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Kurtis Hemmerling

 
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  • Should You Switch To A Low-Risk Defensive Income Portfolio? [View article]
    Bi-annual portfolio rebalancing. Only stocks meeting all buying criteria are held when rebalanced every 6 months. Buying criteria are listed in article.
    Nov 17 05:50 PM | Likes Like |Link to Comment
  • How High Yield Investing Can Make Or Break Your Portfolio [View article]
    the software I used did not have quarterly payout ratios as an industry average - only ttm. As for 25%, I wanted to narrow down the picks because if I made it only 1% less than the industry average it wouldn't be meaningful and too many stocks would appear. Depending on how many stocks you want - you can arbitrarily pick 15% - 30% or whatever number gives you enough stocks.
    Nov 17 03:21 PM | Likes Like |Link to Comment
  • How High Yield Investing Can Make Or Break Your Portfolio [View article]
    You are probably right that I won't be able to define high risk to your satisfaction. But for me, it is when volume goes nuts for some reason. That usually means more risk - either as a hot stock that'll fall out of favor or a falling stock with more emotional trading than on fundamentals.

    It also has to do with negative momentum - stocks that fall the heaviest over 1 year periods tend to underperform the market on broad averages.

    In a recent crisis - banking liquidity, mortgages, etc were at the center of the issue. Instead of taking a position and trying to time the turnaround of an industry that could fall 50% more or double - is high risk. Its why I stay out of pharma stocks that have their fate left to binary decisions of FDA approval - also high risk.

    When a stock, industry, or sector falls like a knife - I don't try to catch it on the way down or the way up. I ignore it and trade something else. That's why I'm away from solar, financials, etc. Trade them if you like but I'll stick to strategies that work on fundamentals without hedge funds, options traders, swingtraders, high-frequency traders, and every joe blow investor jumping all over the stock pushing it in one direction or the other.
    Nov 17 03:19 PM | Likes Like |Link to Comment
  • Gain Great Performance With Small-Cap, Emerging Market High Yielders [View article]
    Yes, I refered to this in the article. But these are also the types of stocks that move upwards fast when markets signal a bull. Sure winners are not the biggest price gainers in my opinion. The thing about common sense is that it results in common profit.

    I guess time will tell...
    Nov 16 07:09 PM | Likes Like |Link to Comment
  • Should You Switch To A Low-Risk Defensive Income Portfolio? [View article]
    I'm not aruging, I'm just saying that the site and software I use categorizes them as utilities as well as a couple other sites. The strategy written about, based on the sector definitions of the software and sites used, seems to include natural gas pipelines and midstreams.

    The point is not to debate the definition of the word 'utility' in the article, but to focus on the strategy - which seems to include other defensive stocks besides utilites. Next time I run this screen I will just use the word 'defensive stocks' instead.

    I used the word as that is what the program filters it as. If that word seems incorrect I'll replace it with a broader term.
    Nov 16 03:07 PM | 1 Like Like |Link to Comment
  • How High Yield Investing Can Make Or Break Your Portfolio [View article]
    Page 13 of the Tweedy Browne report used a similar approach of 10 buckets. The top 3 buckets had the highest gain, although it was not monotonic. The 8th bucket had the highest gain. Therefore, keeping in line with what research had already been performed I used the top 30%, or buckets 8, 9, and10.

    I was not trying to create a trading strategy right away, but first I wanted to show how their results help up over the past 5 years.
    Nov 16 11:00 AM | Likes Like |Link to Comment
  • Should You Switch To A Low-Risk Defensive Income Portfolio? [View article]
    Different sites list them as different sectors, some are specific others more general. I use Portfolio123 software and they categorize them as Utilities. Lumping these into this sector is not uncommon and is inline with other sites:
    http://bit.ly/vZ3lp5/
    Nov 16 10:55 AM | Likes Like |Link to Comment
  • How High Yield Investing Can Make Or Break Your Portfolio [View article]
    You are right that the average investor cannot see the problem well in advance, but you can sell when it becomes high risk. The banking problems were apparant in 2008 but people greedily traded them thinking they were undervalued. Risk averse traders avoided them altogether once the problems came out and prices began to fall. Even if you quit trading financials by the fall of 2008, you would be protected from the brunt of the fall. It isn't to say that banks are not going to be profitable going forward or that you shouldn't trade them if you are proficient at timing - but they are riskier than other products available right now. This strategy doesn't rely on high risk and volatile products for superior gains.

    Thus, be on the alert for industries falling out of favor and do not be a contrarian investor - at least with this specific strategy - if you want to have lower risk gains. For me that means staying out of gold, financials, solar stocks, Greek and Italian bonds, and a couple of others for now. But I am on the lookout for more droppers.
    Nov 16 08:21 AM | Likes Like |Link to Comment
  • How High Yield Investing Can Make Or Break Your Portfolio [View article]
    Feel free to post your comments and views - even if they run contrary to mine. (I am adding the first post as sometimes it gets lost on its way to the board. I do not want to risk losing out on any of your valuable comments)
    Kurtis
    Nov 16 07:06 AM | Likes Like |Link to Comment
  • Why I Am A Market Bull Starting Today [View article]
    I realize there are severe problems with sovereign debt. However, there is always something to point to - in bull markets some say valuations too high, in bear markets there is a plethora of negativity to point to, the real question is when to jump on.

    At the moment there are some reasons why I feel we may go up from here. My experience is that the markets react worse when there is a lack of data or quantification of the problem. Usually, once it is known - no matter how bad - the market tends to look past it. Are we there yet? Maybe not - but for the moment I'm long and I will adjust my stance as the situation as it unfolds.

    We will just have to see I guess...
    Nov 9 10:54 AM | Likes Like |Link to Comment
  • Why I Am A Market Bull Starting Today [View article]
    We trade differently. I am not interested in the smaller swings intra-month or even broader swings multiple times a year. I try to jump in a reasonable earnings forecast trend exists. This is not some buy high sell low system as the last 10 years of entry and exits have shown. But we likely trade different time frames - my signals are generated less than once a year on average.
    Nov 9 10:47 AM | Likes Like |Link to Comment
  • Why I Am A Market Bull Starting Today [View article]
    sure. I do a weekly update on my website as well - AggressiveDividends. The futures look ugly this morning but the forecast earnings are still green (although on the line), and we are above the 100 day moving average.

    If things drop I'll keep you posted.
    Nov 9 09:36 AM | 1 Like Like |Link to Comment
  • How 'Window Dressing' Moves The Markets [View article]
    A good thesis. A report, Window Dressing in Mutual Funds (2011), added some interesting points. Unskilled managers who perform poorly are more likely to use window dressing. But this results in higher fund flows. Since there is a 60 day delay allowed before end of quarter holdings are given - the managers can use the extra funds to boost performance.
    Nov 6 07:20 AM | Likes Like |Link to Comment
  • The S&P 500 is Popping Upwards - Should You Be a Bull? [View instapost]
    Just the utility strategy without any market timing over the past 10.5 years has the following stats:

    Robustness testing with a one year buy and hold tested with over 500 different entry and exit points. Capital gains are 5.89% on average and minimum 5% yields but average is higher.

    Monthly portfolio rebalancing over past 10.5 years with no market timing works out to 10-12% annual gains if you combine dividends and capital gains.

    Same test as above with market timing model works out to 8.75% capital gains per year plus dividends for 13 - 15% total annual growth.

    Doing the simulator portfolio test with low frequency trading rules that I use for actual trading - 5 years of data tested - 8.75% annualized capital gains plus another 5 -7% dividend yields.55% annual turnover of stocks. This includes market timing where you are out of the market over 1.5 years. If you parked your cash in bonds or t-bills you should have higher total 5 year gains than what is listed above.

    Hope this helps
    Oct 28 08:58 PM | Likes Like |Link to Comment
  • The S&P 500 is Popping Upwards - Should You Be a Bull? [View instapost]
    The strategies have been tested over the past 10.5 years. I only report the trailing 24 months on my site to give a more relevant picture. The 10 year stats will come out when my new book is published (hopefully soon). Is there one specific strategy you would like more information on? I'd be happy to post.
    Oct 27 10:19 AM | Likes Like |Link to Comment
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