Excel Tip #17 - Shortcut to Naming Cells or Ranges and Why You Should Name Excel Cell Ranges

Feb 3, 2016 -

Suppose you have a 5x5 Microsoft Excel table. On the top row you have the months of the year beginning with January through May. Then on the left hand side you have stock ticker symbols including but not limited to AAPL, GOOGL, and WFC. In the heart of all of this you have the stock prices of the respective month and ticker.

Your goal is to find the average price for GOOGL in the five months beginning in January.

The simple answer would be to type in the =average formula and drag your mouse over the row beginning with GOOGL. Maybe you are somewhat more Excel savvy and directly type in =average(D5:H5) instead.

Let me introduce to you a third, more efficient and flexible method. Suppose you name that range from D5:H5 "GOOGL". Going forward all you have to do is type in =average(GOOGL). If you are adding more months just make sure you include the additional months in the cell name.

Now, it is quite easy to highlight five cells and type in "GOOGL" in the box to the left of your formula toolbar.

If you have a table that is 100x100, that can become tedious. What is an easy and quick shortcut to naming all of the columns and rows with their headers?

The answer is to highlight the table and hold CTRL+SHIFT+F3 to name the columns and rows based on headers. You will be prompted with the 'Create Names from Selection' box. The default is the 'Top Row' and 'Left Column'. In our example, this means the columns with header 'Jan' will be named 'Jan' and the row 'AAPL' will be named 'AAPL'.

Let's say that you forgot what cells ranges in Excel you named and don't want to duplicate names. Hit CTRL+F3 and you will see all the cells and cell ranges you've named already along with which cells are being selected as part of that name tag.

Quick Summary

1) Quickly sum cell ranges using the cell name in replacement of the cell range
2) Highlight table and hold CTRL+SHIFT+F3 to name the columns/rows based on headers
3) Use shortcut CTRL+F3 to bring up the 'Name Manager' to view named cells ranges

For more excel tips check out the #1 best selling e-commerce book below.

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Tap Dancing to Work: Warren Buffett on Practically Everything - Book Review

Jan 9, 2016 -

About Carol Loomis, Compiler of Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012

Carol Loomis had the longest tenure at Fortune magazine of any employee in its history. She is noted particularly for having covered Warren Buffett's life since 1966 more closely than any other business publication. For decades she watched first hand as Warren Buffett became Warren Buffett. Over the years she has developed a tremendous relationship and rapport with Warren, so much so that she has been the pro bono editor of his annual letter to shareholders for many years. Incidentally, it was Carol's husband who first met Warren Buffet. In Carol's first article mentioning Warren Buffett, she had misspelled his last name 'Buffet'. Later on, Warren gave grief to Carol about that.

Overview and Thoughts about the Book

Tap Dancing to Work: Warren Buffett on Practically Everything is a collection of articles about Warren Buffet, some of which were either written by Fortune and Carol Loomis herself (13 cover stories), Warren Buffett himself (12 articles), or various other writers. All of which definitely help to contribute to understanding Warren's thought process and principals. The book starts with an article about Alfred Winslow Jones, who is largely considered the father of hedge funds. At the time, Warren Buffett had started a partnership, which he eventually closed in 1969 due to what he believed to be unfavorable market conditions. By that time he had already amassed $25 million dollars. While many of these articles you can probably find online, Carol provides insightful information on each of the articles in hindsight. This includes the aftermath of what had happened in the banking crisis of 2008 and Buffett's temporary seat at Solomon as chairman.

For someone who is looking to gain rare insight into Warren's investment principals, you'd have to go through 368 pages of articles to comb though and pick out the fruit. Evidently he does not lay out his investment procedures in simply easy to follow steps, but each of these articles does provide incredible insight into Warren's thoughts and more importantly his adherence to his principals. In particular, a couple of the articles illustrates Warren's cost management and thriftiness.

I would say about a third of the articles are about Warren's generosity in donating a large portion of his fortune to charities. It goes through how the idea came about, who else he has involved, and his relationship with Bill Gates in all of this.

"How did BYD get so far ahead?" Warren Buffett asked Wang, speaking through a translator. "Our company is built on technology know-how," Wang answered." Wary as always of technology play, Buffett asked how BYD would sustain its lead. "We'll never, never rest," Wang replied."

Perhaps one of the most insightful pieces is "Why Warren Buffett's Betting Big on American Express". While Fortune attempted to decipher the secret formula behind Warren's decision to buy American Express, at the end of the article Carol eludes to the real reason behind Warren's decision to keep it all these years. While Warren was initially concerned with competition from other credit card companies such as Visa, his golf day with Frank Olson at the time CEO of Hertz largely shifted him the other direction. At mid-2012 Berkshire's Amex stock had a cost basis of $1.3 billion and a market value of $8.8 billion. Let's not kid ourselves, Warren did not buy American Express on solely a stock tip. 

But being serious now, the article 'Buffett Takes Charge' by Marc Gunther is one of the best articles that describes Buffett's investment criteria and the degree in which they need to be met. This article is on his decision to invest in the Chinese car and battery company, BYD. Buffett purchased the stock at HK$8 and it is now trading at about HK$60. Even with the recent drop in the Asian stock markets, he still returned about 750% from his initial investment. 

Final Word

Had I had the insight and good fortune of collecting all the articles on or related to Warren Buffett prior to or during 2009, I would probably be sitting on a lot more cash than I am right now. Being able to say that means that there is intrinsic value in all of the articles presented in the book. All the way from how to pass on wealth to your future generations to what to look for in purchasing a business. While all of this is easier said then done, at the very least you will have some kind of background into going about becoming a better person and investor. Not to mention, the articles are very well written in their own right, which makes Tap Dancing to Work: Warren Buffett on Practically Everything an entertaining read if nothing at all.

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Carol Dweck: "The Growth Mindset" Concept Review

Dec 28, 2015 -

Carol S. Dweck is the Lewis and Virginia Eaton Professor of Psychology at Stanford University. She graduated from Barnard College in 1967 and earned a Ph.D. from Yale University in 1972. She is known for her research in social and developmental psychology.

Dweck recently published the Mindset: The New Psychology of Success and has since sold over a million copies. In the book she discusses the idea of the mindset being a contributing factor in fulfilling one's potential in parenting, business, school, and relationships.

Why do some people wilt in the face of danger, while others who are no more talented thrive in challenges? How are people motivated to learn? These are some of the many questions that Dweck answers in her book.

In the Mindset: The New Psychology of Success, Dweck argues that there are two mindsets of which are the "Fixed" and "Growth" mindsets. Generally speaking, those who believe talents and abilities can be developed are in the growth mindset, versus those who believe talent is natural born are in the fixed.

However, you can have a fixed mindset in one area and a growth mindset in another. For example, suppose you are great with Microsoft excel and are willing to take on any new challenges associated with it. When you see someone else who is better, instead of feeling jealous, you want them to teach you their skills. That is an example of a growth mindset. On the other hand, suppose you are asked to create a flowchart of your business' processes using Microsoft Visio. You are not particular great with it and are not willing to learn to become better using it. That is an example of a fixed mindset in a different area.

Add the word "yet" to your fixed mindset statement. If you say that you are not "yet" at a certain level, that implies that you can develop and get better. For example, "I am still not able to generate enough passive income to support myself, yet".

When you tell someone he or she is smart and what he or she has done seems effortless, you are in fact communicating another subtle message to the recipient. He or she will start to believe that if it takes effort then he or she won't look smart. Thereby, they start to focus only on what they are good at and instead of challenging themselves and developing their intelligence. Having a growth mindset will allow you to take on challenges and more importantly stick with them.

In growth mindset companies, management values creativity, innovation, and teamwork. Employees in such companies believe that they could develop their skills and thereby felt empowered and more committed to the organization. On the contrary, fixed mindset companies looked to hire talent, but did not believe that those talented individuals they hired had potential to rise and join management. Employees in those companies felt that they had one foot out the door and would leave at anytime if another company offered to pay them more.

How do you ensure that you think in a growth mindset versus a fixed mindset? 

Being in a growth mindset is not just being open minded, it is developing oneself through a life long journey taking on challenges and learning from them. Focus on the process, show interest, ask questions, and most importantly stick with it. When faced with something safe versus a challenge, choose the challenge. When you hit a challenge, ask yourself how can you learn from this and what can you do better the next time. A growth mindset is not a destination, it is a process and a journey.

When is a fixed mindset better than a growth mindset? 

Accepting your sexual orientation and aging. These are two things that you can not change and is arguably biological (one more than the other). Thinking and believing you will get younger as time passes, is not realistic and quite frankly not possible at this point.

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What Makes A Good Life? Lessons from the Longest Happiness Study - Summary

Dec 24, 2015 -

The Harvard study of adult development began in 1938 and tracked two groups of men totaling 724 for 75 years. One group included sophomores from Harvard who ended up serving in WWII shortly after graduating. Another group consisted of Boston boys in the poorest and most disadvantaged areas. Taking populations from two differing spectrum of privilege helps to control the effects that has on living a good and long life. Over the course of 75 years, many of the individuals in the study became lawyers, factory workers, bricklayers, doctors and one was President of the United States. Not only did the Harvard study interview these individuals in their very own living rooms, but they drew blood samples, scanned brains, and talked to their parents.

What are the most important life goals? Of the recently surveyed millennials, 80% said that becoming rich was an important goal. In that same population, 50% believed it was important to become famous. We are constantly being reinforced by society to work hard and achieve greater to have a good life. But, is that truly what will give you a good life?

The Harvard study generated tens of thousands of pages of research. The lessons learned were not about wealth, fame, or working harder. In the 75 year old study, it is good relationships that keep us healthier.

1) Social connections are good for us and loneliness is not. Those who are more socially connected to family, community, and friends are physically healthier. People who are more isolated find that they are less happy and health decline earlier.

2) It is the quality of the relationships and not quantity that is important. Turns out that those living in conflict without much affection are worse off then getting divorced. People in good warm relationships stayed happier even when they experienced more physical pain.

3) Good relationships protect your brains as well. Those in securely attached relationship with people you could count on stay sharper longer. Relationships don't need to be smooth sailing all the time, as long as they felt that they could count on each other, that's what matters.

This is not rocket science or anything novel. So then why do we ignore this? We are humans and human nature is wanting quick fixes. Relationships are hard work, not glamours, and is an on-going life journey. People who fared the best over their lives are also those who leaned into relationships with family, friends and community.

The good life is built with good relationships. 

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Key Challenges with Value Investing

Dec 13, 2015 -

Value investing is an investment methodology whereby you invest in businesses that the market has undervalued. The whole idea behind this is that the stock market is not efficient. As a value investor, you can take advantage of periods where businesses go "on sale". Then sell when a business has been overvalued by the market. In theory, all of this sounds logical and might even sound easy to do, but there are a number of challenges one can face in the process of this.

Just as there will be periods when there are companies that trade upwards of 100 times their earning potential, there are also times when they will be trading at a price to earnings ratio (P/E) of under five or less. This means that the price of the stock is lower than five times the amount of net income the company is generating. In investing terms, one aspect of measuring a business' value is how long it takes for the company to recoup the investment. For example, if you invest $100 in a company that generates $10 a year. If you didn't sell your stake in that company, it would take you 10 years to recoup your investment. This is the concept of P/E ratio. Arguably a 10 P/E ratio is a reasonable value for the company.

Benjamin Graham, the father of value investing, once said that in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company.

One of Warren Buffet's holdings is International Business Machines Corp. (IBM). IBM has been trading below a 10 P/E ratio for much if not all of 2015. The company is currently undergoing a restructuring and deleveraging the businesses that do not have high gross margins in favor of those that do. In other words, selling its hardware in favor of cloud computing products. As a result, they have been experiencing declining revenues over the past few years. However, cost cutting measures has actually led to a higher net income when comparing 2015 vs 2014 financials. In fact, in Q3 2015 year to date IBM reported net income of $8.7 billion versus $6.5 billion in the prior comparable period. All the while, it continues to repurchase shares, which means there is less of it out there. It doesn't take a genius to understand that your shares become more valuable (in a scenario where all other factors remain constant).

If you had purchased IBM in May of 2015 at its high of approximately $171 your investment would be down over 20% in mid-December of 2015 as the stock price hit $135. In fact, you'll have to look all the way back to late 2010 and early 2011 to get prices of $135. Meaning if you had purchased IBM in 2011, 2012, 2013, 2014, or 2015, your shares are most definitely underwater. That is five years! Nowadays we are used to instantaneous information, profits,everything. How do you have the patience for that? At the present moment, it looks like there is no end to this decline in sight. You will have to be able to sit through this temporary, but seemingly long storm. Chances are you did not pick the bottom of the stock.

While we just did a 20,000 feet extremely high level summary analyzing IBM's business above, there is always a chance that we could be wrong. With any investment there is risk. Yes, IBM has been has constantly reinvented itself and yes it has survived over 100 years of business. However, there is no guarantee of tomorrow. Chances favor the stock to grow exponentially over time, especially when you continue to see it generate profits. However, we could be wrong in our investment. The challenge of it all is having the stomach to ride out these large declines in the value of your stock during this holiday season.
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Lessons in Baking - What is a Ramekin?

Oct 8, 2015 -

It was a typical Saturday night, only that it wasn't. My friend's big thirtieth birthday celebration was that night. The guys and gals had planned a surprise fancy dinner for our buddy who rarely treats himself out to a nice restaurant. While the main course was a porterhouse steak, it was the dessert that stole the show - a deliciously sweet and well balanced crème brûlée. By the end of the night, the talk was focused solely on the dessert. We talked about how great the presentation was and the incredible taste. What about the presentation? Yes, you guessed it. It was served in a ramekin.
What are ramekins or ramequins?

The word is from French ramequin, originally a cheese- or meat-based dish baked in a small mold. The French word comes from early modern Flemish rammeken, which meant 'toast' or 'roasted minced meat'. Ramekins are often built to withstand high temperatures, as they are frequently used in ovens, or in the case of crème brûlée, exposed to the flame of a cooking torch.

What can you make with ramekins?

Use it to make crème brûlées! Quite frankly crème brûlée are not that complex. It is basically just heavy cream, vanilla, and egg yolk. Alternatively, if you are looking to make molten lava cake, you'll need egg, chocolate square, flour, butter, and sugar. Essentially, a molten lava cake is an under cooked cake. Whereby the outside is cooked and the inside is runny.

These ramekins make a great gift to those who enjoy baking or otherwise interested in making baking their hobby.
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Three Ways to Increase Mental Energy Throughout the Day

Oct 6, 2015 -

Ever wonder why at the end of each work day you feel drained? At same time you might be wondering how you could be so tired when all you've done is merely sit in front of a computer screen the entire day. It is not like you were out in the field running around; why do you feel so out of it? The answer to all of this has to do with negative and positive ions.

While you might think positive ion are good, it is quite the contrary. Your body’s cells naturally contain a negative charge. Throughout the day your body literally pulls in positive charges; as a magnet would. Hence the phrase, "like a magnet, opposites attract". What are some things that emit positive ions? Dusts, microbes, and bacteria often carry positive charges. Computers, TVs, microwaves, even vacuum cleaners often create positive ions.

"Your body’s cells naturally contain a negative charge."

Often wonder why it is that when you head to the beach and whether it be basking in the sun or enjoying the ocean waves you feel refreshed or renewed? Negative ions occur more often in nature and they are often created by things like lightening storms, sunlight, waterfalls, and ocean waves. This is one of the reasons people often report feeling renewed or refreshed after a storm or at the beach.

Three things you can do to decrease positive ions or increase negative ions.

1) Use a natural Himalayan lamp salt crystal.

These salt crystals release negative ions into the air and create a ionizer purifying the surrounding air. As an added bonus, the amber color creates a calm and soothing feeling. The way it works is that the light within the lamp generates a small amount of heat that evaporates the water surrounding it. Salt attracts water to its surface. When the water around it evaporates, negative ions are created.

An increase in negative ions increases flow of oxygen to the brain resulting in higher alertness and more mental energy.

2)  Use the best and most commonly used ionizer air purifier.

Ionizier air purifiers are great for removing airbourne pollutants that generate positive ions. At the same time it will remove unpleasant odors and freshen the air around you. The purifier above has an added UVGI technology feature that kills germs, viruses, and bacterias.

3) Turn off and unplug your electronic devices before you go to bed.

We all know that you can not wait for your sea salt crystal or air ionizer to come in the mail, so in the meantime we recommend that you turn off all electronic devices before you go to bed.

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Larry Williams' Principals and Insight into Becoming a Better Trader

Sep 19, 2015 -

Larry Williams is a well-known trader and newsletter writer in the stock trading space. He has over 40 years of experience in the market and has written numerous books including Trade Stocks and Commodities with the Insiders: Secrets of the COT Report and How I Made One Million Dollars ... Last Year ... Trading Commodities. There is something to be learned from someone who has been in the markets for 40 years and been extremely successful. We were extremely lucky to be privy to a recent interview Larry Williams was a part of. Below are some notes we've gathered from the conversation.

1) Fundamental and technical analysis both work, however they will only work under the right market conditions whether it be a bull or bear market. 

For example, in the latter stages of a bullish market, as a buyer, you might find companies with low P/E ratio to be few and far between. Therefore, if you stick with fundamental analysis, you will most probably miss out on buying opportunities you'd otherwise find through technical analysis. In technical analysis, your focus is more on supply and demand in what is most likely a shorter time frame versus how well a company is fundamentally performing over the long haul.

2) For commodities, retail traders like to buy strength, but commercials like to buy weakness because the cost is less. 

Our interpretation of this is that most successful traders buy strength because of human behavior. People see an underlying asset like a derivative of oil go up, they jump on it for fear of missing out even if the prices jump and then more people jump on it. Until of course the prices become too ridiculously high and then people try and sell to lock in their profits. Commercial companies that use commodities like to buy at low prices because it keep their cost of goods sold lower. If revenues are constant and you reduce costs then you'd have better margins.

3) Most indicators are redundant, RSI (Relative Strength Index) and STO (Stochastic Oscillator) are the essentially the same. There are a lot of things to look at, but when using an indicator understand the purpose of the indicator you are using. 

There are a lot indicators out there that essentially do the same thing. Both the RSI and STO both help to determine overbought and oversold conditions. While there are evidently cases when regardless of whether or not a stock or index is overbought, prices continue to print higher. The key is not to have too many, keep it simple, and don't use the same overlapping indicators.

4) Trade your personality, find the system that fits you and lifestyle. Can you trade during work or at home? Do a personality check.

One thing I've learned through trading in the stock markets for about 10 years now is that you have to trade your personality. Take someone else's trading plan and trying to trade against that typically doesn't work out unless the both of you have the same personality. Each of us have a different risk tolerance and financial needs. You should only trade with what you are willing to lose and not only that but you have to be comfortable with actually losing that amount.

Market Related Information

When interest rates go up, stocks have historically been hit hard in the short-term, but you'll want to buy that weakness. The logic behind this is that when rates begin to go up, more people will feel goosed into borrowing and that leveraged money will go into consumption and production.

Market tops are typically well formed and structured thereby also taking a long time to develop. On the other hand, market bottoms are based on crashes and plummet on panic.

How many positions should you hold? 

Any more than 4 positions is a lot of multi-tasking.  For Larry Williams, 3-4 positions is plenty. Any more than that require too much multi-tasking. In addition, he typically puts on a 2% - 4% risk of total trading capital on each trade. Losing four consecutive trades at 4% risk would be a 16% drawdown.

What is the biggest lesson Larry has learned from trading? 

He learned to be humble when you are winning and learning from other people. All highly successful traders are a little unsure of themselves, so they never bet big. None of these successful individuals have had high levels of emotional response to things and therefore don't get emotionally rattled.

What are the four steps to making a trade? 

Find condition, find the entry, set your target, create trailing stops.

What are some other interesting tips and tidbits? 

1) Conditional traders look at conditions, seasonality and overlay technicals.
2) Trading should be like combo lock where you need to get a number of factors going your way.

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Stock Market Indices Review for Week 37 in 2015

Sep 11, 2015 -

Stock Market Highlights - Week 37

- Dow had worst August decline in 17 years and the NASDAQ its worst August in 14 years.
- WTI was $44.63 and brent crude oil $48.14 on 9/11. Prices still holding 40s.
- S&P trailing-12-month US corporate default rate was at a two-year high of 2.4% in August.
- Blackstone agreed to acquire Strategic Hotels & Resorts for approximately $6 billion.
- Box beats with $73.5M in revenue in Q2 2016, hits 50K customers.

The Dow Jones Industrial Average (DJIA) closed at 16433.08, which was about a 330 point increase versus a week ago of 16102.38 on Friday, September 4th 2015. 

The DJIA now formed a trading triangle, which we will await to see whether it breaks up or break down. While it briefly tested the 20 DMA, we didn't see follow through action and therefore any shorts from the 20 DMA were most likely covered in the subsequent days. Right now we are pretty much in no man's land with 50/50 odds of where the market will go.

The S&P 500 closed at 1961.05 on Friday, September 11th 2015 versus a week ago of 
1921.22 on Friday, September 4th 2015. This was about a 40 point swing. What we saw in the DJIA is almost mirror of what we see in the SPX. A break in either direction would cause us to put our cash to work. 

The Nasdaq (COMPQ) closed at 4822.34 on September 11th, 2015 versus 4683.92 on September 4th, 2015. There is a bit more strength in the COMPQ versus the DJIA and the SPX. This index is definitely leaning more bullish as you can see this is the only one to have closed above the 20 DMA. We'll see if this price level holds. This might be an indicator that the break of the triangle for DJIA and SPX will be upward. However, we'll follow the price action and time will tell. 

Starbucks (SBUX) is one of the stronger charts that has recovered after what seems to be a minor correction. Whether or not it holds the 20 DMA will be something to watch. Keep in mind the trendline is still broken and until another upward trend sets up, this chart is just making lower highs and lower lows. However, keep this on the watch list if the market turns bullish.

Disclosure: We did not have a position in SBUX at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 36 in 2015

Sep 5, 2015 -

Stock Market Highlights - Week 36

- U.S. job growth slowed in August; unemployment rate near 7-1/2-year low.
- WTI was $46.05 and brent crude oil $49.61 on 9/5. Beginning signs of reversal?
- BlackBerry to buy security firm Good Technology for $425 million.
- Toyota announces $50 million investment into artificial intelligence.
- Apple's $10,000 gold watch fails to impress investors.

The Dow Jones Industrial Average (DJIA) closed at 16102.38, which was about a 540 point decrease versus a week ago of 16643.01 on Friday, August 28th 2015. 

The DJIA has just about gapped up or down everyday last week. Still there were good trading opportunities for day traders throughout the day. We saw two dojis that confirmed short term trend changes one on Thursday of last week and the Friday August 28th. The bounces were sold with conviction. If you went short and held overnight on those two occasions, you would've made out pretty well.

The S&P 500 closed at 1921.22 on Friday, September 4th 2015 versus a week ago of 
1988.87 on Friday, August 28th 2015. This was about a 60 point swing. We are now eyeing three levels of support/resistance as illustrated below. What is not pictured is that we are trading below the 10 day moving average. That looks to be key resistance at the moment. 

The Nasdaq (COMPQ) closed at 4683.92 on September 4th, 2015 versus 4828.33 on August 28th, 2015. Like the DJIA and the SPX, we are seeing the COMPQ present a similar pattern. Though in our opinion, the DJIA and SPX look weaker and quite possibly could present more short term trading opportunities. 

J. C. Penney (JCP) has a number of bullish patterns working for it on the weekly charts. Back in late 2013 and early 2014, we can see an inverse head and shoulders pattern that formed. It was triggered but would be quickly sold and killed off. Then again in late 2014 and early 2015, JCP again tried to develop a small inverse head and shoulders pattern that triggered and we are seeing it unfold now. It's most recent bullish pattern is a break of the trading range. We estimate a target of $10.3 for this pattern.

Disclosure: We have a position in JCP at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 35 in 2015

Aug 29, 2015 -

Stock Market Highlights - Week 35

- Fed's Fischer: Too early to decide on Sept hike.
- WTI was $45.22 and brent crude oil $50.02 on 8/28. Signs of reversal?
- Second Estimate: US 2Q15 Gross Domestic Product Expands by 3.7%.
- Buffett's Berkshire takes $4.48 billion stake in Phillips 66.
- Brazil has entered recession as country's economy contracted by 1.9%.

The Dow Jones Industrial Average (DJIA) closed at 16643.01, which was about a 200 point increase versus a week ago of 16459.75 on Friday, August 21st 2015. We are seeing a small bounce back from the lows of Monday. This volatile price action could suggest further volatile action to come. We'll need to watch to see if the price action can over take the 20DMA or if that becomes resistance. A bounce was likely as we heavily selling that led to price levels that were not seen in almost a year. 

If indeed we are in the beginnings of a correction, I'd almost want to short at the 20DMA and then put my stop just above that and a target of the Monday lows. However, we'll continue to check price action and see what happens before making any decisions. 

The S&P 500 closed at 1988.87 on Friday, August 28th 2015 versus a week ago of 
1970.89 on Friday, August 14th 2015. This was about a 19 point swing back up. We are now eyeing the 2040 level as that had been support prior and is right next to the 20DMA. It is likely that we would see a retest of that level, however we'll have to see where the price action takes us next week.  

The Nasdaq (COMPQ) closed at 4828.33 on August 28th, 2015 versus 4706.04 on August 14th, 2015. We are likely to see resistance at 4900 as that was prior support. There are a couple gaps just above current price levels that programs will be targeting to fill. 

The last two trading sessions had oil jump up. For the first time in over two months, we finally see that the downtrend has been broken. On the UCO (ProShares Ultra DJ-UBS Crude Oil) you can see that we closed above the 20DMA, however we shall see if this will hold up.

Disclosure: We have a position in UCO and UPRO at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 34 in 2015

Aug 22, 2015 -

Stock Market Highlights - Week 34

- U.S. markets tumbled more than 5% as worries mounted over state of the global economy.
- WTI was $40.45 and brent crude oil $45.46 on 8/22. Still no bottom on oil prices, yet.
- Alibaba shares plunge closer to $68 IPO level.
- Uber projects three-fold rise in 2015 bookings worth $10.84B.
- Valeant to buy female Viagra maker Sprout Pharma for $1B.

The Dow Jones Industrial Average (DJIA) closed at 16459.75, which was about a 1017 point decrease versus a week ago of 17477.4 on Friday, August 14th 2015! If you still don't believe we are in a downtrend, then I don't know what to tell you. As we had mentioned last week, in order for the bulls to take control we wanted to see price action above 17610. Well, the bears ripped that dream from the bulls. Instead we saw massive selling and the fact that it closed at the low of the day is not a good sign for the bulls. 

Though the bears appear to be in charge in the short-term, for those who are not short the market, we would want to wait for a pull back before trying to chase this sucker down. 

The S&P 500 closed at 1970.89 on Friday, August 14th 2015 versus a week ago of  2091.54 on Friday, August 7th 2015. This was about a 120 point swing to the downside. Last week, we said that it could go either way. The market decided to pick the downside and with conviction it did. 

We were ready to pick a side at the first indicator of where the market was headed. Wednesday's price action was a hint of what was to come, however it managed to hold at the 200 DMA by the end of the day. However, when the market opened just below the 200 DMA on Thursday, that was our signal to watch for downward action. We initiated a small position shorting small caps on Thursday, August 20th.

The Nasdaq (COMPQ) closed at 4706.04 on August 14th, 2015 versus 5048.23 on August 7th, 2015. We saw signs of deterioration last week and now we have confirmation. These gap downs in the last two days were even more aggressive than that of the SPX and the DJIA. Still the action suggests we are not done and the dust has not settled. Like the DJIA, this would not be a time to chase this price action. We would like to see it pull back and then enter on confirmation of further continuation of bearish action. 

FitBit Inc. (FIT) has been a mention of ours in the past few market reviews. It is a fitness band designer and manufacturer. Also one of our most profitable trades in the last two months. 

After disappointing the market on earnings, the stock gapped down. Our play was a gap fill, however we needed to see price action reverse. At the first sign of such action, we entered in and got denied at the 20 DMA, where we prompted exited. 

Disclosure: We do not have a position in FIT at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 33 in 2015

Aug 15, 2015 -

Stock Market Highlights - Week 33

- Google creates a new holding company called ‘Alphabet’ to hold a collection of companies.
- WTI was $42.23 and brent crude oil $49.22 on 8/14. See no bottom on oil prices, yet.
- Buffett's Berkshire sheds National Oilwell Varco and Phillips 66 stock.
- JC Penney's net revenue totaled $2.88B, up from $2.80B during the same period last year.
- British trader charged in '2010 U.S. Markets Flash Crash' released after bail reduction

The Dow Jones Industrial Average (DJIA) closed at 17477.4, which was about a 104 point decrease versus a week ago of 17373.38 on Friday, August 7th 2015. We've are now in a pretty clear downtrend and this is evidently favorable for bears. For the bulls, we'd like to see price action above 17610 or the 20 DMA. This would signify a return to the prior trading range. 

Though the bears appear to be in charge in the short-term, currently there appears to be no good short opportunities. We want to limit our risk to reward ratio when entering trades. One way of doing this is through position sizing. However, I digress. In any event, a move towards the 20 DMA or the 50 DMA present low risk short opportunities. In addition, I'd like to see the STO (stochastics indicator) overbought. That is the trend follower stock plan.

The S&P 500 closed at 2091.54 on Friday, August 14th 2015 versus a week ago of 
2077.57 on Friday, August 7th 2015. This was about a 14 point swing to the upside. It looks like we are just ping ponging back and forth and have formed a symmetric triangle. Typically, this means there will be a break in either direction.  

To us the SPX looks fairly neutral right now, meaning there is no clear indicator as to whether we will see further downside or upside action. For now, it appears to be consolidating horizontally. However, if we had to pick a side and just based on recent market action, more downside action could happen.

The Nasdaq (COMPQ) closed at 5048.23 on August 14th, 2015 versus 5043.54 on August 7th, 2015. Once one of the strongest in the group, COMPQ is now showing signs of deterioration. We can see a bearish head and shoulders chart pattern below. The top of the triangle being the head and the two sides being shoulders. Like the SPX it now looks like the COMPQ is in neutral territory with a hint of bearish indicator. When we see this sideways action occur, it is typically a stock picker's market. That means you will find stocks that break out and break down. You just have to be picky with what you select. This is in contrast to a bullish market where every other stock just goes up or alternatively a bearish market where just about everything goes down. 

Etsy Inc. (ETSY) is a marketplace similar to that of Amazon and Ebay, but in a niche market of handmade or craft goods. Its recent IPO allowed individual investors to purchase stock at a price of $16, which we were able to take full advantage of. The day it started trading on the market, the stock shot up to $30. Whereby we sold the day after for a hefty profit. 

However, since then the stock has missed earnings expectations and still continues to show a net loss on its profit and loss statements. The market has not been kind to it as we've seen it trade as low as $13-$14 a share. There were two opportunities to take advantage here. The first in July and the second in the following month August. First, in July we saw a reversal of the downward trend and in August a double bottom. 

Though it is possible that we will see a complete gap fill of the gap down in August, current price action shows some weakness. We'd like to see a close above the 18 price level to see if it can make a run at $22. 

Disclosure: We do not have a position in ETSY at the time this article was first written.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Stock Market Indices Review for Week 32 in 2015

Aug 7, 2015 -

Stock Market Highlights - Week 32

- Fitbit Quarterly revenue jumped up to $400.8 million, which beat a $319 million forecast.
- WTI was at $44.66 and crude oil $49.52. Oil prices continue to decline.
- Disney revenue in its third quarter totaled $13.1B, a 5% increase last year same period.
- U.S. unemployment rate held at a seven-year low of 5.3%.
- Service Industries in the US expanded at the fastest pace in a decade.

The Dow Jones Industrial Average (DJIA) closed at 17373.38, which was about a 316 point decrease versus a week ago of 17689.86 on Friday, July 31st 2015. We've now broken the trading range and it is confirmed that we are trending downward. This is looking good for the bears in the mid-term (weeks to months). 

However, from a a short-term perspective (days - a week), we see a potential reversal looming. With the hammer pattern on Friday, we should be looking out for a follow through confirmation bullish candle on Monday. This is somewhat likely considering how oversold the DJIA is. A potential trade would be to go long the DIJA and put your stop just below the hammer pattern. 

The S&P 500 closed at 2077.57 on Friday, August 7th 2015 versus a week ago of 
2103.84 on Friday, July 31st 2015. This was a 26 point swing downward. Essentially of all last week's gains have been wiped out. 

Similar to the DJIA chart, we see hammer candlestick. However, without any confirmation of this bullish candle, we can only guess if this is a true indicator of positive prices to come. If you look closely, you can see that the 50 DMA crossed the 20 DMA and this is otherwise known as the "deathcross". This is definitely a bearish signal. Though I would wait until I see a run up back to overbought territory before trying to short this market.

The Nasdaq (COMPQ) closed at 5043.54 on August 7th, 2015 versus 5128.28 on July 31st, 2015. The strongest of the three indices continue to be the COMPQ. However, the head and shoulders bearish chart pattern has revealed itself. Of the three indices we've reviewed, this one seems to be the hardest to short. Though a break of the neckline at around 5000 and follow through will suggest that we will see lower prices. 

Starbucks (SBUX) was a stock that we reviewed last week. When we spoke of the chart, we liked the up trending prices, but did not like the price at the time. Well we waited for a retest of the 20DMA and lone behold, it arrived just today. 

Therefore, we dumped our Facebook (FB) position in favor of SBUX. While FB looks like it is forming a bullish flag, the SBUX chart looked stronger. 

Disclosure: We have a position in SBUX.

The information provided on this site is not advice to buy, sell, hold, trade, or invest in any securities. I am not a financial professional. Do your own research before acting on any information provided on this site.
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Scott Adam's Template for Success - How to Fail at Almost Everything and Still Win Big Summary

Aug 5, 2015 -

Scott has failed 36 times. All failures have something to teach you. 10% of the things he's tried has worked out really well. Most of the things he tried were high risk/high reward kind of things, so he expected a high failure rate. However, one thing that did work out for him was the Dilbert comic.

His book 'How to Fail at Almost Everything and Still Win Big: Kind of the Story of my Life' focuses on three core ideas.

1) Goals are for losers - Use Systems
2) Passion is overrated - Get Energy
3) Luck can be manipulated  - Change the Game

In today's complicated world, having a goal is sort of like being on a horse with a bow and arrow shooting a target in the fog and at the same time the target is moving. Sometimes you'll hit the target. But, in this complicated world, the odds are not that good that you would hit the target. When you focused on a goal, you limit yourself. Maybe there are things that you you'll miss by focusing on that goal. Instead Scott Adams suggest that you create a system. A system is something you do regularly that improves your odds and makes you more valuable. Thereby, in the long run the odds of success will be in your favor.

What is a System vs. a Goal?

Scott Adams gave an example of himself and his friend Manuel. Both of them liked girls. Adam's approach was goal oriented. He would find one girl that he was interested in and then try and figure out how to bump into her and what to say to her. Most times he would get rejected and that would be that. Manuel had a systems' approach, he would ask everyone in the room if they wanted to be his girlfriend. Every time he went through his process, he was learning to take rejection and what the best pick-up lines were. Manuel was becoming more valuable as he went no matter what happened.

A friend of Scott's would interview for jobs that he didn't want. Basically jobs that would pay less than he was making now and/or be in lower positions. His friend used it as practice and every time he would improve as an interviewer. At the end of one of the interview, the interviewer said that his friend was overqualified for the job, but the head of the department just left that role would be great for him.

Complementary skills improve your odds of success. You don't have to be the worlds best, you just need to have a working facility of it. For example, Scott was a mediocre artist, not even the funniest person in any given room, not a great writer; but when you combine the skills together, he created the Dilbert empire.

What is the difference between the diet goal and a system? Suppose the goal is to lose ten pounds. Resist the cookie will be difficult. In a system, you could replace willpower with something such as knowledge. For example, most people know that vegetables are more healthy then cake. Now suppose you go to a salad bar and see pasta and white potato; which one would you choose to be healthier. Pasta is healthier and knowledge would let you know that is what you should pick. Learning over time which type of flavoring to make your food taste better is better than resisting foods. Eventually the flavoring and seasoning of your healthy foods will be up to the level or near that of bad foods.

Replace willpower with habits. Habits can be built by doing something on a daily basis every day and giving yourself a reward at the end. If you can't do a full workout, underdo it and do half that way it always feels good and it builds a habit. 

Get energy instead of being "passionate".

If successful people didn't attribute their success to passion, what else could they say about having passion? "I'm smarter than poor people." "I did some insider trader that how I got started." "I was lucky". There isn't a good answer. The winner of American Idols all have passion. Well, have you not seen entire stadiums of people in the first couple weeks? It looked like everyone was passionate. If you go by the numbers, passion is more correlated with failure than success. In the formula for success, if you pick out passion, everything would be the same. Instead of passion, boast your energy and systems. Be physically and mentally alert to power through things you need to. You also end up liking or "having passion" for things that you are good at. In order to be good at things, you'll need to practice and put in the work. 

Luck is the elephant in the room. 

Luck can be manipulated. Getting lucky is like being struck by lighting. You can increase the odds by being outdoors in the rainstorm. In addition, you could hold a lighting rods. You can't directly control luck, but you can move to game of bad odds to better odds. People who considered themselves lucky or were more positive had a wider field of perception. They would note opportunities that other people wouldn't see. 
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