Capitalizing on the Long Term | Michael Fairbourn, CVA | 12-20-19


all right folks we’re good we’re live
we’re set to go good to be back here with you good morning good afternoon
depending upon where you might be it’s still morning here it’s about 10:30 yard
time but good morning good afternoon to all of you great to have you here for a
capitalizing in the long term my name’s Mike forever born folks you can follow
me at my Twitter handle right there and by the way I do need to do some tweets
but a little light on twits this week but I do look forward to hitting those
and jumping into it folks today we’ll take a look at market big picture we
want to look at seasonality as well see where we’ve come this year we’ve had a
good run and we’ve actually run up quite a bit in the market I want to address
that with you I want to look at that specifically in fact let me just zoom in
on this camera angle here since we’re not looking at the screen but I want to
look at that folks I want to look at our portfolio as well I want to compare that
we’re gonna look at some seasonality with some of those stocks then we’ll
break it down into three companies that have had some pretty interesting moves
as it does relate to the fundamentals you know looking historically at the fun
of most we want to take a look at see strength in revenues because we know
that revenues oftentimes will will lead to breeds earnings which can lift a
value of security so we look at those companies that maybe have had two three
quarters up maybe some good price levels as well potentially we can take a look
at – so I’m looking forward to going through three stocks with you for our
paper portfolio examination but first let’s start off with our disclosure eyes
and let’s jump on into this alright so we’ll hit the disclosures folks and then
we’ll jump in and we will take a look at the market to go from there the nice
thing about this room here is that we do have this big board behind us and it is
nice so we’ll be able to do some drawings on it take a look at a few
different items as we go through it but keep in mind some of the points that are
listed here if not all of the points there’s a few to go through but yeah
options not simple for all investors are specialists in hearing – options trade
may expose investors eventually we’re a potential losses transaction costs are
important factors that should be considered when evaluating any trade
please remember that past performance of any security strategy is not guarantee
future results for success and all investing does involve risk including
the risk of loss paper money application is for education purposes only so please
keep all that in mind alright and thanks for checking that record
appreciate it what do we have next a quick look at our option Greeks folks
Before we jump on into this okay so very good well we’ve got plenty to take a
look at today and really looking forward to it we’re gonna look at this stock – a
bit later remember this company this h.y we zoom out will see it’s a heist real
materials we talked about materials being a stronger we’ll look at this this
this company had the highest insider buying of actual funds I’m not talking
stock options here we’re talking actual purchases for 2019 you can see sometimes
that really has a big impact on those money flows boom I had it up so I kind
of just mentioned it we’ll hit that momentary let’s start off with the
market as we mentioned we would okay market clearing this upper channel line
let’s zoom into that let’s swing over here I’d love to take a look at this
because we can jump back here folks and take a look at our big Bork’s big board
setup here and I’m in fact I’m going to do that right now with you all right
well very good I was just in here talking to a friend of mine
Barbara Armstrong is also a great coach and we were talking about using a couple
fingers here to draw these channel lines as you could see look at that it’s
pretty actually you do that you can do a lot of things on this particular board
but what I want what I wanted to do actually was point out to you that this
whatever your finger is you’re using you can use one finger which I’ll use this
time look at this look at that consistency all the way back to the end
of April really right the first part of May right there
touch point a high resistance level well if you draw a lower level there and then
you draw these two lines across we could do that again right across there well
what are you getting with the channel you’re getting a couple more touch
points touch points there of course off the bottom as well now to create a trend
line you want two or more touch points and that’s what we’re getting here in
fact we’re getting more than that couple there a couple there folks we broke
above this week above that point extending higher now what I want to do
is point out to you will switch up the colors here once you get above
upper resistance line the corollary whether we’re talking about horizontal
supporter resistance which is what we have through here there are a couple of
different horror look over here you got horizontal lines once you break above
the corollary to resistance is support and also that works you know vice versa
as well so even if it’s horizontal or diagonal if you’re breaking above your
upper channel line this can in fact be now your next level of support and
you’ll find that now sometimes not in every condition and this would be kind
of a well I don’t know I don’t want to say a stretch but it would be a big move
for the market we’re looking what we looked at is about seven seven and a
half to eight percent range in here it’s a big range when you’re talking about
the entire market the sp500 so it’s big sometimes though this same distance
let’s just kind of eyeball it here but if we were to draw a kind of a parallel
line coming across here reaching that same distance in price not percentage
but in price sometimes you’ll make it up to that level and that you’ll find
another level now for the market that might be difficult to do that’s why I
want to take a look at seasonality here with you too and just see kind of where
we’re at five ten twenty years this time of year because seasonally speaking
we’re above average December was a strong year for us we normally don’t get
that kind of a move in December which I’ll show you here shortly okay it been
termed I looked at this tournament goes all the way back to nineteen seventy two
some investors will term this as Santa Claus rally okay you’re getting a big
run and sometimes it will start in October but you know specifically
through December you get a pretty big run we definitely had that this year
there’s no doubt about it okay as you can see that run now what I want to do
is show you all so let’s go ahead and add our indicator in we’re gonna go back
in and just take a quick look at our market forecast because we do like to
check and see where that’s at now you can see over here nothing over the near
term or momentum but we use the intermediate term I’ve widened that
without will color it green there we’ll put the show plot study in click OK and
ok just as our guide a reference on the market itself can I move that it’s gonna
let me yes no no no anyhow there it is so we’re clearly above our eighty level
folks and that’s been our read on the market our guide to tell us that the
market in terms of the market forecast indicator is really providing us here
really a bullish condition right it’s saying that it is quite strong out here
in the market and when you see this above eighty now that is a positive
that’s your number that’s where that line kind of correlates to that’s what
that line is and so we say you’re above eighties is how some technicians in the
market will use this that’s a real positive there okay so what we could do
we could in fact draw a face down there yes it’s mine it’s it’s happy territory
okay kind of a sad joke but um the way some
use traders like to see that because what happens when you’re above that
eighty level the trend can stay up for quite some time do you see that you
start to trigger higher above that twenty you’re pointing up you could say
positive for a period of time look at this if somebody was using this as a
guide to be long the market and if we’re getting above we’re starting to go
higher here point higher and clearly moving above 80 look at that correlation
just we’ll do that again real quick that’s what I’m saying it’s happy
territory for a lot of investors because well you’re above that 80 we correlate
that well how was the market doing it was actually pretty strong okay so keep
that in mind we got to kill that for now okay
so the other thing we could look at here let’s take that off from now I like the
bigger screens I’m just going to quickly just take that show study out click okay
okay again we want to move over here into seasonality it’s gonna take a look
at the market now if I go over here and I go into my drawings you know an easier
way to actually well let’s just do this we’ll go to drawings it’s actually
studies no it’s funny it’s style I can see it over my regular screen but when I
look at this screen for some reason it kind of throws me off we want to go to
chart mode standard will go to seasonality here now seasonally speaking
you can see over here the S&P 500 index what are we getting over here on a
five-year chart five year basis well you see the
pullback December actually tends to go a little low right here it pulls back what
is our December looking like well it’s pretty it’s pretty strong now also come
over here with me on this five-year basis look at this we dragged down folks
that’s January right there okay that’s Jan we dragged to about the first maybe
middle okay a week week and a half of February before we actually bought them
there and from that point on it tends to rally pretty decent now let me make some
changes to the seasonality so you can see it so I’m gonna go to our little
wheel here we’re going to go into our price axis and the reason is is because
if you start looking at the prior ten years relative to where we’re at now the
distance were quite a ways away in terms of price so we knew if we can use
percentages we can shrink that distance and just look at percentage move so I’m
going to put the checkbox there that’s why we do it we’ll click OK come on
there we go okay so here’s our 5-year percentage you can see it a little bit
closer now rights a little bit easier to see
there’s your drag back down in January this year we blew past that January was
up December was up the first month the last month up and that’s not normally
the case so let’s just see if we revert back to maybe something more on average
seasonally speaking now so this upcoming year we’ll see if that happens it might
in fact occur I’m gonna go now instead of a five-year let’s take a look at the
ten-year where’s our weekly monthly is a little bit hard to see what are your
ten-year dailies fine there’s there you go so you can see now pretty clearly to
see the December climbing very sharply but look at that coming down in December
on average if you’re averaging in the last 10 years of market moves over here
same thing really strong this year but generally we’re flat to down did you see
that flat to down in February got a little bit more there we go flat to down
if we go over here we’ll do one more just to show you with a little bit more
data what that looks like same kind of a situation we’re down a little bit come
February we drag towards the bottom of February and then we
kind of make our way higher in the general market and kind of fly through
December so we’ll see I just want to let you know what could be in store because
we have had a pretty big run in December doing do we in fact go flat through
January do we pull back a little bit before there’s a seasonal rally right
maybe towards the end of April we’ll have to see but that on average is what
we get so want to keep an eye on that so let’s take a look at our portfolio now
and kind of jump into this a bit more okay so seasonality is fun at different
times it is it is helpful to look at you know we’re looking at different time
frames especially around strong strong periods of time which is exactly what
we’ve had in this market it’s it’s been really strong I mean where are we on
this year I mean we were looking at this let me just see if I can kill that
sometimes you don’t have to restart it okay so let’s do this here’s our 2019
number is that the first day of 2019 indeed it is so we’re just going to kind
of eyeball it here I have to pull this over so I don’t lose my box off to the
left-hand side but if I run it on up here what have we gotten this year in
terms of a percentage that’s pretty good year twenty-eight point three six
percent on the sp500 Index folks that’s the market performance not too bad
although it’s considered right do you think we’ve had a pretty strong run
since October what does this last quarter look like so October from
October lows where are we just off the lows of October to where we’re at now
just above twelve and a half percent another really good run and all I’m
getting at is yet maybe the seasonality does kick in now you know in terms of
January actually coming in maybe it does and maybe it doesn’t but on average we
kind of know we’ve seen what does in fact happen so it’ll be kind of fun to
take a look and see what see what does unfold okay
well that’s that let’s zoom on over here now let’s get a full-screen of our
portfolio and one thing I wanted to do much of what we do in our portfolio is
an enhancement we sell we’ve sold a lot of puts right into strong conditions on
what we thought to be according to a number of ways that investors and
traders might manage a portfolio this is of
course a paper portfolio with paper positions paper money positions but
we’ve sold those options so when you pull up you can actually pull up the
charts over here a good clear indication that you’re probably doing pretty well
on that is that you’re seeing the chart the option chart go down and there are
option choice right you can just simply click on the options in your portfolio
and you’ll see it if it’s going down that means it’s getting close to
worthless possibly and that is what you want to see right you want those gains
that’s how you’re making gains within your portfolio now we are down to one
sense here in most cases in this class we just let them expire in most cases
okay so let’s just kind of go down our list and we’ll see what we’ve got here
you can see a pullback in our positions and and the symbol that we sold these
puts on you can actually see it over here
CMC would be the first few well that’s the symbol of the stock right dy we sold
you like that trajectory right you like it to come down and just kind of flatten
out to expire let’s keep going down unless there’s forward like the
trajectory obviously an indication of a strong market – you’d expect that if
you’re selling puts the market’s going up
generally speaking you know stocks within the market are going up or at
least staying flat and then these positions are going lower that’s down to
two cents now let’s do take a look at our Facebook we like that – that general
trajectory of going down fnd which is a company we’re actually looking at but it
– also going down some others down as well STL d this we actually sold calls
on this one in terms of a covered call so that’s okay if it’s going out but the
majority of what we’ve sold here to enhance our portfolio just to bring in
general income you know has been through selling puts okay so let’s take a look
at that by the way that F nd we have not added the stock position on it this was
kind of an undervalued but I came up on our undervalued radar we did like come
of that money flow really strong you know from left to
right the indicator that’s wood that we’ve talked about the last couple of
weeks showing us net buying relative to net selling really really strong there
that 50 levels kind of been a resistance point we have not added a stock position
we’ve just kind of built up a little bit of income with it by selling puts at
this point now I want to point out a couple of our securities here of
interest we did add to max our earlier last week you recall us doing that and
max our because it was bouncing off that upper channel line does that look
familiar kind of like what the market had going for it that upper channel line
you can see right there in fact right here you see the top bounce bounce
oh we’ve got we’ve got a pinkish purple line there that’s fine and there you go
you come down and you touch off it again boom really really sharp move why don’t
we not we’re not getting volume on here but it is interesting to see volume kind
of dry up and I’m gonna add that volume in case you need to add volume it’s
right over here on let’s see it no no you got to go into the will you got to
go to equities of course volume you I kind of like it to be in an area where I
could find it more easily but it’s got its own little unique place you’ve got
to kind of dig for it a little bit but there you go yeah I mean generally
speaking investors traders you know in in in this position our paper position
our paper portfolio you like to see the volume kind of increasing more buyers
coming in and then look at this when prices come down the selling pressure
really kind of dries up here the whole while you know you’re kind of bouncing
on those lines let’s just move over to our screen here and take a quick peek at
it we use them some other tools here or will we not there we go up pull that
over here one more time third time’s the charm folks let’s go ahead and click on
this now we can see that being established right there here again that
trend line which was really not sloping a
early as quick as the trendline on the market right the market on a higher it
was a greater slope to it this one’s really been kind of flat but look at
this look at that boom you’re holding it right there
you broke above and you paused you paused again through there
we actually folks we closed above the high of the low day there let me see if
I could just later yeah we closed above the high of the low day right there I do
that right there we added to our position we had a good day a little bit
of a sideways move and some good follow through on our max our okay now what do
you think about this company to just as we look at our portfolio I’m gonna kind
of just take this off for just a moment if I back this out let’s go to actually
a two-year chart which is what I frequently look at I don’t know
sometimes I like more data because then I can see the highs and lows
historically on the chart it’s kind of interesting because you can ask yourself
you know where’s this company come from what’s it been doing and these can all
be I mean kind of fit into a thesis or a theme of what you’re seeing with that
company sort of develop and over here you see this massive come you know come
down in the in the stock price I mean huge look at this we’re just near the
bottoms right here you know what happened over here the company had one
of their satellites literally fall out of the sky they lost control out of it
of it and when the satellite fell out of the sky folks so too did the revenues
right so when this fell down you know that’s not good we’ll use the old up you
know that’s not good and it did add up to losses in revenues which by the way
you know what happened look at that right there that’s a minus $12 the
silver lining here if I have to say is going to be now according this is a
quarter of the company and just taking a look at what they’ve they’ve come out
with in their news and on their conference call etc and you can you can
look at that just I’m just kind of going through an approach that an investor or
trader might use but this same satellite that fell out of the sky and and cut
their revenues and ultimately hurt their earnings is set they were going to put a
new satellite up to replace it anyways in
2020 I don’t know what they were gonna do with the old one dump it out of this
guy anyhow but 2020 there we are they were set to put that new satellite up in
the sky a an improved one that can do that can take better images which is
really what you know a lot of what generates the revenue for this business
right really high-resolution images for countries militaries etc mainly the u.s.
okay but that’s what this company does and by the way they’re also involved
with NASA they won the contract for the next to
the moon contract that was and they designed the jet propulsion systems as
well as a couple other items but they were I think what was it something else
but anyhow they won that contract but just curious you know will that revenue
that was lost over here right that minus revenue will that be a positive over
here to drive it in 2020 right well we shall see but that’s interesting we did
add to it but you know there is a little bit of a fundamental theme to it and
that’s one reason that kind of caught our attention along with the charts so
let’s pop back over here for a second that was an addition that we had money
flow again quite strong let’s take a look at it right now
oh I got to select the portfolio just see how we’re doing on it in margin so
so 579 not you know not huge positions we normally will add a hundred shares
200 shares etc and kind of go from there but it wasn’t that substantial now it
the first of the year we’re going to start managing this is like a whole
portfolio instead of just throwing positions on one hundred 200 shares come
January we’re going to be using position sizing okay as we kind of shift this
class into a whole portfolio shorter term trades intermediate and longer-term
trades and managing these trades so keep that in mind all right so I’ll talk
about that towards the end of our discussion as well a little bit but we
added to this position we have sold puts on it as well so we’re not saying all
the profitability made on it but yeah that’s going
in addition to the portfolio I’m gonna kind of zoom on down much of this MGM 3m
it’s a manufacturer it’s a manufacturing company
I mean Minnesota mining and manufacturing it has been kind of flat
but holding a key level of support here which is a positive this is a dividend
aristocrat and so there is an expectation look at this one two three
four dividends on pointing to the green dollar sign I did that kind of quick
sorry sometimes I got to slow down but that’s you notice they’ve been
increasing it if I go back five you got a dollar thirty six so this company for
the last forty five fifty years don’t quote me but it’s in that range they’ve
been raising their dividend consecutively each and every year
that’s a positive for investors right they’d like to get that income at lower
levels we’ve talked about this one before but we haven’t talked about it
for a while in this class so look at that three point three two dividend
yield this was one that was up towards the upper end of the range on our script
you know what I’ve got to share that script again in our well in I’ll provide
you the script in my Twitter account today okay I’ll try to do that right
after our class but let me just add that on right now so you can actually see
that that this this script I can provide you this script and it shows you the
historical read on that dividend yield where it’s at and look at this as 3m
came down there aristocrat they keep raising those yields the divins and it
improves the yield is price drops but we’re very close to really that upper
ten fifteen percent of where the yield has been historically look at this let’s
back it off pretty far here to what do we got ten Oh 10-year ten-year daily we
need weekly to fit it all on though one second there we go
look at that ten-year weekly we’re still in that upper range if we’re looking at
a weekly 10-year time frame folks that’s where the upper 15% of where that
dividend yields been something that income minded investors are oftentimes
mindful of especially when it comes to a dividend aristocrat companies that have
raised that dividends good times and in bad okay so keep that
in mind I think that’s that could be something to consider – oh I’ll post
that script for you in my Twitter handle so you have that and you can put it on
your own char it’s really useful to look at because a lot of times the stocks
will bottom when they come at lower levels we’ve had a couple classes on
that we’ll have them again but I want you to be mindful of that
unless C scratchpad real quick there’s the Twitter handle just so you have it
just put it there for a second um I will post that script and love to have you
follow me if you’d like here’s oxy oxy is up a little bit oxy oxy dental
occidental is I think how they say it but coming down little ways let’s get
back out of our 10-year so you can actually see this it will zoom in and
you can see it’s making some progress today off these bottoms this isn’t a
historically high yield this yield right here’s about 8% so one way to look at
this is every time they pay it did make a dividend payment boom you’re getting
about a two percent return on that for the year if it’s at 8% you know you cut
it and divided by four it’s about 2% so it’s quite high they’ve been raising
their dividends and they’ve got increasing caching you ever received a
dividend paid as an IOU I’ll pay you later
company has to have cash to pay that dividend right they do and this company
does so they had a merger with Anadarko and that can help but additional debts
kept this down has anybody heard of Carl Icahn before that might another position
SPP having a good day you know it was better I guess earlier it’s bouncing
around there still resistance up top here Spectrum Brands I’ll tell you what
is going higher and we talked about this as a leading indicator on this stock
look at this over here what did we say does everybody remember this what do we
have when the money flow line starts to break above its high level here we could
probably draw a pretty good drawing over here let’s go ahead and do that right
now for us as we zoom on over to our big screen follow me along everybody let’s
go over here let’s make this a little bit bigger come on click there we go
so let’s zoom over here and stick this but we talked about this and we
said that money flow can be a leading indicator of price right and take a look
at the last couple sessions the last couple Fridays where we did we went into
money flow and pretty in-depth so you’d understand how to use it
utilize it going forward but this is a quick note I wanted to show you here I’m
gonna do my best you know what I don’t need to do my best to draw a straight
line I’ve got a straight line right there a line tool check this out so if I
look at my money flow look at this okay and I’m gonna kind of line it up that
looks about straight what’s happening here take a look what we’ve made a
little bit of progress have we not we’ve gotten a little bit higher above that
money flow interesting indication what did we call that anybody remember what
that was called it’s a bullish divergence it’s also referred to as a
positive divergence as opposed to a negative right it’s going higher
what about share prices what are they doing relative to this high well let’s
just take a look at it folks we’ve not cleared that 65 level yet we’re getting
some interesting indications which is one of the reasons why we thought this
would be an interesting addition to our paper portfolio – there might be some
intrinsic value some growth associated with particular stock not to mention
higher highs and higher lows on it – but there you go what is this an indication
of well it’s telling us that we could in fact go higher right it’s an indication
sometimes it precedes price action and that’s what we’re looking at right now
if this is going higher we might be getting more on average net to net more
buying activity there’s more buyers what generally tends to happen to the share
price it can go higher – it can make higher highs on IRA’s so in other words
what this indicator is kind of telling us is that we could exceed that level
and go higher in price I don’t know if that will happen we don’t know we just
don’t know for sure but that’s just letting you know
that’s why traders do in fact use the money flow indicators unique as we
talked about last couple of weeks okay so let’s step back to our
screen over here take a look at it but that was kind of an interesting one
development it’s always fun to look at the developments within a portfolio to
see house see how it’s progressing right STL D doing okay clearly in advance of
money flow we’re seeing the exact same thing it’s making higher highs yet the
price the stock is not maybe institutions are involved we said that a
lot of times its institutional money that that is big enough you gotta have
something big enough to actually push prices higher I mean volumes higher
which is just what we have in money flow WBA okay another dividend aristocrat we
came down to our support level here folks we are in fact bouncing this I
believe now as of today for the first time I’m gonna kind of let’s get really
uh will put the microscope here and look at what soo-min is this the low bar is
this the high bar have we closed above the high of the low bar yet you know
investors will look at this because it could get action price action to revert
and go higher well here’s your high here’s your low I guess that’s the first
day we’ve closed then we haven’t closed yet we still have you know a few hours
before the day is done but it looks like this might be our best chance of closing
above the high the low bar giving us that the K hold indication that some
traders will use right that’s the acronym for it close above the high of
the low day let’s pull this over okay so we’re watching it we did like that
follow-through with money flow really solid really smooth to the upside and
there you have it so a quick overview of the portfolio now without further ado
let’s jump into our some of our stocks I’m get a couple stocks to look at four
to be exact I said three of the opening but I didn’t want to cover when we
looked at last week we’ll start off with that one this this company has the
highest insider buying for the entire market of 2019 at least it did last week
I doubt there was anybody that overcame them they had kind of a high number
relative to others so something to be kind of mindful of insider buying makes
a difference in money flow look at this High Point
whoa what a divergence that is we’re way were we’re totally away from that level
we’ve we’ve brought up so much volume from the backside according this
indicator I mean look at this that’s a that’s a tremendous slope compared to
the market which is actually down talking about positive divergence aka
bullish divergence there you have it right insider buying can help
why do insiders buy folks we’ve talked about this a little bit last week
remember that why do insiders buy well insiders buy really for one reason
because they think that the prospects of the company relative to price that’s not
working I’m sorry god I checked they’re looking at prices relative to what
they’re saying in the market what are they say in the market relative
to what their prospects of the company are I’ll tell you what there’s one
reason why they buy it’s because they think price is gonna go higher and
that’s not always the case when you’re selling stocks they sell for a number of
different reasons possibly they need to buy you know more condos or more houses
or whatever insiders do with their excess funds right some of these people
are rich so they do they are buying multiple things but they buy for one
reason and that’s because they think the price is gonna go higher and that’s the
advantage of shareholders right following this or just market
participants in general keep that in mind this one had the biggest number of
purchases just under 20 million dollars worth of purchases last year so let’s
zoom back to the chart here and take a quick look at this but higher highs
higher lows that trend actually we’re kind of coming down here to a support
level one two three soldiers down possibly if you’re a candlestick person
like myself it is a materials company haven’t closed about the high the low
day but it’s interesting I like that like I said it’s fun to kind of track
insider buying this is this is not stock options this is investors inside the
company taking their own cash buying shares at market prices they don’t get
any discounts maybe that’s you know they’re putting their money where their
mouth is that’s what they actually believe
so not only does money flow show us this but the SEC records verify it as insider
purchases okay and by the way this is net net insider buying and selling and
providing to you just under 20 million highest in the market okay just an
update there we’re watching that and notice I put a price range above here
did we one second here I thought we might have done I thought we did I’m not
seeing it I thought we did a short put no no we talked about putting a trade on
it had dipped this week though coming right back down to support and holding
there so if we put a alert and alert right there so it closes above the high
of the low day I want to be notified got a lot of stocks I’m looking at so I
really don’t have I’d like to be notified via my cell phone and get a
text message and that’s what I do that for so one to kind of track an
interesting one kind of a follow up and here’s another company we’re looking at
now this is five I’m really not getting a lot of let me see if I get a two-year
I want to get more data in here kind of show you what’s been happening this year
now despite this company growing its earnings its revenues first of all
because remember revenues were looking at quarter-over-quarter on a
year-over-year basis growth for this particular company because there’s a
seasonal nature to it especially retailer it’s been growing but the share
prices have actually flattened out this year so what do you think that does if
earnings are growing some of the fundamental metrics but prices are going
flat what happens is the valuation metrics start to look better and it
could show up on the radar of maybe some people that are interested maybe analyst
maybe institutions certainly retail investors to you know that are smarty
smart retail investors like you folks that are tracking this stuff okay so
that’s one reason why we like to look at it but let’s look at the fundamentals
right now I’m gonna point this out to you specialty retailer it isn’t it is a
mid-cap it’s not a small they they’ve grown a little bit over time I’m
gonna go to our income statement to point in the sex we do like to look at
revenues you get that nice bar graph of revenues of 2019
I’m seeing progress there real easy to see when you’ve got a bar graph from
left to right you know going higher this can lead into right over here your net
income and that’s why that revenue growth total revenue you know that going
higher you know all it’s being equal if the companies you know operating income
if they can keep their expenses in check which is actually what we’re seeing here
you’re getting operational expenses tied in well you can imagine that yeah some
of those funds are going to start flowing to the net income or the bottom
line or earnings and what that can do is also raise share prices what made this
one a little bit intriguing though is that as we’re saying you’re getting kind
of a fundamental strengthening but behind the scenes I mean look at this
year here we go west well even a year and a half really we’re trading
virtually where we were maybe in this range just above this range this was
this was actually September of last year you know several days have gone by and
we’re right there despite you know some improvement there at least internally in
growth and and you’re seeing here – again again and you just don’t see this
too often but we’re following fundamental companies that might be more
prone I mean fundamentally strong and growing companies that may in fact be
more prone to institutional buying now they buy and hold for a little bit
longer they need the fundamentals to be strong right they don’t trade just both
flags and things like this but you’re seeing some of that come through over
here I mean we’re breaking above some highs in here money flows looking
interesting is you’re you’re kind of resting along a support level so that is
a consideration here I mean we can watch it through January to see if it gets
allah dates but i mean you start to break above this range it would be
interesting because you’re getting above a resistance point there that may be of
interest and you can see I’ve drawn that in I’m gonna raise it just a tad bit get
us above some of those upper spikes okay all right
that’s what now here’s one how many people follow Valvoline I I didn’t
really know Valvoline was out there I I knew about the product I didn’t know it
was publicly traded it is it’s right here this is Valvoline let’s go ahead
and pull it over Valvoline incorporated there’s been a
insider buying yeah higher highs and higher lows well it started by I’m sorry
more buying than selling according to the money flow indicator yes sorry I
misspoke their money flow going higher certainly from where it has been is in
the general downward slope we’ve started to bottom in money flow over here so
we’re clearly above that range we’re kind of holding in a support level here
we did close above the high to low day yesterday energy has been interesting in
terms of energy prices kind of going higher many of these companies let’s see
IX e energy select index kind of in a little bit of a tightening range I show
you that right now so it’s sort of like a triangle pattern right there and we’re
just breaking out of that so that’s the whole energy industry the internet
sector the whole energy sector index we’re extending out of there and a break
above a coiling or kind of a squeezing tighter triangle technicians will see
that as a positive indication across the board I personally like to see it get
above like the last highs as well we’re kind of sitting right at the prior high
yeah it’s right around 620 anyways you can use this as a reference guide but I
thought that was interesting something like this too could be beneficial energy
prices going higher could benefit our oxy as well that’s part of our portfolio
right okay last but not least I wanted to point that out to you because I think
it’s well alright let’s review this though don’t want to skip this this is
important so look over here with me here are the fundamentals that we have here
in terms of the statement so four out of the last five
years revenue growth going higher now we’ve come down a little bit in our
operating income in our net income but we started to recover a little bit in
2019 look at this if I go and take a little bit more of a minut view at the
quarterly numbers what you’re seeing here is a gradual improvement in the
quarter over quarter over quarter growth which can happen when behind the scenes
you’ve got oil prices going up if oil prices are climbing can have a huge
impact on these companies okay so let’s see what does unfold it’s kind of
recovering a little bit but this is one that we may want to consider watching it
closed above the hide a load bar just for our portfolio here with that money
closed let’s go ahead and add a couple just a hundred shares for now get it
started in our portfolio if we can continue to break higher in this trend
maybe makes it a leg above this 22 where there is a resistance maybe we could add
some more I’m gonna go ahead and click on buy market always be mindful of any
commissions of course this is an online okay I got to do this right an online
equity US equity security hang on okay online US Exchange listed stock where
you going to get that zero Commission want to get that clear because you know
if it’s outside of that range it’s not gonna be Commission free but what a cool
advantage for for you folks okay so let’s go ahead and just place that right
now we’ll start a position on Valvoline okay now I do want to be notified if we
take a dip below our level here which is about a point lower is it let’s see yeah
we’re getting you know not quite a point I still want to know if we start to
break a low here there is some support at that lower channel but I want to be
aware of it we looked at seasonality in terms of oil prices and we’ve seen that
on average though tend to be stronger first
of the year that’s kind of a play here right a possible macro driver for us so
be mindful of that so we’ll see what happens and as long as the economy stays
strong – there’s more uses well all its being
equal demand could be could stay the same or even go higher for energy right
because – for businesses to grow there are energy demands ok so there we have
it we like the revenue growth coming
through recently and we do like a lot of the technicals as we’ve gone through a
list of what traders investors will look at for our paper trade here I mean we
like when I say we like it it’s meeting the criteria that we discuss and we look
at in terms of what investors are you know many things and investors are using
ok so let’s go to IBM right now and take a quick peek at this now IBM is one
that’s been around the block it’s it’s been here for a while is it an
aristocrat I’ve got a cheat sheet here folks and you can get this cheat sheet
anytime you want for those companies that have been raising their dividends
at least 25 years each and every year it’s got to be consecutive that’s the
key so let’s go down here and let’s find my divot aristocrats there you are
no one more up right there you are ok so no that wasn’t it I’m sorry I
missed it again David aristocrats it says 18 but I’ve
updated it to 19 is 2019 it’s just when I built this with how IBM in here
now we don’t they have not raised it for 25 years they have done for a while but
it’s technology stocks it’s more difficult but they have been raising
them you see a dollar 57 57 62 good sign for income minded investors just
generally speaking now iBM is initiative position they acquired a company because
they’ve had trouble with their revenues the revenue growth and it has actually
hurt the share price the values because that revenue has been diminishing over a
period of time let’s pull this up and take a look ok let’s go back over here
let’s go to a weekly again though we want to see this on a weekly so you get
everything in here that’s an IBM look at this this I would
say is mainly due to revenue loss of revenue just very
consistently over a period of time now to offset that loss to loss of revenue
they did purchase his company called Red Hat and as I was looking at the earnings
of Red Hat after the acquisition Red Hat in
earnings still had 20% earnings gained relative to the same period on the prior
year so the acquisition let good at least from the first quarter but folks
they’re looking I beams looking to get that it to be a revenue driver and from
early indications yeah red hats growing so that’s a positive okay as a driver
for this company so maybe a bit of a turnaround here somewhat of a special
situation due to an acquisition of red hat there’s no guarantee that’s going to
filter in those revenues companies will mess up or make mistakes on acquisitions
all the time heavy debt loads etc but IBM’s really taking a lot of they’re
doing a lot to pay down the debt on this company to I’m in on their company so
it’s slowing down the the purchase of stock as I was reading but they’re
trying to pay off that debt pretty quickly I’m going to show you what those
revenues look like on IBM there we go it’s already up for us check go look see
this kind of a slow steady but very stable downward moving revenues they’re
looking to reverse that trajectory and kind of point it up this way you know
get it moving with that Red Hat purchase so fun and interesting one to kind of
track within our own portfolio here and you can see it’s breaking above this
range right here the markets extended higher IBM’s kind of flattened out maybe
IBM could show more strength as it does kick into gear but it is one due to that
acquisition that could give them back that revenue that they have been losing
in their business right they’ve shelved to a lot of non-performing areas of
their company so that’s why they did I mean that’s why companies do
acquisitions they need to get back into the growth shareholders compliant
whatnot whatever happens and then next thing you know they’re making
acquisitions to make up for losses sometimes so we’re looking at this right
now it is kind of an expensive stock we’re breaking above a range I’m gonna
kind of watch this a little bit but I would be fine putting on a hundred
shares here as well obviously a hundred shares here it starts the position just
in a kind of a you know a round block a hundred shares I’m go ahead just click
on this or we’ll just call it a hundred ship right there want to track it a
little bit I want to be mindful may be areas that it’s breaking through and
clearing it is a good day to day on IBM it’s really kind of flattened down
through here just you can see it’s actually tightening a little bit and by
the way if we come back and we look at our triangle which is always so
interesting not always but it is an interesting guide you can see it’s
breaking through those highs so something internally is kind of changing
a little bit in terms of the share price action we take a look at it if we’re
drawing it off these lows here we bounced we bounced again and then boom
we broke above and now we’re having a sort of a breakout day above definitely
above this channel and above our recent range gotta zoom in so you can see it
and actually breaking just above here too if we can hold what we took a
position on maybe not the most timely position but it is right you know
generally speaking we’re down quite a bit from our highs as we’re kind of
consolidating money flow itself that’s kicking into gear it’s hard to kind of
see but we’ll see what volume does on a weaker kind of a Friday today it’s gonna
let see Martina says do you have the dates of buying marked on that chart
sorry I’m catching this a little bit late can you remind me Martina of what
chart we were looking at sorry I just got the question a little bit late but
if you can plug that in I’m happy to answer that for you and while you’re
doing that let me go over here and just show you last week the last couple of
weeks we did hit the money flow indicator
pretty in-depth so welcome to all of you that are new you missed that
but I we do have some archived webcasts that are available to you that I’d love
for you to utilize if you’re able to right here under webcast here let’s
click on it under education webcast archived I’ll point out what’s there
because we didn’t make a reference to it I’ll try to make some posts here at the
end of our presentation so you can see that in the archived version but anyhow
if I go into investing there you have it okay I did value stocks too if you value
stocks in there now where is our capitalizing they’ve been moving things
around a little bit dang it let me take that often I think if I go under you
know what I think it’s under a whole portfolio management now is it not yet
should be they’re making some changes folks so bear with us as we make those
changes for the upcoming year there you go so this is the one last week
capitalized the long term money flow indications you can check that out just
by clicking watch now to take you on to youtube to see that in addition we have
another one the prior week hmm that title didn’t show up this too was it
showed a little bit about money flow a little bit more in depth last week but
we’re going to keep using that indicator now for this class though that we’re in
right now this capitalizing on the long term just to read a little something
here over the years several TD Ameritrade clients have expressed a
desire to have a webcast that shows how to apply different strategies and
concepts to the whole portfolio during changing market conditions we’ll be
combining the concepts taught in this webcast with concepts and principles
taught in our other investing webcast to do just that so beginning Friday January
3rd this upcoming year at the same time folks
so 12:30 p.m. Eastern Time 9:30 Pacific that’d be in the morning we’ll be
changing our name to actively managing a long-term portfolio to learn not only
how to apply different stock investing concepts but also how to apply to to
potentially take advantage of opportunities in the market as they are
developing much like we do here it’s going to be a little bit more in-depth
we’re gonna be using more money management take
as it comes to percentage purchases of securities and kind of conceptualizing
that for you okay so I look forward to having you all join us at that time of
the year first part of the year will be managing a portfolio that we’re going to
be selling options through through ways that investors look at traders you know
to generate returns or the way that they utilize this to generate returns in art
we’ll be doing that in our paper portfolio though so even shorter term
option opportunities we’ve done some of the larger well-known companies not to
mention our are kind of our approach here that we’ve discussed in things that
we follow to find companies are both maybe undervalued maybe they pay a
dividend that’s of interest maybe they’re growing these kind of
combinations are going to come together for us in that class that is called
actively managing a long-term portfolio all right well on that note folks it’s
been great being here with you didn’t get that question Martina following up
so I’m sorry about that but feel free to you know ask me next time be more than
happy to answer that we don’t have by it if by chance you were talking about hy
at hyster martin hy company hydro gallops card and materials you don’t see
insider buying here you’d have to go to the SCC gov to actually see when those
purchases were made but I’ve just kind of gone through a process so that you
know that the biggest purchaser out there as of last week like I said it
could have changed but probably not it was a big distance between where we were
in terms of total insider buys and that company had a substantial lead so
alright folks it’s been great being here with you I couldn’t follow up here to
demonstrate the function of the platform we did use actual symbols TD Ameritrade
does not make recommendations though we’re terminus it above any security
strategy for individual traders and investments is you make your sucker to
count it’s only responsibility all right well great to have you here folks
today I hope you have a good weekend coming up you deserve it
you deserve it it’s been a long week a lot of crazy stuff in the market folks
be sure to stick around though for Pat mullaly’s technically speaking for in
Vance concepts he does a great job with that
and love to see you next time all right everybody take care have a great day

Leave a Reply

Your email address will not be published. Required fields are marked *