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Joseph P. Porter
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I am a retired college faculty in Philosophy, with specializations in Ethics, Socio-political Theory and Rational Choice/Decision Theory. My teaching focus was on Business Ethics, Medical Ethics and Logic. After retirement I freelanced as a Grant Writer/Fund Raising Consultant. I have taught at... More
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Joseph P. Porter's Instablog
  • Dogging The Markets: Week 30 5 comments
    Jul 28, 2013 5:15 PM

    The past two months have been "interesting" to say the least. At least one of my colleagues believes the market is headed for a significant drop, and Zacks has started cautioning about August.

    Nothing like trying to get a panic started, is there?

    The problem is, the market has vacillated since mid-May. This may be nothing more than some resistance to any momentum to keep moving into record territory; it may also be signaling underlying concerns about the sustainability of such high prices, especially in the face of mediocre performance in most market sectors.

    I will stick with my belief that this is the "correction" that people had been worrying about since March and April.

    I am also contemplating a new set of stop losses on my holdings. It can't hurt, and it's free.

    The Dow numbers:

    (click to enlarge)

    The Pedigrees are up, but only marginally - total yield is 20.40%, up from last week's 19.97%. Cisco Systems (CSCO) and McDonald's Corporation (MCD) both dropped a little, while IBM (IBM) gained about $4.00 per share. Other companies had only modest changes in price.

    What I find worrisome is that the share yield for the Pedigrees is 18.67% YTD, putting it behind the Dow Jones (18.73%) and DIA (18.82%). We're not talking significant differences, but that quality companies are starting to trail the index I find -as I said - worrisome.

    Perhaps more worrisome is the situation the Dogs are in. The team as a whole is up 100 BPS over last week, but more and more of the success is due to Hewlett-Packard Co. (HPQ), with a total yield of 84.33%. There are some rumblings around questioning whether HP can maintain its market position - its products are doing fair, but it seems to be stumbling into the cloud market, and it offers no meaningful phone product. Acquiring Nokia (NOK) would be a nice move for them, particularly since Microsoft Corp. (MSFT) has pretty much scrapped any plans it may (or may not) have had in that direction.

    How important is HP to the Dogs? Factoring it out of the team, the Dogs have a share yield of 17.86%. Not very encouraging.

    The S&P numbers:

    (click to enlarge)

    Here the Pedigrees lost about 50 BPS, while the Dogs gained almost 40 BPS. All things considered, no significant change in their standing vis a vis one another. Seagate Technology PLC (STX) took it on the chin, dropping $6.50 from last week, and KLA-Tecor Corporation (KLAC) took a substantial hit. Fortunately for the Pedigrees, Eli LIlly & Co. (LLY) increased by about $2.80. Overall, the Pedigrees were underperformers last week.

    For the Dogs, however, R.R. Donnelley & Sons (RRD) continues to run roughshod over everyone, coming in second only to the Dow's HP. Donnelley's performance was offset by Reynolds American (RAI), which dropped 560 BPS +.

    As with the Dogs of the Dow, the value of Donnelley to the Dogs of the S&P is substantial. Factoring it out leaves the Dogs with a share yield of 2.64%. Ouch!

    If there is an advantage to the Pedigree teams, it would be that, on the whole, all stocks in the portfolios are performing fairly comparably (with a few exceptions), with no stock really standing out the way HP and Donnelley stand out in their respective Dog teams.

    Disclosure: I am long PFE.

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Comments (5)
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  • Miz Magic DiviDogs
    , contributor
    Comments (3994) | Send Message
     
    Maybe the Dogs are just taking a summer vacation. ;>

     

    Miz
    29 Jul 2013, 04:29 PM Reply Like
  • Joseph P. Porter
    , contributor
    Comments (643) | Send Message
     
    Author’s reply » No no no. No vacations. If HP and Donnelley can put up the big numbers, everyone else ought to do their part, too. They can take their vacations after December 31, when I adjust the teams. Hey! I'll let them take Christmas week off.

     

    How are your Dogs doing?

     

    jp
    29 Jul 2013, 04:54 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (3994) | Send Message
     
    LOL! Man, you're tough! Only one week vacation. :)

     

    From the tracking portfolios here on SA, they're doing wonderfully. I need to catch up and do a recap, though. Been way behind while moving this summer. But it sure is fun playing in the new pool every evening with the dogs (the real kind). :)

     

    Miz
    29 Jul 2013, 05:05 PM Reply Like
  • Joseph P. Porter
    , contributor
    Comments (643) | Send Message
     
    Author’s reply » Yeah, I know how real life gets in the way of writing. I haven't put much out there recently but for two Small Cap Insights and a couple of blogs for TMF - hardly have time for my weekly updates.

     

    Have fun in the pool! I bet the dogs just love it, too.

     

    jp
    29 Jul 2013, 05:14 PM Reply Like
  • Miz Magic DiviDogs
    , contributor
    Comments (3994) | Send Message
     
    We do, we do! The dogs surprised me, they turned into real poolaholics. I knew one loved the water, but now the other 2 are just as enthusiastic. Best part is that they run around like crazy, jump in and out and swim like crazy, and get lots of vigorous exercise, while I get to swim around and throw stuff for them, and get some nice, relaxing, moderate exercise. Win-win. :)

     

    Miz
    29 Jul 2013, 05:26 PM Reply Like
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