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Ragusa Capital Share Discussion Threads
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|June month end
July signals confirmed that the equity recovery was a storm in a teacup except for USA Tech which has powered ahead.
Aside from Henderson Technology (still held at 20th July)we have used absolute return and diversified growth funds to mop up recent equity holdings which proved a mistake.
To tighten signal discipline the Risk Asset decision map will now be produced in full monthly to show where reward trend and net trend meets hurdle returns.|
|23 May 2014
The NAS rose over 2% last week (an annual rate of over 100%) and we see this as a potentially significant breakout.
From Monday 26th May we see the 6 months from Nov 2013 as a useful period of consolidation and with the VIX below 12 we are more scared of getting left behind than being too early.
Our tactics are to commence re-building equity positions through shifting our high cash holdings into key equities and trusts, de-weighting certain safety first holdings and trimming the weaker performing bond trusts as SLXX remains trendless.
Our fund of the month is Cavendish technology.
(obviously individual funds whose weekly support line remains below their monthly support line are strictly off limits)
With the current artificial lowering of interest rates we are looking at a move to cut certain asset class performance hurdles so that they remain realistic. This translates into a permanent policy of holding four parallel sets of asset class hurdles for monetary policy states:
loose (like summer 2014)
Following the post in Feb above there were 8 more weeks of astonishing equity gains.
By the end of April this upthrust looked overdone and we were casting around for the next hole for our funds as the performance of bonds looked drab.
A lucky meeting with Stewart Cowley (Old Mutual Bond guru) at the Morningstar conference gave us the lead-"non-directional funds".
Translated this means we were sitting comfortably (if staidly) in Targeted Absolute Return funds during the shake-out from May to July.
As well as Crispin Odey it was David Crawford at City Financial and the team at Cazenove who did so well that they later soft closed their funds All bar David Crawford).
By 7th November 2013 we were seeing a huge point of inflection in the Dow but the NAS continued to surge up until April 2014. This meant that we played a few games with Smaller companies and Techs but generally re-positioned in long Gilts and wider Absolute returns such as Shroder Absolute credit and Standard Life Distribution as well as sinking about 75% into Absolute Return.The last 5 years now look like:
I would need to know what is the USA's equivalent of the FSA
Thank you for your help|
|8 Months Later. (Late Feb report)
Mid 2012 showed a mixed but positive picture up to eve of Pres. election week but following the subsequent severe late Oct early Nov shake-out and better news from Europe- a clear uptrend commenced which we bought into:
Gradually in Dec 2012
Fully in Jan 2013
Strong (as in over 80%) by the start of Feb.
At the point of writing there is still no medium term confirmation of Equity bias but the short term picture is solid and gains of over 10% in 2 months mean that this could be the start of a solid uptrend, even if a short one.
Commentators continue to see weakness in trade, confidence and GDP. The US housing market data show bursts of life that may confirm recovery but given the high levels of short term govt stimulous the net picture is hardly encouraging. The more bearish commentators continue to press for bank balance sheets to be shaken out. A return to positive real interest rates will achieve this.|
|Looks like the end of nyse in it's current form...........ice will probably keep the iconic wall st........|
I hope all our US friends will stay safe in the wake of Hurricane Sandy.|
|Shocking picture of Hurricane Sandy hitting New York|
|Good plan. We don't want a contagion or a storm in the markets.|
|Hurricane Sandy forces US markets to shut for a second day
Markets in the US will not be open today (Tuesday, 30 Oct 12), as Hurricane Sandy continues its path along the eastern seaboard of the USA.
"Frankenstein's Monstorm" shut US markets yesterday as well, but things are looking good for trading to resume tomorrow. NYSE warns that is is a "precautionary" plan though and if conditions get worse, trading might not resume until later in the week.
NYSE - Hurricane Sandy Planning
NASDAQ - Trader News
National Hurricane Centre - Atlantic cyclones update page
ADVFN - NYSE Still Closed For the Second Day
|What are you 'saying' John?
Has Irene gone in for gender re-assignment treatment, came out as Sandy and as a result has been piling on the pounds ?|
|This hurricane is HUGE.
Have a look at this link and use the slider in the middle of the image to compare the sizes of Irene (from last year) to Sandy:
|Lazy lot. Cannot believe they would shut up shop because of a bit of wind and rain. What are those people made of?, toilet paper or something?.|
|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.
NYSE - NYSE Euronext Statement on Closure of U.S. Markets
National Hurricane Centre - Atlantic cyclones update page
ADVFN - Sandy Puts NYSE and Nasdaq Trading to a Halt
|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.|
|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.
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.|
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.|
|As per above.|
|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.