Kirk Lindstrom

Growth at reasonable price, portfolio strategy, newsletter provider, bonds
Kirk Lindstrom
Growth at reasonable price, portfolio strategy, newsletter provider, bonds
Contributor since: 2007
Company: Kirk Lindstrom's Investment Newsletter
Great comments!
For younger investors, bear markets are great opportunity.
I remember when I was starting to invest seriously in stocks in the 1980s and I was actually HAPPY after the 1987 30% bear market. I remember telling myself "I CAN DO THIS!" in that I didn't panic out and was looking for things to buy with my paychecks plus early retirement plans. I was in a fund through HP (when it was a great place to work) with my IRA type money that they sold some near the bottom and I got angry, wrote internal letters and helped change HP's offerings to include index funds.
GREAT comments!
President Obama made it clear he understands well what it takes to increase the velocity of money and stimulate growth. How? Easy: The Obama Tax Cuts were BIGGER than the Bush tax cuts in that he slashed the payroll tax 2% for everyone to jump start the economy. He then made the temporary tax cuts permanent for us working folks then hit those who benefit from large government with higher taxes.
The trouble is, those cuts expired and with all the rules and regulations plus the HUGE TAX of ACA/Obamacare... the velocity of money won't get going.
I believe I know how to fix the system but like you said, it would turn this into a political debate as I saw just trying to list a few of my ideas that I deleted.
BTW, this link has the data and graph for the Federal Surplus or Deficit by year http://bit.ly/20g9WS8
and this has the deficit as a percent of GDP by year
http://bit.ly/1hml28V
We've never had a $19T deficit. Total debt has roughly doubled over the past 8 yrs to roughly $19T. What matters is debt as a percent of GDP as that takes into account inflation.
From the text for the chart at "US Total Debt Since 1900" at http://bit.ly/1Kx0loa
"Government debt began the 20th century at less than 20 percent of GDP. It jerked above 45 percent as a result of World War I and above 70 percent in the depths of the Great Depression. Debt has breached 100 percent of GDP twice since 1900: during World War II and in the aftermath of the Crash of 2008."
and from the ST Louis Fed you can see the ration peaked in Q1-2014 at 103.6% and had come down to 100.5% in Q2-2015.
http://bit.ly/1yywu2F
So yes, the total DEBT is horrible but it is less than after WW2 as a percent of GDP. We've been fighting a war on terror as if it were WW3 so total debt as a percentage of GDP isn't unprecedented.
Thanks for the kind words.
>>love your articles. Could you please add the IIS. bulls and bears numbers not in moving average. Thank you<<
The bulls over bulls plus bears data point on chart 3b is the weekly number.
I believe the raw numbers are only available to people who pay for it. If you can find me a site where they post those for free, then I may consider adding them to what I post. I don't want to be profiting by giving out someone's work product here.
I used that number in a day for effect. What if it went from 1501 to 2200 in a year and you missed by $1 while waiting for that last level... or even got more bearish and lowered your target because it would not reach 1501 without far worse news than we have now.
Oh oh! I hope we are not using "confirmation bias" to congratulate each other too soon! LOL
But... I hope we are right!
The truth is, I'd never make a HUGE bet using market timing...
”....there are confident ones; they move from ninety-ten (90:10) in stocks-bonds to five-ninety-five (5:95) in stocks-bonds. That implies a degree of self-confidence bordering on hubris and self-deception. Over the decades, when both groups...have equal limited (!) ability to "time," the cautious chaps who alternate between sixty-five-thirty-five in stocks-bonds (65:35) and sixty-forty (60:40) are likely to end up with a superior risk-corrected total return score.”
[Paul Samuelson, "Journal of Portfolio Management," Fall 1994]
What happens if you are wrong and it only gets to 1501 then reverses to 2200 in the next day? Long term wealth isn't from trading or market timing. I make extra return from trading around core positions but a 50:50 asset allocation for a retired person with regular rebalancing and perhaps some buys and sells of Explore Stocks makes the most sense.
I'm honored to be the recipient of your first comment on SA. Thanks!
FWIW, I took a picture and scanned the SJ Mercury News front page headline from about 2 weeks ago that talked about the "Market Collapse."
Maybe I should upload it to my blog and reference it in a future article. There are a LOT of stocks here in the Silicon Valley as well as Biotech Gulch closer to SF that are in a great deal of pain, some 70% off highs. I've written about it in my newsletter, but the bears might miss how the yield seekers held up a ton of stocks this cycle that probably would have gone a LOT lower had interest rates been at 2000/2003 levels or even 2007/2009 levels.
Thanks for the kind words. So far, I think we have three bears and one bull so far. If we could get more to read and comment, I could probably start tracking bull and bear comments here also!
Brinker was nearly the only game in town back in the 1990s. He was good at not really saying anything actionable on the radio so you had to subscribe to his newsletter. Sadly, the individual picks usually did very poorly and seemed to be there so he could talk about this or that "hot tech stock" being "recommended" in his newsletter but never for the model portfolios so if they were topping out at their peak of popularity, his performance record wasn't damaged. It upsets me to this day that Hulbert doesn't count his "individual issues portfolio" in his performance like I do with my "Explore Portfolio."
Yeah, I added it to my newsletter portfolio at $15 in 1998 after it crashed nearly 50% after Brinker recommended it on TV. I have a copy of the transcript of his recommendation somewhere on my web site if you want to relive old pain.
Tons of insider selling at UTEK this month.... They exercised a bundle of options when it was $15 without selling but now they are selling.
Of course, UTEK is one of my best trading stocks but a TERRIBLE investment as the company hasn't made any progress in two decades (was over 30 in the 90s) as the high volatility is to the benefit of insiders who get low priced options they dump when the shares go up.
SEC Filings:
http://bit.ly/1StZ844
http://bit.ly/1StZ848
http://bit.ly/1StZ84c
You're welcome. Make sure you check out bid/ask spread. Schwab has an EM ETF that is .01% lower cost than Vanguard but when I looked to buy them both recently, the bid ask spread at Schwab was 3¢ compared to 1¢ for Vanguard's ETF... and Vanguard's ETF is higher priced so I went with Vanguard's ETF. SPY has a ton of volume so bid/ask might make it cheaper.
Do you care to share how you got 1977?
I see 1977 as:
#1 the bottom of the bull flag S&P trading range, that broke-down in December, projected out in the future.... so a decent target based on that resistance level.
#2 a 50%/Fib retrace
Two resistance levels makes it better than just one.
You're welcome. Thanks for the kind words.
Sorry, but I'd have to give it many hours of thought and look at charts to make a proper comment on your theory.
The purpose of the weekly article is to share the data and get inputs from others where my thinking might be wrong or other sentiment charts I should chart.
I also try to toss in a bit of what I did since the last article except for the week when I'm writing my newsletter (this week) so I left that part out of this article.
During the time since the last sentiment article, I was a net buyer and got MORE of at least one Explore Portfolio stock during the intraday spike that went below the prior low.
Some of my newsletter explore portfolio stocks that I bought last year on the decline rallied enough to sell some of what I bought but they didn't go low enough this time to get close to their 2015 lows and buy back. That tells me there is rotation to those and we should see great performance from those stocks this year... HOPEFULLY as nothing is certain.
Specifics of what I do is in my newsletter.
Good luck with your trading!
Wouldn't breaking up the big banks be good for shareholders while bad for the top 0.01% who run the banks?
The lower capital reserve requirements of the pieces after the breakup would mean more $ available for dividends and/or buybacks.
OK, I was able to get a good image of the headline "Silicon Valley stalwarts such as Intel, Google, Facebook at center stage of markets’ collapse"
and posted it here in the comments to today's market update at http://on.fb.me/1J96LcI
OK, I was able to get a good image of the headline and posted it here in the comments to today's market update
http://on.fb.me/1J96LcI
Today's headline in the San Jose Mercury News, paper for the Silicon Valley, was about the market "collapse." I'll have to save a copy for my records and perhaps for the next update of this article.
Next week I work on my newsletter so it might be two weeks until I can update the charts again here.
The "Fear and Greed Index" just hit single digits... 9
http://cnnmon.ie/QxDqZ3
There is blood... the debate is if it is a single flesh wound or the blood from the Third Battle of Changsha.
I'm curious why you would imply I have no sense of history?
I recall making a great deal of money using cash to buy after the 1987 crash, after the 2000-2002 bear market and again after the 2008-2009 bear market. In 2001 my newsletter portfolio actually had a positive return from buying the big declines and taking profits in the rallies.
The perma bears have said for decades we don't have blood in the street and it was a lousy time to buy and they've been wrong for decades. I hope you are not in that camp and were just trying to be clever.
Yes, I think you may be right. When examining the data last night after the close, I found two other periods during the past 16 years that got to this level and where buying then required "patience" of up to 2 years to redeem a reward. Those where the last two bear markets over 50%. It is why I wrote I had STARTED to put some back in. I ended the year with the highest cash/fixed position as a percentage for my newsletter and personal IRA trading accounts. I've STARTED to put some back in but I am in no big hurry... If I miss a "V-bottom" then what is in should make me happy enough.
Thanks for the kind words Tiki.
I know many who do well selling options (buying them is a losing proposition for most...) but......
I've not been a fan of using puts and calls because they can tie up your capital and it is possible you don't get the stocks or SPY ETF if it briefly trades below your strike price in a "flash crash" type event.
OTOH, I got some Intel shares for my IRA at $25.00 last year during the intraday panic selloff on 8/24/15. My guess is someone holding a put option to sell me Intel at $25.00 probably would not have exercised that option because that was very close to the low for the day and they would be smarter to hold for perhaps a lower price. BTW, I sold 2/3rds of those $25 Intel shares at $34.87 two months later....
I've sold options in the past and was not happy I had my capital tied up until expiration or I was hostage to the whim of the buyer to exercise at the worst time for me. Since I know many who do well selling options, my guess it is a matter of taste for what works best for different people.
Thanks again!
Thanks for the thanks.
>> I appreciate the articles Mr. Kirk, thank you!
Here is a new way to look at the data "AAII Despondent Sentiment" from Schaeffer http://bit.ly/1TZcjH6
"The four-week moving average of neutral and bearish respondents hit 77%, which tied with the week of March 12, 2009 -- coinciding with the post-financial-crisis bottom, just before stocks went on a long-term run higher. Prior to that, you'd have to go back to February 2003 (also 77%), Prybal said. The all-time high of this moving average occurred in the late 1980s/early 1990s, right around 80%."

Quote from http://bit.ly/1TZclis
I agree! I try to remain calm and ask myself "what would Yoda say" during times like this.
"To your favor embrace volatility and use it. Herh herh herh."
Reading charts is somewhat like playing the piano. It is a mix of natural talent and a ton of practice. Even then, I still hit wrong notes.
Some smart people can't ever read a chart while some can with practice. I suggest picking one of the charts I present and tabulate the data yourself along with stock market data at the weekly close. I've been doing it since the 1990s and still hit some wrong notes so hopefully you learn quicker!
Good luck and thanks for the comment.
Wow, TickerSense now:
Bulls 15.4%
Bears 69.2%
http://bit.ly/1UJTqZ5
Today the markets are testing the lows of the year set intraday yesterday. If it holds into the close, this should really push sentiment lower for next week's readings.
Market Scan: http://bit.ly/1OUHpvc
The questions is "Will we reach the Fall lows where the markets were down about 15%?"
S&P500 Scan: http://bit.ly/16kKpNL
.
I tend to agree but everyone seems to be saying this so I put some back in already and will add more if we go lower.