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Today's Headline ... Stocks Now Selling At a 10% Discount According to Moringstar

edited May 2012 in Fund Discussions
Linked below is Moringstar's Market Valuation Graph which currently reflects that stocks in general are trading at ten percent below their fair value as of yesterdays market close. It is getting close for me to put my buying britches on!

http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx

It looks like ISI, S&P 1500 Index ETF, closed at its 90day low. It's charting, that I follow, is linked below. (It appears the hyper link took a short cut and everything did not transfer into the link. Simply input the codes into the T/A area of the chart and you can view in more detail).

http://finance.yahoo.com/echarts?s=isi#symbol=isi;range=3m;compare=;indicator=dividend+split+sma(21,65,260)+macd(27,12,9)+mfi(9)+stochasticslow;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

Have a Great Day ... and, Good Investing,
Skeeter

Comments

  • Buying a little on some long-term holdings today or tomorrow probably, but otherwise not doing much. Some ETFs, some funds, and an array of individual holdings (primarily foreign, some US.)
  • edited May 2012
    Hi Skeeter,

    Maybe we should do a phone conference to find what we may have that you would be interested in buying.........:):):) Just yanking on your chain. I just do not feel this year's bottom is in place for the equity sector, broadly noting.

    Catch
  • Skeeter, I have my shorts on (inverse mutual funds) in my IRA. From my charts, it looks like it will be a while before I put on my buying britches.

    Tony
  • don't know about if stocks are discounted... I think commodities may make more senses long term... My hunch is that we'll finish the year flat or <--> +/-5%

    http://finance.yahoo.com/blogs/daily-ticker/long-term-case-commodities-push-comes-shove-going-141058084.html
  • Nothing is moving on fundamentals. It's all fear and/or panic right now. We'll maybe have some quick, brief surges on particular data releases, but the Markets are scared. The "new normal" is not normal at all. It's the wall of worry, about Greece and the EU in general. Throw in China's slump. It's all short-sighted. The EU has too much at stake, after working ever since WW II to CREATE the EU, to let it fall apart. But the hard decisions have yet to be made. Some bunch of somebodys are going to have to swallow hard and write-off a big buncha losses. My own holdings are down from a recent high by just -2.48%. But I've been making a change or two, lately. I added to holdings last month. (Just in time for this downturn.) Dunno if I can trust that number. But anyway, no one's come as far as to steal and eat my lunch.

    ...And so, I figure the short-term traders will serve to SUPERFICIALLY ameliorate things here and there on a daily basis. Otherwise, I am convinced that we are in the midst of an era-long funk. I'm counting more and more on bond-dividends, rather than equity-capital-gains. Profits will not soon again be like those we saw in the go-go- 1990s.

    Unfettered capitalism did this. But systems need people to run them. Big Business got too greedy, and government has been and continues to be in bed with BB. It's a recipe for awful-ness, like lasagne that comes out of the oven looking and tasting like bricks.
  • Reply to @Tony:

    Hi Tony,

    You might be right on your short positions ... after all J P Morgan probally has to sell some assets to cover its stated two billion loss. That should put some selling pressure somewhere. Don't you think? Or, perhaps the New York Fed will let them visit the discount window at a low, or no, cost loan. I wonder if they are one of the Plundge Protection Team's banks?

    When I feel the fancy ... S&P 500 Index in the 1320s ... I'll start my accumulation and spread it over five months at a measured pace increasing my equity allocation by about one percent per month and reducing cash by a like amount as long as the Index remains back of the 1320s and there is at least a 10% discount shown by Morningstar. From my thoughts and perspective that should produce at least a four percent return by year end on these special positions ... probally more. Put that with what I have already made this year on special investment positions ... I'll take it.

    Hey ... I got those britches (breeches) out today ... S&P Index Closed at 1330 ... and, I am ready to suit up. Just show me the low 1320s. I wish you the very best with your shorts. Some of the mutual funds that I invest in are currently carrying some short positions as of my last check. It works out that I am about 5% short overall in my portfolio accordingly to Moringstar's Instant Xray.

    Good Investing,
    Skeeter
  • Reply to @catch22:

    I hear you Catch ... I'll just start the nibbling process in the 1320's (S&P 500 Index).

    A long five months to go ... Not backing the truck up ... Just measured buying.

    Skeeter
  • Hi Max,

    Max you are probally right about fundamentals. Perhaps J P Morgan is doing some selling of assets to cover their stated two billion loss, working perhaps on three; and, if this is so, I would expect that would be putting some selling pressure some where. Perhaps there are others that are having to cover losses too and perhaps some are selling just out of fear to raise cash and/or reduce risk in their portfolio.

    I look for the markets to turn upward once we get through the November elections ... and, between now and then, I look for news driven volatility in them.

    I have asked myself ... I wonder if the Feds low interest rate policy has not caused some banks to take out sized investment and trading risk? Indeed, perhaps so.

    Years back, in my special positions, I did not start to load equities until the early fall. The past couple of years I started in mid summer ... and, now summer is not yet here and I likely will start my accumulation of them soon.

    Good Investing,
    Skeeter



  • Reply to Skeeter:

    Hi Skeeter,

    Thanks for your reply. Yes, the inverse funds are working now, but I will be caught going the wrong way whenever the market turns around. I am trading ProFunds mutual funds and using StockCharts.com for my charting. One overlay that I'm using on selected funds is Parabolic SAR, and the distance between its line of dots and the price is increasing with time. An indicator that I'm using is ADX; its +DI line and -DI line are diverging with time. These actions are in part why I think the upturn could be a while yet, but I just take what the charts give.

    Good charting,
    Tony
  • Hi Skeeter,

    I don't place a lot of value in the M* FV chart as even at a 10% discount, the market has moved significantly below this discount in recent times: 91% FV (8/2/11) down to 77% FV (10/3/11); and 90% FV (1/10/08) down to 55% FV (11/20/08) and then up to 61% FV (3/5/09) at about the market lows.

    This market is likely heading to the 1300-1310 level on the S&P 500, and below this level, I anticipate QE3 as the incumbent is trailing in the most recent objective polls. So, I will be buying riskier funds on a daily basis as we approach 1300. And the fact that Bill Gross is anticipating QE3, which will benefit his large MBS positions in his funds, makes me confident that this will become a reality if the equity markets move 5% or more lower.

    Kevin
  • Hi Tony,
    I will preface my question with the following in mind. At least for myself, although I suspect this must be the case for many people; I may find the need to read a given book about technical or scientific information that I do need to understand and learn. If I am able to choose 5 different authors writing about the topic, I will likely discover that one writer will have a style or method, that at
    least for my comprehension, is easier for me to grasp versus another. It is also possible that the combination of the 5 writers and their style or methods of presenting the information will fill in most of the informational holes.
    As to your note about ADX and the +DI and - DI; do you find this method to be a superior indicator above other methods you have knowledge of; or are you using this to modify or support other charting?
    I have not had time to investigate ADX, although I hope to investigate more at the StockCharts learning and through other internet sniffing. The dots and distance between are trends lines and strength, yes? Or have I misunderstood the base nature of the graphing style?
    I did discover enough to use ADX against some etf's and fiddled with some settings; but I am a baby crawling on the interstate highway when playing much past moving averages of various day ranges and RSI's.
    Although I know of, but don't understand the various math models associated with the many charting methods available, I do believe individuals will find some charting styles to be more understandable than others, even when the same data is being displayed.
    I know some people who absorb the same data more readily from a simple pie chart versus a simple bar chart. I suspect even the coloration used may have some effect.
    I would enjoy knowing the results of using investments charting, when two observers have a full knowledge and understanding of what the data is supposed to represent; but one person lived their life always with a view of the never ending surface of an ocean to the horizon and the other person always had a view of the 3D surface features of a nearby mountian range. I fully suspect they each would feel more comfortable with viewing a particular graph style.
    Our brains are most complex, eh?
    My question remains: Do you find this method to be a superior indicator above other methods you have knowledge of; or are you using this to modify or support other charting?
    I thank you for your time.
    Regards,
    Catch
  • edited May 2012
    Hi Kevin,

    I have a high school buddy of mine who is an engineer and invest in the market as I do. He uses highly technical programs and I use elementary math skills I learned from the fourth throuh sixth grades. High, low, mean (average) and +/- varriance (channel). For me the +/- varriance is the slot or the width form the mean.

    Now let us explore. The 52 week high number for the S&P 500 Index in round numbers is 1420 and the low is 1260 that produces a range of 160 with a mid point or average of 1340. Many of the charting experts have called for support in the 1340-1350 range. So for me to decide where I want to start an accumulation phase of buying, I targeted 1320 ... Looks like we will get there quite possibly today. Why 1320? It is about 5% off the low and 7% off the high ... It's slot range 3%. Lets see that range would be 1320 to 1360 or a 40 point spread. If one covers the spread that would leave a profit of 3%. To expand the profit you have to expand the range form mid point if that is what you are working off of as I am here. So figuring off of a 1320 counter trend rally most likely would produce a run of at least 3%. Bingo, you now have Skeeter's Elementary Trading Matrix.

    I threw in Moringstar's Market Valuation Graph as another measure of value.

    Heck I've got my game plan in place and my buddy ... He's still crucnhing high level math number far beyond me.

    Have a great day ... and, most of all, run with what you know.

    Skeeter
  • Reply to @johnN:

    Hi johnN,

    I wanted to think on this a little before I responded. I think you are on spot on two things ... The market S&P 500 Index could end the year +/- 5% form its starting form back of 1260 and commodities are in a correction form my thoughts.

    I have linked below the Spider Sector ETF site. It shows the Index itself plus its major sectors. You can change the viewing peroid and see which ones are leading and trailing for a selected peroid. Hope you find value in this link. Watch and pay special interest in the engery and materials sectors move as the periods are changed.

    http://www.sectorspdr.com/sectortracker/

    Have a great day ... and, thanks for expressing your thoughts.

    Skeeter

  • Reply to catch22:

    Hi Catch,

    I cited the recent performance of ADX and SAR as a way to indicate that the trend was becoming more negative, not that they are superior to other overlays/indicators. I use their StockCharts default values. They do support other overlays and indicators that I use.

    SAR is probably kind of simplistic. When its chain of dots is above the price line, it indicates a down-trend. When the dots approach the price line, the trend is likely ending, and the dots may soon flip to the other side of the price line. Likewise, in a downtrend, the ADX's -DI line is above the +DI line, so when the trend is ending, the -DI line crosses down thru the +DI line. I'm glad that you found StockCharts' ChartSchool; it is a good resource to find much more detail about SAR, ADX, and other indicators/overlays.

    Best, Tony
  • Hi Tony,
    At StockCharts, just below whatever chart one has set to view; there is an icon for "linkable version" which will refresh the chart page and then allow to copy/paste the link to the chart. I used this for FA and it does function properly for a linkage. Might you find the time to perform this function, so that we may view how this chart appears? I am curious how it may vary with what I fiddled with for some settings.
    I thank you for your time with this.
    Regards,
    Catch
  • Reply to catch22:

    Catch,

    The linking didn't work for me. If you want to look at some charts that I think make sense, I recommend The dk Report. It is ranked no. 9 in the Public ChartList on StockCharts.com.

    Tony
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