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Stocks may be in shock from the Indonesian earthquake. As we have heard before, the market does not favor uncertainity. The market will recover. The people of Asia will need a lot of help. I would hope that the United Nations would rally to their aid.
In the mean time equities may be a drift. Crude oil dropped to $41.32. It could even go lower. The talk is that economic growth has picked up the last few month of this year. For the month so far the I fund has done well at a gain of +.40, followed by the S fund with gains of +.21. C fund cranked out +.15. The F fund has been treading water since September.
Will tweak my allocations tomorrow to 20G, 20C, 30S and 30I.
Attached is a chart of the S&P for the last six months, with a 50 day moving average, still trending upward and under the pricing.
Rgds, and be careful! :) Spaf
Wrong Post!
The Asian earthquake is terrible!
Rethinking allocations will transfer to 50-G, 0-F, 15-C, 20-S, and 15-I, and see what comes of tomorrow, may cancel, or change. A lot of "if's". No profits necessary on others losses, tomorrow is a new day and hopefully better for all envolved. I kind of hurt for the Asian people. They were some of my best friends.
Rgds :( Spaf
teknobucks
12-28-2004, 07:32 AM
or buy the fear......
some time ago a couple of co-workers and me experimented with an arbitrary system of "buying down mornings" and "selling green ones" on the tsp. if u move only 7%aday into or out of allthree stock funds (csi) it seemed to work fairly well.
now if the markets have an extended rally you miss out on the back side of it.
and in a major capitulation the falling knife syndrome kicks your tail. (ouch!)
off yahoo news this morning:
Economies of Asian Nations Should Survive
Tue Dec 28, 3:13 AM ET
http://add.my.yahoo.com/content?id=6412&.src=yn&.done=http%3a//news.yahoo.com/news%3ftmpl=story2%26u=/ap/20041228/ap_on_go_ot/quake_economies] (http://us.rd.yahoo.com/dailynews/addtomy/*http://us.i1.yimg.com/us.yimg.com/i/us/my/addtomyyahoo3.gif[/img]
http://add.my.yahoo.com/content?id=6412&.src=yn&.done=http%3a//news.yahoo.com/news%3ftmpl=story2%26u=/ap/20041228/ap_on_go_ot/quake_economies] (http://us.rd.yahoo.com/dailynews/addtomy/*U.S. Government - AP[/u]
By JEANNINE AVERSA, Associated Press Writer
WASHINGTON - The devastating earthquake and tsunamis that hit Asian countries will deal a fresh blow to the tourism industry there but aren't expected to produce crippling economic problems in the region or in the United States, economists say.
http://us.news1.yimg.com/us.yimg.com/p/ap/20041228/thumb.xsl10112280801.thailand_quake_tidal_wave_xsl 101.jpg (http://story.news.yahoo.com/news?tmpl=story&u=/041228/481/xsl10112280801)
AP Photo (http://story.news.yahoo.com/news?tmpl=story&u=/041228/481/xsl10112280801)
Private economists were scrambling Monday to assess the economic toll of Sunday's deadly natural disaster. For now, they foresee a limited economic impact — largely affecting tourism — because the disaster hit coastal towns and not big manufacturing centers, analysts said.
"The impact on the United States is expected to be minimal mostly because the areas that have been affected by this are primarily rural areas and nondeveloped areas and not big industrial areas. So we don't expect any major production facilities to be affected," said Rakesh Shankar, an economist who focuses on Asian economic issues at Economy.com.
In that regard, this disaster is quite different from the 1995 earthquake that struck the major industrial center of Kobe, Japan, and destroyed much of its port, analysts noted.
"The strongest negative impact will be for countries like Thailand and Sri Lanka. Both of them rely on tourism," Shankar said. "Tourism is really the industry that is going to get hit hardest by this. Even so, we don't expect the impact to last longer than a year at the most." He said millions of dollars in the tourism business probably would be lost.
Tourism in the region had been on the rebound after a slump as travelers were shaken by fears about SARS (http://news.search.yahoo.com/search/news?fr=news-storylinks&p=%22SARS%22&c=&n=20&yn=c&c=news&cs=nw] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*news[/u] - http://search.yahoo.com/search?fr=web-storylinks&p=SARS] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*web sites[/u]) — severe acute respiratory syndrome — and terrorism, analysts said.
Shankar and other economists believe the economies of the affected countries will weather the disaster and won't be thrown into a recession or a serious economic downturn. But they may log somewhat slower economic growth, analysts said.
"I think the human toll is severe. At the same time, economically, I don't see it affecting the global economy very much," said Sung Won Sohn, a chief economist at Wells Fargo, who has traveled extensively through the region.
Analysts said rebuilding efforts — assisted by international aid — will eventually help economic activity in the countries.
So far, experts said they are unaware of any major disruptions in international trade.
"Right now it's business as usual at the ports," said Bill Anthony, a spokesman at U.S. Customs and Border Protection. However, he said, there may be a temporary slowdown if ships are rerouted.
Sri Lanka is a big exporter of textiles and apparel to the United States and other countries. India exports textiles, gems and jewelry, among other goods. Indonesia's exports include oil, gas and electrical appliances. Malaysia's exports include electronic equipment, petroleum and liquefied natural gas. Thailand's exports include computers, transistors and seafood.
"I don't see any major impact on U.S. manufacturers," said Clifford Waldman, economist at Manufacturers Alliance/MAPI, a research group. Waldman said the countries affected aren't huge markets for U.S. manufacturers.
Waldman also didn't expect major supply disruptions to U.S. companies. But there's the possibility of "transportation bottlenecks and uncertainties with orders and shipping," he said.
The National Association of Manufacturers (http://news.search.yahoo.com/search/news?fr=news-storylinks&p=%22National%20Association%20of%20Manu facturers%22&c=&n=20&yn=c&c=news&cs=nw] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*news[/u] - http://search.yahoo.com/search?fr=web-storylinks&p=National%20Association%20of%20Manufac turers] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*web sites[/u]) had no immediate assessment.
From January through October of 2004, U.S. exports to the Asian countries were far outweighed by imports from them, Commerce Department (http://news.search.yahoo.com/search/news?fr=news-storylinks&p=%22Commerce%20Department%22&c=&n=20&y n=c&c=news&cs=nw] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*news[/u] - http://search.yahoo.com/search?fr=web-storylinks&p=Commerce%20Department] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*web sites[/u]) figures show:
_India: U.S. exports came to nearly $5 billion; imports totaled $13.1 billion.
_Indonesia: U.S. exports were nearly $2.2 billion; imports came to $9.2 billion.
_Malaysia: U.S. exports totaled $8.9 billion; imports totaled $23.3 billion.
_Sri Lanka: U.S. exports came to just $133.5 million; imports totaled $1.6 billion.
_Thailand: U.S. were valued at $5.2 billion; imports totaled $14.3 billion.
In comparison, U.S. exports to Canada, a major trading partner, totaled $157.5 billion, while imports from Canada came to $212.4 billion.
Treasury Department (http://news.search.yahoo.com/search/news?fr=news-storylinks&p=%22Treasury%20Department%22&c=&n=20&y n=c&c=news&cs=nw] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*news[/u] - http://search.yahoo.com/search?fr=web-storylinks&p=Treasury%20Department] (http://us.rd.yahoo.com/DailyNews/manual/ap/ap_on_go_ot/quake_economies/13818889/*web sites[/u]) spokesman Rob Nichols said it was too soon to assess the possible economic impact of the disaster on the region.
___
teknobucks wrote:
or buy the fear......
now if the markets have an extended rally you miss out on the back side of it.
and in a major capitulation the falling knife syndrome kicks your tail. (ouch!)
Economies of Asian Nations Should Survive
Exactly!
Thanks for the comments Tekno.
Rechecked AM markets and will revert back to 20-G, 0-F, 20-C, 30-S, and 30-I. Playing the market with TSP and the 1 - 2 day transfer time is like my dog that use to chase his tail. He finially had to give it up. Never did catch it. Well one of these days I'll move funds to Scottrade and then no more handicap.
Only thing I can do about the Asian disaster is to leave it to G_d.
Rgds :? Spaf
Link view of Market Charts
http://stockcharts.com
See Easy as 1-2-3 in create a chart now, i.e., For the S&P500:
Style: gallery view
Symbol: $SPX
GO
Rgds :) Spaf
Looking at some of the news on the street. 2005 was forecast to be a good year for the market. Not a great year, but good.
Did a 15 day check of the TSP funds for diversified returns and changing allocations (tweaked) to 20G, 20C, 35S, and 25I.
Rgds :) Spaf
teknobucks
12-28-2004, 09:55 PM
Daily Trend and Trade Review..December 28, 2004
Trader Talk:
The major stock indexes traded up-up-and-away today, continuing the recent trend of buyers jumping on board the slightest corrective dips, which is a very bullish sign. Officially, the NASDAQ advanced 1.1% on 1.6 billion shares, while the Dow Industrials rallied 0.7% on NYSE volume of 1 billion shares. The leadership profile remains bullish, with 458 new highs versus 30 stocks making new lows.
Our short term momentum indicators have turned positive, confirming the bullish view of the primary trend indicators.
The most significant bullish sign you will ever find is major stock indexes breaking out to new highs on increasing volume, confirmed with an expanding 'stocks making new high list,' which is exactly what have been seeing for the past couple of months. These bull-runs usually last 4 to 8 months, and usually end on a parabolic buying frenzied rise, which all continues to suggest that 2005 should start with a bullish bang.
teknobucks wrote:
Our short term momentum indicators have turned positive, confirming the bullish view of the primary trend indicators.
teknobucks........... :^
I kind of put market analysist and weathermen in the same category of educated guessing, but they seem to be getting better, if they could read from the same page! I came across this prediction, and seeing as how a "crystal ball" was envolved, it caught my attention (as cheese in a mouse trap). Never the less it is quite bullish, and I favor the yea, rather then the nay.
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Stovall's Sector WatchArchivesTuesday December 21, 2004 (10:59 pm ET)
A Quick Glance in My Crystal Ball
The coming year will see an even weaker dollar, a Fed funds rate of 4%, and more jobs. As for investing, bet on stocks to beat bonds.
I have compiled a series of macro-to-micro projections made by S&P's economists, strategists and analysts, for the coming year. Let's start with the big picture:
Economic Forecasts
Real U.S. gross domestic product (GDP) is expected to advance a healthy 3.6% in 2005, on top of the 4.4% rise seen for 2004.
The consumer should support economic growth, but not lead it, since Americans are basically spending all that they earn and continue to shoulder a mountain of household debt. Consumer spending will likely rise 3.1% in 2005, following the 3.7% growth expected for 2004.
Instead, the leadership will come from businesses, spending heavily to respond to new orders, as well as replace aging equipment.
The jobs picture is projected to improve, as businesses add staff to handle the expected increase in orders. Jobs growth is expected to increase to an average 133,600 per month in 2005, vs. the average 131,300 anticipated for 2004. What's more, the unemployment rate is seen falling to an average of 5.2% during 2005, vs. 5.5% in 2004.
A pickup in inflation is not expected to result from this continued improvement in economic growth. We forecast both the overall and core (excluding food and energy) consumer price indexes to rise by 2.3% in 2005.
The Federal Reserve should continue to raise short-term interest rates until establishing a neutral Fed funds rate of 4% just prior to Alan Greenspan's term expiration in January, 2006. The yield on the 10-year Treasury note should edge up to 5%.
The U.S. dollar should continue sliding to $1.45 to the euro and 95 yen per dollar by yearend, 2005.
The twin deficits will remain large. The current account deficit is seen swelling to $738 billion in 2005, from the $662 billion for 2004, while the U.S. budget deficit will likely narrow to $338 billion from this year's $412 billion.
Crude oil prices for the benchmark West Texas Intermediate grade are seen slipping to $39 per barrel by the end of 2005 from the current $45.
Global economic growth rates are all projected to be positive, ranging from 1.8% in Japan and 1.9% in Europe to 3% for Canada and and 3.5% Latin America. Some of the fastest growth is likely to come in non-Japan Asia, with an overall forecast of 6.2% (including a 7% advance projected for China).
Investment Outlooks
We still favor equities over bonds and cash, as interest rates rise and corporate profits hit new highs.
S&P's Investment Policy Committee recommends an asset allocation for a typical balanced investor of 45% U.S. equities, 15% foreign stocks, 25% short-term bonds, and 15% cash.
Our S&P 500 target price for yearend 2005 is 1,300, indicating an anticipated 8% advance over our 1,200 target for 2004. The Nasdaq composite index is seen closing 2005 at 2,360, 9.5% higher than recent levels.
Investment catalysts include a gradual reduction in oil prices, the weakening dollar's effect on foreign revenues and earnings, moderate inflation, a double-digit increase in corporate earnings, and a market price-earning ratio that is two percentage points below its 16-year average. We believe all these factors will be sufficient to counterbalance a 1.75% increase in short-term interest rates during the year.
Earnings for the S&P 500 are expected to advance 10% in 2005, to $74 per share, up from the 23% rise to $64 for 2004. Earnings-per-share growth estimates and current valuations of mid- and small-cap stocks also continue to look attractive. Indeed, 34% of the stocks with our highest investment ranking, 5 STARS (strong buy), are under $5 billion in market value.
As this bull market -- cyclical or otherwise -- is getting on in years, we recommend leaning toward companies with the highest S&P earnings and dividend quality rankings of A-, A, or A+.
Risks to this modest scenario are many, including a return to oil prices in the $50 to $60 range, contributing to a slowdown in U.S. and foreign economic growth, and a free fall in the value of the U.S. dollar, which would hurt confidence and cause a spike in inflation concerns and yields.
The S&P Europe 350 Index is forecast to rise approximately 9% next year, which is in line with our earnings growth forecast.
Median earnings growth in Asia (excluding Japan) is expected to slow to 11% to 2004, from 15% in 2004.
S&P Asia equity analysts' recommended country weightings are: Overweight Hong Kong and Malaysia; marketweight Australia, Indonesia, Japan, New Zealand, Philippines, Singapore, South Korea, Taiwan, and Thailand; underweight China.
Sector and Stock Recommendations
If 2003 was a great year (the S&P 500 rose 26% and saw only 4 of its 114 industries post declines), 2004 was a good year (the 500 gained 7.4% through Dec. 17, while 80% of the subindustries advanced). We think 2005 will also be a good year, but not a great year.
Sector catalysts for the coming year include rising dividend payouts and increasing M&A activity. Companies in the S&P 500 have approximately $600 billion in cash that can be put to work buying back shares, paying out dividends, reinvesting in their own businesses, or in acquiring others.
Concerns include rising interest expenses and higher commodity costs, and decelerating earnings growth rates.
The Industrial sector carries an overweight recommendation due to the continued improvement we see for the U.S. economy. Signs of life emerging from manufacturing also should aid results.
Consumer staples has an underweight recommendation, due to expected pressure from higher input costs, rising competition, and a weaker retail environment.
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Thats it!
Rgds, and be careful! ;) Spaf
I love the bottom line.
Ur $, educate Urslef. Bull market. Go good equities. Diversify. Plan the Exit.
:cool:
.................................. Spaf .............................
learning
12-29-2004, 05:29 PM
Tom and people: a
Friendly heads up. Do not look at the polls where people sign in and take them. They are not accurate. (They can be fun and nice to do. They may even help a little. Just be careful. Yahoo, CNN, etc...)The problem is you do not have a good cross section of society or the people as a whole. You have only those people that go to that sight and take it. There are other segments of society. You could write an entire paper on this subject.
So when you see a report that says someone did a poll, question it. See how it is done. If it is not done right, do not believe it. So if a report says that people are bullish or bearish that is done by people just doing it. I would look at it with a grain of salt. They should post percentages of how accurate it is. Plus or minus 3 percent is ok. Over 3 percent and it is not considered a good report. Reason- 50% plus or minus could be 47% to 53%. That is a 6% difference. That is a big difference. That is why you see most polls at the magic 3 number and not over.
tsptalk
12-29-2004, 07:12 PM
learning wrote:
Tom and people: a
Friendly heads up. Do not look at the polls where people sign in and take them.
Thanks! Plus polls are what people are saying, not what they are doing. Big difference.
Actions speak louder than words. I'm generally bullish, but it won't stop me from making short-term moves out of the market.
Market Talk:
If sentiment holds, the market should be rather dull for the remainder of the week.
The market loves certainty and dislikes uncertainity. 2005 should be a good year by all forecast. However, that uncertainity factor always looms overhead. For example, Today in Saudi Arabia a car bomb went off and oil spiked at $43.64. There are factors that are unpredictable.
What is a good strategy for todays market?
My opinion!
The big picture: the market is bullish, stocks are gainers, interest rates are rising and bonds tread water at best. The market could change and will, so an exit plan from stocks should be a plan "B".
The TSP picture: We have good index funds. The 1-2 day transfer time is a slight handicap. G is safe, but small returns. F is treading water. C is ok. S is tops, but more risk. I is very good, but carries a two fold risk of market and currency.
Allocations: (for non buy and holders) should be based on their risk tolerance (the nervous factor). For myself:20-30% is conservative, 30-40 is moderate, and over 40 is aggressive, where I get nervous, and lose sleep. Putting some funds in G has a soothing factor. I may allocate 20G, 0F, 20C, 35S and 25I depending on proportional 15 day fund returns, and tweak allocations as returns vary every 15 days or so. If Tom (tsptalk) hints on a correction, I may follow him to a more conservative allocation. And, he has been right several times. Tom is more aggressive then me, mainly because I am approching retirement and capital preservation is more of a concern.
I am not in any competition to see how much gains I can achieve. 10% plus and I'm ok. So I guess my talk should be taken as a conservative of capital preservation, and more aggressive participants will have a somewhat different approach. My final comment is good flying to us all, whether you are in a ballon or a jet, just stay away from the potholes if you can, but mainly be in tune with the primary movements of the market (bull or bear).
Bottom line: Before TSPTalk my investements were harem-skarem, by luck invested in the S fund during 2003. Being a member of TSPTalk from 2003 I have a increase of over 20%. Thats the bottom line! Thanks Tom!
Rgds :) Spaf
smedlap
12-30-2004, 04:16 AM
Spaf, Many excellent posts. Thanks for sharing the valued forcast. Happy New Year!:^
Hey Smedlap..............A great year to you too! :^ Rgds Spaf
Exit Strategy
Some folks may say this post is premature. But, I say that it is the next thing to follow (what goes up has to come down). Right now we are in bullish times with an advancing primary movement market. Hopefully the bullish movement will run for a long long time!
However, it's going to end sometime and the market will turn bearish. At that point we will need to protect our funds, maybe by moving to the G fund, or the F fund, changing allocations, etc.
So an exit strategy should be in everyone's plan. But, how do you know when the bull market ends.
Well this is part of The Dow Theory, and in part the theory explains what happens, and what to look for:
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Primary Bear Market - Stage 1 - Distribution
Just as accumulation is the hallmark of the first stage of a primary bull market, distribution marks the beginning of a bear market. As the "smart money" begins to realize that business conditions are not quite as good as once thought, they start to sell stocks. The public is still involved in the market at this stage and become willing buyers. There is little in the headlines to indicate a bear market is at hand and general business conditions remain good. However, stocks begin to lose a bit of their luster and the decline begins to take hold.
While the market declines, there is little belief that a bear market has started and most forecasters remain bullish. After a moderate decline, there is a reaction rally (secondary move) that retraces a portion of the decline. Hamilton noted that reaction rallies during bear markets were quite swift and sharp. As with his analysis of secondary moves in general, Hamilton noted that a large percentage of the losses would be recouped in a matter of days or perhaps weeks. This quick and sudden movement would invigorate the bulls to proclaim the bull market alive and well. However, the reaction high of the secondary move would form and be lower than the previous high. After making a lower high, a break below the previous low would confirm that this was the second stage of a bear market.
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I've attached a chart of the S&P for one year. Indicating the bearish period of 2004. The squiggle line indicates the grey area when the market begins to change. Note the first decline and the reaction rally that followed. This reaction high makes a lower high and confirms a bearish movement.
If I'm around, I'll tell you about it. If not, you now know what to look for. The Bulls will not voice the change in market. I hope the change is a long way off. But, no one can predict the market.
However, you now have a exit strategy and know what to look for.
Rgds :) Spaf
neirbod
12-31-2004, 11:17 AM
Excellent post, Spaf. Thanks!
tsptalk
12-31-2004, 02:57 PM
Boy, we sure saw some profit taking selling thelast few minutes of the day bothtoday and yesterday. A nice day just turned negative again.
Tom........Like carrying a sack of groceries, when the sack splits open!
The S&P started In January at 1111, got as low as 1063 in August following some bearish cycles, but ended the year at 1211, and in a bullish mood. 2004 was a interesting year for the market!
Happy New Year to ya! Regards :) Spaf
How the TSP fund did in 2004.
I went over to the TSP web site and extracted the funds returns for the year. The data was from December 31, 2003 and ending December 31, 2004. This data is the share price increase/decrease through that period.
FundG = +0.44
F = +0.43
C= +1.26
S= +2.25
I = +2.58
The I fund did the best. However it carries the two fold risk of market plus currency. The S fund did 2nd best, and only with market risk.
The C fund did good.
The F fund didn't do very good. Probably the rising interest rates.
The G fund was safe and with low returns.
.................................................. .................................................. ..................................
Based on the 2003 and the 2004 returns my retirement goal with TSP has been met. I could put the funds in G and just wait till July 2006, my retirement date. I'm not in competition, so I don't have an "Account Page" on the site. My strategy is a bit different. Capital preservation plays a key issue with me, therefore, I'm a bit more conservative.
For you guys and gals nearing retirement, my allocations correspond to your style. For the younger group that can tolerate the risk, and maybe make up a not so good call, well listen to the more aggressive financial talk.
Maybe I belong in the old folks section, or the near retirement forum, na I'm going for a new bass boat now! Not with TSP but with my pillow fund at Scottrade.
Rgds :u Spaf
I'll convert those raw numbers into percentages:
G: 4.30%
F: 4.30% (lower starting price than G)
C: 10.82%
S: 18.03%
I: 20.00%
This makes my 10.18% return for the year look rather pathetic in comparison... but I beat the S&P. :^
I'm devising a new strategy that I expect to do better with... we'll see how it goes.
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