Watch List Update

As you are well aware, or should be, our watch list is now in two parts.  Stocks selected by the methodology of Charles Kirkpatrick, CMT from one of his books: Beat the Market: Invest by Knowing What Stocks to Buy and What Stocks to Sell. If you haven’t read the book that is a link to Amazon. You can review brief dissertations about this book, by myself, and also from AAII (American Association of Individual Investors), by visiting, Individual Stock Selection in the navigation then to Stock Selection Methodology.

The second part of my stock watch list involves the IBD 50. This is a computer generated list that combines technical (primarily relative strength) and fundamentals. Both are now updated for your review over the long weekend.  I am thinking about adding buy and risk points to these lists if that would be of interest?

While IBD does not make specific recommendations on their 50 list, AAII tracks many screens over time. Notice as you peruse the various performance charts that not one moves in a straight line. They all go through periods of underperformance or just plain not working for awhile. First here is the Kirkpatrick Screen results:

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While AAII does not have performance data on the IBD 50 it does in two other categories, IBD Stable 70:

Investor’s Business Daily attempted to identify the characteristics of those companies that had weathered the recent economic and stock market downturn. The goal was to apply those factors going forward to identify “recession-proof” companies. The fruit of their efforts was the Stable 70 list, which consists of companies with strong and stable long-term earnings growth.

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O’Neil’s CAN SLIM Screen – O’Neil discusses his approach in “How to Make Money in Stocks: A Winning System in Good Times and Bad“, which is now in its second edition. This book serves as the primary source for this screen.

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Don’t get caught in the trap of I’ll do this one because it has the highest returns.  All methodologies go through cycles as do the markets. In all honesty do you know anyone who would be unhappy with any of these returns? I don’t think so.

I think I need to pay more attention to these watch lists for you! Let me ponder a how and if you have any ideas on the how, please pass them along.

Talking Points and The rise of the new global super-rich:

Are You Concerned About Markets? (David Kotak)

Ignore the Market, Watch the Data (Bloomberg View)

That Pesky Indicator Still Saying U.S. Stocks Are Cheap (Bloomberg)

Wonky: When Will the Fed Change Its Reaction Function? (Tim Duy’s Fed Watch)

Intentions On Housing (Alhambra)

Tech Leaps, Job Losses and Rising Inequality (NYT)

Dovish Sign? Janet Yellen Says Nothing About Asset Bubbles (Business Week)

Economic recovery accelerates as winter turns to spring (The Term Sheet)

EM tail-risks are rising (Humble Student)

Bonuses Should Be Tied to Customer Value, Not Sales Targets (HBR)

Tesla vs. the Auto Dealers (New Yorker)

This Is Amazon’s Smartphone (BGR)

LOL: A Statistical Analysis of the Work of Bob Ross (FiveThirtyEight)

The Cayman Islands: Where tens of billions of dollars don’t get declared to IRS (Quartz)

How the wealthy resemble sociopaths: Peculiar Traits of Rich People (Motley Fool)

How Innovation May Make Wall Street Less Efficient (Real Time Economics)

Why Scientists Increasingly Need to be Salesmen (Priceonomics)

Chrystia Freeland: The rise of the new global super-rich

Enjoy Your Holiday Weekend!