Archive for 'Trading Tactics' Category

Next Page »

Does Window dressing mean stocks will go up

Not necessarily so for a general market already tanking.

For investorwords, window-dressing means the deceptive practice of some mutual funds, in which recently weak stocks are sold and recently strong stocks are bought just before the fund's holdings are made public, in order to give the appearance that they've been holding good stocks all along.

Investopedia Says…     Performance reports and a list of the holdings in a mutual fund are usually sent to clients every quarter. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings.

The Commodity Boom?

Here's a clip on the recent strength of commodities, made in March. Notable points on:

- parabolic moves in commodity trends, usually prior to bursting
- not all commodities are equal, some are doing better, some are really doing worse
- the media covering all the "all-time highs" in commodities.

Interesting note is that the clip was done just as Gold was hitting $1000 and the analysis had an early warning of an impending decline (although not confirmed as of the the video's date)–which of course happened shortly after.

Philippine Peso is special mention–to illustrate that the boom in commodities has been largely against the US Dollar, as other currencies have also appreciated against the Dollar. So it's largely a dollar weakness fueling the commodity boom.

Cramer’s Lucid Interval

Mad Money's Jim Cramer, normally crazy, actually makes sense to me in this clip. Good points on the inverse relationship between Oil and stocks, first on futures, and secondarily on oil-related stock plays vs. more general economy plays.

Also good points on value players vs. momentum players.

Cute host too.

Lessons From A Trading Diary

If I hadn’t made money some of the time I might have acquired market wisdom quicker.

- Jesse Livermore

The ING Philippine Equity Fund, despite its size, was beating the index in the first half of 2007, until the subprime crash hit, prompting it to switch gears and pursue a modified strategy. 

For the largest institutional equity fund, to shift from Food and Banking to Mining, and to double Communications exposure, such changes didn't happen overnight, but over a dynamic process that took 12 volatile months. Unlike the retail investor, institutional fund managers will always worry about liquidity in their decision making. As Paul Garcia, who runs the ING Philippine Equity Fund, says, "It is difficult to move when you are bigger than the market's turnover."

Diary Of An Investment Fund (Part Five: Evolving Strategies)

October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. 

- Mark Twain

September 2007

Global markets begin to recover from the meltdown. PSE Index stages a 6.2% rally to recoup YTD gains to 19.8%, effectively rebounding 23.9% from its recent low and now within 5.8% of its all-time high. Daily turnover was thin and foreigners remained net sellers for the month.

Diary Of An Investment Fund (Part Four: Turbulent Times)

If there were no bad speculations there could be no good investments; if there were no wild ventures there would be no brilliantly successful enterprises. 

- F. W. Hirst 

May 2007

It's election month. Market sets new all-time high with the PSE Index gaining 6.2% bringing YTD yields to 16.5% while the fund gained 7.4% for a YTD yield of 22.8% The manager writes "following relatively peaceful elections that assured President Arroyo of a stronghold in the lower house." 1Q GDP was suprisingly higher at 6.9%–highest in 17 years. Foreign direct investments soared while inflation remained below consensus estimates.

Diary Of An Investment Fund (Part Three: A Good Start)

“The four most dangerous words in investing are: 'This time it's different.'”

- Sir John Templeton

Starting Point - December 2006

"2006 was A Good Year" states the ING Manager's Report. And good it was. The PSE Index ended the last 12 months up 42.29%, its highest annual gain in the bull run since 2002. The fund beats the index and ends the year with a NAVPU gain of 54.67%, quite a feat considering the fund's size. The rosy outlook for the period is summed up by the Manager's comments: "Prospects are quite positive with fiscal improvements leading to record-low interest rates and a strong Peso, which in turn lay the ground work for a stronger recovery in overall demand and profits."

Diary Of An Investment Fund (Part Two: Following A Fund Manager’s Footprints)

"The hardest thing to explain is the glaringly evident which everybody had decided not to see. "

- Ayn Rand

We should all be so lucky to have an inside peek at a portfolio manager’s playbook. However, I found a way to estimate the trading moves of major funds based on publicly available information. Most investment funds open to retail investors publish monthly fact sheets. Typical content of a fund fact sheet would be key statistics like the following:

In addition to the above, funds also publish a summary of the investments the fund has as of the period end, which can also be found on the fact sheets:

Next Page »