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Post by sd on Aug 25, 2020 16:03:26 GMT -5
Recent SA article on ARK funds - seekingalpha.com/article/4370415-3-important-things-learned-reviewing-arks-etfs?utm_medium=email&utm_source=seeking_alpha&mail_subject=3-important-things-i-ve-learned-reviewing-ark-s-etfs&utm_campaign=nl-etf-daily&utm_content=link-0
Ark funds home page- ark-funds.com/
I was asked which ARK Fund I would select if I could only select One. My response was ARKK because ARKK has a mix of selections from the other funds- so it is also more broadly diversified across sub sectors- I also like that Catherine Woods has the discipline to take some profits off the top- and -as TSLA was a 10% position, but gained tremendously, Sold a portion of the position off to A: capture high gains and B: to keep the portfolio weightings from becoming lopsided with too much in any one investment.
Also asked- what % should one have in cash?
Cash nets virtually nothing, and after inflation - Avg annual -2.5% cash loses significant value over time- 4 years of cash = a loss of -10% in purchasing value.
Last week I realized I had been conservative, and perhaps holding too much in the cash position, and -- added to some existing positions and added into some Vanguard Funds - VOOG -which tries to outdo the S&P 500 Growth- and VGT.
Presently, the cash position is now approx 25%.
Arkk Funds 25%
VPU- Utilities 6%,
SWAN 3% - somewhat defensive
VGT- Vanguard Tech 8%
VOOG- 8%
VPU 6.5%
VXUS- 14% Total INtl markets - Broad Vanguard International fund
Misc small stock positions -5%
Despite the ARK funds lack of gain this week, the other combined positions managed to net a positive gain- The true test of performance should perhaps be compared to the SPY on a weekly basis- Ultimately, I believe the tech sector - will be the leadership overall for the market's advances- Unfortunately- this off sized tech allocation into a few large caps likely eventually results in a reset based on a sell-off - because the underlying economy ultimately will resurface to see a new normal - I still believe that technology will be the economic driver of future growth - despite the periodic pullbacks due to political and short term economic factors - Just as 3 Dow 30 components were replaced today with new industries- the evolution in the future will likely be even faster- I'm not willing to go all-in 100% because of the swing too far it seems- and so stop-losses are prudent - for all types of one's positions- because a negative market reaction will likely result in a mass exodus at the peak- If it ever gets to that point-
I think a wide stop-loss at the typical 50 ema gives leeway for the normal volatility- but the ultimate question is will the market decline substantially lower this year?
What does one give up in terms of net gains with that wide a stop? Presently within .5% of an all-time modest high in the account- So, what is the damage if one stops out on all positions? That is the Risk evaluation. In today's market , so many things move in lockstep- that some of the negative correlations of the past have diminished.
Truly, i do not have a solid go-to other than employing stops and looking at defensive bond allocations. All portfolios would see net losses in a market wide decline- - and few of us are prepared to act defensively - The March decline was a wake-up call for many investors- Sharp, FAst Sell-off over 6 weeks- -25% several years of investment negated in such a short period- This present snap back rally appears to have been too much, too far- and is open for a large sell-off-
I would recommend that stop-losses to protect gains- or at least the basis entry level is prudent- Let's go back 20 years- to a topping Nasdaq market with extreme valuations and people proclaiming it was a new valuation model- I did not understand then what I understand now- Markets -when they break trend- can drop precipitously fast- and be choppy-
Should we roll over here- and break trend, I would expect we drop significantly- But protect yourself with stop-losses - or Option puts if so sophisticated.
and -perhaps raise a bit of % into cash to be able to Buy at a discount-
Keep in mind- on a hard sell-off- the 1st rally typically fails- and a reentry on price going lower and then a 2nd shot at a recovery seems to happen often- but as all things in TA- not a 100% guarantee-. 
tEXT BOOK ILLUSTRATION OF A DOWNTREND , 1ST RALLY FAILS, PRICE DROPS LOWER, AND THEN THE REAL RALLY HOLDS- TIME TO GO ALL-IN WOULD BE ON THE PRICE EXCEEDING THE 1ST RALLY ATTEMPT- BUT A PARTIAL POSITION PRIOR ON THE FAST EMA UPCROSS WOULD BE WORTHAN ENTRY- iT SOMETIMES PAYS TO WAIT- AND YOU HAVE AN ESTABLISHED SWING LOW TO STOP OUT AT.
i.imgur.com/TUEF2Os.png
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Post by sd on Aug 26, 2020 7:59:59 GMT -5
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Post by sd on Aug 26, 2020 16:01:29 GMT -5
8-26
Markets rallied on Fed continued support- and perhaps some slightly better covid news...economy improvements in some areas- Tonight Cramer is suggesting to do some selling-
Yet highlighting/ celebrating the outperformance of CRM and DKS on blow out earnings-
While I find Cramer informative - he promotes the selection of individual stock picking -only after one has a substantial ETF core exposure- He hesitates in suggesting narrower ETF sub sector selection, but he highlights leaders in these sub sectors-So he is fully aware of their potential to outperform-
Had a good day- broke 200K and held at the close - Net $nice up move today- things had been flat, but the ARK funds were major contributors today-Let's see how much I can hang onto LOL!
Trading account also at a new high and includes some AARK funds-as well as a 1 share TSLA, 10 shares JD, 60 WOOD just to mix it up a bit.
i.imgur.com/MjTqtdG.png
Notice in the chart the high SCTR ratings for the funds that outperformed- While today's entry in Tan and ICLN actually had a smallpullback, their SCTR ratings are in the upper 90's-
Conversely, the VPU position is in a sideways trend- and not gaining , with a sctr rating of just 8.6
I'm holding the VPU position as part of a "Core" position- not looking for big gains- perhaps a "safer" and dividend provider for that portion of the portfolio-
Similarly, the VXUS position would be part of a core Vanguard Portfolio along with BND, and BNDX- Had I allocated my portfolio to the Vanguard professional advisers approach, those 4 funds would represent the majority of any core portfolio- Because they are very broad in scope, they ultimately return the average for that entire allocation.
8-27 Note- Fed chair spoke, unemployment increased, arkk in the red- Those elusive gains are slipping away!
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Post by sd on Aug 28, 2020 14:18:42 GMT -5
8-28-20 afternoon break gives me a few minutes....
Interesting Day, Markets this Friday up about .5% across all the indexes with 1 hour to go-
My BNDX -Intl Bond fund stopped out today, as it Closed below the 50 ema yesterday - and it is a continuation of the weakness seen in the past 2 weeks , with a prior close at the 50 ema, a move back higher, and then continued weakness this week- and breach of the 50 ema- managed to keep a small $300 gain on what was a total of 250 shares allocated.
I should have tightened the stop on the 1st touch near the 50, and when the resulting rally-blue bars into green failed to hold and gapped down to the 50 again, I should have Sold then, but hadn't been watching. I also wait to make a decision After the price has made a Close, and not react to intraday volatility- which I also generally cannot find the time to watch during the day- That may be the best aspect of not trying to day trade....
i.imgur.com/LPvw93Z.png
I added 2 positions to replace the Bond components- 500 SWAN (8% port ) and 250 RPAR (3% port value) Both of these are defensive types of plays -
amplifyetfs.com/swan
www.rparetf.com/ RPAR has exposure to equities, commodities, and treasuries-Tips. www.rparetf.com/rpar/fact-sheet
During the March sell-off where the SPY showed the most dramatic decline, RPAR had about 50% of that volatility, and a net higher recovery-
Similarly, SWAN was the most conservative, and less volatile, but also had decent net gains
i.imgur.com/J6nr68X.png
8-30 -
Comparing SWAN<<BND<BNDX over the same YTD period:
The Perf chart from Jan shows that SWAN started the year off outperforming, Declined a few % more than the BND fund, but then rallied higher-
The net return @ +11% YTD certainly is better than the 2 Bond funds a Vangaurd personal advisor would have selected.
i.imgur.com/UKpYpgr.png
The fund is under 2 years old- with net 3x out performance to the 2 bond funds-
i.imgur.com/P7XiuVW.png
This next Perf Chart shows that this fund -since inception in 2019- has also outperformed SPY during this period, with lesser volatility
i.imgur.com/VL5JNEr.png
RPAR is less than a year old- and demonstrated more volatility (downside) but still less than 1/2 of the decline the SPY had, with a similar upside as SWAN.
i.imgur.com/bTGReaV.png
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ira85
New Member
Posts: 837
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Post by ira85 on Aug 31, 2020 0:33:06 GMT -5
Thanks SD for your thoughtful feedback on my August 24 post. I realize I've relapsed to my old habits, i.e. reading about macro financial issues when I should be focusing on learning to apply discipline to managing my portfolio. I realize that you focus on improving your buy and sell strategies more than you do on the broad economy. That's were the attention needs to be. That's were your study and application of what you've learned can make a difference. I seem to get caught up in pondering the significance of the 30+ year trend of lower interest rates. It may be interesting, but whether I'm right or wrong it makes no difference to my investment portfolio without a plan. I need to study the buy and sell strategies, the application of moving averages, and other trend following systems. I have a habit of reading about the markets as recreation and neglecting the real life application of practical skills and knowledge.
I have 4 real life urgent issues to attend to, so I'll likely be a week or two before I get back to business. I'll try to shift my focus to spend more time with stock charts and less time with Seeking Alpha.
Again, thanks SD -ira
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Post by sd on Aug 31, 2020 6:05:54 GMT -5
I appreciate your insights- and putting things in the context of the bigger picture Ira.
I too enjoy reading SA's contributors-- and history should not be forgotten, because it rhymes if it does not exactly repeat.
Good luck on the 4 real life issues you are presented with- I wish you success in dealing with them!
As I periodically alter my portfolio, I hope to eventually settle on a good mix of investments- some aggressive- some more conservative-
I feel I have a lot to yet consider in developing a good portfolio mix.
Using stockcharts to monitor your portfolio is good practice.
Will September follow it's historical record of underperformance? This August is the best performer in 30 years.
Fed is supporting the markets- but we are "Highly priced"
Will the upcoming election derail the markets? MY "belief" is that a Biden win will be bad for stocks- and so a trailing stop-loss seems prudent if investors
see Biden gaining. With the amount of social unrest occurring, it is easier to think the markets will turn cautious - and potentially rotate out of growth and tech-.at least in the near term- But again, that is simply my conjecture - not based on what the charts say...
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ira85
New Member
Posts: 837
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Post by ira85 on Aug 31, 2020 21:55:02 GMT -5
SD, I just noticed something. I'm 14 days older than you. Your birthday is coming up in a few days. Until then I'm the old man, on paper, appearing to be a year older.
I hope you kids have a good time while I'm away. -ira
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Post by sd on Sept 1, 2020 19:11:57 GMT -5
HA -LOL! I'm the youngest 70 year old I know - Hope it stays that way! You've got a few months on me with retiring -but I'm one short step behind- Wrap this project up May 2021 if not sooner-
Hope the next weeks goes smoothly- Best- SD
As this year goes on, my goal is to protect the majority of my gains and to stay long the primary trend, and get stopped out early when that trend fades.
Presently, it appears that the momentum continues higher, with tech still leading- Talk about market rotation taking tech lower into value stocks- has not materialized.
Well, the CNBC speaking heads likely have it wrong- so we should trust the charts- albeit with trailing stops in place.
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Post by sd on Sept 4, 2020 8:04:40 GMT -5
Good jobs report premarket- Nas futures lower- Buying partial positions at market open in ARKK, ARKQ, vgt, with lower limits as well.
This am trying to position myself into positions I would be willing to average in on. This can be dangerous- akin to catching the proverbial falling knife.
During the course of the trend since March, we've had a number of short declines- Markets were extended for some time, purchased an initial reentry at the open and will be adding larger %
in shares at lower limits.
i.imgur.com/QJN7ig6.png
Interesting day to be Home and watching the markets and making trading decisions based on "real time" market action-
I had a few orders to fill on a lower drop approx -10% - and I missed getting ARKK at the lows by $.33 and had to repurchase at higher levels on today's remarkable recovery from the lows.
I did manage to get filled very close to the lows on VGT @ $301.00 for 80 shares-VGT moved back higher and closed @ $313-
As I followed the markets this pm, I saw the higher Hammer/almost a DOJI close on most positions- and added back into those that had stopped out at the open-
I repurchased 400 SWAN at a net lower cost - as well as ARKK, ARKQ, ARKG - and added to ARKF on a low limit being hit - I'm leaving my standing limit orders to add into these on another decline- .
Saw that TSLA was not added into the S&P 500 index as expected- quite a surprise!
I bought a few shares of TSLA and AAPL at the close-
As we go forward, I may be more aggressive in tightening stops-
A week of vacation ahead- Fishing- markets-fishing- garden-fishing... HMMM
Following up Note-
Since I am a fan of the various ARKK funds-and hold positions in most of them, it needs to be noted that these funds may be outperformers on the upside, but can also be more volatile on the downside. a 1st reaction may be to think "this is too volatile " to sit and hold through- thus the rationale for trailing stops to capture a good portion of uptrends and to limit the downside Risk. However, the take-a-way of the following performance chart is that lower performers don't necessarily equate with lower Risk being a reason to hold a lagging performer-
SPY had a -34% decline, and has only returned approx 7% YTD. ARKK outperforming in the Tech sector comparison by a 100% + outperformance compared to Q's and VGT.
i.imgur.com/SwBVUTS.png
The hard selling Thursday and again Friday took out weeks of progressive gains in just 2 days.
Ended up -3% lower in Port value off the week's earlier all-time new high .
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Post by sd on Sept 6, 2020 20:43:48 GMT -5
With a 3 day weekend, and Time for a YTD performance chart- The momentum theme continues ......repetitive yes-
What I like about the Perf charts is that one has the flexibility to compare as recently as 1 day back for years, and can move in blocks of time- to get a moving snapshot.
In this chart, I was wanting to compare the volatility as well as the performance- Tech obviously substantially outperforms the Market (SPY) and yet SPY has substantial volatility for a much lower net return over this period- So, If SPY does not bring greater "safety" proportionately for a net significantly lower return, why not go with the higher volatility/higher return investment?
A Critical Part of the investing process -is the matter of making a choice(s) in one's allocations- Never be all-in one thing- but allocate a greater % to that which rides the momentum wave higher-Momentum does have persistence- until it changes-' this chart illustrates that the early 2020 momentum got knocked down, and then made a resurgence. The same outperformance evident in early 2020 resumed in the recovery after March- and this was also evident in 2019- So the volatile decline in March, and potential recovery since-
This chart indicates the outperformance of Tech during this period YTD - This also appeared to exist in the prior years - It may not always be so, as sector rotation may select "value" or small caps as the future area of outperformance-
i.imgur.com/SwBVUTS.png
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Post by sd on Sept 7, 2020 14:50:37 GMT -5
Doing a series of review of some of my biggest losers -over the past year. The WCS will stand for WOULDA-COULDA-SHOULDA - since hindsight tends to have the advantage of knowing how it turns out and could have been a different result if I had done a more disciplined management at the time- This trade lost 15% of the entry value.
Start with the ARKG entry- The Entry wasn't off per se- entered on the potential breakout of a sideways range-, but the assumption would be that price would stay within the range at the worst- but I should have relied on the swing low red bar made a few days prior to the entry. As price peaked and declined, I was negligent in raising a tighter stop-loss, and had several opportunities to take notice of the price weakness. When I finally did set a stop-or a sell order- price gapped down below that on the open.
i.imgur.com/7hkP8Pw.png
ARKK:
i.imgur.com/kb2V0s8.png
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Post by sd on Sept 8, 2020 8:10:59 GMT -5
Futures sharply down on the Nasdaq- -4% May precipitate a
substantial sell-off- and revaluation of the excess in Tech holdings-
Presently holding about 50% cash, will start with some limit orders ....
Gene Munster is very solid on AAPL being a big winner in 2022.
I've set some substantially lower limit orders expecting a 25% push lower.
TSLA will likely sell off very hard-, and potentially blow past the 275 -300 level- since it is priced so high-
What about a "flash crash"? hasn't happened in years- but the potential is there-machine algorithms trading
I had submitted a Market order to Buy a few shares of TSLA at the Friday Close- and had assumed it filled. The market apparently Closed prior to my clicking "submit"
That order executed at today's OPEN $355.50 (a 15% discount from Friday) .
1 hour into the trading day- and the sell-off is not as sharp as I expected, presently trying to come off the lower open-
Interesting to watch this in real time, with everything I own presently lower- but I elected to not sell into the open, as it was obvious that things were going to gap down .....
markets are trying to make a run at recovering some of the loss- under -2% off the -4% lows.
i.imgur.com/1wUziJw.png
Reading some opposing articles on SA:
seekingalpha.com/article/4372935-buy-dip-regret-missing?
seekingalpha.com/article/4372960-this-mini-crash-is-likely-only-beginning?li_source=LI&li_medium=liftigniter-widget
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Post by sd on Sept 9, 2020 6:31:49 GMT -5
Sold my small TSLA position-took that small loss vs being optimistic -
Besides being extremely overvalued, TSLA had another share release last week- and was not included- as expected- in the S&P500.
I incorrectly took the hammer close 9-04 as being a positive sign of selling abated- which initiated some buying- presently down -5% from the recent high.
I disregarded the caution that has been evident in the recent weeks about the high valuations-
Since March , buying the dips
Chart example shows the potential for a greater downside vs greater upside during this slump-
Futures look for a Nas move higher- Dead Cat Bounce? Opportunity to lighten up on overbought positions? reduce position size?
Does the uptrend manage to go higher from here? A lot of negativity on over valuations has pressed the Sell button these past few days
TSLA chart- Note we are at the 50 day ema with TSLA-
Similarly, reviewing my other positions to evaluate where to take a loss on a move lower-
i.imgur.com/IvHexoy.png
eod UPDATE- Did a fair amount of Buying today- I filled the IB account which had stopped out earlier last week on tight stops- I decided I would diversify in the accounts-
43 ARKK, 100 FCX, 30 IPO, 100 PLUG,50 SFIX,110 SNAP,30 WOOD
iN the Van IRA- I added to ARKK, 80 VFQY, TAN,ICLN, DOW, VZ -I was going to put some of the cash segment into a dividend fund- but need to do additional research- Some of the so-called dividend Aristocrats have lost -40% of their account value- XOM- that's a hefty price to pay for a small payout on a large loss in your account value
While my spouse has kept her shares of TSLA, I chose to sell mine-at a loss today - and did not wait to see the position close higher- I think TSLA is the poster child for the excess momentum, and will also be the higher Risk to the downside- I'll be content to own Tsla through the ARKK fund, and the broad market indexes- When the market breaks down further- Not If, TSLA will likely be a big participant in the news of the decline.
I will likely use this week's lows as the swing-low litmus test to gauge future declines- One reaction rally day does not mean the trend resumes....but it does provide a line in the sand that we hopefully will not cross below in the near future.
The decision to make an investment in some slow movers- VZ, DOW, and the VFQY- Vanguard Quality ETF - was a diversification from cash into what appears to be a less volatile segment-
I have largely been using the Tech sector investments and the ARK funds to generate gains- and with some success- but that also has kept a larger % in cash-
The VFQY selects from a large group of company's that pass certain screens for growth and profitability- Similar to JQUA-
I did not care for the downside volatility both Value funds and Quality funds demonstrated this past March- Actually greater downside and lesser upside compared to tech.
i.imgur.com/HKPUSoS.png
The question is whether Quality manages to hold up better than Tech in a real market rotation.
The chart of the past 2 weeks indicates lesser growth compared to tech, but also lesser volatility.
i.imgur.com/y19JssR.png
Lesson should be learned though- This week's low defines the potential swing low for the markets- It provides a final line in the sand that should be respected if we see a break of trend.
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Post by sd on Sept 10, 2020 10:10:41 GMT -5
Added to ARKK this am on a 2nd day move up- Wasn't heroic enough to Buy at the prior lows-
I also added more ARKQ-yesterday- the automation fund- My local grocery store is reducing it's cashier lanes for self-checkout lanes-
In the pre Covid past, I would always elect to go to a checkout managed by a live cashier- But post-covid, I don't want other people handling my items -even though we sanitize them when we get home.
I also went long RYT- an equal weight Tech fund- holds 71 tech positions in approx 1,5% weightings each. The equal weighting gets rebalanced quarterly.
www.invesco.com/us-rest/contentdetail?contentId=7d2d7c23dbd92610VgnVCM1000006e36b50aRCRD
Cash position is down to 33 %
Markets all turn lower this pm.....
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Post by sd on Sept 10, 2020 21:16:30 GMT -5
Today's price action suggests that Buying the dip this time may not see a quick rebound higher- I was somewhat aggressive in adding to the positions- but the charts don't look happy-
Prices are still holding above last weeks sharp lows, but possibly going to break lower- In a different approach in the IB accounts, I elected to reduce my position size by 2/3 with stops- and no stops -yet- on the remaining 1/3. In the trading account I put stops in for the entire position size. Tomorrow is Friday, plan to be on the lake and catching fish before the markets open! Reviewing a number of the positions are already 10-12% below the recent highs, but this may turn out to be more than the textbook-11% shallow decline- I will have to consider buy limit orders once I get stopped out- or hold the cash-...
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