Wednesday, November 26, 2008

My Portfolio..up about 2% from the June 2008 Market Peak

The other day I got into a lively discussion with someone about the stock market. I was unsuccessful in my arguments, however this person challenged me by saying what really counts is your portfolio performance not how you have done on one particular stock.

Since I had not looked at my portfolio as a whole for a few months I updated it to see where I stood.

I used the peak in the Canadian TSX Composite Index in early June 2008 (15,155 points) as a start date for my calculations. Its a date that everyone can relate to. Since that point in time my entire portfolio has increased by 2 percent.

In comparison, the stock market in Canada has dropped by 47 percent over that same time period, falling from 15,000 to 8,000.

Now to be honest, being retired I did not have a huge percentage in the market to begin with so my risk going into the Bear Market was not great compared to someone who was closer to having 100 % investment in the market.

Two percent is not a lot but considering what happened to the market during that time period my guess is that I might place relatively high on a portfolio performance comparison list for any age group.

Time will tell how I make out going forward.

Does anyone else have numbers for comparison?

Friday, November 21, 2008

Canadian Banks Getting Hammered in the Bear, Nov. 21, 2008

The Canadian Financial sector is taking a big hit during this Bear Market and it doesn't look like it is over. So far the TSX Financial Index has corrected back about the last 5 years of increases. A dividend mutual fund, one that includes Canadian Banks has only lost about 4 years of gains. Perhaps the dividends are helping to keep the value higher than the index. Definitely on sale today but my analysis suggests prices will continue lower, at least in the short term. I'm not buying any yet.

Thursday, November 20, 2008

Exchange Traded Bear Fund Update November 20, 2008

I continue to hold my shares in the stock market Bear Funds and see a high probability that they could become more profitable with a further market decline. Here are the current charts for the Canadian TSX 60 Index Bear Fund and the US SP500 Index Bear Fund.
These funds are like holding short positions without the risk of losing more than you paid for them. Also, unlike buying "Puts" they have no time limit working against you.

Saturday, November 15, 2008

Stock Market Comments for November 15, 2008

Its been two weeks since my last post. The markets have continued to churn more or less sideways for the last two weeks. Corrective waves can take a long time to finish.

SP500 and Nasdaq have made new lows in November but not by a lot. DJIA and DJTA have yet to do this. The Canadian TSX has not made new lows yet but it may be close. RIM, one of the big index influences has already done so.

The index volumes continue to remain relatively low or are still decreasing. Continued evidence that this sideways period is only a pause in a continued decent. The fast paced upward and downward moves is continued evidence of a system that continues to be unstable.

Deep Bear Markets (say negative 40 %? or more) often take in the order of 2 - 3 years to bottom so this is all within normal historical experience.

I continue to see some evidence that this Bear Market actually started in 2000 and this is just a continuation. I have stumbled across a number of stocks have already gone below their 2002 lows and some that are approaching that price level. The 2002 to 2008 Bull may have been just a large upward move within a much longer duration Bear (correction). The mainstream media has yet to see this happening.

An interesting stock is Fedex. It has a well defined almost text book set of 5 waves. It now appears to be correcting the Bull market it experienced over the last 30 years or more. It is now into what Elliott called the next higher cycle, a second wave. And, second waves, in the extreme, have the potential to retrace almost all of the first wave. A third wave, one that will go above the 2008 peak, will only occur if Fedex survives the Bear. Some stocks/companies don't.