Portfolio Update 2/8/10

Before reading, please see the disclaimer in the 'About Me' section.

Here goes...

Today the Wilshire 5000 closed at 10,913.90, down from 11,330.55 since my last post on 2/3/10. The Wilshire 5000 is now 4.00% above it's 200-day moving average. The last few weeks have been a pretty solid consolidation in the market. In my opinion, this is a reason to be bullish, and why I have recently filled the portfolio.

The Investor's Intelligence Survey was released on Thursday night of last week, as it is every week. This survey is a measurement of the sentiment in the market. This week's reading was 38.9% BULLS, and 22.2% BEARS, for a spread of 16.7%. This is in comparison to a reading of 40.0% BULLS, and 23.3% BEARS, for a spread of 16.7% on January 26th. The spread between bulls and bears has remained constant, however, there are fewer of each out there in the market right now. Again, I see this as bullish.

The Volatility Index closed today at 26.51, up from 21.60 at the date of my last post.

Now for the portfolio...
1) Verizon at $28.37, down 14.15% for the year (ouch...still).

2) AT&T closed at $26.25, down 1.65% for the year.

3) GE closed at $15.60, up by 3.11% for the year.

4) Citigroup closed at $3.15, down by 4.83% for the year.

5) TBT, the doubleshort U.S. Treasury ETF closed at $46.77, down by 6.23% since our buy.

6) FXP, the doubleshort China ETF, closed at $10.41, up 20.77% since my buy.

7) GOOD closed at $13.82, up by 2.52% since my buy.

8) NLY closed at $17.88, up by 3.17% since my buy.

9) X closed at $44.09, down by 0.05% since my buy.

10) AAPL closed at $194.12, up by 0.19% since my buy.

Overall, the portfolio is up by .27% (-4.27% for the DOW Dogs), versus -5.08% for the Wilshire 5000. I have widened a nice 5.35% gap against the market for the year, up from 2.80% last week.

Some of you have commented on my recent transactions, and as always, such commentary is greatly appreciated. Please pass this blog along to family and friends, and get them participating as well.

Update 2/4/10

Please see the disclaimer in the 'About Me' section...

Given the fact that the market is getting killed today, I think it's time to go shopping. I am going to add X (United States Steel) to the portfolio at $44.11. I will also pick up Apple at $193.75. These two picks will round out my 10-slot portfolio, and we will see how it goes from here.

Market/Portfolio Update 02/03/10

Before reading, please see the disclaimer in the 'About Me' section.

Here goes...

Today the Wilshire 5000 closed at 11,330.55, down from 11,342.70 since my last post on 1/27/10. The Wilshire 5000 is now hovering around 8.33% above it's 200-day moving average. In my eyes, this is a sign that the market is still consolidating, and that's a good thing

The Investor's Intelligence Survey was released on Thursday night of last week, as it is every week. This survey is a measurement of the sentiment in the market. This week's reading was 40.0% BULLS, and 23.3% BEARS, for a spread of 16.7%. This is in comparison to a reading of 52.2% BULLS, and 18.9% BEARS, for a spread of 33.3% on January 19th. Since the last reading, the spread between bulls and bears was cut in half, not necessarily a good thing, and helping to support my conclusion from the prior paragraph.

The Volatility Index closed out the week at 21.60, down from 23.14 at the date of my last post.

Now for the portfolio...
1) Verizon at $29.19, down 11.67% for the year (ouch...still). However, we were able to get the dividend of $.475 on February 1st. For the purpose of this exercise, we will assume all dividends are reinvested. As such, we were able to pick up another fraction of a share, and to lower our cost basis a bit. It is also worth noting that Verizon has crossed below it's 200-day, 50-day, and 20-day moving averages. A sign that I see as very bullish.

2) AT&T closed at $26.37, down 1.20% for the year.

3) GE closed at $16.68, up by 10.24% for the year. It's also worth noting that one of the analysts on Fast Money mentioned it as a buy today, as well as X.

4) Citigroup closed at $3.37, up by 1.81% for the year.

5) TBT, the doubleshort U.S. Treasury ETF closed at $48.68, down by 2.41% since our buy.

6) FXP, the doubleshort China ETF, closed at $9.14, up 6.03% since my buy.

7) GOOD closed at $13.97, up by 3.64% since my buy last week.

8) NLY closed at $18.05, up by 4.05% since my buy last week.

Overall, the portfolio is up by 1.35% (-.91% for the DOW Dogs), versus -1.45% for the Wilshire 5000. I have opened up a nice 2.80% gap against the market for the year, not too shabby. I still have two slots open, but as of now I am unsure of what I want to do with them. Stay posted.

As always, question and comments are most welcome.

Portfolio/Market Update - 1/27/10

Before reading, please see the disclaimer in the 'About Me' section.

Sorry it has been so long since my last post. It's that busy time of the year with CPA exams and work getting in the way. Apparently some people actually read this blog, so I am taking the time out tonight to update it. Here goes...

Today the Wilshire 5000 closed at 11,342.70, down from 11,715 since my last post on 1/15/10. The Wilshire 5000 has lost a little over 3% since my last post, and is now hovering around 9% above it's 200-day moving average. It is worth noting the last time the index was below 10% above it's 200-day moving average was back in July, and the index was 20% higher than it's 200-day moving average last in the end of October.

The Investor's Intelligence Survey was released on Thursday night of last week, as it is every week. This survey is a measurement of the sentiment in the market. This week's reading was 52.2% BULLS, and 18.9% BEARS, for a spread of 33.3%. This is in comparison to a reading of 53.4% BULLS, and 15.9% BEARS, for a spread of 37.5% on January 12th.

The Volatility Index closed out the week at 23.14, up from 17.91 at the date of my last post.

Now for the portfolio...
1) Verizon at $29.87, down 9.84% for the year (ouch...still).

2) AT&T closed at $26.70, up .04% for the year, and flat since my last post. However, anybody who watched the Apple show today has to be encouraged.

3) GE closed the week at $16.30, up by 7.73% for the year.

4) Citigroup closed the week at $3.20, down by 3.32% for the year.

5) TBT, the doubleshort U.S. Treasury ETF closed at $47.77, down by 4.23% for the year. I have been following the Bernanke story, and while I am super-bullish on this ETF, I would be even more bullish if he does not get confirmed for a second term. Plus, it acts as a nice hedge for my two new additions to the portfolio...

6) FXP, the doubleshort China ETF, which was my latest addition a few weeks ago, closed at $9.91, up 14.97% since my buy.

Today I am going to go ahead and fill two more slots of my portfolio with GOOD, Gladstone Commercial Group, which is a commercial real estate REIT. GOOD is currently trading at $13.48, and I find the 11+% dividend to be quite attractive. The dividend has been a steady $.115/share for quite some time now, which I love. As I have looked at their balance sheet and statement of cash flows, I have become even more optimistic.

The final spot I am going to fill today is NLY, Annaly Capital Management, which is also a REIT but deals in mortgage backed securities. Their dividend was just increased to 17+%, and while it is a bit more fickle than GOOD's, I feel as though my TBT holding helps to mitigate that risk. I feel this stock has a bit more upside price-wise than GOOD, considering their strong profit history and cash flows from operations, not to mention the space they operate in. Furthermore, aAs the perception of the housing market improves, I feel as though this company is positioned in a manner that will allow the price to increase.

Overall, the portfolio is up by .90% (-.68% for the DOW Dogs), versus -1.35% for the Wilshire 5000. I still have two slots open in the portfolio, but I am going to be patient and take what the market shows in stride. Given where it is in relation to the 200-day moving average, and where the VIX currently is, I think it's almost time to fill the portfolio and let it ride.

As always, question and comments are most welcome.

Portfolio/Market Update - 1/15/10

Before reading, please see the disclaimer in the 'About Me' section.

Today the Wilshire 5000 closed at 11,715, down from 11,816.9 a week ago for a weekly loss of .86% on the week. The close today also put the Wilshire 5000 at 14.02% above it's 200 day moving average, down two percentage points from last week.

The Investor's Intelligence Survey was released on Thursday night (on the public website, Tuesday if you pay for it) of this week, as it is every week. This survey is a measurement of the sentiment in the market. This week's reading was 53.4% BULLS, and 15.9% BEARS, for a spread of 37.5%. This is in comparison to a reading of 48.3% BULLS, and 46.9% BEARS, for a spread of 31.4% last week.

The Volatility Index closed out the week at 17.91, down from 18.1 a week ago.

Now for the portfolio...
1) Verizon closed the week at $30.58, down 7.70% for the year (ouch...again).

2) AT&T closed the week at $26.70, up .04% for the year, and basically flat for the week.

3) GE closed the week at $16.44, up by 8.66% for the year.

4) Citigroup closed the week at $3.42, up by 3.32% for the year.

5) TBT, the doubleshort U.S. Treasury ETF closed at $48.59, down by 2.59% for the year. I have no doubts that this one is coming back. Anybody that reads and sees the nonsense going on around us knows that interest rates cannot stay low, and thus bond prices must decrease.

Right now I am going to go ahead and fill one more slot with FXP, the UltraShort China ETF. As stated in a previous post, I do not like the prospects for the Chinese economy over the long run, and that is what I am building this portfolio for, the long run. At the current price of $8.62 per share, I am going to go ahead and add 116 shares to the portfolio. We'll see how I do.

Overall, the portfolio is up by .36% (.35% for the DOW Dogs), versus 1.89% for the Wilshire 5000. I am formulating ideas for what I want to do with the remainder of the portfolio, however, I believe there is downside in the market (in my opinion: the VIX has been below 20 for quite some time now, the Wilshire 5000 is still double digits above it's 200 day, and the investors intelligence indicates a level of bullishness not matched in over a month), so I am going to wait a bit and see if we don't get a pullback/correction. As of now, a few of the names I am kicking around are DUG, the UltraShort Oil & Gas ETF, GLL, and UltraShort Gold ETF.

Taxes, Politics, and America

Please see the disclaimer in the "About Me" section before proceeding.

As I was sitting in my CPA review class this evening (REG, for those of you familiar, is basically a crash course in the American tax system), a few thoughts occurred to me and bothered me. Since a blog is virtual soap box, I thought maybe I would share those thoughts, and see what others think, perhaps.

The thesis of this post is that the political system in America starts with the tax system. The government spends money, and politicians are in office, basically to decide how to spend it. Everything revolves around the spending of money, for the most part. Every new law or program that Congress enacts has an associated monetary cost with it. Think about it, it does.

I liken this to the way I conduct my life. I get a lump sum of money twice a month, and I decide how to spend it. Very few things in my life are truly free. I can't watch TV for free, read a book for free, read the newspaper for free, or procure any sort of food that is truly free unless I eat myself.

As you can see, there is an obvious parallel, and the basics of fiscal responsibility are the same for individuals, as well as governments. Individuals procure their money through jobs or investment, and governments procure their money through taxes. The only way that governments take in the money to pay for their expenditures is straight from yours and my wallets. When governments spend more money than they receive, that's a deficit. When individuals do so, that's called "on credit".

Now for my point. While sitting in class this evening we were discussing refundable tax credits. For those not familiar with what a refundable tax credit is, here is a link. Basically, a refundable tax credit allows a "taxpayer" to owe negative tax. Basically, the government pays you for meeting a condition it has set forth, like having a kid. Seriously. The $8,000 homebuyer tax credit is also considered a refundable tax credit. For those of you so inclined, here is a link to a list of both refundable and non-refundable tax credits here.

In my opinion, it is both wrong and counterproductive to pay humans money who are nonproductive and contribute nothing monetarily to the system. Being paid to be a citizen of the United States goes against both logic and the principals of a capitalistic society.

In my opinion, it would be much more productive for the government to limit the tax liability to $0 for individuals. That is, an individual who pays nothing into the system will do exactly that, pay nothing into the system and receive nothing more.

The current United States deficit is over $12 trillion. That is a lot of money, and most would argue unsustainable. The projected budget for government receipts in 2010, otherwise known as taxes, are budgeted to be a little over $2.3 trillion, up from just over $2.15 trillion projected in 2009. In addition projected government outlays are $3.997 trillion in 2009, and $3.591 trillion in 2010. In both years, the government is projecting a deficit. The data mentioned can be found here.

In my mind, common sense must takeover somewhere. No sane person would ever budget themselves to lose money. If we did, we would pick up a second job or simply cut spending. In my opinion, the government must first cut spending, as well as increase the revenues taken in. Reducing spending begins with reducing the payments made in the form of refundable tax credits. That means that everybody would have a tax liability (sort of), as opposed to being a liability to the government. Second, the government needs to increase revenue. The government must raise yearly revenue to the $4 trillion amount yearly at current budgeted levels of spending in order to begin to make a dent in the deficit.

Sorry for the long windedness of this post, that will be all for now. To conclude, while tax credits are not the fundamental problem, in my opinion they are a tiny piece of the solution. More to come later (maybe)...

$10,000 Portfolio Update

Please read the disclaimer in my "About Me" section before proceeding.

Today the Wilshire 5000 (the index I use to measure the market, as opposed to the DOW or S&P 500) closed at 11,816.9, up from 11,679 from the beginning of the week. These facts are come from the Yahoo! website.

The Wilshire 5000 so far this year has posted a gain of 1.80%. The Wilshire 5000 is now 16.01% above it's 200 day moving average of 10,185.97. The 200 day moving average is calculated by taking the average closing price of the equity (or index, in this case the Wilshire 5000) over the past 200 trading days. As time goes by, the average follows, that's why it is called a moving average.

The Investor's Intelligence Survey was released on Thursday night of this week, as it is every week. This survey is a measurement of the sentiment in the market. This week's reading was 48.3% BULLS, and 16.9% BEARS, for a spread of 31.4%. This is in comparison to a reading of 51.1% BULLS, and 15.6% BEARS, for a spread of 35.5% last week. As you can see, investors are slightly less bullish this week.

The Volatility Index closed out the week at 18.1, the lowest close since May 30, 2008, and the 5th straight day it was down.

Now for the portfolio...
1) Verizon closed the week at $31.75, down 4.17% for the year (ouch!), however, we got in early enough to get the dividend which will be paid in February (NICE!).

2) AT&T closed the week at $26.69, down .52% for the year.

3) GE closed the week at $16.60, up by 9.72% for the year.

4) Citigroup closed the week at $3.59, up by 8.46% for the year.

5) TBT, the doubleshort U.S. Treasury ETF closed at $50.60, up by 1.44% for the year.

Overall, the portfolio is up by 3.00%, versus 1.80% for the Wilshire 5000. As the year goes on I will look to add positions to the portfolio, as there are 5 spots left. However, the time has not come for that yet.