is the only place people ride to in a Rolls Royce to get
advice from those who take the subway. "
2007 is starting out well. There is still no evidence the
bull market has matured. There is little likelihood
a bear market with declines into the 20% range is around the corner
My Guru would like to see a health restoring 5-10% correction in the
months ahead to assist in furthering the
bullish trend. Absent that, dollar cost averaging is the
best way to invest new money. That, and patience.
- GDP in a range of 1.5 - 2.5% is expected through
New Housing Permits are at a nine year low.
- Oil will trade in the 50 - 70 range.
No major tax law changes. Gridlock reigns supreme.
- US Exports will have another good year
as the dollar is still weak against the Euro.
- Gasoline prices will remain a wild
Inflation remains tame. Year over year
inflation is running around 2.6%
Fed Rates will probably stay @ 5.25%
during early 2006.
Later on in the year fed rates will be
reduced to a 4.25 - 4.75% range.
S&P 500 operating earnings will come in @ $88.00
in response to Dollar weakness vs. the Euro.
A Forward PE of 16 -17 looks likely.
PE = Price of the Stock Divided by
Earnings per Share.
= Price of the Stock Divided by Expected Earnings
the ideal scenario for the next year would be a health restoring 5-10%
correction in the market before
continuing on to new highs.
the model will continue to monitor for signs of deterioration going
It is my Guru's view that
conditions favorable to a bear market
trend are not yet in
The 60 Day Put- Call ratio remains favorable, although this contrary
indicator has eroded somewhat.
August of 2006 saw an impressive 1.06,
which is very high.
The current level of .88 suggests
the extremely deep bearish sentiment seen in mid
This indicator bears watching.
Personally, I think with the Dems in
control the bearish sentiment could deepen.
The threat of raising taxes, minimum
wage, class warfare, the nanny state, and Nancy Pulosi could push this
sentiment back up nicely.
Timing Portfolio Changes:
Fairholme Fund is replacing Muhlenkamp Fund, thereby eliminating that
Year End Results.
Active / Passive:
Total Market Index:
Year End Result: 21.4 %
last month sure ended up with a bang. My annualized return of
21.4 % did quite well against my
guru's 16.5%. This was in part because of the heavier
weightings in the overseas markets, Europe in particular.
Another reason was thatr I sold Muhlenkamp (MUHLX) and
Rydex OTC (RYOCX) early last year in favor
Weightings in Telecom helped out as well.
Last year featured a gradual liquidation of small cap and value funds
in favor of dividend producing large cap funds.
This year I am continuing to move away from mid cap value and into mid
- large cap growth. I am of the opinion
that true value plays are going to be harder to come by in
There will always be sectors that are in and out of favor
but I think growth will be a good place to be.
I sold a majority of TAVFX and bought FAIRX, a mid
cap growth oriented fund.
I also sold FWRLX in favor of FSTCX, which I hope performs somewhere
around PRMTX catagory.
ACUIX, the fund listed under US Large Cap is not actually the fund I
own. The fund I own is *AIUYX.
This is the same fund as ACUIX without the load. It is not
listed outside of the custodian.
However, if you are interested in dividend producing funds without a
load, this would be a consideration.
So, here is the latest breakdown:
looking at reducing international exposure later on this year unless of
course it continues to run.
I would also be wary of country specific funds, in favor internation
funds with a broader approach.
might look at this list and see a lot of duplication - funds with
I agree. However, when you are dealing with several types of
retirement funds your choices within
those funds usually tend to be somewhat limited.
This type of approach spreads the risk, as well as the reward.
Doesn't help reduce paperwork, though.
Natural Gas has spent the last year tanking. We also are
having a warm winter. Imagine that.
So, I did some looking at
candidates within my price range and came up with NGAS:
This to me
looks like a candidate for a few investing $$.
This is a small player in the Gas Industry and one thing that gives me
pause is the PE.
However, the five year average PE on this stock is about 58.
Can it go lower? Sure. Will it? My
crystal ball says if it does, not by much.
So, I sold about 2/3's of my DHI stock for a 9.2%
gain and bought this at 6.09.
I think that the way hedge funds and commodity traders bounce these
types of stocks
around, this is worth a small bet.