Baillie Gifford Us Growth Share Discussion Threads

[jgpgw] 29/10/2012 10:58

Hurricane Sandy forces US markets to shut

Markets in the US will not be open today (29 Oct 12), as Hurriance Sandy blows in on the eastern seaboard of the USA.

"Frankenstorm" (or "Frankenstein's Monstorm", for Shelley buffs) is forecast to have passed New York by Tuesday morning, so we hope our American cousins will escape without too much damage or other trouble and the markets will be open again tomorrow.

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News

NYSE -
National Hurricane Centre -
ADVFN -

John

[ben gunn] 14/6/2012 11:19

One year later from the June/July 2011 signal.....

Our metrics have been adjusted to reflect the Global DOW index as the key underlying "positive bias towards equity markets, or negative bias".

This follows ten months of weak trends since AUG 2011 and some of our portfolios switchhing back to equities in March 2012 only to re-switch, expensively, to sovereign bonds in late April/early May 2012.
The incredible mass of the Global DOW prevents sub-trends appearing as trends and we shall use it as our sheet anchor in future.

2011 remains an excellent year for Digitalinvesting but 2012 has been damaged by this mistake in the first 5 months and we shall see what we shall see.
95% sovereign bonds with bits of exposure to gold remains our plan.

The impact of the current negative bias is that we respond to all fresh signals immediately rather than wait for confirmation at month end.

[ben gunn] 22/11/2011 16:50

Mid November Update 2011

The strong recovery from the AUG CRASH in Sept/Oct showed all the signs of putting us into uncertainty. Friday 18th Nov 2011 chart metrics confirmed that the recovery is over and the healthy recovery from the early AUG sharp downtrend has started to fall away and may be ignored. The Transportation and Forestry indeces (which show little derivative activity) also confirm that we are now 5.5 months into a downturn from the early June signals.

Learning point
Digital Investors may now add the crash definition of "a 15% fall in a 40 day period" to the normal definitions of a stockmarket crash.

[ben gunn] 15/8/2011 12:44

July/August update
The switch from equities to bonds from Early June has proved profitable.

The 2009/2011 recovery in equities was stalling and so we were able to quit this trend with strong profits on 1st June and some profits on the last bits and pieces that got moved on 1st July. (I was already on holiday in South West France by 1st Aug so it was good to have got the heavy lifting done well in advance of the USA rating shock)

The 9th June posting above was a bit cagey about the details of the SELL signal:
* for the usual reason that Digital Investing is a valuable proprietory system
* because we had to fake the "Media Index" numbers within the signal.

Usually the media index is our key UK leading index and we stick to it like glue but the index caries a high BSY weighting and BSY helicoptered up from 730ish to 830ish on the expectation of a News Corp bid. This single factor meant that the weakness I looked for in the Media Index was missing. What to do?
I took the executive decision to use the WPP price chart as a proxy for the Media Index in calculating the June signal and was proved right when the Media Index took a heavy hit from Mr Murdoch's escapade at the Palace of Westminster.
By 1st July the two charts all aligned; so the executive decision payed off.

We dont know what will happen next but we sit in Sovereign bonds e.g. (SGIL, IBGM and IGLT), precious metals and cash awaiting a buy signal. With Washington's current political weakness it may well be that the 2008/9 crash...which was headed off at the pass by the Fed.....will now fully take place, the banks and property speculators will be decimated and, gradually, the real world can return to dominate G7 countries rather than the tricks of "the masters of the universe". No genuine recovery is in prospect until the Augean Stables are fully cleansed and this may take 2 to 20 years.

[mechanical trader] 27/7/2011 20:12

As per above.

[ben gunn] 09/6/2011 10:57

Fresh Sell Signals
Relying only on monthly charts we now have a definative set of three levels of negative signals to knock us off our "bias towards equities" stance.

As a result of the 1st June weak SELL signal we have switched 14 portfolios from Equities to bonds anticipating a repeat of the early 2008 collapse rather than the spring 2010 collapse which was followed by a strong autumn 2010 recovery.

In Mid June we will have a measure of the success or failure of this strategy and will post in detail our decision metrics. In the meantime analysis of the price trend of WPP may serve as a good marker for what is over the horizon in UK and BRK.A for the US.

[ben gunn] 16/8/2010 13:37

The June- July equity bounce has failed to break free of past highs.
This represents an astonishingly good time to sell down corporate bonds in expectation of a resumption of risk appetite collapse and time to buy Allianz Pimco Gilt and Old Mutual strategic govt bond etc.

As well as shedding corporate bonds and Euro denominated bonds we have also shed Index-Linked bonds. This simply reflects the collapse of their outperformance since deflation became more like ly than inflation. The 5% equity retention in my wife's SIPP is almost entirely in the three solar cell companies: FHL, PVCS and SOLA.
Update 14th Sept..forced to de-weight SOLA owing to rapid 60% gain-losses on the other two members of the solar energy portfolio naturally.


Equity markets are now signalling BUY once more and an effort is to be made to fine tune the SELL/BUY decision metrics so as to catch the trend earlier.


Update on Update:
The false SELL signal in Spring 2010 has proved expensive both as to transaction costs/spreads and timing of the two sets of sell-offs. From 2010 forwards the "Termination of Trend signal" will generate only a 62% SELL Off, completing the following month if and only if the crossover signal is confirmed by one of the moving averages falling that month.
This apparently insignificant "belt and braces" will be our watchword going forward.

[ben gunn] 19/7/2010 23:27

Late news
IBM produced a strong profit gain but weak sales growth means that IBM and TI shares have fallen back in aftermarket.

[ben gunn] 19/7/2010 23:21

Mid July
As predicted elsewhere the week ended 9th July gave the DOW a strong gain owing to the unweighting of down positions as we head into the July quarterlies led by Alcoa on 15th. Week to 16th July shown a half percent slip back after being strongly ahead on Wednesday. Poor data continues.

This week to 23rd may be the second and last of this quarter's up weeks and we aim to have a couple of modest downbets in place as we depart for 2 week summer holiday 24th July. The FT's Pikarda and others are confirming in July the signals we saw in early June. We are happy to get through 3 pull-back weeks and expect a return to a clear strong DOWNTURN. We remain 95% out of equities.

Re post 34944...now is the time to buy those government bonds at reduced prices and modest or zero premium to 1 yr moving average.
Similarly NOW is the time to spot turning points in those heavenly corporate bond funds and dump them all over the coming weeks.

[ben gunn] 29/6/2010 14:01

June 2010
The VIX slipped back below 26 in early June indicating renewed market resilience but as I write on 29th June it is back at 29 and the uptrend of the last 15 months has broken down.

The evidence for this lies in:
SLXX has gone sideways for 6 months castrating the buy signal
The NAS 100 leading index is leading the DOW down over 3 months (Though in the UK its matching leading index- Media Sector- has not collapsed as a bid has been made for the other 70% of BSY by "you know who".)
This unwinding of the NAS gives us "Negative Bias" so sells are easily triggered.
The DOW has broken down through its 5 month moving average.
The 1st June Unholdable and Unbuyable signals took us out of the Europeanmkts and now in June the FTSE All Share has given a strong deceleration signal together with an expensive lower low for 9 months signal.
S&P Asia Index has breached its 260 day EMA for 2nd month and EMA now falling.

Generally we have passed in 4 June weeks from equity troubles to equity distress. No more than 5% equity holdings can now be recommended.

[ben gunn] 30/4/2009 11:07

As we reach the end of April the strength of equity recovery in US is breaking new bounds.Here in the UK the Media sector index has broken up into positive returns for 2009 whilst the All share is still off some 6.2%.

Will post positions when month end perspective fully available as this all seems a bit early on fundamental grounds.The other leading index-SLXX is up over one month but strongly down over 3, 12 and, of course, 36 months.

Tested alternative strategies during rally. Results will be posted once discussed elsewhere for usefulness.

[ben gunn] 28/1/2009 14:29

The DOW is showing renewed strength on the back of the Obama/$852 bn. quantitative easing bounce. This has led to a rise today in British Land (as a for instance) of 6%.
We have lost money on the DOW trades but made good money on shorting UK Commercial property companies for 3 weeks including £3.3k on one trade alone.

Looking back at serious matters:
a) Last year we achieved a 16% gain for the Direct portfolio which falls to 11% rolling 12 months to the Barclays reporting date of 12 Jan as the currency gains melted away.
b) The govt bond bubble at the end of 2008 has landed with a thump but even the UK longs (which got no currency change benefit) have remained in hold territory. Financial Journalists have railed that the govt bond bubble has burst and corporate bonds are a must. This investor doent know why they say this as STAB broke through its stop loss on Jan 20th on its way to losing 20% and there is no upturn (from an investor's perspective) in the bond index. The substitution will be right in due course but the depth of signal to support it is not yet there.
c) The Trustnet sector by sector report shows that over a one year view only Overseas bonds, gilts and Japanese stocks have beaten risk free. We discount consideration of Japan as over 5 years it has not beaten risk free. This means that our asset allocation remains unchanged: gilts and O'seas bonds(now including Emerging nation bonds)
d) At the time of posting IBGS is a b, IBGM and IBCI are limit b's requiring rises of about 1.5 to become b's again, IBGL is a limit b needing a 2.5 rise and IGLT is a weak hold only. We are watching Corporate bonds closely and today's 12% boost in UK bank equities will generate some noise but we dont know if it will generate a signal.(No advice to retail Investors intended).
e) UK Gilt yields are now at 0.93% for 12 months and 3.6% for 10 years so it is hard to get excited about them unless we see severe deflation in the 20 years now seen as needed to tidy up the bankers crash. This means that avoiding losses and looking for premiums to the 1% available on risk free investments is what its all about. Turnover may grind to a halt.
f) Henderson may pick up New Star's mess so I shall go off and read their useful weekly report that came out Monday.

(Prediction of a possible low over the Jan Quarterly results season is now seeen as well wide of the mark as the Obama bank rescue is hogging the headlines over and above the week results from Main Street)

[ben gunn] 22/12/2008 13:15

The DOW's peaks on Tuesday 16th/Wed 17th gave us the confidence that the Friday morning high, up 165 points, might be "it" for now and DOW short positions were taken out along with sympathetic short positions in the main UK property companies.

Naturally, these will be closely monitored in the run up to 28th Jan. It is assumed that this 2009 reporting season will be the first post the NOV 2008 low when company results and forecasts can reflect the new stark realities. No one knows if this will trigger fresh lows but one posssibilty is for fresh lows:
Jan 2009,
July 2009
Jan 2010

One matter on the horizon for Private Equity is that the renewal dates for the major 2005 and 2006 leveraged buy-outs fall due,along with much else, in 2010 and 2011. This is going to challenge the liquidity of the markets further.

[ben gunn] 20/11/2008 10:08

The markets have produced a dramatic oversold position so it is reasonable to expect pure inertia to present us with a fool's rally. Consequently no short positions are being considered until shortly before the Christmas closedown when fears over the run up to January quarterly results may start to dominate.

In expectation of this rally our existing Euro Government bond positions are being maintained but re-positioning more to the longer dates as the short dated boom has become suspiciously bubbly and these profitable holdings are only reviewed at month end.
In the run up to 19th December when peak values will drive city bonuses we are buying a few oversold Asian and Brazilian Investment trusts for the expected 4 week bounce.

From 22nd December we remain extra cautious as weak banks may find the holiday season difficult. I am taking soundings how the Basel ll rules cope with banks reflecting their undrawn down company credit lines in their exposure to risk.

[ben gunn] 22/10/2008 20:41

Quarterly Results- DEEP CONCERNS

Just a headline entry to say that after Tuesday's weak Technology results and a raft of results today, Wednesday, the tentative conclusion is that this quarter will disappoint badly and so DOW is off 500+points half an hour before the close.
This weakness will trigger reduced confidence around the globe and it will be most worrying if end of trading Friday cant show a better % rally than last Friday on Wall Street.

[ben gunn] 07/10/2008 15:24

7th October update (before "the bell"):

As we now know the employment data was weak and as the global credit crunch became the global credit crisis as Mr Fuld had his toys taken off him by the administrator leaving various etfs in the awkward position of possibly losing their Lehman Bros index cornerstones. Wise investors have now learnt that exchange traded notes have a good deal more counterparty risk attached that exchange traded funds. Barclays capital please take note.

DigitalInvestors have been a bit on the sidelines since mid 2006 when they retreated from committed equity holdings towards cash and Govt bonds. below are the 12 month returns and buy/hold signals today for the key Govt bond etfs:

IBGS +15% Hold (i.e. todays DI signal)
IBCI +16% weak hold
IBTM +25% BUY (But severe $ worries)
IBGL +16% BUY
IBGM +16% Weak BUY
IGLT +5% BUY

Naturally it is important to admit that about 10% of these gains come simply from the collapse of sterling last autumn (which wont repeat in this manner and could well reverse)

The author finds all this bond and cash business quite dull though the side hedges in gold have been volatile beyond the norm with the Physical Gold etf not beeing the violent pricing nightmare that Randgold's low capitalisation has allowed.

Unlike Anthony Bolton who has been quoted as saying that bargains are now on the equity table I have positioned small short holdings in DOW and Google for the 29th September mini crash and DOW and 3i (before the ban) for the 6th October full blown global crash.
(If the Russian stockmarket falling 19.2% in a day and FTSE falling its greatest % in a day (almost 8%) isnt a crash then what is?)

Today, 7th Oct, is the day for rapid correction in emerging markets and perhaps interesting corrections in the DOW. Only 2 media stock shorts are maintained for the run through to Christmas.

Aside from leaving the battlefield on time with chips cashed the three learning points for me from the last 10 days are:

1. The 1.4% rises in Govt bonds yesterday were great but very meager for anyone looking for effective diversification of exposure to equities falling 8%.
2. If you purchase risk instruments (and they are rarely held for over 4 days) you will do well to buy them on Friday and sell them on Monday as long as your analysis gives you an adequate stear on the market's trend.
3. DigitalInvestors disparage consideration of Japan as it has underperformed for over 10 years. This is increasingly vindicated as the fall through 10,000 approaches.

Historical Note:
The etf SLXX is of no interest as a holding as it is for corporate bonds. These are a poor holding in a systemic downtrend since they both correlate with the trend of declining equities and are overweight property and financials which are tricky.
Thus over the last 12 months if you held SLXX you outperformed the 30% fall in the All Share as your fall was only 14% (say a 19% underperformance to Risk Free).
The mathematical reasoning behind diversification as a risk management tool may need re-analysis. The overlapping search for short term absolute performance and medium term relative out-performance may create a stronger risk management tool for all.
When we say stronger we are emphasising that the year's 55% outperformance of US Treasury bonds to UK holders compared to the All share's decline is real and darn right attractive to anyone in a hurry to build his retirement pot.

[ben gunn] 02/9/2008 20:31

2nd September Update
Since the last post:
1) June saw a savage fall in the DOW leaving it strongly oversold
(26 June TimingCube capitulated and agreed the DOW as a sell)
2) First half July saw a continuation of the weakness and the DOW momentarily dropped below 11,000.
3) Mid July saw a terrific bounce and the DOW has been above its 20 day moving average as much as below it ever since. This is a confused (but weak) signal with the index permanently below its 200 day but as often as not above its 20 day index.
4) August saw planty of volatility while the computers took over from the people on the beach. Timingcube made the US market a Buy once more arround the 6th Aug onwards but yours truely has been quietly £2 a point short of the DOW throughout....meaning that the account is almost wholely in cash as we await the confluence of signals.

Today saw the DOW well up 200 points early on with the yield on treasuries stumbling and then going into "freefall" off 5,6,7 points. The NAS led the DOW down and after the usual hesitancy at par for the day it fell 40 or more points into the negative.

Meanwhile the speculative froth was blown off Oils as Gustav missed the Mississippi and was cut to grade 2 and gold mysteriously slipped $25 or so despite the ultimate weakness in the DOW on this magic first day back after the extended holidays.

On the horizon we have important employment data on Friday5th Oct to be followed by positioning as we head into the October quarterly results season. Bad news from Dell at the end of August does not make the writer at all hopeful for a robust recovery and the short position may be raised.

[ben gunn] 02/6/2008 16:46

2nd June Update

After 10to 20 weeks of astonishing recovery in Equity markets it is possible that this short term trend will now melt away.
SLXX has given a weak sell signal and if this is confirmed with strength then we will outline a possible portfolio strategy for the coming summer. The DOW has not managed to hold above the 13000 level.

We stick to our medium term equity sell signal despite Timingcube recommending that equities are a short term buy. Truely confusing for now; should Timingcube re-join us then we will focus on further bond opportunities..

[abcd1234] 15/4/2008 17:30

Ben, meant to say by the way thanks for the response earlier

[ben gunn] 15/4/2008 16:59

Friday 11th April 2008
This may turn out to be the main turning point for Equity Investments. The trigger was The DOW's largest constituent- General Electric reporting profits below expectations and freshly reduced forcasts owing to weakness in its large Financial business. Naturally this is a powerful signal as:
*Early reporter in the quarterly cycle
*More US tipsheets have GE in their recommended list than any other stock.
*Global player of almost "conglomerate" status though with admired management

(n.b. remember that the DOW isnt weighted it is just the price of 30 leading shares added up)

Tactics are now fraught as my correspondents at Timing Cube have the markets as a sell (but have made a loss on this advice so far) but it is no way to build confidence in the turning point. I was away planting hedges in Wales on Friday (its that time of year here) so in anticipation of the 230 point fall that arose I replaced the full DOW downbet that I feel is appropriate at least until the DOW slips back to the conservative side of 11,000. (re-placed is a polite way of saying that on two occasions the main DOW short position was rapidly stop lossed out at no in-considerable cost so don't venture money that you cant cheerfully lose if at all)
This is still meant to be "only short 3 quarters in 30" but I do have a negative position in size in BSY as well with a view to clearing enough surplus to pay for the re-painting of my small property in France.

Meanwhile the Euro bonds and gold are performing more than satisfactorily and the final 1/3 of the cash released has been invested in a physical silver etf. At 14th April this meant a 13% return on the adventurous portfolio in the 15 weeks since Christmas compared to an 8% fall in the All Share.

My concerns that the lack of further interest rate cuts may soon make Euros unattractive has now been balanced by the independent-investor.com website noting that the poor UK current account balance alone may bring further sterling woe (accompanied as it is with the North Sea oil production falling off a cliff and precious little alternative energy sources being encouraged.)

Outstanding tasks: Bond hodings need to be rebalanced according to relative performance and more family portfolios to be brought into line with bond, bullion and junior oil strategy.