CIO, SignalPoint Asset Management, 2008 to 2024, Retired
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Hi JD, Re: Current v-Wave status...........................
We can't say that the v-Wave didn't give us reasonable warning of the Storm the Financial District is experiencing this AM.
Both the v-Wave and the MRI were signaling a barometric pressure change well before this softening. While the MRI is my own home brew (going back to the Idiot Wave) and the v-Wave is built from Value Line's black box Appreciation Potential, they both have tracked quite well with each other.
There are more moving parts in the MRI so it can be a bit more responsive to sudden changes than the 3-5 year v-Wave but looking at the two standard deviation break points (Caution and Proactive) we see they are generally singing in harmony.
Thanks again for keeping us up-to-date,
OAG Tom
Hi Jake, Re: This week's v-Wave..............
You are correct, the v-Wave ticked upward a point to 50% cash for the 3-5 year "Stocks" value and 33% for the "Funds" value. The shorter term v-Wave stayed unchanged.
Here's how it looks in Living Color............
Best wishes for the coming week,
OAG Tom
This AM I noted Mr.Buffett's cash position is at an all time high at $233 Billion!!!
That's slightly above Tom's International Equity Warehouse!
OAG Tom
PS: That's Warren, not Jimmy......
Good morning Jake,
I was playing hooky most of yesterday with my grandson. We were at the IMSA races at Road America for the whole day. You can watch the Sunday final race which will be on TV at around 2PM CDT.
Well, I guess Wall Street knew I wasn't watching the Markets! Here's my Watchlist weekly tally:
Ticker Close Wk Change Percent
EXAS EXACT Sciences Corp. 57.35 12.05 26.60%
RSPU Invesco S&P 500 Equal Weigh... 63.26 2.29 3.76%
BIV Vanguard Intermediate-Term ... 77.56 1.87 2.47%
RSPR Invesco S&P 500 Equal Weigh... 35.42 0.85 2.46%
IAU iShares Gold Trust 46.06 0.98 2.16%
VNQ Vanguard Real Estate ETF 91.27 1.70 1.90%
SCHP Schwab US TIPS ETF 52.81 0.71 1.36%
RSPH Invesco S&P 500 Equal Weigh... 31.49 0.37 1.19%
VCSH Vanguard Short-Term Corpora... 78.50 0.82 1.05%
RSPS Invesco S&P 500 Equal Weigh... 31.57 0.32 1.04%
AAPL Apple, Inc. 219.86 1.90 0.87%
AWF AllianceBernstein Global Hi... 10.57 0.08 0.72%
AWF AllianceBernstein Global Hi... 10.57 0.08 0.72%
EMLP First Trust North American ... 31.65 0.09 0.29%
UGI UGI Corp Holding Co. 24.69 0.04 0.16%
RAVI FlexShares Ready Access Var... 75.26 0.11 0.14%
PSK SPDR Wells Fargo Preferred ... 33.86 0.04 0.12%
RSPC Invesco S&P 500 Equal Weigh... 30.44 -0.00 -0.01%
BKLN Invesco Senior Loan ETF 20.91 -0.07 -0.33%
VNQI Vanguard Global ex-U.S. Rea... 41.95 -0.22 -0.52%
NLOP Net Lease Office Properties 28.46 -0.25 -0.87%
VIG Vanguard Dividend Appreciat... 186.48 -1.97 -1.04%
DGS WisdomTree Emerging Markets... 50.71 -0.56 -1.08%
DGS WisdomTree Emerging Markets... 50.71 -0.56 -1.08%
DLN WisdomTree LargeCap Dividen... 73.71 -0.94 -1.26%
CWB SPDR Barclays Convertible S... 71.79 -1.13 -1.55%
SCHE Schwab Emerging Markets Equ... 26.10 -0.41 -1.55%
DOW Dow Holdings Inc. 52.00 -0.86 -1.63%
VTV Vanguard Value ETF 163.70 -3.21 -1.92%
XLG Invesco S&P 500 Top 50 ETF 44.06 -0.96 -2.13%
DEM WisdomTree Emerging Markets... 41.87 -0.92 -2.14%
DEM WisdomTree Emerging Markets... 41.87 -0.92 -2.14%
VUG Vanguard Growth ETF 353.66 -8.06 -2.23%
RSPM Invesco S&P 500 Equal Weigh... 34.85 -0.81 -2.27%
FGD First Trust Dow Jones Globa... 22.69 -0.53 -2.28%
AB AllianceBernstein Holding LP 34.14 -0.80 -2.29%
VIGI Vanguard International Divi... 81.64 -1.98 -2.37%
QYLD Global X Nasdaq 100 Covered... 16.91 -0.42 -2.42%
DLS WisdomTree International Sm... 64.12 -1.84 -2.79%
DLS WisdomTree International Sm... 64.12 -1.84 -2.79%
DIM WisdomTree International Mi... 60.87 -1.79 -2.86%
DIM WisdomTree International Mi... 60.87 -1.79 -2.86%
RSPN Invesco S&P 500 Equal Weigh... 46.28 -1.37 -2.88%
SCHC Schwab International Small-... 35.55 -1.06 -2.90%
EFG iShares MSCI EAFE Growth ETF 98.64 -3.06 -3.01%
EFG iShares MSCI EAFE Growth ETF 98.64 -3.06 -3.01%
DOL WisdomTree International La... 50.26 -1.58 -3.05%
DOL WisdomTree International La... 50.26 -1.58 -3.05%
RSPD Invesco S&P 500 Equal Weigh... 46.55 -1.53 -3.18%
EPD Enterprise Products Partn 28.48 -0.94 -3.20%
RSPF Invesco S&P 500 Equal Weigh... 63.51 -2.24 -3.41%
DON WisdomTree MidCap Dividend ... 47.90 -1.81 -3.64%
VBR Vanguard Small-Cap Value ETF 188.16 -8.76 -4.45%
PIZ Invesco DWA Developed Marke... 34.03 -1.61 -4.52%
VB Vanguard Small-Cap ETF 221.06 -10.98 -4.73%
SCHW Charles Schwab Corp. 63.38 -3.22 -4.83%
RPG Invesco S&P 500 Pure Growth... 34.39 -1.76 -4.87%
RSPG Invesco S&P 500 Equal Weigh... 77.20 -4.11 -5.05%
DES WisdomTree SmallCap Dividen... 32.89 -1.90 -5.46%
RSPT Invesco S&P 500 Equal Weigh... 34.33 -2.00 -5.51%
WPC W.P. Carey and Co. Llc 57.22 -3.42 -5.64%
JETS US Global Jets ETF 17.41 -1.72 -8.99%
MESA Mesa Air Group Inc 1.43 -0.14 -9.21%
JBL Jabil, Inc. 99.68 -10.75 -9.73%
GNRC Generac Holdings Inc. 142.89 -16.54 -10.37%
PRIM Primoris Services Corp. 50.47 -5.96 -10.56%
CRSP CRISPR Therapeutics AG 2 51.11 -6.81 -11.76%
Hi Toof,
Here near the close my account is off 1.3% on the day. A couple of my favorites were hit with some doodoo from the fan.
OAG
Well, that was a nice uptick in share price today.
https://schrts.co/sFVDWhrv
It should move up 25% every day!
Best wishes,
OAG
Risk ticking upward
indexes showing some Stress
Cash gives some comfort
----------------------------
Can there be a measure of Quality associated with the stock price moves we've seen in the marketplace? I follow the "Best and Worst Performers - Latest 13 Weeks" in Value Line (Page 33 of the Summary & Index section, weekly). This past week's data shows 22 of the top 41 stocks (out of 1700 total) have "Safety" rankings of 4 or 5 (lowest two quintiles). Over on the "Worst" list 30 of those 41 stocks are showing 4 or 5 as well. We'd expect it on the worst stocks list, but 22 on the best list is unexpected. Further, Value Line shows that 11 of the 41 best stocks are currently 'unrated' for their "Timeliness" ranking. 8 of the worst stocks are also unrated.
It's rare to have so many poor timeliness and safety stocks on their "best" list and can be considered a measure of the quality of the stocks so listed. Are we seeing speculative activity in stocks of generally lower quality than other times? That's my suspicion. Maybe it's why the Dow 30 is diverging from the S&P 500 and NASDAQ Composite.
July turned in a mixed bag of performances. There was really not much change at all from previous periods.
Tom's 10 Stock Composite Portfolio
(17% Cash)
Tom's 9 International "Style" ETF Portfolio
(20% Cash)
Tom's U.S. Business Sector ETF Portfolio
(16% Cash)
Tom's Converted IRA Portfolio (was Contributory until January 2024)
(25% Cash)
Mr. Lichello's AIM continues to be a reasonable cure for the Summertime Blues. AIM added to cash reserves in some of these while cash treaded water in others.
Best wishes,
OAG Tom
PS: my new office computer won't run my old picture editing software (company no longer exists) so I did these with "Paint." Resizing is something I'll have to learn!
Good morning Steve, Re: LD-AIM..........
How's LD AIM treating your portfolio these days. I'd be happier with some higher cash levels and am not complaining about recent stock inventory reductions.
I noted with the fires out west and some tropical activity that Wisconsin company Generac has been moving up seasonally. It's teasing AIM with a potential sale at these prices.
Best wishes,
OAG Tom
Hi JD, Thanks once again for the data!
Of note this week is that if there is a quality view of the best and worst stocks, it wasn't as good as usual. 11 of the 41 stocks shown on Value Line's "Best Performers" list were 'unrated' for "Timeliness". 30 of the 41 stocks on their "Worst Performers" list were also unrated for this same measure. As far as their "Safety" ranking, 22 of 41 stocks on their Best list were showing 4 or 5 (lowest two quintiles) and 30 of 41 on their "Worst" list. These are exceptionally high numbers of unrated and poor safety rankings on both the best and worst lists. Maybe it's a sign of an odd form of speculation.
A new reader asked me some questions and I thought this reply might be a helpful reminder as to why I spent the last 4 decades gathering the data for these market risk measures. I imagine my weekly reports could use some points of reference. Most of the people reading this have followed my efforts for a long time and generally understand what it is I'm discussing. I've probably become lazy in not providing more explanation. Let's see if I can help fill in some gaps.
First, I've been a fan of Value Line for decades. Nobody ever accused me of spending too much time in the Library when I was a student. It was only when I was a young working stiff that I really began to visit such places. I'd look up companies I'd be calling on in Thomas Registry at first. Later I found Value Line and it became a regular place for me to study prospective companies on whom I'd call.
As I learned more about Value Line, the depth of its information began to show patterns. A basic survival instinct of humans is "pattern recognition" and I'm sure that was what was coming into play. One of the first patterns I began to notice was in one of their weekly Screens. On page 33 of their Summary & Index section they post the 41 best and worst performing stocks over the previous 13 weeks. Things noted were that sometimes stocks on the 'worst' list would later show up on the 'best' - and visa versa! Sometimes the 'best' list percent gains were huge compared to the losses on the 'worst.' Again, sometimes the opposite was true. There are 41 stocks listed in each column and sometimes a significant bunch on one list would all be from the same general industry (say "Retail" or "Energy"). Things learned:
1) the Best and Worst weren't always the best or worst but would swap lists
2) in bullish periods the best percentages far outweighed the worst percentages
3) in bearish periods the worst percentages far outweighed the best percentages
4) Business sector rotation can and does show up on these lists with multiple companies from specific sectors being represented.
From the first page of the Summary & Index Section I could pick up the weekly median Price/Earnings ratio of the 1700 stock Value Line universe. Also displayed was the median dividend and also their estimate of the Price Appreciation Potential. These also moved around based on bullish and bearish market conditions. High P/Es, low dividend yield and low appreciation potential usually coincided with markets topping out. The opposite was also true. Each week the previous bull and bear peaks for these three areas were also shown. Hmmmm. This might be useful if the data proved to be consistent!
Already, from these data points I could see some potential for improving my stock selections and also being able to independently judge ongoing market risk relative to bullish and bearish periods. Making better buy decisions is always helpful. Being cognizant of market participants' current mental state also seemed to have potential to help my overall efforts as an investor.
Other sources of data taken from Barron's became part of my weekly effort. Each seemed to tell me a different part of the current market conditions. By combining all this information in a spreadsheet I could grade each relative to their own history and the other components. I ended up with four overall. These are:
A) One told of investors' willingness to pay for company earnings compared to "risk free rate of return" of short term treasuries. (Relative Valuation)
B) One told of investors' "piling on" either winners (going Long) or losers (going short) on individual companies and sometimes whole business sectors. (Speculation)
C) One told of investors' short term consensus on market direction (Divergence)
D) One told of investors' interest in "What's New?" (Zealous IPO interest)
Weighing and combining these four proved to be a task all on its own. If one was bullish or bearish and the rest neutral, how would I interpret that? How about if two were at an extreme and two neutral? Etc. The histograms shown above let you look at how these things move around over time. Note what is shown in "Green" is when I'm most bullish and is contrary to what most people would be thinking at the time. None of the components are 'perfect' but the sum of them improves their judgement. Over time it has shown to be very good at calling out market bottoms. Market bullish periods can last far longer than would seem logical, so my efforts are not quite as good at calling market tops. However, being forewarned of building market risk helps to keep "irrational exuberance" at bay.
Best wishes,
OAG Tom
I vote for Rocky & Bullwinkle!
OAG
Hi Clive, Re: Retirement...
Yes, I retired as of January of this year. I was in my 15th year of a 5 year commitment!!!!!
Succession Planning is important.
Best wishes,
OAG Tom
It's been nice to have some selling activity recently.
Sold 5% of AAPL
Sold 5% of PIZ
Sold 5% if RPG
Sold 5% of DLN.
A nice string of sales has me feeling pretty good right now. The Sales Dept is happy as is the Savings and Loan Dept.
Best wishes,
OAG Tom
This week Value Line replaced Autoliv (ALV) with Phllip Morris (PM, yield = 4.7%) because of current dividend yield. ALV in about a year's time has risen in stock price faster than dividend increase. That pushed its effective yield down to around 2.2%/Yr. This isn't all bad since the stock price rose to $122.52 from $85.10 at the start. This occurred in their Model Portfolio II.
This sort of swap happens once in a while as Value Line's #II model as it has a "dual mandate" of seeking above average yield while also looking for reasonable price appreciation potential. In this case, ALV satisfied the price appreciation while the dividend remained steady.
For AIM users, ALV may still be a viable choice for a longer term investment. AIM would have done well with the price appreciation while harvesting the yield along the way. The three year chart for ALV looks like AIM would have been selling more than buying but there were a few "round trips" along the way.
https://schrts.co/NrxIusBs
Best wishes,
OAG Tom
Hi R, Re: Value Line's Stock Screener..........................
Sorry for the late reply, I need to check in here more often!
I've tinkered with the Stock Screen function at Value Line with some success in generating investment ideas to fuel my AIM method. It's been interesting, but I can't say I've found it to be the perfect answer. I'm not sure I've put one of the screen selection stocks into my portfolio as of yet.
I have found that if I load the screener up with too many conditions, it tends to make the lists VERY short. My suggestion would be to try one condition at a time and then trim its range to get a manageable list length. Jot down the condition and range for future reference and/or print the short list. Try again with the next condition and see what you get. Save or print and repeat for the next one.
You may find a common theme and that may help you focus on a specific business sector that's currently depressed and ready for a rebound. I tend to concentrate on three goals when selecting stocks.
1) Price Appreciation over Time
2) Dividend Capture over Time
3) Profitable Volatility Capture over Time.
AIM will manage the holding with all three goals, so I just sort for things I think will satisfy these. This gives me the overall "Total Return" target through all sorts of market conditions. One stock may be stellar for Dividends in one era and good for Growth in another. Another era might have reasonable frequency and amplitude of price movement that will drive AIM's profit capture mechanism. AIM's ability to adapt to the situation is why I consider each of these three goals when choosing a new investment.
Let me know if this helps.
Best wishes,
OAG Tom
Hi 1979, Re: Book...............
It's a quick book to read. I found it interesting and had also read Sun Tsu's original Art of War. I found the mindset of the shorter term trader to be well described. Considering the length of time our AIM holdings usually are, we aren't part of the ST Trader pool. But, they end up being our Customers and Suppliers as we run our Equity Warehouse businesses. So, understanding their motives and actions helps.
I also found that using the book's main topics of being one's own boss, devising a strategy, gathering information, adapting to the situation and plan execution all made sense with Mr. Lichello's AIM. We do these things even if we don't know it.
I read this book while on a spring vacation over 20 years ago. As I read it I started jotting down notes. My review of the book is the result of those notes.
Enjoy the book!
Happy Financial Independence Day!,
OAG Tom
I read this book and wrote this review a long time ago. It's still a good review and the book's interpretation is still valid.
https://web.archive.org/web/20120830055138id_/http://www.aim-users.com/books.htm#b6
Oh, and substitute v-Wave for IW in the write-up.............
Best wishes,
OAG Tom
The first half of the year comes in positive, but not by great amounts. Here's the image summaries:
Simple IRA (converted from Twinvest to AIM in January, 2024)
(Cash Reserve = 24%)
US Business Sector ETF Composite
(Cash Reserve = 15%)
Tom's 10 Common Stock Composite
(Cash Reserve = 17% and reflects the Required Minimum Distribution for 2024
YTD results before distribution = 7.75%)
International Style-type ETF Composite
(Cash Reserve = 20%)
Cash levels improved while monthly performance varied. Overall, in a tricky year, I feel good about AIM's guidance so far.
Happy Independence Day and also Happy Financial Independence,
OAG Tom
Hi W, Re: Lichello Financial Leadership........
I've not heard of it and the web site requires a phone call to gain access to information on it.
Sorry,
OAG
Nice close on the week.
"We have Lift Off!!!!"
OAG
Why are the NASDAQ
and S&P 500
Diverging from Dow?
Another question would be "and for how long can it continue?
Market risk according to the v-Wave contracted slightly in the last week. While still well above the Median, any improvement is welcome.
The v-Wave is based in the Value Line "Appreciation Potential" data available each week in their "Summary & Index" Section. We've been recording it since January of 1982. It has shown good correlation to the markets over time and given fair warning when risk is high (low appreciation potential) and sound encouragement when risk is low (high appreciation potential).
Hi EU,
Now we'll have to see if there's any follow-through on this price action. It's been a while since MESA last showed a quarterly profit. How many shares were sold short along the way isn't something I know, but we did see that big volume spike as some shorts covered.
Time will tell,
OAG
3.5MM shares traded, too.
OAG
This is looking better again.
OAG
Hi MIJ, Re: Fosback's High/Low Logic Index......................
I pull data from Barron's on a weekly basis. Mr. Fosback based his in the NYSE originally. Since Barron's had it for the NYSE and NASDAQ, I chose to combine both for my "Divergence Index." It works the same as Mr. Fosback's HLLI with it looking at both the number or new highs and lows and taking the Smaller of the values as a percentage of all issues traded in the week. There are weeks when NYSE and NASDAQ are in sync and some weeks when they're moving differently. In total, it works pretty well with the combo.
BARRON'S has been very consistent over the years. I have data from 1982 on to this week. It's an effective sentiment indicator, but is a bit fickle and can change direction quickly. Most libraries will have Barron's available. I subscribe to the On Line version as it saves me about a 10 mile drive (each way).
Hope this helps,
OAG Tom
.....and an Image to go along with the data..................
Indexes were up even while market breadth was lower. Also, the number of new highs and lows over the previous 52 weeks was higher making the Fosback High/Low Logic Index bearish. Valuations are still lofty, too. This puts the dividend yield of stocks a bit below their average.
Keep some Powder dry,
OAG Tom
He was a nice man. He was a CPA, so not the Rambo type. He was more than a decade older than my parents, who were also WWII vets.
Hi Toof,
We paid a price for that war in human loss and then paid for it again years later in inflation.
I guess there's no free lunch served with government overspending; Domino Effect or not.
Watching the WWII Vets in Normandy this week was eye opening. My uncle attempted to enlist 3 times in his 30s. He had just one lung (from pre-antibiotic pneumonia) and was turned away. Then, they drafted him anyway! He was one of many who stormed ashore at Normandy. He was 36 at the time. He lived and continued on until the war's conclusion. He lived into his late 80s.
Best wishes,
OAG Tom
Guess what! Another month has passed and along with it the first half of 2024. Here's where my AIM portfolios stand:
My 9 "Style" International ETF Portfolio:
My U.S. Business Sector ETF Portfolio (mostly Equal Cap Weight Sectors)
My 10 Common Stock Portfolio
My Retirement Account (after required distributions)
May turned out to be a pretty good month overall. Cash is slowly rebuilding as stocks and ETFs rise.
Best wishes,
OAG Tom
Hi LongTimeAIMer,
Wow, I completely missed that bit of news. I've been busy porting all my regular software and apps from my 2014 laptop (main) computer over to a new one. So many passwords, so little time!!
There's a couple of software programs I may not be able to use again. I'm having trouble finding license IDs on stuff I've used for two decades! The one company still maintains a web presence and I've written to them. I'll just have to wait and see if their records are good!
I hope this didn't cause Warren any heart palpitations!
Best wishes,
OAG Tom
Correction:
Euronet symbol is EEFT
OAG
Correction:
Euronet is EEFT and its long term history looks like it would have been very well benefitted by AIM's management method...........
https://schrts.co/BDFeeuht
....and Starbux would have also benefitted from Mr. Lichello's magic.
https://schrts.co/PBWdMjKX
Best wishes,
OAG Tom
Hi JD, Re: v-Wave in living color...........................
It seems Earnings need to grow or interest rates and inflation need to drop for the markets to move much beyond where they are currently.
On a different topic, Value Line dropped SBUX from their 3-5 year growth model and replaced it with Euronet Worldwide (EEET). See the updated list of long term growth stocks here:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174532376
Best wishes,
OAG Tom