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Marc Courtenay
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Marc is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor at the internationally acclaimed web site www.ChecktheMarkets.com. He holds an MS in Clinical Psychology from California Polytechnic State University, and is a former senior vice-president... More
My company:
Advanced Investor Technologies LLC
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ChecktheMarkets.com
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  • How Realistic Are We Investors?

     Treasury Secretary Geithner said today that U.S. companies scarred by the financial crisis remain “very cautious” and are trying to get more productivity from current employees before hiring new ones.

    Job growth is “not as fast as we need,” Geithner said in an interview broadcast today on NBC’s “Meet the Press” program. Employers “are still cautious, still very cautious,” he said. “So they’ve been trying to get as much productivity out of their employees as possible.”

    Earlier this week Fed Chairman Bernanke made the comment that the economic conditions in the U.S. are "unusually uncertain". Can we take a hint? Are pigs usually pink.

    We've had a great, short-term move in stocks, and it's hard to see the light at the end of the tunnel on all this. But it just might be a "freight train", or from a bearish perspective, a "fright train".

    My instincts and my proprietary "market observation analytics" tell me that we aren't too far from an abrupt shift in market direction and in investor sentiment. Market psychology isn't at important as most people think, but the fact that many small investors are not participating at all in these market surges and plunges, is quite telling.

    It is time to be in a state of heightened awareness about the media's "hints", the comments that powerful officials are making, and the track record of the stock market since the "flash crash" of May 6th.

    Realism beats optimism and pessimism every time.



    Disclosure: no stocks were mentioned
    Jul 25 7:30 PM | Link | 3 Comments
  • Buy Ridiculously Cheap and "On Sale" like Gilead Sciences and Anadarko Petroleum
    Today I purchased Gilead Science (Nasdaq:GILD) at $39.81, very close to the 52-week low. I based my decision on the fact that this company's EVA Momentum shows the kind of valuation that allows patient investors to "buy low" and eventually "sell high".

    When I consider whether a stock or a company is worth buying there are performance ratios that I like to consider, including: Price-to-earning, Price-to-sales, Price-to-Book and Enterprise Value-to Revenue.
     
    There's also been great merit in looking at the company's balance sheet and cash flow statement. I want to know how much total debt they have, what their total cash flow is, what's their operating cash flow, and the levered free cash flow number.
     
    A company like GILD meets these criteria. On top of that, it has over a 38% profit margin and an operating margin that exceeds 52%. This is a value play that is also a growth investment.

    Its trailing PE (ttm) is 12.76 and it's future P/E based on earnings estimates that are realistic is a mouthwatering 10. A company that is selling at 10 times next year's earnings and also has a return on equity (ttm) of 47% deserves our attention.

    The Price-to-Earnings-Growth (NYSE:PEG) ratio (5 year expected) for GILD is .80. A PEG below 1 is trading at a discount to its anticipated future growth rate.

    These criteria are exactly the same as I used to buy ConocoPhillips (NYSE:COP) back in January of this year. It is also why I purchased shares of Anadarko Petroleum (NYSE:APC) today at $63.42.

    Anadarko plans to boost capital spending this year to a range between $5.3 billion and $5.6 billion, or as much as 22 percent, as it explores for new oil fields to develop. The bulk of the money is earmarked for U.S. operations.

    In February, Mitsui & Co. agreed to take a $1.4 billion stake, or 32.5 percent, in Anadarko's assets in the Marcellus Shale gas field.

    Sometimes what drives prices of companies like GILD and APC down are disappointing earnings, future guidance, or potential fallout from disasters, which I believe is why APC dropped so far today.

    Andarko is one of the nation's largest independent exploration and production companies, with operations onshore in the United States, in the Gulf of Mexico, and off the shores of Brazil, Africa and others.

    It has a 25 percent non-operating stake in a deep water well operated by BP PLC (NYSE:BP)  where an explosion occurred earlier this month, creating a massive oil spill. Anadarko has insurance policies in place that have a total of $15 million in deductibles designed to provide protection in the event of disasters.

    APC reports earnings on Monday, and the market might be smelling disappointment. APC doesn't meet my usual EVA Momentum criteria, but they have almost $4 billion dollars in operating cash flow and strong leadership. This "Black Swan Event" is driving the price down to where investors like me feel more comfortable beginning our accumulation.

    You can learn more about EVA Momentum by way of an introduction in an article at
    http://www.checkthemarkets.com/index.php?option=com_content&task=view&id=1356&Itemid=40

    Getting back to Gilead Sciences, Inc., it is a biopharmaceutical company which engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide.

    It's product line is nothing short of incredible, and again it has sound corporate leadership that knows well how to create a great future pipeline and outstanding cash flow. http://www.gilead.com

    When great companies are ridiculously inexpensive, we are managing risk by looking at the reasons and deciding for ourselves whether the stock price is likely to be significantly lower or higher 6 months or one year from today.

    If we get in too early, we still know we are getting better than "reasonable value" and if we consider the most important criteria for buying a company, which includes its EVA Momentum, the potential rewards can be quite pleasing.
     

    Disclaimer: Nothing in this commentary should be construed as investment advice or guidance or any recommendation to buy or sell any financial instrument. It is not intended as investment advice or guidance, nor is it offerred as such. It is solely the opinion of the writer, who is NOT an investment counselor/professional. All content of this commentary is solely an expression of his personal interests and is posted as free-of-charge commentary and is subject to error and change without notice. Please do your own due diligence before investing in ANYTHING. The presence of link to a website does not indicate approval or endorsement of that website or any services, products or opinions that may be offerred by them.

     



     





    Disclosure: GILD,COP, APC, BP

    Disclosure: gild,cop,apc
    Tags: GILD, COP, APC, BP, biotech, energy
    Apr 30 3:24 PM | Link | Comment!
  • ETFs and Reality--Why Their Day Has Arrived
    The following article was written by my friend Richard Wendling and edited by yours truly. You are about to read a perspective that is truly "outside the box" and contains some counterintuitive insights that I hope will help you consider some very viable possibilities.

    I've been investing from this "realistic standpoint" more frequently over the last 6 months and my results, which will be reported after I've actually "realized" my gains, have been the best of my 36 year investment experience.

    They've already included some outstanding results with companies like Dupont (NYSE:DD), Chesapeake Energy (NYSE:CHK), Alcoa (NYSE:AA), IAMGOLD Corp (NYSE:IAG), Goldcorp (NYSE:GG), and Cisco Systems (Nasdaq:CSCO).

    I've had a few disappointments in the past 10 months such as NYSE Euronext (NYSE:NYX), and although I made some money and then lost some with Citigroup (NYSE:C),  that was during the "learning and experimenting phase" of my personal investing journey...and we learn as much from our mistakes as we do from our triumphs.

    It's all about understanding how the major stock exchanges operate, the role of the "exchange specialists" and "market-makers", and the "activities" that they create on a daily basis. It's all about accepting "reality" and working with it.

    Believe me, it isn't rocket science but "reality" is difficult to accept and buy into. It took me years of personal experience, research, studying and my willingness to "suspend disbelief".

    I don't care to judge these realities or analyze them. I just want to know the truth and accept reality as it exists in today's very unique financial universe. This is no time to have one or both eyes closed when it comes to investing in the stock market.

    It seems like yesterday that Jim Cramer was screaming his head off (around October of 2008) that we have entered an extraordinarily dangerous time in the financial markets and that people should "get out and put aside five years worth of cash, because this financial crisis isn't going to go away anytime soon."

    He even said, screaming like a maniac, that "Helicopter Ben Bernanke", "Uncle Ben" and his fellow Fed governors, and I quote, "...know nothing. They know nothing."

    This week Captain Cramer was lauding the competence and "amazing performance" of Uncle Ben, and telling people that 2010 will be a great year for the stock market and for stock investors. That's when I realized that I wanted to share Richard's article, so here it is:

    "During the last two monthly reports, I have laid out for investors what I see happening in the market place due to current and future conditions, and why I feel that way. The information in those two reports indicates that a major decline is in the making, and it is only a matter of time before it rears its ugly head.Bull & Bear by Leonieke.

    "In order for investors to be prepared for it and also profit from it, they need to move their money from stocks (as they reach their highs and the decline approaches) into short-term cash. Then the next question that arises is, “Where do we put our money as the decline starts and deepens?” To answer this question, there are two trains of thought:

    1) Some investors choose to move their money to the safety of bonds (which pay little return), or place their money in CD’s (which pay even less) or,
    2) They return to the market place and purchase ETF‟s (“exchange-traded funds”) which will profit from the declining stock market. My choice for my own personal investment strategy is the ETF gig. What you choose for yourself is your decision.

    "Now some are asking me, “Why are you choosing ETF‟s for your portfolio?” The answer to this question is incorporated below: When one looks at the year in retrospect, a lot has happened -- yet not much has changed. “Now I am starting to talk like a politician”. When the year started, we had two months of relentless selling in the broader markets -- followed by nearly 10 months of rallying markets.

    "The rally in November and December 2008 proved to be fertile soil for those individuals who were trying to sell you on the idea that the “First Bailout” package was working just fine, and that the worst was now behind us.

    "We all know now that this indeed is not the case. To prove that point, all one needs to do is look at January and February 2009 to see that the wheels fell off the track very quickly. Then, as if by magic (“Specialist magic by the way”), the entire market turned on a dime --and from those early March 2009 lows to the current date, the sentiment that the recovery is now in place and the “Stimulus Package” is indeed working have surfaced again.

    "Reuters reported, and I quote: “The blue chip economic indicators survey of private economists, showed that 90% of those responding believe the economic downturn will have ended in this quarter”. This type of reporting is consistent with sky-rocketing sentiment readings -- which are recording extremes not seen for well over a year.

    [If you don't realize how far the S&P 500 has come over the past 12 months and that a solid breakthrough above the overhead resistance has occured, including upside penetration of the 50-day and 200-day moving averages, look at this chart]

     Chart for S&P 500 INDEX,RTH (^GSPC)

    "For those investors like myself, these are sure signs of trouble ahead. It is this type of enthusiasm for stocks --and only this enthusiasm – which has been driving the stock market higher despite the mixed bag of economic data. There is one key factor that investors must remember before investing in the current stock market arena, and that is: “The market is 'rigged’ against you in every shape and manner of investing”.

    "Specialists and their System will do whatever it takes in order to separate as many investors as possible -- from as much of their hard earned money as possible. This persistent rise from the early March 2009 lows is converting bears into bulls and bulls into extreme bulls -- while realists like myself, and bears, are now becoming extinct.

    "Those investors who had lost a great deal of their money during the decline, and moved to the sidelines, are now beginning to panic. They are becoming afraid that they are going to miss out -- or have already missed out -- on this rally."

    To read the rest of this "ground-breaking" article and to learn more about Richard's remarkable track record and approach to investing in the stock market click on the link below.

    http://www.bearfactsspecialistreport.com/Stock%20Reports/2009/DJIA%20-%2012-31-09.pdf

    Richard has studied and documented the work of the late Richard Ney. Mr. Ney proved for himself through first-hand experience and personal contacts that the direction of the stock market and the daily pricing of individual stocks was controlled by exchange specialists, a.k.a. "market-makers".

    The amazing proofs of this and how we as investors can benefit from this knowledge is found in great detail and documentation on another section of Richard Wendling's site. The link and address is found below:

    http://www.bearfactsspecialistreport.com/Specialist%20Information.htm

    If you are as serious an investor as Richard and myself, you'll want to study this carefully and learn all you can. There are indicators, clues and charts that help us to see what these market insiders, the so-called "smart money" are currently up to. Their "activities", as the late Richard Ney called their strategies, are the key to staying out of harms way or to riding the markets higher, or shorting the markets and making money on the way down.

    We are working on a brand new web site and a completely unique "guidance system" that will inform, educate and awaken stock market investors to the realities and the vast opportunities that are right under our noses everyday. Stay tuned. As soon as it's launched we will let you know and you'll be among the first who will have the chance to profit from "Stock Investor Insights" that very few possess. 

    Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please remember investments can fall as well as rise. And they will! - Advanced Investor Technologies LLC accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this content.




    Disclosure: I'm still long some IAG,GG, CSCO
    Jan 09 5:25 PM | Link | Comment!
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