TB Rambling Man
Profits of companies are going up; profits are going down. Interest rates are going up; interest rates are going down. The currency (you name the version of "In God We Trust") is going up; the currency is going down. What's the average investor to do without knowledge of what Mr. GreenJeans is going to say today?
I'm slowly expanding my TA to include the companies on US stock exchanges that have a market cap of more than $50B. Frankly, this includes some of the giants of the World (as we know it). In fact, it seems that the flat earth society continues to be alive and well!
I've spent much more time studying these investment themes than I spent getting my Masters degree. But then, the Masters degree I got is worthless!
There are (as of 5/31) 57 companies with a Market cap of more than $50B. This group is well-diversified, but represents six main themes -- health care, financial, technology, telecommunications, consumer products and energy. An investment guru would be hard pressed to classify any other themes in modern investment folklore.
I previously indicated my belief as to the well-defined investment cycles. The investment cycle relates to the stock; not the company. There really are only six cycles, as I previously identified.
We owe it to ourselves to understand the direction of the Market in which we are currently investing. In this regard, a knowledge of long-term cycles is clearly appropriate. These cycles have been discussed for a long time and we are clearly in a bullish cycle. Tracing this cycle back to 1831, it is not scheduled to end until the year 2000 (Y2K rears its ugly head). Could one possibly not look at the charts and understand that current trend is up?
Next one must consider the short and long-term trends in the sector. Excuse me, but would you want to maintain energy or technology inventory on your store shelf! I might even add telecom to this group. But, are we buying a company or a stock?
Next, consider that we are a world Market (until we find a way to get off this rock) and we really need to consider whether better investment opportunities are available. Alas, finally, we are at the point of considering individual equity investments.
Long ago, Bill on the SI BK thread convinced me (by waving his mouse) that all FA is reflected in the current TA. I would add that this applies only to the Big Boys, the stock price of which is not manipulated by the sanctioned money (excuse me) market makers. In this case, it has been clearly demonstrated that the Pirates control the regulators. In fact, they are the regulators. The game is, in fact, rigged.
We need to understand that the game has changed! Each month millions, if not billions, of dollars are going into the Index funds. Thus, GE (at a ridiculous historical PE) has to get even more ridiculous. To deny this is to deny the obvious!
Let's get back to the main point. For the short term the Market is going up. So what. It doesn't help one's individual financial worth if one invested in our beloved Intel a year ago. One would have been better off acquiring (not investing) in a CD.
The purpose of Rambling Man is to acknowledge that all equity investments will generally move in the direction of the Market. Duh! However, I've come to understand that it is absolutely foolish (the only time I would refer to anything Motley) to consider any secondary stocks in one's equity portfolio. It is just not necessary!
Just wait 'til the Big Boys beat up the stocks of the Big Boys and buy them.
Now then, let me put forth a hypothesis: a brutal lesson learned. Just wait 'til the Big Boys are killed and buy them. A better JT lesson I could not imagine.
However, TA involves an understanding of trendlines, support, resistance. and retracement. Duji Juju doesn't hurt.
Again, based on my education, the issue involves investing in a company when the MACD is bearish (but trending to the bullish side) on a weekly basis, but trending bullish on a daily basis. OK, putting it all on the line (or like I say walking out on the limb with saw in hand), I vote GLX as my vote to exceed Market performance over the short term. Let's see if I'm right.
BWDIK and all other disclaimers for those of you that chose to look without adding your input.
Berney |
