Bullitt's Account Talk

[Birchtree]

Sheet - we might do Dow 13K today. There is a lot of money on the sidelines and if we hold into 1500 hours there could be a bullish rampage to get in. Soon it will be get me in at any price. This could be a classic move with the chicletts all sitting on the lily pad. They will be afraid to buy in because of the potential whipsaw - just what the bull likes. It's not buying that makes the market go up, but the market going up encourages fresh buying.

 

[Bullitt]

Still too many retail Bulls. I thought for sure the crooks would shake the lemon tree today but instead they squeezed whatever was left out of it.

Good handle forming off the cup that began in Mid-the end of March. Next stop 13K and as soon as the Dow hits above that level, the bears will already have missed out on ~10%. Thank you Meredith Whitney. I like the Wall of Worry setup you've steadily provided to Main Street investors like myself.

When I look at a chart of Gold, I can't help but to compare it to the chart of China/FXI.

 

[Bullitt]

I remember hearing about it last December, but since you reminded me I just looked it up again. I'd like to hear it.

 

[Bullitt]

Not a big fan of checking the autotracker rankings, but I'm seeing firsthand that DCA does work. FWIW, My real return is .02% better than the return in the autotracker because the autotracker does not reflect the impact of non biased, Bi-Weekly Contri's.

Of course, all of us TSPer's are on an even playing field with the tracker so it doesn't matter for trading purposes.

Looking forward, I think most of America is going to spend those stimulus checks in reckless ways such as new televisions, new cars, etc. Might be a good time to look into Consumer Discretionary stocks/ETF's for a 6 month swing trade. The spending in the discretionary sector will move the economy away from recession land, but we'd better hope commodity prices correct and that the dollar rallies by time America runs their stimulus accounts dry.

I'm not on the side of the doom and gloomers. I actually think a short term run up in Gas is a good thing for Americans. It's about time people woke up out of their dream world and got a clue.

 

[Bullitt]

Smart Money is rotating out of hard assets and back into equities.

SPX keeps getting closer and closer to that 50DMA. The rally is still intact, I'm just waiting for that ever elusive follow thru day.

Maybe not necessarily rotating into equities, but no doubt they are reducing exposure to hard assets. GLD, which has largely been propped up by technicals as of late, broke support today at 86. I've been seeing similarities in the charts of GLD and FXI for a few weeks now. Compare today's action in GLD with the action in FXI on 12/16/07 and develop your own conclusion. Timber.

Is that an IBD 'handle' forming in equities? Maybe, maybe not. We won't know until hindsight like all TA.

Looks like the big boys are playing the dollar for a trade with tommorrow's headlines.

Right now my biggest financial concern is not the economy or Warren Buffet's soundbites, but the overzealous bullishness by the retail investor lately. The market can't climb up the wall of worry with everyone on it's back.

 

[Guest2]

Speaking of Warren Buffet's soundbites,
I understand he's on FoxBusiness tonight at 8pm.

 

[Birchtree]

I'd actually like Warren if only he wasn't such a Donkey supporter.

 

[Bullitt]

After a few month's of trying, I still have a hard time seeing the effects of this so called recession we're in. If we were in a recession, every register lane wouldn't be open at Target, I would have found a parking spot at Lowes, Starbucks wouldn't have a line to the door, Americans would stop buying ~$4 gas just to drive around in their IROC Z Camaros, and the main streets of our city's shopping district wouldn't have been backed up so much that I wouldn't be able to hit the gas when the light turned green.

Maybe it's me. Maybe it's the city I live in. Maybe the whole thing is overblown. I don't know. I do know that the economy has nothing to do whatsoever with the stock market.

Thank you to all the bears, Gold bugs, and doom and gloomers who've promoted the headlines along the way. You've all been doing a good job at bringing stock prices to levels of negative fair valuation for a bull with the long run on his mind to accumulate at a frantic pace.

It's good to see that MSFT gave up on YHOO and that Warren says we're still not done with the credit crisis. The bull was carrying a bit too much weight there last week. Those two things should be some good bear fuel next week.

Weather's getting nicer round here and we've got quite a few projects lined up the next few months. Stocks for the long run. The wall of worry. It doesn't end. Luck to longs.

 

[Reactive1]

Yes, I agree, sort of. The talking heads and others who were saying we ARE IN a recession in the December - February time frame have already been proven wrong as we haven't had negative economic growth in any consecutive months, if at all (can't remember). Now the speculation continues on a future recession. I think what we have had, and will have is a near zero-growth economy through the year. It still plays havoc with the stock market. The markets, I think, are in an indecisive mode. It makes it very difficult to assess. Looking back, of course it would have been smart for anyone who was out for the big drop to jump back in in January on the day of the emergency Fed cut of .75. I still don't think this whole thing solves itself so easily.

 

[Birchtree]

The market place has this discounting mechanism that is able to see over the horizon on what the future fundamentals might be moving forward - this is why money moves in advance of the news. This is why many of my chiclett friends buy near the top (because the news is now known) and why many sell near the bottom (because of this very same news). Follow the money and seek the reasons later. The SPX earnings in the first quarter, excluding financials, are up 12% - and that's what makes a price pattern move higher. It does seem likely that greed will replace fear as the market's overriding theme in 2008 - get me in at any price. Snort.

 

[Bullitt]

I'm contemplating a DCA approach into S and out of I and C in the weeks ahead. As far as the US Dollar goes, I'm in the bullish camp. I believe that the bottom was put in the $USD when the G-7 bankers made it known that they would be willing to backstop the dollar on April 11. Even though the effects of a strong dollar won't be seen in the international front for some time, I don't think we're going to breach the lows of January and March when the market moves lower.

I've never believed in something as foolish as sell in May and go away and I don't believe it's going to be a good strategy this year either. With this being an election year, I won't be surprised if there are additional hat tricks from the powers that be. If you're playing the Oil game, just make sure you sell high. Commodities move in cycles. Always have, always will. This time is not going to be any different. Another cycle not worth fighting is The Fed's rate cut cycle. Historically it has been a great time to be in the market once the Fed signals an end to rate cuts.

Watch for commodities to begin cracking once this tragedy in Myanmar stabalizes. Holding the line and waiting for the big players to shake the fair weather fans off the tree in the near term.

 

[Birchtree]

I worked up my latest stock list today with some issues going up and some moving lower, but all deserving some DCA attention. I have 61 issues on the list and it's mostly a follow up from some of the buying I did late last year. All I have to do is be able to pay for them all - thinking about releasing my LNN at around 118 and sliding out from under the rest of my MOS at 140. That should be enough to cover my game. The potential here is flat out enormous and the time is right. Next week could be one of those surprising rallies where you just never get a chance to buy in on a pullback so I'm going to start my own buying panic. Got some of that NHYDY on the list with a 5.38% dividend yield.

 

[Bullitt]

I'm going to start my own buying panic. Got some of that NHYDY on the list with a 5.38% dividend yield.

I'd love to join you big bull, but I'd rather play hard to get. Besides, I couldn't even party if I wanted to. I'm still recovering from the two and a half month buying party I engaged in that began in late January.

NHYDY or the artist formerly known as NHY. I remember the last time we talked about this one. If you're still holding on that means you accumulated some Statoil ASA in the spinoff which is up some 20% YTD.

Can't do much in the other accounts without powder, but I love those dividends rolling in. Will Large Caps finally get their chance to shine in the next 6 months?

 

[Bullitt]

The retail investor seems to be a bit too bullish. I think alot of folks out there are buying on the bad days thinking they are contrarian investors but the time for being contrarian has passed us by. I'm back to collecting cash in my alternative accounts in case we get another drop in the time ahead. I'm not chasing this thing and I'm sure not going to buy anywhere near that 1400 level. Most of my buying in stocks and ETF's was done around 1300, right where when the doom and gloomers least expected it. Even though I rode this correction (yes I'm still in the belief that this was a correction), there were some great days in the past 3 months for those bi-weekly contributions to kick in.

Nice uptrend going on. As Vectorman's charts show, Nasdaq is back on track and the DJTA is gearing up for a move either thru resistance or back into the channel.

Be careful, there aren't enough lifeboats for all of us if that reading gets over 70. Chart courtesy of www.marketgauge.com

 

[Bullitt]

I just plugged all of my equity holdings into the Morningstar Portfolio X-Ray Tool at morningstar.com. Morningstar is a great site if anyone hasn't ever visited it before and is well worth the year's subscription. The only cash values are thse held by Mutual Fund/ETF managers and do not represent my amounts in the disaster savings account, checking accounts, etc.

TSP is currently 45 C, 20 S, 35 I.

For X Ray purposes, C Fund I used SPY, I Fund EFA, and S Fund VXF.

Here it is, all of my stocks, mutual funds, ETF's, TSP, the whole kit and kaboodle....

55% US Equities
42% Foreign Stocks
2% Cash
.85% Bonds
.15% Other (Woohoo, maybe I've got some money in SIV's or CDO's!)

Morningstar calls this portfolio 'aggressive' with the capability of generating long term gains but high volatility. It claims this is a good allocation for someone with a 10+ year time horizon. I'm comfortable with my global allocation and will continue to maintain a long term approach to investing. Trying to ring in additional cash for future buys if we get another drop, but until then, I'm mainly relying on dividend reinvestment for additional buys.

 

[Birchtree]

Excellent plan - I kind of wish the market would trend sideways for another quarter because I really like the buys I'm getting with my dividend reinvestments - what a lazy way to invest. But it will be impossible to control Ferdinand any longer. He is ready to stampede. I noticed my STO just hit a new high at $41.69.

 

[Bullitt]

Some recent sound bites from the professionals.

"The most misunderstood inflation concept is the concept of rising oil prices. Believe it or not there are people out there who think rising oil prices means inflation. Wrong. Rising oil prices are counter inflationary because they result in a sluggish economy." Bob Brinker

"I'll follow my indicators and if the trend turns bullish then that's fine, but for someone to sit there and wish for rising commodity prices so that they can speculate, then they are an idiot." Tim Wood

 

[Silverbird]

"The most misunderstood inflation concept is the concept of rising oil prices. Believe it or not there are people out there who think rising oil prices means inflation. Wrong. Rising oil prices are counter inflationary because they result in a sluggish economy." Bob Brinker

Ooookay, now, oil is used by what industries and in what products, Mr. Brinker? Actually, name one that isn't affected and won't have to try to pass on high oil prices. :toung:

 

[Steadygain]

Wrong. Rising oil prices are counter inflationary because they result in a sluggish economy." Bob Brinker

"Cheap Oil" has way more to do with "us" being in Iraq than any kind of "Godly humanitarian" effort. It also would be the overwhelming basis of "us" attacking Iran.

This country has long lived on "cheap oil" and our demand has well exceeded the rest of the entire world put together. A falling supply does nothing to halt a growing demand. Brinker is right on target but very few would be able to really understand this.

 

[Birchtree]

The lousy Iranian Mullahs have been responsible for perhaps hundreds of American soldiers deaths by supplying arms to the Shiite militia - there will be a pay back at some point. Remember during the Clinton sad days when idiot Madeline Albright paid homage and offered contrition and penance to the Mullahs - that won't happen with McCain. Our appeasement candidate would try offering up the same foolishness. Nothing will work accept violence and they shall receive their share when the time is right.