WiserTrader Industries Monthly

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June 2008                          Prescott, Arizona                     Contact Editor

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Contents

 

 

 

Published the 3rd Tuesday of the month     

  Subscription to Weekly Newsletter

 

 

 

 

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   Top-down stock selections are normally based on leading industries in leading sectors with a focus on stocks that show growth in market share, earnings and sales. 

 

    Comparative industry performance is not provided this month as the Yahoo database has problems, possibly due to the many distractions it faced concerning negotiations with Microsoft.  This issue is therefore briefer than usual.

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1.0 Top-Down Portfolio

 

     The portfolio activity is shown for 2008 in Table 1A, including broker fees. 

 

 

Table 1A

Top-Down Portfolio Performance

Top-Down Trading in 2008 ($9809.07 Initial Capital)

% Initial Capital

Closed trades in 2008 =

16

 

Average Trade Size =

$1,000.00

 

Total Closed Position Share costs =

$16,000.00

 

Gross Profit on Closed Positions =

-$864.26

-8.81%

Number of Open Positions =

5

 

Cost of Open Positions =

$5,000.00

 

Gross Profit on Open Positions in 2008 =

-$60.99

-0.62%

Total Gross Profit =

-$925.24

-9.43%

Broker Commission ($9.99/trade) =

-$309.69

 

Subscription Cost to date =

$0.00

 

Net 2008 Profit After Expenses =

-$1,234.93

-12.59%

Cash =

$3,944.81

 

Current Capital =

$8,574.14

6/17/08

 

 

 

 

      Closed positions for 2008 are listed in Table 1B.

 

Table 1B

Closed Positions

Top - Down Portfolio Closed Positions

 

As of Market close on

6/17/08

Stock

Begin Date

Begin Price

Last Date

Last Price

Gross P/L (%)

Status

Sell stop

Metrics

CNX

12/31/07

71.52

1/4/08

65.48

-8.4%

closed

66.22

Growth

BBY

12/31/07

52.51

1/4/08

47.48

-9.6%

closed

48.04

Growth

PBR

12/31/07

115.24

1/16/08

98.09

-14.9%

closed

106.93

Growth

SRP

12/31/07

16.98

1/22/08

14.90

-12.2%

closed

15.28

Defensive

CPD

1/16/08

17.00

1/28/08

15.27

-10.2%

closed

15.30

Defensive

ACH

2/19/08

45.26

3/6/08

45.71

1.0%

closed

46.91

Growth

POT

2/19/08

152.50

3/10/08

143.03

-6.2%

closed

147.85

Growth

BHP

2/19/08

72.66

3/10/08

66.16

-8.9%

closed

68.18

Growth

NFLX

3/18/08

35.00

4/22/08

30.00

-14.3%

closed

32.56

Growth

FXE

12/31/07

146.40

5/1/08

154.66

5.6%

closed

128.08

Defensive

FXA

2/19/08

92.34

5/1/08

93.49

1.2%

closed

76.40

Defensive

FXF

3/18/08

99.85

5/1/08

95.16

-4.7%

closed

80.90

Defensive

FXY

3/18/08

100.30

5/1/08

95.50

-4.8%

closed

80.70

Defensive

IYE

4/15/08

138.54

5/1/08

139.32

0.6%

closed

117.42

Growth

OIH

4/15/08

190.73

5/1/08

191.77

0.5%

closed

166.13

Growth

USO

4/15/08

91.44

5/1/08

90.38

-1.2%

closed

76.55

Growth

 

 

     Stop loss settings are explained in Section 2. 

 

 

     The portfolio is listed in Table 1C.

 

Table 1C

Top-Down Portfolio

Top - Down Portfolio Open Positions

 

As of Market close on

6/17/08

Stock

Begin Date

Begin Price

Last Date

Last Price

Gross P/L (%)

Status

Sell stop

Metrics

TIP

12/31/07

104.82

6/17/08

105.35

0.5%

Hold

99.95

Defensive

IYE

05/20/08

155.61

6/17/08

152.05

-2.3%

Buy

140.05

Growth

OIH

05/20/08

218.22

6/17/08

216.44

-0.8%

Buy

196.40

Growth

USO

05/20/08

104.30

6/17/08

108.68

4.2%

Buy

100.95

Growth

X

05/20/08

184.02

6/17/08

169.85

-7.7%

Hold

165.86

Growth

Trailing Stop Settings are Bearish

 

 

 

Tspi (long) = -10%

Net capital for 2008 =

-12.6%

 

 

 

f (long) = 25%

 

Alerts: TIP and X are rated HOLD.

 

 

Open Positions:

 

      iShares Lehman TIPS Bond (NYSE: TIP) is an inflation-protected US Treasury ETF.

 

     iShares Dow Jones US Energy (NYSE: IYE) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Oil & Gas index which measures the performance of the oil and gas sector of the U.S. equity market.  The top 10 holdings are: Anadarko Petroleum (2.48%), Apache Corp (3.14%), Cheveron (14.59%), Conoco Philips (4.4%), Devon Energy (3.57%), EOG Resources (2.62%), Exxon Mobil (23.09%), Occidental Petroleum (4.88%) Schlumberger (6.54%) and Transocean (2.49%).

 

     Oil Services HOLDRs (AMEX: OIH) diversifies across 18 companies in the oil service industry.  Principal holdings accounting for 80% are: Baker Hughes (7.95%), Diamond Offshore (7.47%), Halliburton (9.48%), Nabors (4.26%), National Oil Well (4.9%) Noble Corp (6.08%), Schlumberger (10.7%), Smith International ((5.67%), Transocean (18.18%) and Weatherford Intl (6.98%).

 

     United States Oil (AMEX: USO) seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.  The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges.  It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

 

 

 

 

New Positions:

 

     The Agricultural Chemical Industry has outperformed the market recently due to planting disruptions caused by flooding in the Midwest.  Optionable stocks priced over $20 are listed in Table 1D.  Three stocks selected for the portfolio are:

 

     Agrium Inc. (NYSE: AGU) produces agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South America.

 

     Mosaic Co. (NYSE: MOS) produces crop nutrient and animal feed products worldwide.

 

     Terra Industries Inc. (NYSE: TRA) produces nitrogen and methanol products for agricultural and industrial markets worldwide

 

 

 

Table 1D

Agricultural Chemicals

Stock

Company

 

Price

% Change

1 Week

1 Month

AGU

Agrium Inc. (USA)

$110.99

4.9%

20.4%

$21.40

CMP

Compass Minerals International

$85.40

1.8%

5.6%

$15.25

DD

E.I. du Pont de Nemours & Comp

$47.15

0.0%

3.1%

-$2.48

MON

Monsanto Company

$142.69

5.0%

4.7%

$17.58

MOS

Mosaic Company, The

$161.08

5.0%

11.9%

$31.42

SMG

Scotts Miracle-Gro Company, Th

$23.44

-2.0%

-8.8%

-$5.54

SYT

Syngenta AG (ADR)

$65.04

3.1%

5.2%

$3.64

TRA

Terra Industries Inc.

$55.10

5.9%

21.9%

$9.24

 

 

 

2.0 Portfolio Trailing Stop Settings

 

     The trailing stop percentage TSP for WiserTrader portfolios is described below.  When stocks are bought in a bullish market, an initial trailing stop percentage TSPI = -20% is just about right.  However, the market can change.  A -20% trailing stop is too wide when the market turns bearish and a -10% trailing stop is too narrow when the market is bullish.  Also, there is the feeling that when profits grow beyond a certain level, say 65%, a stock should have a progressively wider trailing stop.  So a 65% profit acts as a new transition point.  These considerations are described graphically in Figure 2A for long positions.  The lines indicate the TSP for bullish, cautious and bearish market conditions.