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2005-03-25 Report

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Bill's Portfolio:

This was the week my Lexar Media (NDQ: LEXR) idea of February 16 worked out and I got to ring the bell many times, due to a gain of 80 percent in the stock, from $3.88 to $7.00 (Thursday afternoon).

Lexar came off on Thursday afternoon with the general market weakness, but after the close, the company reported that additional damages were awarded in the court trial, making it one of the biggest trial awards in the history of intellectual property theft cases.

I suspect there will be another run-up on Monday after the shorts (those who are still alive) realize this company is now (1) litigation-free, (2) technology rich, and (3) extremely cash rich.

There will be a few more bells rung on LEXR.

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It was also a good week in that my (temporary) bearishness in the broad equity and bond market has borne fruit. But, you know, some people like to shoot the messenger.

Over a ten-or-twenty year time horizon, I am 50:50 bearish to bullish in the equity markets. However, because cyclic bear phases are typically shorter in duration than bull phases " as stock prices tend to fall faster than they rise, and rising stock prices mirror corporate growth within a constantly growing economic environment " you might wonder why I am not, say, 75 or 80 percent bullish.

The reason is simple; cycle tops and bottoms typically do not occur in recognizable spike patterns. At the topping-out of a bullish cycle, the sell-side from Humungous Bank & Broker is still giving you lots of product to buy and plenty of reasons to buy it. You might even say there is a lot of smoke being blown at these critical times in the market.

Actually if you look it up, you will see that in March 2000, the precise point I was telling my deaf business partners (of the time) that the broad market had turned distinctly bearish, the percentage of sell recommendations on Wall Street for the Dow 30 stocks was about 1.5 pct.

The "advice" you were getting then " when the market Gnomes were distributing " was 98.5 pct buy or hold.

Readers can tell by now that I don't fly with the crowd. When eagles turn to turkeys, I separate myself from the flock. Moreover, I have to call my portfolio the way it is.

Besides, when equity markets are priced abnormally high, and I am detecting a high-risk buy coming into play, I recommend that you "accumulate" rather than outright "buy". The reason for that is to play the percentages.

The percentages are high that put options will expire worthless, so rather than buy stock at or near a cycle top, I'll write a (relatively short duration) put option of a stock of a company that I wouldn't mind owning in my portfolio if prices came down faster than I expected (and the stock was "put" to me). Usually I just pick up the option premium in these cases.

But the bottom of a market cycle typically mirrors a top, and since I have no interest in trying to pick an exact bottom, I'll write put options there too. In these cases, however, I am actually looking to accumulate the stock by having it "put" to me.

If I am smart about it, I'll have just one stock put to me for every three I write naked put options on. Hence, I will earn the option premium on the other two as well, which really reduces my cost base on the one I do end up buying.

But at a cycle top (as per my analysis), where I believe market prices will decline, I call that a low-risk sell zone. At those times, I tend to buy puts (naked), or sell most of the stocks in my portfolio, or write calls on the core stock positions of the few sectors that are out-performing the broad markets then. Today the call-writes in the Dow 30 would be (arguably) in XOM and AA.

In the meantime, as the broad market is pulling back to who-knows-where, there are special situations that traders can follow, like Stelco (in a bankruptcy re-organization) or Lexar Media (in a court trial), for example, but this type of "special situation" trading is speculating on exogenous events rather than investing based on capital markets analysis.

Trading is trading, whether it be speculative-based, capital markets-based or what Warren Buffet does, which is to buy controlling positions in a few companies, which he typically does based on discounted cash flow analysis.

As I say, it's different strokes for different folks.

As a securities trader, even after you have a clear understanding of what kind of trading meets your objectives, including knowing what makes you comfortable, sometimes, in the pursuit of your goals, you have to accept the market reality that there are ‘courses for horses'.

In that regard, because the nature of the equity market often changes quite dramatically, you have to understand the importance of asset allocation, sector analysis and geographic markets. These investing concepts are well described on free websites like Yahoo Finance.

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ETF:

The widespread destruction to capital wealth in the equity markets continued this week across most sectors including energy. The only lights " although quite dim " showed up in Health Care (sector 35) and Technology (sector 45).

But when the BEST sector ETF is up just 0.47 percent on the week, you know the bulls have had a bad one. Not to rub it in, but JUST HOW BAD WAS IT?

The following ETF charts are for sectors 10 (energy: IYE), 15 (basic materials: IYM), 20 (industrial: IYJ), 25 (consumer discretionary: XLY), 30 (consumer staples: XLP), 35 (healthcare: IYH), 40 (financial: IYG), 45 (technology: IGM, IGV and IGW), 50 (telecom: IYZ) and 55 (utilities: IDU).

The hourly data ETF charts in the following interactive links are for the 10 industry sectors. I have taken a screen shot of some of them.

10 (energy: IYE, XLE, VDE, and IXC)

Last week I advised: "Don't chase the oils, if they start to run. The risk is clearly to the downside." If you were paying attention to the master, you avoided a loss of 4.00 pct on the week. You can say "Ouch!" if you wish. With me it was more of the same old, same old -- ka-ching!

The biggest price drop to the Oils was Tuesday afternoon, taking the ETF back to February prices. I hope you have been listening. They don't call me "Wizard" for no good reason.

15 (basic materials: IYM, XLB, and VAW)

It's been a tough three weeks now for the Basic Materials sector, especially the gold group.

The XLB was down 1.88 pct Week over Week. I wish the golds were down as much!

20 (industrial: IYJ, XLI, VIS, and IYT)

It was a down week for the industrial goods stocks too, although the XLI was down just 0.36 percent. So let's call it "mixed trading" " thanks to GE's Jeff Immelt who seems to be carrying Corporate America and the Dow 30 on his back.

25 (consumer discretionary: XLY and VCR)

Last week I wrote: "Even with the rally on the 14th, which the bulls crocked up by sending their best TH's to CNBC to tell us how great consumer discretionary sales have been. Sadly untrue. The rest of the week was a downer." Well, this one was too " down 1.41 pct for the XLY.

30 (consumer staples: XLP and VDC)

The Consumer Staples stocks, as represented by the XLP, were down 0.52 pct in mixed trading. They had a good day Wednesday as the last of the bullish money managers decided to go defensive into consumer staples and healthcare that day. Bad news here, though; XLP was still down on the week.

35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)

A week ago I wrote that: "Cramer told us to step into some of the healthcare leaders at the open Friday. Maybe he was selling along with the rest of Wall Street? Nothing going on here. Straight down." Well, chock one up (finally) to CNBC's MadMoney Jim Cramer. The IYH healthcare ETF was up (a dazzling?) 0.47 pct W/W.

But IYH weakened Thursday afternoon going into the close, and I suspect it will be a down week next week.

40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)

Last week I thought I was really struggling with my writing, which was a natural result of ("n number of") Guinnesses at the St. Paddy's Day party.

But then I re-read this passage and feel it may have been my best one in a whole year:

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"Wall Street loves the Financial sector. For the life of me, I can't understand why? These companies have got us totally insured, totally invested, totally in hock, going to Vegas or buying lottery tickets to try to win it back, totally into class action lawsuits to try to recover damages, and that's just half the story.

During the 20-year disinflation cycle of the 80s and 90s, where Mom & Pop jumped headlong into financial assets, causing the biggest bull market ever, even the good guys at Humungous Bank & Broker (and there are a few) thought they were creating real wealth by buying and selling x's and o's on their computer screens. Not!

Enron played the same game. Buy from Jimmy at 2 and sell to Joe for 3; buy from Mary at 5 and sell to Jane at 6. And on and on, until California turned the lights out.

When do reasonably intelligent people start to get it?

I mean, how many Enrons does the world have to endure before people understand that trading paper from this guy to that guy is a game of musical chairs? At some point, the music stops.

Where's the beef?

But Wall Street knows that you know that to start a rally, Humungous Bank & Broker stock has to be among the leaders. So the TH's tried to kick start something on Monday the 14th, but you and I obviously didn't fall for the crapola because Tuesday through Friday saw acceleration to the downside in this sector. End of the day. Turn out the lights. Elevator down."

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Here's the beef; it's in my analysis and writing! This week the XLF Financial sector 40 ETF was down 3.00 percent. This week, yes.

You might say that the public, as well as Alan Greenspan, has started to get the message that big bank trading room speculation is no good for your wealth " and maybe your health for that matter, if this bear doesn't relax it's claws.

45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, and MTK)

Don't ask me why the IGM was up 0.21 pct on the week. Maybe smart traders really do see all the high tech that goes into a GM automobile? Geez, it's tough not to rub it in.

But, as I wrote a week ago, "until the yield spread gets back to a normally sloping 300 basis points, it'll be none but the brave who venture into tech." For this discussion, please see my notes headed, Bonds.

50 (telecom: IYZ, VOX and IXP)

It was another bad week for telecommunication services. No matter how hard this sector 50 has been hurt, what's another 0.92 percent loss on the week for the IYZ? Same old; same old.

The message here has something to do with an economic engine in the U.S. that is not cranking as fast as say Larry Kudlow's mouth.

Slap my fingers; did I really write that?

55 (utilities: IDU, XLU, and VPU)

We have come to the end of the list, unfortunately. Sector 55 is the last.

And, what did I write last week about Utilities? Pardon me but I think it was: "The Utility sector seems to be trying to hold up, looking for a glimmer of light that long-term interest rates are not headed north. But, alas, we are fortunate to have enough sunlight to pack our suitcase for the trip south. Expecting to leave any day now."

Would a loss of 1.3 pct in the XLU this past week qualify as a vacation? Or possibly, by "south", did I really not mean Florida, but Brazil?

How bad can this get? For an answer, just look at the 30-year U.S. Treasury bond yields. Forget interest rates; yields are not interest rates. Interest rates are what Humungous Bank & Broker decide you have to pay based on their assessment of your credit standing (and theirs, although they don't tell you that). Yield, on the other hand, is the flip side to bond prices.

And what happens to the stocks of Utility companies that are flush with long bonds? They suffer along with falling bond prices. That's why they're called interest-sensitive stocks, although as I say, yield-bearing instrument holding company stocks " like insurance, utilities, and stodgy old banks -- are the ones to suffer when bond prices fall.

XLU took a big dive Tuesday afternoon along with the oils. You see, it's got a lot to do with the speculative frenzy (or the ending of it) that has been going on. But, more on that later.

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Bonds:

There was a definite weakening this week in the bond market as yields moved up across the board, but the yield curve only moved from 215 basis points to 216 bp.

Everybody was awaiting the Fed move on Tuesday, expecting a 25 bp raise and no change to the guidance, which they got. But something funny happened, and not surprisingly nobody I saw or read put an accurate spin on things. Not even Kudlow, not that he's often right.

Here's what happened, but before I say it, hide the kids if you don't want them to hear you screaming: the word is STAGFLATION.

How do I know? Simply because when the whole yield curve from short end to long end rises in tandem, and the spread is much closer to 200 bp than 300 bp, that's the time serious holders of stocks and bonds want to " let us say " be ill.

That's when interest rates and inflation rates are both rising faster than economic growth rates, and that's not good.

From the U.S. Fixed Income (Bonds) Yield Table at Yahoo Finance, the 30-year T-Bond is now yielding 4.84 percent, up from 4.81 pct, while the 3-month T-bills moved up on the week, to 2.68 from 2.65 pct.

Last week I asked: "Do I hear 5? 5, anybody? Funny (sad actually), but when it's 57 oil, I'm hearing TH's ask about 80. But, when do you hear these Wall Streeters talk about 5 or 5.5 percent yields on the long bonds? The answer is never, and you wanna know why? Because collapsing bond prices take down utility stocks; they take down real estate, they take down banks " yes the same employers of those TH's you see parading to CNBC because they look "sooo good" on camera. Yet interest rates are rising. Mom & Pop are having a tough time carrying the margin debt just like they are having a tough time paying the credit card interest, and the home mortgage ARM. But, Wall Street doesn't want to talk about it."

Equity investors have to learn that the fixed income markets, and in particular the bond market, are tremendously powerful capital markets.

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Commodities:

Commodity prices are no longer flying. The CRB index dropped 3.86 pct W/W.

Is that the end of commodity and real estate price speculation in the U.S.? Did the Fed break their backs when he put a lot of pressure on Citigroup and others in the Humungous Bank & Broker peer group to watch the easy credit, and to change the rules on the number of speculative condo units one person can hold, restricting the number to just four, which must be quite a shock to those who are holding ten to twenty or more, and face a prospect of some five months average to roll them over.

What happens when the music stops in the musical chairs game? It comes to a halt " just like the hot money speculators are starting to experience. Now the heat's on them.

Tough. Get a job.

After setting a $CRB record high last week at 323.33, up from the prior week's record high of 318.82, the index closed this week (just four days) at 306.88. Bam! That's how these things go.

I told you that I was awaiting lower oil prices. This week, crude oil dropped to a $54.84 close, and a low of $53.40. What happened to the $80 oil that T. Boone P would have you believe in?

For the past month, I have been writing: "In my database of the energy sector (GICS 10), I have 59 oil & gas stocks broken into six sub-industry groups. As the oil market is shifting gears, I will continue to post these charts in the Week In Review until oil becomes less of a market driver:"

10101010 Oil & Gas Drilling Drilling contractors or owners of drilling rigs that contract their services for drilling wells.

10101020 Oil & Gas Equipment & Services Equipment manufacturers, including drilling rigs and equipment, and providers of supplies and services to companies that drill, evaluate and complete oil & gas wells.

10102010 Integrated Oil & Gas Integrated oil companies engaged in the exploration & production of oil and gas, as well as at least one other significant activity in either refining, marketing and transportation, or chemicals.

10102010 additional list.

10102020 Oil & Gas Exploration & Production Companies engaged in the exploration and production of oil and gas not classified elsewhere.

10102020 additional list.

10102030 Oil & Gas Refining & Marketing Companies engaged in the refining and marketing of oil, gas and/or refined products not classified in the Integrated Oil & Gas or Independent Power Producers & Energy Traders Sub-Industries.

10102040 Oil & Gas Storage & Transport Companies in storage and/or transportation of oil, gas and/or refined products. Includes diversified midstream natural gas companies facing competitive markets, oil and refined product pipelines, coal slurry pipelines and oil & gas shipping companies.

As you can see, the stock prices are falling. And you do know that stock prices move up and down before the commodity price.

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Gold:

Last week I wrote: "For a forecast on gold prices, I wrote that it would be two steps forward and one back. This was a week for the "one back". Actually I didn't quite get it right. It was another one back this week for the gold bullion and stocks. Ouch!

And I was having so much fun too.

The Philly Gold & Silver stock index had a REAL disappointing week, down 7.54 percent after a loss of 1.32 pct in the prior week. The index is now down to 92.97 from 100.55. Worse, it's now below the 50-day Moving Average of 95.83 " and well below the more important 40-week MA of 96.55.

And just as disconcerting, the TSE gold stocks index is off 6.92 pct on the week. And, bullion fell just 3.30 pct!!

I've already told you that equity price moves precede the price for the physical commodity. So that portends a further drop for gold bullion " unless my evening bedside prayer starts to take effect in the marketplace.

Bullion is down to $424.85 from $439.35 last week. It's below the 50-da MA ($428.52) but still (thankfully) holding above the 50-week MA ($421.86).

Gold bullion and gold shares either turn up next week, and the USD starts to lose steam, or I don't know what I'll do. Get a new broomstick maybe.

For those who really care, here's my assessment: the mid-February bull move in gold stocks was premature. It was what I call a high-risk buy. So too was the correlated move in the USD recently, which took down gold prices. The gold stocks have fallen to low-risk buying territory and the USD is ready to weaken again " technically speaking. So, I say, hang in, smoke ‘em if you got ‘em, and go to the store for more if you don't.

The next section (on Forex) will add to my rationale.

This interactive chart shows the bad week for the Gold Bullion index closing at $424.85, to the sound of both of Kudlow's hands clapping.

The Toronto Exchange-listed goldminer ETF is starting to look attractive. This is the iUnits S&P/TSX Capped Gold Index Fund, which trades under the ticker symbol TSE:XGD.

Here are the interactive charts of the leading goldminers. As I said two weeks ago, immediately preceding the downturn: "The fundamentals are lagging the prices at this point, so there are risks. If you see a distinct change in the USD forex market you may wish to step aside, which you can do by writing calls on the gold stocks you want to continue to hold for the long-term, and to sell the rest. Active traders enjoy these markets, but I can certainly appreciate the nervousness of the average investor. In any event, you do have to watch the USD closely and try not to get faked out.

I actually think I got it right.

List #1

List #2

List #3

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Forex:

The U.S. Dollar had a bullish move on the week of 2.51 percent, and that followed a move up the previous Friday of 0.38 pct, so the past five trading days has seen a 2.9 pct rally in the USD.

Still, at 84.14 (up from 82.12), the USD remains under its 40-week MA (85.30). Somehow, I don't believe the March 7-11 low of 81.28 represents a cycle low and that the USD is going into a new bull phase. As long as politicians in Washington continue to spend like drunken sailors, and San Francisco real estate speculators, I have to believe that December's low for the USD of 80.39 is going to be tested.

The only thought I have in opposition is that the Bush Administration is able to convince France, Germany, Italy and Spain to help foot the bill for the U.S. action in the Middle East, so that the twin deficits pressure is relieved. So far, I don't see the Europeans blinking, and I just know they would be shaking in their boots at the thought of having to raise interest rates more than they already have in Europe. That would surely lead to recession as their economies are barely in positive territory as it is.

This is where the landscape gets tricky though. If the Europeans do hike interest rates, bond investors would likely start flowing money back their way, taking the USD down again.

But, at the end of the day, I really think that global investors are more worried about the twin deficit issue in the U.S., and that more than anything is going to continue pushing down against the USD " unless the Europeans come in and help.

The $XEU was down 2.66 percent on the week to 129.54. What the heck happened to my forecast of a 135 cross-rate (going to 140)?

The answer here is simple: the Eurozone economy is in the tank " even worse than the Americans.

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International Equities:

On Tuesday in New York, there was a huge sell off of most of the internation market ETF's like the EWJ (Japan), the EWU (U.K.), and the EWC (Canada).

The Japanese market looks like it could out-perform the rest in the next week or so. The others, and maybe the EWJ too, will likely follow the Dow 30 south.

U.K. market ETF: EWU

Canadian market ETF: EWC

Let's have a look at the hourly data charts:

(Japan, Taiwan, Hong Kong, Singapore)
(U.K., Germany, France, Italy)
(Canada, Mexico, Brazil, Australia).

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U.S. Equities:

Three weeks ago, I wrote: "There would need to be a convergence of very positive key developments to provide the catalyst needed to take the broad equity market higher by say four percent in the next six to nine months (say from Dow 10,940 to 11.380)... I really believe that the risks of a move down are significantly greater than a move up. I see a twelve pct move down (from Dow 10,940 to 9,630) as being more likely than a four percent move up. That's not a good risk/reward ratio. The equity market losses have started and I suspect they will continue next week, across the board, in recognition that interest rates are rising, which is causing a readjustment of price-to-earnings multiples in the marketplace."

Now, after three weeks, the Dow 30 average is down from 10,940 to 10.442, which is a 500-point loss, or "4.6 percent. Ka-ching!!

That really is a multiple bell ringer, and the loss to the broad market averages may just be starting.

Of that, I'm not so sure, but I do believe that next week will be the bearer of more bad news to the bulls.

Here is the 60-minute data chart of the Dow, S&P 500, Nasdaq Composite, and Russell 2000 (small cap) indexes.

As you know, I look at the weekly performance for the individual Dow 30 stocks and try to see where the big money is moving. This week, which was a bad one for most stocks, there were just six Dow 30 components that gained, and only three of them over 1.0 pct, while there were eight down from 3.19 pct to 8.54 pct in the past week (four days only).

Of those that rallied, GM was up 3.35 pct (but I won't gloat), JNJ +1.64 pct (because Cramer is still buying :-)), and GE +1.02 pct (on higher guidance). IBM (on some silly story they have morphed into something new and improved) was up +0.92 pct. Drug stocks PFE (+0.62) and MRK (+0.47) were up probably because half of Wall street is now addicted to pain-killers. Pop ‘em if you can afford ‘em.

But the loser board was quite a sight to behold. The eight biggest losers in the Dow ended the four-day trading week (I was going to say work week, but I cannot tell a lie) down about an average 4 percent, with a combined market cap of $1.246 trillion.

So, if anybody's counting, just these eight haircuts cost $50 billion. Kinda looks like a Pentagon purchasing agent gone amok at Boeing.

But, hey, it's only money, right?

WMT was down 3.19 pct, HON down 3.28 pct, CAT down 3.34 pct, JPM down 3.37 pct, AA down 3.80 pct, XOM (XOM!!) down 3.98 pct, AXP down 4.14 pct, C down 5.76 pct, and AIG down 8.54 pct, this week. This week, yes.

And some people didn't want me to be the bearer of bad news on March 2.

You remember, where I was quoted by the Soothsayer of Omaha: "Throwing Down the Gauntlet : Bill Cara is throwing down the gauntlet! Bill states that we have reached the cycle high on the Dow 30 at 10,869. Bill adds some advice as well, "Sell stocks. Sell bonds. Clear your debts, including short-term mortgages. Accumulate cash. Buy gold. And, if you've got a job, hope you can keep it." Kind of scary talk coming from Mr. Cara."

You can do this table yourself by copying the following list of the Dow 30 stocks and entering them in the window for "Summaries" at Investertech.com.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG SBC UTX VZ WMT XOM

After you bring up the list, click on the Performance tab. To sort for the relative price performance for any recent period, you just need to click on the column header of the period that interests you.

You can also sort the Dow 30 by PE multiples, where you will note that some of them have ambitions exceeding their reach, particularly in a rising interest-rate environment, which is a time that serious investors ratchet down their PE multiple expectations.

Here are the Dow charts from Investertech.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

For each of the individual Dow 30 component issues, using Investertech.com, you can look at the different time frames from intra-day to monthly data charts, and see the technical indicators at the points where trends and cycles reverse.

(AA) (AA) (Here is the Jan. 21 Value Line report on AA: next one is due Apr. 22)

(AIG) (AIG) (Here is the Feb. 25 Value Line report on AIG: next one is due May 27)

(AXP) (AXP) (Here is the Feb. 25 Value Line report on AXP: next one is due May 27)

(BA) (BA) (Here is the Dec. 24 Value Line report on BA: next one is due Mar. 25, today)

(C) (C) (Here is the Feb. 25 Value Line report on C: next one is due May 27)

(CAT) (CAT) (Here is the Jan. 28 Value Line report on CAT: next one is due Apr. 29)

(DD) (DD) (Here is the Jan. 21 Value Line report on DD: next one is due Apr. 22)

(DIS) (DIS) (Here is the Feb. 18 Value Line report on DIS: next one is due May 20)

(GE) (GE) (Here is the Jan. 14 Value Line report on GE: next one is due Apr. 15)

(GM) (GM) (Here is the March 4 Value Line report on GM: next one is due Jun. 3)

(HD) (HD) (Here is the Jan. 7 Value Line report on HD: next one is due Apr. 8)

(HON) (HON) (Here is the Jan. 28 Value Line report on HON: next one is due Apr. 29)

(HPQ) (HPQ) (Here is the Jan. 14 Value Line report on HPQ: next one is due Apr. 15)

(IBM) (IBM) (Here is the Jan. 14 Value Line report on IBM: next one is due Apr. 15)

(INTC) (INTC) (Here is the Jan. 14 Value Line report on INTC: next one is due Apr. 15)

(JNJ) (JNJ) (Here is the Mar. 4 Value Line report on JNJ: next one is due Jun. 3)

(JPM) (JPM) (Here is the Feb. 25 Value Line report on JPM: next one is due May 27)

(KO) (KO) (Here is the Feb. 4 Value Line report on KO: next one is due May 6)

(MCD) (MCD) (Here is the March 11 Value Line report on MCD: next one is due Jun. 10)

(MMM) (MMM) (Here is the Feb. 18 Value Line report on MMM: next one is due May 20)

(MO) (MO) (Here is the Feb. 4 Value Line report on MO: next one is due May 6)

(MRK) (MRK) (Here is the Jan. 21 Value Line report on MRK: next one is due Apr. 22)

(MSFT) (MSFT) (Here is the Feb. 25 Value Line report on MSFT: next one is due May 27)

(PFE) (PFE) (Here is the Jan. 21 Value Line report on PFE: next one is due Apr. 22)

(PG) (PG) (Here is the Jan. 7 Value Line report on PG: next one is due Apr. 8)

(SBC) (SBC) (Here is the Dec. 31 Value Line report on SBC: next one is due Apr. 1)

(UTX) (UTX) (Here is the Jan. 28 Value Line report on UTX: next one is due Apr. 29)

(VZ) (VZ) (Here is the Dec. 31 Value Line report on VZ: next one is due Apr. 1)

(WMT) (WMT) (Here is the Feb. 11 Value Line report on WMT: next one is due May 13)

(XOM) (XOM) (Here is the March 18 Value Line report on XOM: next one is due Jun. 17)

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Each month I am driven to improve this personal (non-commercial) blog and website. Starting sometime in April, I'm going to be commenting weekly on individual Dow 30 components as to my buy-hold-or-sell rating. Soon after that, I will publish my own Dow 30 Investment Report to coincide with the Value Line report.

So, in my eyes, at least, it will continue to get better.

My belief is that if any securities trader just stuck to the Dow 30 stocks, buying and selling on technical indicators, and using a put and call option tactics, their annual portfolio performance would rank in the top decile (top 10 pct) of all professional money managers.

That is a bold statement to make; but bear in mind that (i) I was formerly a pro money manager, (2) anybody can read the Morningstar summaries that illustrate how 80 pct of fund managers under-perform the broad market indexes, and (3) most equity traders today, including professionals, are so overcome by the emotional push-and-pull of the buy-side, and by the media's extreme reporting of "news" that they lose focus of what is truly important, which is to independently and objectively trade securities based on facts with an appreciation of the cause-and-effect capital markets trading paradigm.

That may be a mouthful, but when you break it all down, you will see the common sense to it. And, after a few months of practicing this discipline, you will begin to see how much a rip-off the sell-side is, and why you have been losing capital over the years to your "advisors" at Humungous Bank & Broker.

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I had some fun writing this blog; it took less time too, as I was more clear-headed.

Enjoy your Easter weekend.

On Sunday, I'm going Polish. If all goes well, I will return to blogging on Monday. That is, after I return from visiting my Mom. It's her birthday Sunday, and she's hanging in.

BCara@BillCara.com