version 45 results

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Version 45 results.
In this version I cut the investment amount per trade to 10% of its prior value, which allowed all trades that could happen to happen. In this way one can see which ETFs would trade regardless of order, since overall exposure is now not quite 30% since there is plenty of cash even with repeated scaleIn and scaleOut operations. RAR is 7.48%, which is indicative of the non-reliance at this point on RSI. read more

version 45 economic notes

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Version 45 trades version 2

I revised the economic indicators for accuracy. The RAR increased to 9.82% with 82% exposure. MDD is -16.23%, relatively unchanged. Two open Bond positions with BNDX and MUB.

Economic Interpretation is 6-3 in favor of indicating that we are in an expansion period, as follows:

Version45
Phase 1: Expansion leaving Trough
Phase 2: Expansion approaching Peak
Phase 3: Contraction leaving Peak
Phase 4: Contraction approaching Trough

DGS3MO 90-day Treasury Indicator
DGS3MOprice=0.1
Phase Prediction=1

DBC COMMODITY INDICATOR
DBC price=15.3
Phase Prediction=2

SPY BROAD MARKET INDICATOR
SPY price=375.7
Phase Prediction=2

UNRATE BROAD MARKET INDICATOR
SPY price=6.7
Phase Prediction=2

HOUST HOUSING STARTS CONFIRMATION
HOUST price=1547
Phase Prediction=3

VIXCLS CBOE Volatility Indicator
Phase Prediction=3

CP CORPORATE PROFITS CONFIRMATION
CP price=2118.86
Phase Prediction=3

TWEXM US DOLLAR INDICATOR
TWEXM price=91.5077
Phase Prediction=2

XLU UTILITIES INDICATED PHASE
XLU price=62.99
Phase Prediction=1

Phase Predictor Indicator
Phase 1 Total = 2
Phase 2 Total = 4
Phase 3 Total = 3
Phase 4 Total = 0

Expansion Ind = 1 Contraction Ind = 0 read more

economic summary 1/17/2021

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Economic Summary 1/17/2021

In the lower part of the chart below you can see that the difference between Phase 1&2 (expansion) and Phase 3&4 (Contraction) remains high at 4. You can also get to that math by adding the Phase 1 and 2 totals from the count below and subtracting Phase 3 & 4. Historically that bias of 4 is high. It presumes that the risk of investing in assets that are correlated to the economy is low at this point.

The model is invested in two Bond funds (MUB, BNDX) but also in commodities (PDBC), and as long as the correlation between bonds and the overall market remains positive I suspect that the algorithm will not change its opinion.

Phase Predictor Indicator
Phase 1 Total = 2
Phase 2 Total = 4
Phase 3 Total = 3
Phase 4 Total = 0 read more

Collaboration

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This site is designed to allow collaboration among people who are managing or intending to manage their retirement investments themselves.

The important elements of retirement investing are covered including stock/ETF selection, asset allocation, rebalancing, BUY/SELL timing. What is out of scope is retirement budgeting, expense management, and other financial planning topics such as estate planning.

One of the elements of the site is a monthly strategy that is designed to provide low risk return with a predictable income stream. This strategy is grounded in technical investing theory as well as economic theory. It is designed to be reviewed and managed on a monthly basis.

Review the various postings on the site at your leisure. And “follow” topics of interest to get emails as updates are created. read more

portfolio slicer

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I use this software to give me an aggregate look at the overall investment status on a daily basis by bucket.  It is free, and uses Excel and Power BI as its toolset so it will be around a while, and my data stays local on my machine.

Not sure I mentioned it before.

I updated the Power BI view to also give me a stock chart, so I can run this daily to update the quotes (free) and look at both allocations and individual stock prices.

Probably been using it for 3 years give or take.  Replaced Quicken with it.  Also just to humor myself I loaded every stock trade I made over the past 15 years so I can see some aggregate data.

http://www.portfolioslicer.com/ read more

bucket strategy

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The emerging approach uses a “Bucket Strategy”. Basically, Bucket #1 is Cash, Bucket #2 is Fixed Income, Bucket #3 is Income producing Equities, and Bucket #4 are capital gains focused Equities. On an annual basis, the income from Buckets #2 and #3 refresh Bucket #1, and we use Bucket #4 to capitalize on long term market gains.

This approach has been described in an article by Morningstar. We are modifying the approach slightly to include an additional bucket.

https://www.morningstar.com/articles/840177/the-bucket-approach-to-retirement-allocation read more

george dagnino

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Our analytic approach is designed to link technical investing techniques with economic data. This is described in many of the presentations by George Dagnino. We are attempting to automate this approach using the Amibroker trading software for convenience.

Dagnino’s books that we are baking into this analysis include “Easy Ways to Beat the Market with ETFs” and “Profiting in Bull or Bear Markets”.

https://www.peterdag.com/ read more

DL Miley Picks for 2020

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I struggled to find 5 top picks for 2020, I was only able to come up with 2:

 

  1.  DR Horton (DHI).  I think this homebuilder, currently at about $53, will reach $86 by year end.  With low rates and a booming economy this is my top pick.  EPS growth over the last 5 years was about 24% and return on equity is about 17%, current P/E is only 12, so I think this stock is undervalued.
  2. LCI Industries (LCII).  This auto component supplier, currently at about $108, is undervalued and could reach about $164 by year end.  It also sports a dividend yield of about 2.4% as a bonus.  EPS growth over the last 5 years was about 23% and return on equity is 18%.  The P/E is a bit high at about 20, but expected EPS growth is 20% so I still think that this stock is undervalued.

For a speculative pick, I still like ROKU, as it is not tied to single streaming supplier – it supports Disney+, Hulu, Netflix, just about every streamer out there.  And they have their own ad-supported Roku Channel.  As I said on traditional value metrics I would not pick them but I bought a small amount of shares back in 2018 at about $47, and the stock is now about $148!  I still think that this stock has room to grow.   read more