along with a fiscal stimulus early next year, could get the economy back on track by as early as mid-2009. If this has any chance of happening there is a really BIG V coming in a market rebound starting any day.

 

[Steadygain]

Re: Birchtree's account talk

I fell $8K short of breaking even on the week and I'm appreciative of the come back. My DIN was up over $3.00 on Friday so it goes on the list for more share purchases - gotta chase the momentum all the way back to 1380 on the SPX. I believe within the next year, many smaller and medium-sized financial institutions will lose their independent identities to buyouts - I own about 40 of those cookies that I bought on the July 15th lows so we'll see how many I have to give up. Ah the beauty of toxic waste.

I did find a silver lining in the -533,000 jobs report. The tally of 1.9 million jobs pared thus far in 2008 surpasses the losses of the past two recessions, signaling that the current downturn could be the worst since the years immediately following WW II. Unfortunately, figures for November are also likely to be pulled down when the final numbers are released. The final figure could rival the 602,000 jobs lost in December 1974. Wait for it here it comes - but the overall labor market is about 75% larger today, so the job cuts now represent a smaller share of the work force. It would appear from looking at graphs of the previous damage that the deep spikes down appear to come near the end of the recession time period. Planned moves by the Fed and Treasury along with a fiscal stimulus early next year, could get the economy back on track by as early as mid-2009. If this has any chance of happening there is a really BIG V coming in a market rebound starting any day.

Thanks Birch,
I think this is one of your best posts so far. That is exactly where all the focus is at this point 'How to make the BIG V' over come the drop and roll. The drop was (or is) unavoidable, but the LONG ROLL on the bottom is just as bad and I believe you are right THAT IS THE MOST PRESSING ISSUE THE PLAYERS ARE ADDRESSING.

Beyond the FED and Treasury - I bet the more Key Global Players along with UAW (and other huge Unions) will join together to do everything possible to make the BIG V happen.

I'm not sure how to take your last comment. Are you thinking that any day now we will begin the real and final Big V - with a drop towards 600 followed by the BIG V - sustained upward momentum in mid 09 - (which many analysists would agree). Or are you honestly thinking the worst is over (volitility is ending) and we beginning a sustained BULL RALLY within the next few weeks??

 

[Birchtree]

Re: Birchtree's account talk

I don't think that volatility is ending - we need that to keep shaking people out but I believe we may be on the cusp of a very nice bull move back up to SPX of 1150 at least. If this collapse has been historic and that appears the case, then rebounds that follow historic collapses can often be equally dramatic. It is never easy to battle feelings of powerlessness that overcome investors in bear markets - but what happens if we score a 700 point gain come Monday and then another one the next day. A lot of the technicals are showing good positive divergences - I'll gladly stand or run in front of this train. I need all these people to be in cash - that provides fuel further up the incline to get us closer to real value of 1380 on the SPX. Up, a BIG V could definitely be in the making. A break of 1008.50 level will certify the November 20th low as the absolute low. The October 10th low was the volume capitulation low. The hedge funds will still do some selling during the intraday pauses but that only provides more opportunity for buyers to give them time to get the best prices. I feel like I'm on the farm smelling all this superlative bull manure.

 

[Steadygain]

Re: Birchtree's account talk

I don't think that volatility is ending - we need that to keep shaking people out but I believe we may be on the cusp of a very nice bull move back up to SPX of 1150 at least. If this collapse has been historic and that appears the case, then rebounds that follow historic collapses can often be equally dramatic. It is never easy to battle feelings of powerlessness that overcome investors in bear markets - but what happens if we score a 700 point gain come Monday and then another one the next day. A lot of the technicals are showing good positive divergences - I'll gladly stand or run in front of this train. I need all these people to be in cash - that provides fuel further up the incline to get us closer to real value of 1380 on the SPX. Up, a BIG V could definitely be in the making. A break of 1008.50 level will certify the November 20th low as the absolute low. The October 10th low was the volume capitulation low. The hedge funds will still do some selling during the intraday pauses but that only provides more opportunity for buyers to give them time to get the best prices. I feel like I'm on the farm smelling all this superlative bull manure.

Thank you!!

Very good words and excellent advice. In the long run only those willing to get in and ride it out are going to win. Those who jump out after an 8% gain will lose other gains waiting to get back in. Those who wait for the ideal entry point (WHERE I AM NOW) will often miss at least a 10 - 15% gain by the time they realize the point they are waiting for has already passed them up.

I am very Bullish about the years ahead. I will go with my heart and with the collective data at hand and wait for a fairly huge fall. Then I'll go in and remain in over the years. The only way I can possibly maximize gains - is by being fully invested - but I can take it to a much higher level by waiting for a substantially lower entry point. I think a new low will be reached within the next few months.

 

[Birchtree]

Re: Birchtree's account talk

From the print edition of TWSJ 12/6/08 - Heebner the Contrarian. Fund Manager Bet Against Financials; Now, He's Buying.

"About 40% of his $4.3 billion CGM Focus fund was in financial stocks as of Sept. 30, according to its portfolio report. In September, when the government started taking steps to inject capital into banks and back troubled assets, he became convinced that confidence in credit markets would be restored and financial stocks would benefit. He was further encouraged by consolidation within the sector, which he believes will bolster big banks over time." There is a lot more to the article talking about price to tangible book value and price to preprovision earnings ratios - more technical stuff that I'm sure most readers would find dull. Very positive for my bank stocks though.

 

[Corepuncher]

Re: Birchtree's account talk

Futures are up almost 2% already. 850 is a very buoyant level and once we close above 900...it may be clear sailing to 1000.

 

[Birchtree]

Re: Birchtree's account talk

The charts point to a retest of the Nov. 30th high of 897.50, a break above which should trigger a move that projects to 940.60. A break of 1008.50 level certifies the November low, as the absolute low. That parabolic move in the 30 year Treasury Bond is indicative of what the Dow has coming. I'm headed to do a little buying this morning.

 

[Birchtree]

Re: Birchtree's account talk

I just completed some purchases of 10 different stocks now for a total of 432 around this bottom. I'll be a buyer of C at $9.00. This morning I bought: WB, CIT, PXP, ALY, NFX, SSD, LZB, LBY, DIN, GCI.

 

[Birchtree]

Re: Birchtree's account talk

"We show the 1972-75 market below. Note the clear lows seen in October and December of 1974. It was followed in 1975 by an impressive rally, despite the fact that unemployment continued to rise in 1975. The stock market often precedes both falls and rises in the economy."

Http://safehaven.com/article-12024.htm

 

[McDuck]

Re: Birchtree's account talk

Congratulations on the 10% rally over the last week. I didn't see it coming.

 

[Birchtree]

Re: Birchtree's account talk

I want a 700 point up day to really set the traction and create all kinds of anxiety. I've got another 20 buys to make perhaps tomorrow and I'll gladly chase this momentum until the money starts getting low. I can't afford any more profits this year so I won't be selling anything until after the first of next year.

 

[anthony]

Re: Birchtree's account talk

From the print edition of TWSJ 12/6/08 - Heebner the Contrarian. Fund Manager Bet Against Financials; Now, He's Buying.

Birchtree, thanks for the nice read on Heebner. I really like to try and follow his work. On a whole I do not like mutual funds, but his is the one that I will use/follow. A majority of my wife's Roth is invested in his CGMFX.

Thing with Heebner is he moves so quickly that the running joke is, if you read a report about what Heebner bought 2-3 months ago, and you run out and buy the same thing, Heebner's probably the guy on the other end selling it to you. Mostly I see his buys as validation of something you may have bought at the same time, like your financial purchases.

Best way to follow Heebner in my opinion is by DCAing into his fund. With an automatic transfer arrangement, USAA let me buy CGMFX all year long without any brokerage transaction fees. Heebner's operating expense ratio is also very low, given the quality of the fund.

 

[Birchtree]

Re: Birchtree's account talk

A quote from Maurice Walker: "I remain very bullish and believe we are about to blast off higher, with a massive recovery move as the renegade rally continues to ignite the bulls. Technical traders will have confirmation that the bear market's back has been broken once the VIX breaks the 60-day moving average uptrend. There is also a double top and a head and shoulders pattern that is bullish for stocks."

The financial markets will always behave in the manner which will benefit the minimum possible number of its participants. Ain't that the truth. For every crisis there is a corresponding opportunity. The year's crisis has brought equity values to opportunity levels for those with the courage to rumble with the bear.

 

[coolhand]

Re: Birchtree's account talk

A quote from Maurice Walker: "I remain very bullish and believe we are about to blast off higher, with a massive recovery move as the renegade rally continues to ignite the bulls. Technical traders will have confirmation that the bear market's back has been broken once the VIX breaks the 60-day moving average uptrend. There is also a double top and a head and shoulders pattern that is bullish for stocks."

The financial markets will always behave in the manner which will benefit the minimum possible number of its participants. Ain't that the truth. For every crisis there is a corresponding opportunity. The year's crisis has brought equity values to opportunity levels for those with the courage to rumble with the bear.

I also think that what many people who use indicators as their sole basis for making trading decision are missing is that we have an embedded STO to the upside in the many bond markets. And this is not the only area of extremes. A large segment of the market has been on the extreme side. But when we become overbought we look at the indicators and think we should bail.

Okay. In a normal market I'd agree. But this is not a normal market and we can't day trade our accounts. Watching short term market activity is of very limited use for TSPers who really should be looking more Intermediate Term with only occasional short term trades. The fact that we have embedded STOs in some parts of the market suggests the same will happen to other parts of the market when that coiled spring finally gets sprung.

 

[Birchtree]

Re: Birchtree's account talk

Very good points Coolhand. There are a big boat load of undervalued stocks out there waiting. Now is the time to scoop them up because the market tends to rocket up quickly at the beginning of a recovery. The economic climate is being transformed from bleak to bullish at one of the most rapid rates ever. There is now massive liquidity waiting on the sidelines. The afterburners are about to kick in. The recent rallies have shown the market is anticipating the economy to stabilize and possibly begin its recovery in a matter of months. The expectations are for a turnaround to come sooner, rather than later.

 

[Fivetears]

Re: Birchtree's account talk

Yep; it'll be a sea of green tea when the flood gates open. A good entry point will be stolen like a thief in the night.