Saturday, January 30th 2016

The "it's going to get worse before it gets worse." edition. 

As you already know one of my favorite money talk shows is Marketplace from American Public Media. Last week's wrap had a scary conversation about how things are going to get bad in the next few months. The conversation gave me pause about the timing of this (mis)adventure. Foolish as it seems, I am going to forge ahead with the best choices I can make with the knowledge I have, and take comfort in the knowledge that I have a reasonable amount of time before I retire so I still have time on my side.

On the sunny side, this is the first week that officially gets a Ka-Ching rating, a new tag that denotes that stocks in my Buy list actually made enough gains to put me into the "black" or took me higher up than last week. Both Alphabet Inc. (GOOG) and Fresh Del Monte (FDP) ended the week with gains. GOOG made great progress ending the week at $742.95, putting one of my batches well in the black and the other pretty close. On average though, I am 1% over. FDP ended the week at $40.81 giving me a current gain of 3.2%. This put a smile on my face in spite of the potential storm that is approaching.

This week I saw another manifestation of what I have referred to as the "Ownership Bias". At the grocery store while buying lunch time fruit in syrup things, I ended up buying the Del Monte brand over the Dole brand, just because I own FDP stock.

In the Potentials list I have a new stock this week:

Name:                                Novo Nordisk ADR

Industry:                            Drug
Symbol:                              NVO
Timeliness:                        1
Safety:                               2
Technical:                          3
Approximate Price:            $55
Dividend Yield:                  1.6%
Industry Rank:                    27
Low Gain Estimate:            20%
High Gain Estimate:           55%

Novo Nordisk (NVO) is a Dutch company that makes medications primarily for diabetes management, hemophilia, and other conditions. They have a had a strong 2015 and are poised to continue a good run this year too. Two new diabetes drugs have just received FDA approval and more drugs are well into the research and approval pipeline. They have a small (1.6%) dividend and a good price appreciation potential too. This is also the only stock given a Timeliness of 1 by Valueline in the Drug industry group. I foresee a good chance that I will convert this to a Buy in the next week.

Still on the bubble is Cal-Maine (CALM) which I should have bought when I first saw it. If I had I would have put away a gain of 5%-7% and also claimed the dividend that just passed the ex-dividend date. Maybe this will be the week I jump into this omlette too.

That's all I have this week. If you have been a regular reader, please leave a comment and tell me WhatSayYou?

Saturday, January 23rd 2016

The rollercoaster ride continues...

The market had yet another day of free fall, with 500+ point drop during the day. But by the end of the week the panic had subsided and the markets had levelled off to the levels at the beginning of the week. Read the weekly wrap from my favorite money program on the radio Marketplace.

In terms of current holdings this was a good week. Alphabet Inc. (GOOG) jumped up close 36 points to approximately $725 and almost caught up to one of the batches that I are in my Buy list at $726.70. If this trend continues next week I will break out of the red on this Buy.

Fresh Del Monte (FDP) managed to stay about flat to just under the surface and ended the week at $39.36. This is below my purchase price of $35.54, but not too far to worry just yet.

Cal-Maine (CALM) which is still on my list of Potentials has been a tease. Jumping up and dropping back down but not really picking a direction in this volatile market. I am starting to wonder if I should commit to this stock and ride the waves or hold back a bit longer. My worry is no matter what I choose, it might end up being the wrong decision. Aargh! Maybe my 3 ( is it up to 4 this week ) loyal readers want to chime in and leave a comment to push me this way or that. WhatSayYou?

Last week I did not find any stocks that were good Potentials, so nothing new to report this time. 

Saturday, January 16th 2016

The market freefall continued in the previous week fueled by China, low crude oil prices, and the worry about the long terms effects of the Federal Reserve raising rates. 

All this meant that my previous week's Buy, GOOG continued its downswing and ended the week at $694.45, a significant further loss of investment, earning this week another Ka-Flunk rating. Still I am confident that the investment will pay off in the long term. A contrarian (read crazy) side of me is wondering if I should dig in deeper and buy some more. What would you do? Feel free to leave a comment and let me know WhatSayYou?.

Fortunately it was not all gloom and doom this week. Last week I found another stock for the Potentials list and immediately purchased it too, putting it into the Buy set. First the stats on the new find:

Name:                                Fresh Del Monte Products

Industry:                            Food Processing
Symbol:                              FDP
Timeliness:                        1
Safety:                               3
Technical:                         2
Approximate Price:            $39
Dividend Yield:                  1.3%
Industry Rank:                  28
Low Gain Estimate:            0%
High Gain Estimate:           25%

Fresh Del Monte (FDP), is a familiar name if you shop for groceries anywhere in the United States. You probably know them from the Del Monte brand of canned fruit that you have most likely purchased. Although the dividend yeild is not stunning at only 1.3% and the potential gain is a bit on the lower side, this seems to be a solid stock to weather the current storms. Also, it just got a bump in its Timeliness, from 2 to 1 and the Technical (short term price variance) rating has been bouncing between 1 & 2. The Food Processing industry has also been bumped up from 35 last week to 28 this week making this stock a worthy Buy.

I managed to pick up a few at $39.54, and in spite of the rough week the stock ended the week $39.36. A fraction lower than my purchase price, but not to the tune of the drop in my GOOG holdings. I will be watching this one like a hawk and probably taking my gains as soon as they get above 10%.

And now for the Greek Tragedy of the week. For ( the 3 of you ) that have been following my (mis)adventures from the beginning of this year, you know that I have had Cal-Maine Foods (CALM) on my list of Potentials. Well, I have still not purchased it and put it into the Buy set. Then last week as the entire stock market was in free fall, CALM managed to reverse gravity and advanced almost $4 on the day the market dipped 500+ points!! It ended the week at $49.39 over $3 higher than the start of the week, a gain of about 6.5%. Sadly, I missed out on this goose which laid a golden egg this week.

That's all folks!

January 15th 2016: AAAAAAAAAAAAAAAAAAAA...

...AAAAAAAAAAAAAAAAAAAAAAAAAAAAA

January 9th 2016: Addendum

So what happened to Kimberly Clark (KMB), you're wondering. It was listed as one of the Potentials in January 2nd 2016 post but there was no mention of it in the January 9th 2016 post. Well, after further consideration I have Dropped it from the list...

Here's the reason; the stock is priced at a whopping $128 or so. This means to get a reasonable number of them I am looking at multiples of $12800. The price appreciation potential of the stock does not justify, for me, such a large investment at this time.

So it's off the list. Maybe another time.

The Ownership Bias

I noticed an interesting behavior I exhibited this weekend and thought it was relevant to this blog, so here goes...

Needed to buy something for a small home project and was heading to my local home improvement store. As I was driving I noticed that there was a Lowe's store on my way that I had not noticed before. But rather than stopping in there to get what I needed I drove another 5 miles to the Home Depot store!!

It's not like I thought I would not find what I needed, some hardwood and some hardware ( screws and fasteners ), at Lowe's. My only reason was that I own stock in Home Depot and spending my money there seems like a better return on my investment!!

There you go, the "Ownership Bias."

Can I copyright that phrase now?

Also, maybe I should look into buying some Lowe's stock too and save me some driving.

Saturday, January 9th 2016

... Or a funny thing happened on the way to the market.

Two of my picks from last week CALM and FUN got downgraded by Valueline in the report that came out last week. CALM went from a Timeliness of 1 to 2 and FUN dropped from 2 to 3. This meant that FUN immediately Dropped out of my list of Potentials; I may consider it again if at a future date if it rises from the ashes. You know, with a stock symbol like FUN, how can you completely give up on it? 

CALM though is still on the Potentials list because a Timeliness of 2 is still considered a good or Timely stock in the Valueline universe. CALM also withstood the storm that came down on the market last week reasonably well, which is a great segue to the GREAT CHINESE MARKET DEBACLE of 2016.

The Chinese stock holders and the world in general have started to catch on to the hoax of the Chinese stock market. As a person of Indian origin, with a Chinese made knife still stuck deep in the back of my psyche, reference to the "हिंदी चीनी भाई भाई" ( Indians and Chinese are brothers ) days right before the Chinese People's Army attacked India, I have a deep suspicion of anything Chinese. So I am not surprised that the miracle of the Chinese stock market is just a mirage that is starting to fade.

Anyway, the instability meltdown of the Chinese market affected markets around the globe and I figured this would be a good time to buy some stocks that have dropped from their high perches. So, onward to the Buy(s) of the week.

I picked up a small quantity of GOOG at $744.475 and another small quantity of GOOG when the market dropped even further at $726.70. I thought this would be a good time to invest with the market on the downswing, but I underestimated the velocity of the downswing. The week ended with GOOG at $714.47 earning this week the Ka-Flunk label :-( . I am not worried about this because I believe the Google (Alphabet Inc.) is still a good investment and it will pay off.

Still on the list of Potentials is this stock from last week:

Name:                                Cal-Maine Foods

Industry:                            Food Processing
Symbol:                              CALM
Timeliness:                        2
Safety:                               3
Technical:                          3
Approximate Price:            $46
Dividend Yield:                  6.6%
Industry Rank:                  35
Low Gain Estimate:            0%
High Gain Estimate:           45%

The Industry ranking has dropped 3 slots to 35, the estimated yield is down to 6.6%, and both the Timeliness and Technical Ranks have dropped by one. But the price appreciation has risen to 0-45% to match the price drop showing that the stock still has the same appreciation potential. Also the price is only down a few points to a little above $46, so the stock dealt with the China crisis quite well. This makes sense because the company has no real exposure to Chinese markets. All this keeps the stock in the running as a potential buy.

That's all folks...