Family Bloggering

New Family blog to follow the progress on The Expected is here.

Stopped Out (twice)

Hah, I started a post with an update and forgot to finish it! Didn't realize how bad I was being. I have been slightly active since the last post.

As for NE, well, that didn't work out too hot. We got stopped out at 48.5 on the NE trade. To Ken's point, I think the volume was not strong enough to indicate a buy in a sideways move. Ah well, small loss!

On the other hand, we made another move into Garmin (GRMN) at 114.15. Garmin appears to be very strong financially, is in a strong uptrend. On the day we bought, they just got 3 green arrows. The only downside is that they are not trading at a discount at the moment. Well, that kinda went bust too. We bought right before the NavTeq buyout news hit and Garmin went . . . well, south. I had a stop and got out at 103.79. Another loss. :(

But, in the spirit of getting back on horses, we found another one. This time I screwed up, but we will watch the play. The stock is FSTR, LB Foster. They fabricate parts for many industries, namely rail. Strong uptrend, good financials, good price pattern. Oops, Dave forgot to double check industry. Well, the purchase was made (at 48.01) and a call will go into the coach's on Monday to see if I should vacate the position.

So, let's summarize our progress thus far:

Still holding on AAPL@135.5 (currently at 161.45 or up 19%)
In on FSTR@48.01 (currently at 47.70 down less than 1%)
In on NE@50.85 stopped out at 48.5 (loss of 5%)
In on GRMN@ 114.15 and stopped out at 103.79 (loss of 9%)

Total realized gain(loss): (7.7%)
Total un-realized gain(loss): 4% Yea AAPL!!

First (Real) Trade

Okay, we did our weekly meeting for the first time and only found 1 stock that looked really strong on the 1 year chart, had 3 green arrows and a volume surge. The symbol is NE. As an added bonus, it is trading at a discount according to the valuation. So, we made the move. Log the trade, in on NE@50.85.

So, a quick recap of the portfolio at this point:

AAPL@135.5 (currently at 146.73 or up 8%)
NE@50.85

I started thinking about how I am reporting return. Since size of the position does affect the overall portfolio return, I am wanting to get a neutral way of analyzing my successes. So, for the purposes, of the blog, I'll deal with portfolio yield in terms of trading 1 share of stock without commissions.

Building Searches

One thing I have noticed in the past is that, as a computer guy, I can find easier ways of navigating a program or website than my non-techie friends. So, I have started my portfolio building process using the investools website and thought I'd pass along the "easy" way I found to build a Bullish portfolio.

First, my instructor, Michael Drew, pointed out 3 pre-built searches to start learning from: Under ProSearch Backtested there is "Great Earnings, Sales and Cash Flow Growth" and "Strongest Stocks in Multiple Time Periods" and under Prebuilt TurboSearches there is "High Scoring Stocks with Positive Industry Momentum." Open each of these searches and click Select All and then Add these stocks to a Portfolio. Add the symbols to your Bullish portfolio. You should have a very large portfolio at this point . . .


Open the portfolio and switch to the "Auto Analyzer" tab. This tab summarizes the phase 1 and 2 scoring. By clicking the F/E score twice, you can sort the stocks that don't pass F/E Score (part of Phase 2) to the top. Select the ones without green arrows and delete them. Do the same with Price Pattern. If you have a volatility preference, you can do that here too . . . Now you have a portfolio from the 3 big searches with stocks that don't pass phase 2 weeded out.

No switch to the Technicals tab. This tab colors each of the technical indicators according to whether it is neutral (black), green arrow (green) or red arrow (red). Sorting by one of the indicators can give you an easy to read view of where each of the stocks is by arrow. The numbers indicated how many days since the indicator turned . . . nice!

The last step is the most painful. I have sent an email to investools to get the to fix this. You will want two windows open, or a piece of paper handy. Switch to the Thumbnails tab. Scan the charts for any down-trending stocks. Remember, as we learn, we don't buy stocks in a downtrend. Write down or use the other window to remove the stocks in a down trend.

Tada! 4 quick steps to building a portfolio of bullish stocks. Adding alerts to these is another pain point. You have to click each of the technical indicators for each stock you want an alert on. I'd like to see portfolio level alerts or at least an easy way to add all the technical indicator alerts.

Training Hard

Well, the vacation is over and our training begins for real. I have worked my way through the course material and I am getting my searches set up for my weekly review. I am getting my accounts set up, transferring 401(k)'s and such. Wow, it is a pain, but I can't wait to be done with it.

I don't have a lot of wisdom at this point, but wanted to give an update. AAPL, PCU and FCX have all done well. The paper trade will likely go south, but the long investment is looking good for FCX. I need a strong confirmation of a rally today. If that happens, I expect to see a new support form for FCX along the trend line as we head into earnings season!

The first paper trade

So, Ken inspired some thinking yesterday. The sideways move on FCX . . . sounds very Aikido. Now, I still know nothing about the risk calculations and I wasn't going to have time to talk to a coach with the vacation planning, so I decided on trying my own hand using our paper money.

I did my research and found a very tempting scenario so, I'll spell out my paper move from yesterday here (for you to check), but I'm not going to count it in my ongoing portfolio updates.

So I did a little looking around and found two interesting spreads for Sept:


CALLS:
Strike @ 95 for .58
Strike @ 90 for 1.5

PUTS:
Strike @ 75 for 1.1
Strike @ 70 for .5

I traded 10 contracts in each. So, my exposure on the shares should be $5K (I can't lose both!!) with an immediate income of 1,520. This puts my maximum risk at 3,480. If everything pans out, I should net 4.08 per share on the CALLs and 4.4 per share on the PUTs. If my math is right, I have a potential return of 44%!!!

Check my math peeps . . . and my risk!

Evaluating the Current Portfolio

So, before I begin tracking the investools strategy here, I needed to evaluate my current portfolio. Also, how does the fact that I have a current portfolio affect the results I plan on reporting here??

As for evaluating the current portfolio, I currently own 3 stocks: AAPL, PCU and FCX. AAPL just got a buy signal at 135.5 and the fundamentals are sound. I'll hold, but for this exercise, I'll reset my returns and track as if I had actually gotten in @ 135.5 PCU and FCX are trickier. Both have two green arrows and closed close to the 30 day moving average. FCX passes Phase 2 while PCU does not. Both are on tremendous upswings. Though it doesn't matter, I should point out that I am off ~7% in each already. I could take the small loss and love it or ride it out. Both are really strong on Phase 1. For today, I am going to hold them both but not track them in this strategy . . . they don't fit the investools model. I would love if any of my class buddies are reading, some input on these two stocks . . .

So, there you have it, the first investools move. When I make moves, I put them at the bottom of the post, so here is the first one.

Today's Moves:
In AAPL @ 135.5
Current Investools Return: 0%