Bill’s Current Thinking: February 16, 2017
  • February 16, 2017 08:04 am
  • by Bill Cara

Very soon now, I will be announcing the Greenfield Decision Support System (or GDSS for short). This is a complex computer system that will help me publish much more frequently and manage client accounts much more effectively.

 

In writing some algorithms and report specifications this week, I took the opportunity to see if my logical approach to trading, as expressed in my writing, would hold up under stress testing by computer. So, I reverted to my writing this past summer, at least to a few blogs where I had opined my “current thinking” that might have led to investment decisions.

 

In June-July 2016, we all saw that the US equity market was under a lot of selling pressure. While probably 80% of the talking heads had joined in a communal voice to discourage new buying, I was writing words, much like I have in the past, to remind people that the market is a game that plays people. I said it was important not to get played.

 

On June 24, with the Dow 30 index dropping quickly, I picked a level (“just north of 17000) where I opined the bleeding would stop. I wrote, “Buy. Don’t sell” or something to that effect. At the end of the first week of July, in two short weeks that followed, I noted that the Dow 30 index was up +1000 points.

 

Still, we buy stocks; so I threw out some ideas in my blogs last summer.

 

On June 16, I wrote that I believed the RSX VanEck Russia ETF at $16.84 could soar 50% within a year. Eight months later, RSX had climbed almost 30% to about $22.

 

Then, on July 10, I wrote that the Airline stocks, which had been under selling pressure, would reverse course and with the corporate revenues and earnings to be reported that following week, I felt there was an opportunity for investors to get aboard. In a few months, the share prices of the companies I listed had all done well. United had flown from $42 to $75, Spirit from $45 to $60, American from $30 to $50, Copa from $60 to over $100, JetBlue from $17 to $23 and Delta from $36 to $52.

 

On July 30, I wrote that I liked the oil refining company Valero at $52.28. In a few months, VLO had jumped +28%.

 

These are not penny stocks as you know, but the gains were extraordinary.

 

Am I happy about all this? The short answer is “no.” The summer of 2016 was a particularly difficult one for me, which is only now getting straightened out. I’m referring to my doubts about a computer project that to that point I had invested 18 months and far too many dollars, without the expected results.

 

Last summer, facing an onslaught of computer trading from the world’s largest financial companies and central banks, without adequate tools to support me, I felt I was making decisions I would not normally have made.

 

But, as some of you know, if there is one facet of my life that defines me is that I am usually early into the game and not a quitter when the prospects look bleak.

 

Last summer, I was going through one of the most difficult times in my life because I needed computer programs that would put me into a personal comfort zone of knowing that every decision I made I could both invest in and write about in confidence, day in and day out.

 

I was unable to do that. In fact, my days back then were filled with anxiety.

 

Today, some eight months later, I have friends who chide me for what they think is the good life, but who are not aware that my computer project is keeping me working 70 hours a week, bringing it to the conclusion I had in mind when I started.

 

Until quite recently, things had not changed much. My associates who have been receiving emails from me at 2, 3 and 4am obviously know that I am not sleeping well. My wife and I arrived in Cuba on October 20, where you know the weather is glorious in winter. But, you probably don’t know that we have been to a swimming pool just once and have not been to any of these wonderful beaches at all. Seldom do we venture into Old Havana now for sight-seeing and to enjoy our favorite restaurants. I am not complaining however because, finally, my objective in finishing my huge database system is nearly complete. Finally.

 

Of course, my IT team now numbers eight. Many others from the past are no longer involved. The team I now have, I’m pleased to say, is THE TEAM who know that they will be making what we have today better, week after week, for many years to come. Life for all of us – including you, the readers — is about to change.

 

About the market today, I am quickly forming views that, along with sore eyes, comes from reviewing 4000 charts a day, sometimes more. This routine is possible because I have the database organized in about 500 peer groups presented in slideshow format. A month ago, I could not attempt to do more than maybe 3% of what I now do.

 

A 30 times improvement speaks volumes about productivity, something too few people have managed to discover in this country for reasons I’m not going to get into again. I will say that if I could buy Visine in any of the pharmacies here in this city of 2.2 million people, I’m sure my personal productivity would go even higher.

 

Every day now I review specific data and charts of stocks, ETFs, bonds, mutual funds, indexes, commodities, and currencies from over 50 countries, in the order and format I want to see it, which is the key. Finally, I can again feel the rhythm of the market, people acting like people.

 

We still need to finish some decision algorithms and report formats, but we will; so, publishing at least will soon become fun again.

 

Oh, there is so much I plan to write about. When I get busy doing that you’ll know I am back in a happy place.

 

All the best,

 

/Bill


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