Mouse
|
XLB
|
3.56%
|
|
Rabbit
|
Date
|
Return
|
Days
|
NVR
|
12/16/2015
|
-3.48%
|
347
|
CASY
|
5/12/2016
|
7.47%
|
199
|
AVB
|
5/24/2016
|
-9.35%
|
187
|
AEM
|
6/7/2016
|
-18.51%
|
173
|
AMED
|
6/16/2016
|
-17.31%
|
164
|
FRO
|
6/27/2016
|
-2.57%
|
153
|
ASTE
|
7/12/2016
|
15.49%
|
138
|
BSET
|
8/3/2016
|
17.28%
|
116
|
MFC
|
9/1/2016
|
29.25%
|
87
|
CFFN
|
9/12/2016
|
15.15%
|
76
|
Turtle
|
Date
|
Return
|
Days
|
BT
|
8/11/2015
|
-34.94%
|
474
|
DY
|
10/30/2015
|
-0.76%
|
394
|
TMK
|
11/23/2015
|
18.58%
|
370
|
UPLMQ
|
12/1/2015
|
82.04%
|
362
|
CMP
|
2/19/2016
|
17.06%
|
282
|
NVR
|
2/22/2016
|
0.59%
|
279
|
ENOC
|
3/15/2016
|
-13.93%
|
257
|
AMWD
|
3/17/2016
|
13.39%
|
255
|
ESRX
|
6/13/2016
|
1.30%
|
167
|
SFM
|
9/8/2016
|
9.35%
|
80
|
Since 5/31/2011
|
Annualized
|
||
S&P
|
64.54%
|
9.49%
|
|
Mouse
|
128.00%
|
16.18%
|
|
Rabbit
|
66.60%
|
9.73%
|
|
Turtle
|
120.87%
|
15.51%
|
|
Previous
|
YTD
|
||
S&P
|
51.94%
|
8.29%
|
|
Mouse
|
77.79%
|
28.24%
|
|
Rabbit
|
57.21%
|
5.97%
|
|
Turtle
|
58.35%
|
39.48%
|
So where are we?
With about a month left to the year, the Turtle continues to
outperform the Rabbit, which is set to be officially absorbed into the Turtle
for 2017. I’ll continue with the same 20
stocks but rotate and select on the time schedule and fundamentals the Turtle
has been using:
Small cap stocks with room to grow, low current P/E driven
more by rising earnings than falling prices, and good 3-5 year projected
returns in an industry that looks bottomed out on its unique business cycle (no
two industries are exactly alike in this respect).
The holding periods will average about five years as well –
some longer and some shorter, with a typical trade about once a quarter for the
best trade in the portfolio.
The Sector Model continues to function as expected:
The current deviation from the regression line is -0.11406489. A standard deviation between 2 and -2 is
entirely normal behavior. This is barely
more than a tenth below the regression line.
It can’t get more “normal” than that.
The post-election
rally hasn’t yet shown up in the sector ratios, so we are still showing a bear
market configuration:
And what of Trump? He’s
an unknown. A real bull market COULD be
sparked by a perfect combination of taxes and regulation, but it would require
an INCREASE in both trade and immigration.
Trump is in favor of lowering taxes and regulations, but campaigned to
renegotiate trade agreements and cut down on illegal immigration. It’s not impossible for him to increase legal
immigration and increase trade by no-tariff bi-lateral agreements.
But Trump is running into the same problem that Clinton (or
anyone) would be facing in these next three years: the long term demographic
trends pose a serious head-wind to the market, pointing to another major bear
market taking the S&P back into the 1600 range by 2019 (going into the next
election).
The current value of the S&P is 2213.35. The projected value of the S&P should be
2228.43. We are exactly on target.
Without some kind of massive inflationary stimulus, we
shouldn’t pass our current levels again until 2023.
Demographics aren’t destiny, but they aren’t to be ignored
either.
If I were President I’d ramp up both trade and targeted
immigration, and cut taxes and regulations.
But I’m not President, and none of the candidates promised to do all
four of those actions.
We may be in for a long rough ride.
Tim
Great information Tim. I am going to sign up for your emails. I am a friend of Josh.
ReplyDeleteThanks Tim.
ReplyDelete