Wednesday, April 26, 2017

Sunday, April 23, 2017

4/23/2017 A Stock that No One Seems to Want

Sector Model
XLB
0.08%
Full Model
Date
Return
Days
BT
8/11/2015
-41.79%
621
DY
10/30/2015
39.56%
541
TMK
11/23/2015
27.80%
517
NVR
12/16/2015
26.15%
494
CMP
2/19/2016
0.93%
429
NVR
2/22/2016
31.46%
426
ENOC
3/15/2016
-22.13%
404
AMWD
3/17/2016
27.87%
402
CASY
5/12/2016
-1.17%
346
AVB
5/24/2016
6.83%
334
AEM
6/7/2016
-7.86%
320
ESRX
6/13/2016
-12.45%
314
AMED
6/16/2016
4.47%
311
FRO
6/27/2016
-11.55%
300
ASTE
7/12/2016
5.39%
285
MFC
9/1/2016
27.57%
234
SFM
9/8/2016
15.55%
227
CFFN
9/12/2016
6.95%
223
FIG
12/6/2016
58.88%
138
PMC
3/16/2017
2.67%
38
(Since 5/31/2011)
S&P
Annualized
9.91%
Sector Model
Annualized
16.32%
Full Model
Annualized
13.02%
S&P
Total
74.60%
Sector Model
Total
143.85%
Full Model
Total
105.83%
Sector Model
Advantage
6.41%
Full Model
Advantage
3.11%
Previous
2017
S&P
66.43%
4.91%
Sector Model
120.54%
10.57%
Full Model
91.27%
7.61%

The market news sites are talking about the Trump trade.  Has it fizzled?  Will it get a second life?  Should we be in the market or out of the market?

Since I’m always in, the question isn’t the Trump trade, but the Clontz trade.  What industries are in high supply and low demand?  In other words, what’s on a fire sale?

The stock I’m looking at right now is GNRC – Generac Holdings.  They make generators and do well when the weather is chaotic and oil prices are high… neither of which is true at the moment.  Oh yes, the march for science is saying that the weather will get destructive as a result of climate change, but it hasn’t been very destructive lately.

When do people buy generators?  Well, right after they experience a power outage.  A hurricane comes through and everyone who needed a generator two months ago will buy one now that they no longer need it.  That’s just human nature.

But this brings us to two different kinds of stocks: a quick trade or a longer term investment.  A trade is in high demand and shrinking supply.  More and more dollars are chasing fewer free shares.  An investment is just the opposite: fewer and fewer dollars are chasing stocks that no one wants to hold onto.

That’s GNRC.  No one seems to want it.

And that’s why I’m watching it.

Tim


Sunday, April 16, 2017

4/16/2017 The New Abnormal Normal

Sector Model
XLB
-1.62%
Full Model                                 
Date
Return
Days
BT
8/11/2015
-42.81%
614
DY
10/30/2015
26.10%
534
TMK
11/23/2015
24.70%
510
NVR
12/16/2015
27.70%
487
CMP
2/19/2016
2.36%
422
NVR
2/22/2016
33.08%
419
ENOC
3/15/2016
-23.50%
397
AMWD
3/17/2016
25.90%
395
CASY
5/12/2016
-1.56%
339
AVB
5/24/2016
6.70%
327
AEM
6/7/2016
-6.64%
313
ESRX
6/13/2016
-12.44%
307
AMED
6/16/2016
3.43%
304
FRO
6/27/2016
-11.28%
293
ASTE
7/12/2016
2.38%
278
MFC
9/1/2016
26.75%
227
SFM
9/8/2016
15.29%
220
CFFN
9/12/2016
3.55%
216
FIG
12/6/2016
58.68%
131
PMC
3/16/2017
2.45%
31
(Since 5/31/2011)
S&P
Annualized
9.79%
Sector Model
Annualized
16.03%
Full Model
Annualized
12.83%
S&P
Total
73.13%
Sector Model
Total
139.70%
Full Model
Total
103.34%
Sector Model
Advantage
6.25%
Full Model
Advantage
3.05%
Previous
2017
S&P
66.43%
4.03%
Sector Model
120.54%
8.69%
Full Model
91.27%
6.31%

Immediately after the sale of UPL, the stock nearly doubled in price again.  Since the model adjusts the trading strategy based on how stocks perform even after a sale, the rotation process has been revised into a manner that would not have missed that opportunity.

I had been observing that potential change in the process, and the UPL miss was only the final verification – and a rather expensive one at that.

The short version of the story is that the median trade will increase to become more like the average trade – a hold of five and a half years.

In other news, the Sector Model remains firmly on the long term regression line – abnormally “normal”.  Something has to give. 



In Sector relationships, the market is both defensive and rising, the ultimate indecision.





     
Nothing to do at the moment but wait.


Tim