BUY OF THE WEEK 11/25/2014

Posted on November 25, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Interval Leisure Group, Inc. (IILG) is his “Buy of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Buy of the week




When Will Apple Be Worth $1 Trillion?

Posted on November 21, 2014 | Dividend Investing

Hedge fund executive Steve Einhorn predicted that DI holding Apple Inc. (AAPL) will command a market capitalization of $1 trillion. Einhorn, of Omega Advisors, made the prediction at the Reuters Global Investment Outlook Summit on Monday. He did not give a timeline, however, only saying the stock could “eventually” get there.

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Peking Duck Fuels Pre-Thanksgiving Rally

Posted on November 21, 2014 | Stock Superstars Report

The only true constant in life is change, and we were reminded of that again this morning. We had written up a commentary on how the portfolio was flat for the week but in the middle of the night, the Chinese central bank cut interest rates 25 basis points (0.25%).

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Investors Believe Consumers Faring Better This Year

Posted on November 20, 2014 | Uncategorized

This week’s Sentiment Survey special question asked AAII members how they think the average consumer is faring relative to a year ago. Slightly more than half of respondents (53%) said the average consumer is doing better, though many of them described the consumer as only doing somewhat or a little better. Gas prices were the top reason given as to why, though several respondents mentioned employment and/or economic growth. Roughly the same number of respondents (about 15% each) said the average consumer is faring about the same as last year or is faring worse. Though the decline in gas prices are viewed as a positive, stagnant wage growth and inflation in other areas were cited as headwinds.

Here is a sampling of the responses:

  • “Better. The economy is improving and oil prices are falling.”
  • “Better in part to more employment, falling heating and driving costs and the housing recovery.”
  • “Somewhat better due to lower unemployment, modest wage gains in some areas and lower fuel prices.”
  • “May be helped by lower gasoline prices, but is also facing rising food and housing prices.”
  • “Not much better. Job growth, and, more importantly, income growth has been slow.”


AAII Sentiment Survey: Optimism Drops Below 50%

Posted on November 20, 2014 | Uncategorized

Optimism pulled back from a four-year high, falling below 50% for the first time this month in the latest AAII Sentiment Survey. Neutral sentiment rebounded and pessimism rose for the second consecutive week.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 8.8 percentage points to 49.1%. The drop puts optimism at a five-week low. Nonetheless, bullish sentiment remains above its historical average of 39.0% for the seventh consecutive week and the 14th out of the past 15 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded by 4.3 percentage points to 27.1%. Even with the increase, neutral sentiment remains below its historical average of 30.5% for the seventh time in the past nine weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 4.5 percentage points to 23.8%. The rise was not large enough, however, to prevent pessimism from being below its historical average of 30.5% for the fifth consecutive week and the 38th week this year.

Seeing a bit of reversion to the mean is not unexpected given how high optimism was last week (57.9%, the 58th-highest reading in the survey’s history) and how low pessimism was on November 6, 2014 (15.1%, a nine-year low). Optimism remains at a very high level this week, however. Bullish sentiment is right at the border between what is typical and what is unusually high. Viewed in another manner, optimism is above 49% and pessimism is below 25% for the fifth consecutive week.

The sustained high level of optimism is occurring as the S&P 500 has risen by 10% since hitting a 2014 closing low on October 15. In addition to the avoidance of a correction and the strong rebound in equity prices, individual investors are also encouraged by falling energy prices, earnings growth, the Federal Reserve’s ending of its bond purchasing program and sustained economic expansion. Some AAII members may also be reacting to the outcome of the midterm elections. Keeping other AAII members cautious are geopolitical events, a sense that prevailing valuations are too high and the pace of economic growth.

This week’s AAII Sentiment Survey results:

  • Bullish: 49.1%, down 8.8 percentage points
  • Neutral: 27.1%, up 4.3 percentage points
  • Bearish: 23.8%, up 4.5 percentage points

Historical averages:

  • Bullish: 39.0%
  • Neutral: 30.5%
  • Bearish: 30.5%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online at: http://www.aaii.com/sentimentsurvey.



Sell OF THE WEEK 11/19/2014

Posted on November 19, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Medtronic (MDT) is his “Sell of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Sell of the week





BUY OF THE WEEK 11/18/2014

Posted on November 18, 2014 | Podcast

AAII Journal Editor Charles Rotblut explains to Chuck Jaffe of MarketWatch why Stamps.com Inc. (STMP) is his “Buy of the Week” on the MoneyLife Radio Program. MoneyLife is a daily personal finance show that sorts through the financial clutter to bring you the information you need to lead the MoneyLife.

Audio url: Buy of the week




THE November 2014 PASSING COMPANY LISTS AND PERFORMANCE DATA IS NOW AVAILABLE ON-LINE

Posted on November 14, 2014 | Stock Screens

YTD Return of Top Performers: O’Neil’s CAN SLIM 56.0% — Rule #1 Investing 50.3%

See the results and passing companies »



November 2014 AAII MODEL PORTFOLIOS UPDATED: Small Caps Lead the Way

Posted on November 14, 2014 | Model Portfolios

The S&P 500 index climbed 2.3% in October, although it was far from a smooth ride. There was a sell-off in the early-to-mid part of the month, but the markets rebounded strongly from those lows. This could indicate strong buyer interest sitting on the sidelines waiting for an opportunity to buy in, which would be bullish, but the signs are far from clear. Instability across the globe continues to be an issue. We have seen defaults that are not defaults in Argentina and a shortage of, well, everything in Venezuela. Despite all this uncertainty, or perhaps because of it, the oil glut pushed prices down even more, and $3 per gallon gas was a welcome surprise for many Americans. While all stock styles performed well last month, small caps outpaced large-cap stocks. Whether this signifies a return of the small caps is unclear. The Model Fund Portfolio climbed 3.0%, while the Model Shadow Stock Portfolio, which is heavily concentrated in small-cap stocks, rose 3.2% during October.

The Model Shadow Stock Portfolio’s 3.2% gain for the month trailed its comparison benchmarks: The Vanguard Small Cap Index (NAESX) was up 4.5%, and the DFA US Micro Cap Index fund (DFSCX) was up 6.5%. Year-to-date, the Model Shadow Stock Portfolio has declined 7.4%, also trailing the Vanguard Small Cap Index fund (up 5.0%) and the DFA US Micro Cap Index fund (up 0.3%). The Model Shadow Stock Portfolio has a compound annual return of 17.1% since its inception in 1993, while the Vanguard Total Stock Market Index fund (VTSMX) has gained 9.4% annually over the same period.

The Model Fund Portfolio’s 3.0% gain in October compares to a gain of 2.7% for the Vanguard Total Stock Market Index fund. Year-to-date, the Model Fund Portfolio is up 8.3%, while the Vanguard Total Stock Market Index fund is up 9.8%. The Model Fund Portfolio has a compound annual return of 9.4% since inception in June of 2003, matching the performance of the Vanguard Total Stock Market Index fund over the same time period.

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Online Resources for Getting the Most from SI Pro

Posted on November 13, 2014 | Stock Investor Pro

Stock Investor Pro is AAII’s powerful fundamental screening system providing rich company and industry data. You can screen for stocks based on their financial qualities using 60 predefined strategies or by creating your own screens. The Windows-based program offers fundamental data supplied by Thomson Reuters and earnings estimates supplied by I/B/E/S. For individual investors, it offers the power of a fundamental stock screening tool at their fingertips for a reasonable price, whereas other similar tools cost a thousand dollars or more.

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