The power of new money

Welcome back in my website

The stock market was particularly bad last week. A 30-day cycle finished and a new 30-day cycle has just started probably.

As the FED continues to print money, the stock market keeps on growing.

Look at the chart below… its title may be “the power of new money”.

 

FED M1

 

Due to this fact, my forecast have been modified a little bit, automatically.

The stock market wants to go up again with less strength. I will try to find out good stocks to buy now. However, this is a distribution phase and buying now is very risky. I will perform a very good stock picking session tomorrow to understand if there is some low risk buy stocks worth considering.

Here are my forecasts.

 

S&P 500 stock index forecast updated on 27th of March 2015

 

Nasdaq stock index forecast updated on 27th of March 2015

 

Sensex stock index forecast updated on 27th of March 2015

 

Italian stock index forecast updated on 27th of March 2015

 

They show the willing of the stock market to go up, but with no real conviction. Remember that this is the last 30-day cycle before the end of this important 6-month cycle. So, let us pay attention because everything can happen now.

As you can see, the forecasts of Indian and Italian markets show one scenario and the forecasts of the NASDAQ and the S&P 500 show another scenario. Which of them is correct? I do not know. The stock market will tell us the truth.

However, there is an ugly bar of sell volume in the S&P 500 future. Futures are managed by great funds and they know perfectly what they are doing…

Nevertheless, I do not like it at all. It does not correspond to a bottom. Therefore, I do no consider it a pure buy signal. Something great is about to happen.

 

S&P 500 full future updated on 27th of March 2015

 

That is all for the moment. I will keep under control the stock market and I will inform you.

Do not forget to share this post with your friends in social media. They will be happy. You can find all the buttons here below.

Kind regards,

Fredrick

 

Best buy stock checker: the importance of one best stock inside your portfolio

 

Today I’d like to talk about the importance of having one very best buy stock checker. It’s important to take care of our portfolio this way.

I mean that everybody wants to buy very good stocks and only those ones. Even if it is not easy to find the best stocks to buy, it is worth it in term of portfolio results.

I have prepared two simple examples that explain what is the difference in a portfolio management between having and not having a stock that can increase in value very much in a short period.

It is not always possible, but it is the aim of every good stock picker.

The first example shows a low return because of only one great stock present in the model portfolio. The second example shows the presence of two very good stocks inside this model portfolio.

I have imagined a hypothetical portfolio of 500 USD (it may be 50.000 USD … it is the same), that Is invested every quarter of one year in only 5 stocks.

Besides, I suppose to operate for only 3 quarters of this year. I maintain a very conservative approach.

Every quarter, I invest the entire capital in other 5 stocks (one fifth of the capital for each of them).

Let us suppose that my stock picking system is correct only 60% of times. When it is wrong, the 40% of times, the stocks selected show a loss of 5% (stop loss level). In the 60% of times, it can find good stocks to buy with a positive result and one stock with a very good positive performance.

The compounded returns at the end of the year are very interesting, as you can see.

Here are the tables. I think that they are self-explaining.

 

best buy stock

 

 

best stocks to buy

 

I have shown two basic examples that can grow in complexity as much as you like. However, I think that they are sound enough.

What are the observations that we can deduct form these simple examples?

I think that they are the following:

  • If you have only one very good stock inside your portfolio at least, then, the overall result of your portfolio can be very interesting. If you have 2 or more very good stocks in your portfolio, your results can be astonishing;
  • A single stock trade is not that important. Quit your losses short and let your best stocks make the hard work for you. All the rest is not important;
  • Portfolio wealth is built on the basis of few very good things that you have bought, with a little diversification;
  • Compounded return is what builds the real value in a portfolio. This is the true magic aspect of wealth creation.

 

These examples express better than other things the importance and the confidence that I have in stock picking. It is not important to be right every time, but if I am right the 50% of times, and I buy one of the best buy stock, I know that the compounded return will make my fortune on the long run.

Someone can object that I have supposed to buy a stock with a return of at least 50% for every quarter.

I know that this is difficult but it is a simplification. However, it is a reachable goal…

I remember that there are two great differences between a stock and a commodity, for instance, in term of price behavior.

The price of a commodity varies because of the “quantity” of its supply and demand. If its demand is greater than supply, its price grows.

Instead, the value of a stock varies not only because of the behavior of its supply and demand. The value of a company can be calculated in several ways. In general, I can say that the higher the net income produced, the higher the value of a company and of its stock.

It may happen that the launch of a new product makes its income to grow very much in a quarter and in the following ones. There may me a deep reorganization of the costs of a company that makes it more efficient. It is not important what takes place. Whatever may happen, it can make a stock to be a best buy stock inside a group of stocks in a certain moment.

The duty of a stock picker is to understand what changes happen in a stock market. Besides, he has to discover which stocks are very likely to take off in value.

Therefore, my best advice for those persons that look for a great percentual result of their portfolio is to buy stocks that are very likely to increase in value. It is important that you can be right is one maybe two stocks each time.

I know that it is risky, but if you manage this risk correctly, the total return on your capital could be much greater. I am referring to those sums of money that are completely invested in stocks.

A great way to reduce this risk of choice is to observe volumes. If a stock is heavily bought, it is very likely to increase in value soon after.

I wanted to express a concept that I consider very important in portfolio management. You can be wrong many times, but if you are right few of them and if these few times have a great return this is enough for you. Do not worry.

As regards the current situation of the stock indices, I present my usual forecast.

I think that nothing is really far from what I wrote last week. Remember that stock indices are facing the top of a six-month cycle that started in October 2014. I imagine that a quick downtrend is about to start.

In fact, while I am writing now, the stock that I suggested few months ago (CEMP) and that has had a great performance (about a + 40%) is having a collapse of -8% now. This is not only a sell signal, but it is also a signal that many stocks have arrived to their top of this 6-month cycle. Let us pay attention, please.

Here are the anticipated forecast graphics.

 

S&P 500 stock index forecast updated on 20th of March 2015

 

Nasdaq stock index forecast updated on 20th of March 2015

 

Sensex stock index forecast updated on 20th of March 2015Sensex stock index forecast updated on 20th of March 2015Sensex stock index forecast updated on 20th of March 2015Sensex stock index forecast updated on 20th of March 2015

 

Italian stock index forecast updated on 20th of March 2015

 

 

You can understand one simple thing: the more new money is printed (M1) the higher these indices will go respect their expected value given by statistics.

The so-called “collapse” of the stock market in 2015 is not likely to take place anymore. Everything has changed in the last two weeks.

As you can see, trading is a never-ending game that changes always. For this reason is so stimulating. We have to adapt continuously to its variations.

I will discuss about this argument the next week.

That is all for this week.

Do not forget to share this post with your friends in social media. They will be happy. You can find all the buttons here below.

Kind regards,

Fredrick

 

Stocks update today

 

Welcome back in my website.

I want to do a resume today, dealing with what this website is about.

My website is an objective window open on the stock market. From one side, I want to understand where the overall stock market is about to go. From the other side, I try to find out the best stocks to buy both in the American and in the Indian stock market. I prefer quality to quantity.

Not only, but I want to find out those stocks that have the potential for a great uptrend with low risk.

I have painted in red “low risk” because everybody knows that stock trading is risky. However, I try to limit this risk with different methods of stock picking, like for instance: the study of volume distribution, the objective measure of supply and demand of a stock, etc. A stock has to overcome 17 conditions (some of them are simple, some of them are difficult) to enter in my watch list.

The problem with risk is that it is difficult to measure in an easy way. I mean that I want have from a stock what I waited for. If this happens regularly, for instance 80% of times, this is a low risk method of selection.

No system is perfect, but I want that every aspect be filled before offering a new buy signal.

This is for me risk reduction.

Therefore, why the title of this article deals with stocks update today? Because today I want to show you an updated situation of a stock that I suggested on the 19th of February 2015.

I feel happy to show some interesting result about some of my buy signals.

This stock is CEMP and here is its graphic.

 

stocks update today CEMP on 13th of March 2015

 

 

The buy point was at 28.76 $ per share. Now, its current price is 38.71 $. This means a + 34% of gain. This has been a FREE buy signal. I do not think that its run has arrived to an end yet. I will inform you when I receive a sell signal.

As regards the overall stock market, I think that it has arrived to an important top. I wait for a definitive signal of reversal before suggesting some more buy signals.

I suggested one position to my customers last week about an ETF and I confirm that it is the first of my list. All the details were well set for an important move up. This means the highest probabilities in our favor.

We will discover what happens in few days. Quality rather than quantity.

If the stock market starts to go down, it will go down very fast. I want to be already in before this happens.

Here are the forecast graphics of the stock indices that have behaved particularly well in the last few weeks.

 

S&P 500 stock index forecast updated on 13th of March 2015

 

Nasdaq stock index forecast updated on 13th of March 2015

 

Italian stock index forecast updated on 13th of March 2015

 

Sensex stock index forecast updated on 13th of March 2015

 

 

My question is always the same: are these forecasts of stock indices confirmed by other financial instruments? Remember that money never sleeps…

The correct answer is: yes, they are!

If money comes out from a market, it enters another market. I think that the bond market is a good market now. Interest rates of the bond market are about to go down and the nominal value of bonds should increase.

Look at the graphic of this etf TMF, here.

 

TMF etf updated on 13th of March 2015

 

I see new buy volumes and an accumulation area. I think that the current annual cycle of this instrument started at the middle of September 2014. It is likely to have its end in September 2015. Therefore, a new six-month cycle is ready to start now. This fact explains the new buy volumes.

We will discover if my forecasts are correct in few days.

That is all for this week.

Do not forget to share this post with your friends in social media. They will be happy. You can find all the buttons here below.

Kind regards,

Fredrick

 

  • Fredrick

    Fredrick

    This is MY PERSONAL and OBJECTIVE point of view about American and Indian stock markets.

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  • STRONG AMERICAN STOCKS – FREE FINANCIAL ADVICE 2014 (FEW DAYS DELAYED)

    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    MNST 8.00 138.28 98.6 22/10/14 106 15/12/14
    ANAC -1.00 56.12 34.5 02/12/14 34 15/12/14
    EQR -1.00 79.73 78.5 15/01/15 77.59 02/02/15
    CEMP 30.00 40.92 28.75 19/02/15 37.5 24/03/15

  • STRONG AMERICAN STOCKS – PAID FINANCIAL ADVICE 2014 (1 MONTH DELAYED)

    Ticker% Gain/lossCurrent priceBuy priceBuy dateSell priceSell date
    AKRX5.0048.9842.720/01/1544.9611/03/15
    IBKR10.0034.283023/01/153326/03/15
    NVAX-6.999.558.0806/02/157.5326/03/15
    FTNT1.0034.5832.7812/02/1533.2011/03/15
    IMKTA-2.0049.524806/03/1547.226/03/15
    DUG-6.9954.355811/03/1554.1420/03/15
    MTSI038.863718/03/153726/03/15
  • MOST UNDERVALUED AMERICAN STOCKS – PAID FINANCIAL ADVICE 2014 (1 MONTH DELAY)

    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    ADT 2.0 36.26 32.85 27/05/14 33.479999999999997 09/07/14

  • STRONG INDIAN STOCKS – FREE FINANCIAL ADVICE 2014 (FEW DAYS DELAYED)

    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    PCJEWELLER.BO -3.00 265.45 248 30/10/14 240 25/11/14
    SKSMICRO.BO -4.00 447.65 469.45 19/01/15 450 27/01/15
    HCLTECH.BO 0 2035.95 2030 19/02/15

  • STRONG INDIAN STOCKS – PAID FINANCIAL ADVICE 2014 (1 MONTH DELAYED)

    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    KPIT.BO -2.00 185.9 215 20/01/15 210 02/02/15
    GDL.BO 5.00 413.6 372 19/01/15 390 05/02/15
    BHARATFORG.BO 18.99 1295.34 1015 19/01/15 1208 26/03/15
    MARICO.BO 2.00 371.6 361 23/01/15 370 16/03/15

  • Federico, l have to say that it's very unusual to come across someone that is as open and honest as you are.
    You openly show all your calls including the loses. Such honesty should be rewarded.
    I will continue to follow you and thank you so much for your time and efforts.

    Angela P. (UK)

    /////////////////////////////////////////////////

    Dear Fredrick you are a very serious and reliable person.
    You have always given to me pieces of advice and information that have revealed very valid.
    What distinguishes you is the seriousness and the love that you use in doing all this.
    Thank you.

    Azzurra Z. (IT)

    /////////////////////////////////////////////////

    I just happened upon your site in the last few days and am satisfied with your attempt to communicate. I will continue to follow until I see a noticeable lack of "something" like sound advice, logical remarks and well put sentences. Should I notice what I feel are these and other short comings, I will attempt to email you at this address and share my concerns. I know you want to be a success at this and I support your endeavors. Be patient. Asking us for input today, that's a good idea.

    Ben W.

    /////////////////////////////////////////////////

    Hello Fredrick,
    I happened to bump into your blog and i must tell you that i'm glad i have. I'm an aspiring trader whom wants to develop a trading method like you have since i dont have the time to daytrade....
    I would appreaciated it if you can give me further explanation and i was also wondering if your willing to take me as your apprentice to teach a good strategy like the one you've acquired. I have experience position trading but i need a good foundation like you have. ...
    Thanks in advanced,

    Harley D.

    /////////////////////////////////////////////////

    Hi Fredrick
    First of all I wanted to thank you for your analysis on the Italian market and the Nasdaq.
    I found your suggestions very helpful and I followed all the signals of the newsletter with great results.
    ...
    Best regards

    Domenico S. (IT)

    /////////////////////////////////////////////////

    Hello Fredrick, some time has passed and I wanted to write to you to thank you warmly for your weekly counseling about markets.
    I want also to congratulate with you for your forecasts that are always accurate and detailed. My regret is that I have not always followed you.
    While I am saying bye to you, I want to espress my best wishes to you for the great work you are used to do in your website.

    Bye and thanks again.

    Andrea Z.

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