Sell a little more, Part 3
Steve Cook on Disciplined Investing

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Economics

   This Week’s Data

    Weekly jobless claims were unchanged versus expectations of a 3,000 decline.

    I neglected to include the third quarter personal consumption expenditure index (PCE) in yesterday’s GDP report.  Third quarter PCE rose 4.2% (annualized rate) in line with estimates; core PCE was up 2.9% versus a 2.2% increase in the second quarter PCE.

    There are always adjustments to the initial GDP number.  Here is an analysis of likely changes to net exports:
    http://econompicdata.blogspot.com/2008/10/gdp-breakdown-not-better-than-expected.html


    September personal income rose .2% versus estimates of a .1% increase; on the other hand September personal spending fell .3%, in line with forecasts.
    http://www.capitalspectator.com/archives/2008/10/saving_its_the.html

   Other

    More perspective on the taxes paid by ExxonMobil:
    http://mjperry.blogspot.com/2008/10/exxon-taxes-federal-tax-revenue-from-6.html
   
Politics

  Domestic

The candidates on trade:
http://online.wsj.com/article/SB122523957339378291.html

    An analysis of Obama’s health care proposals:
    http://www.american.com/archive/2008/october-10-08/obamas-plan-to-end-private-health-insurance

  International War Against Radical Islam

    A view in opposition to last week’s raid on Syria:
    http://www.slate.com/id/2203243/

The Market
    
   Technical

    The current stock market decline as compared to other major crashes:
    http://calculatedrisk.blogspot.com/2008/10/comparing-stock-market-crashes.html

    Percentage of stocks trading above their 50 day moving average:
    http://bespokeinvest.typepad.com/bespoke/2008/10/percentage-of-stock-above-50-day-moving-averages.html

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    Yesterday’s rally changed nothing technically.  Both indices (DJIA 9180, S&P 954) remain below over head resistance (DJIA 9707 or 9264, S&P 1062 or 954; you pick’em).  The VIX, which traded down, is still at elevated heights (65) and volume was paltry. 

    Two positives which we get new information on today: the VIX closed right on the lower boundary of an easily identifiable up trend--if it closes below that boundary today that would at least hint that lower levels are possible; and  we didn’t get the late day sell off that has become a regular feature of daily trading--that suggests that fund liquidations could be winding down.

    On the other hand, maybe it is not winding down:
    http://dealbreaker.com/2008/10/bring-out-your-dead.php

   Fundamental
    
    Meanwhile, credit conditions continue to improve:
    http://bigpicture.typepad.com/comments/2008/10/ted-spread-impr.html

    While many think that the economic outlook is getting bleaker:
    http://calculatedrisk.blogspot.com/2008/10/feds-yellen-economy-contracting.html

       Our Portfolios will continue to lighten up today.  They are selling both stocks that seem to have gotten ahead of themselves and those that haven’t participated in the rally.  These sales are small and will bring the cash portion of the Dividend Growth Portfolio and Aggressive Growth Portfolio to 25-26% and the High Yield Portfolio to 22-23%.

  







Posted 10-31-2008 8:42 AM by Steve Cook