Weekly Market Assessment
What goes up must come down! What was an unbelievable rally in the market in October seems to have reached a point of exhaustion. After hitting the lows in August and rallying all the way back to even for the year, we seem to have reached a short term peak in the market. The culprit for making this week one of the worst in just under three months...the good ole Federal Reserve! Of course the on again, off again remarks along with market data that suggest that they may be a December rate hike has the market worrying that it "may" happen this time. Will the market take another dive before the meeting or will we remain in a trading range, frustrating traders that are looking for market direction and trying to position themselves before the meeting. What are we going to be talking about when the Federal Reserve finally removes its hand over the market? Bill Clinton I guess said it best, "It's the economy, stupid." Is it possible to look past the long awaited rate hike and realize that "if" they do hike it will only be 25 basis points or is the market truly not ready for such a thing. Has this whole rate hike talk only been an excuse to sell the market, giving those that look past it another great opportunity to buy assets at discounted prices. There are going to be tons of questions when it finally happens and I have a feeling that when it happens it wont be as bad as we have been making it out to be!
The buy the dip mentality continues to remain as the most simple but hardest thing to do in this market! The old saying goes, the bigger the risk the bigger the reward. However the tolerance for risk is something not many understand because when it arrives, most hit the exit button. Over the last five years there have been numerous times where the market sells off and the reminder of 2008/09 comes right back into the spotlight. This is what the market does to us, it reminds us, if we lived through them, of that time and the mere thought paralyzes us to not step in and take that risk of buying on corrections. It seems physically impossible to do when the event is actually taking place. Fear and panic sets in and overwhelms the mind with just one thought, get out! The market has an evil trait where it wants to inflict the most pain on the most amount of people before it lets up and changes its mind. This last paragraph may come off as if we are in a major selloff, we aren't, however if you look towards the commodity markets and especially crude oil this paragraph is very relevant to those who are investing in it. So here is to the buy the dip investors and the investors willing to take on risk looking for the big reward!
Making the Watchlist: Below are the stocks that I will be looking at over the coming months. I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them. You will be able to see and follow their growth and/or decline. Chart links may be attached.
See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.
BlackPacific Capital has created three funds. The first is the Total Return Fund and the other is the Growth Fund. Both of these funds will be compared against the S&P 500. Both will hold a total of no more than five companies each. The Total Return Fund is a low turnover fund where every holding must have a dividend and be undervalued to its peers. The growth fund is made up of momentum high growth stocks where the turnover rate is much higher. Below are their Weekly and Year to Date returns. For more information and to see the holdings in each fund click here.
New holdings and liquidated positions: -11/17- GPRO was added to the Growth Fund at $21-11/12- AIG was added to the Total Return Fund at 59.50, while locking in a dividend yield at 1.88%
S&P 500 Return
Year to Date: -3.5%
Total Return Fund Return
Year to Date: -1.23%
Year to Date: -6.5%