Editors’ Note: Welcome to the new Wall Street Daily Weekend Edition.
In addition to our regular roundup of top content featured at Wall Street Daily during the week that was, we’re now including extended commentary from Editorial Director David Dittman.
And highlighting this new digest is the video-based Saturday Spotlight, which will “shine” on one member of our talented and hard-working team of market analysts each week.
Enjoy! And please let us know what you think of the new format by contacting us here.
I’ve been a huge fan of P.J. O’Rourke for more than half of my life, since before I left home for college way back in the late 1980s. Long gone is my youth.
I still consider myself a pretty curious guy, however, with a healthy amount of skepticism coupled with at least an equal voracity for ideas. I love to read – political satire is still a favorite genre, as are financial, military, U.S., and world history, along with postmodern fiction.
Mr. O’Rourke dared to ask, in his seminal 1991 takedown of the U.S. government and the American political system Parliament of Whores, “Would you kill your mother to pave I-95?”
I actually spend quite a bit of time on I-95, so that’s a tough one for me to answer. But I invoke the old humorist today because he later pointed out, in the title to another 1995 compendium of his wit and wisdom that, in his case, Age and Guile Beat Youth, Innocence, and a Bad Haircut.
With the benefits of age and guile, I now consider myself a long-term, buy-and-hold investor. I contribute to my employer-sponsored 401(k) plan, I max out my annual IRA contribution, and I invest primarily through passive, low-fee exchange-traded funds (ETFs).
I like dividend-paying stocks, with an emphasis on utilities and telecoms, with a dose of master limited partnerships focused on energy infrastructure assets. When I add risk I tend to favor mature technology names whose growing dividends reflect both stability and upside potential.
Here’s the thing, though: I have room for more adventurous allocations. And here’s another thing: Risk appetite is not a matter of age, but temperament. Still one more point to consider: A diversified portfolio will include a sleeve of higher-risk, higher-reward plays.
One of the first books I ever read on investing was Burton Malkiel’s A Random Walk Down Wall Street, which posited that a monkey throwing darts at stock tables printed in newspapers could do just as well as a market expert with years of education and training on the financial arts.
It still colors my perception of the process of choosing individual stocks. And, of course, so much of the way of the market’s movement is driven by human factors. And, of course, we aren’t always the most rational of creatures.
Earnings, for sure, are a matter of fact. Price, on the other hand, is often a matter of emotion. So, even a P/E ratio, a core element of determining “value,” is fraught with ambiguity at any given moment in time.
Acknowledging the fact that I am relatively conservative when it comes to managing my portfolio, I like my higher-risk, higher-reward, speculative activity to systematic and disciplined.
(And to know thyself – for real – in the investing context will save you tons of anxiety and tons of money, too. Simply put, don’t do anything that makes you uncomfortable.)
With New and Better Darts
Which brings me, at last, to our Saturday Spotlight.
I’m shoehorning Senior Analyst Jonathan Rodriguez into the “youth, innocence, and (as you’ll see for yourself) a bad haircut” role today. But let’s not be mistaken: Jonathan is a savvy, pattern-trading expert who sees the market and its movements in a way that will help me boost returns.
In short, he brings a fantastic set of technical trading tools to the project of building a portfolio that will help me build wealth over the long term.
Jonathan’s genuinely exciting presentation in today’s Saturday Spotlight focuses on “what could be the biggest investing opportunity since the August 2015 Flash Crash.”
I think you’ll find Jonathan’s discussion of the iShares Nasdaq Biotechnology ETF (IBB) and the imminent “death cross” about to form on its chart pretty compelling. More importantly, he provides some guidance that will help you trade it like a pro.
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Jonathan is the lead analyst for our Trigger Point Pro service. The strategy supporting Trigger Point Pro is based on a number that’s fascinated mathematicians for centuries, “the golden ratio,” which is also known as “phi.”
The geometric relationship of phi is reflected in some of humanity’s most spectacular achievements, including the Great Pyramids. The golden ratio also appears in patterns in nature, including the spiral arrangement of leaves.
Jonathan is able to identify profitable trading opportunities based on phi’s appearance in stock charts. In so doing, he can help us beat algorithmic trading programs at their own game.
In today’s Saturday Spotlight he also passes along some great advice for investors of all risk tolerance levels: You can’t be afraid to buy when the herd is selling.
I don’t always trade stocks. But when I do, I drink from Jonathan Rodriguez’s well of knowledge.
My first car was a 1977 Volkswagen Bus. My second was a 1991 VW Fox. The first car my wife and I bought was a 1999 VW Jetta. The second was a 2001 VW Passat Wagon.
We now have a 2009 Routan. And though I drive a different German make, it’s safe to say I’m a “VW guy.”
So this diesel situation is a mess disappointing on many levels. That it could be a catalyst more negative that Greece with regard to the global economy is troubling. Greg Miller offered a great overview of what may be the most shocking corporate scandal since Enron.
Global Markets Analyst Martin Hutchinson’s insights will be useful for dividend investors concerned about the potential impact of another global recession. And he also offers a look at a beaten-down group that offers solid value (and compelling dividends) right now.
Meanwhile, emerging markets have suffered in recent months. But not all are lost. Shelley Goldberg notes that even as China falters, our neighbor to the south is showing signs of relative strength.
And be sure to check up on another “death cross” opportunity identified by Jonathan Rodriguez.