August 5, 2014 **Signal Change**

Karl's BorB Report Logo Headingcaution

THE BULL OR BEAR DAILY REPORT

By: Karl Hormann

 (BTI:  Bull or Bear Trend Indicator Signal)  Gains since Jan/2012: +22.84%

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NOTE: NEW MINI-TURBO PORTFOLIO (SEE BOTTOM OF NEWSLETTER).  RETURNED +70%+ in 2013; 

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BTI Signal:  CAUTION
**SIGNAL CHANGE**

**Liquidate BTI trading positions to 100% Cash on 9:30am open tomorrow**

(Using QQQ & IWM)

August 5th —  Another distribution day of institutional selling on higher volume has finally pushed our BTI Signal into a full Caution Mode.  This will have us going to 100% cash with only our BTI trading capital.  We continue to HOLD all Core Long Term holdings as we add to them systematically during these types of pull backs.

 

Today the Institute for Supply management said its services index rose to 58.7 last month, the highest since December 2005, from 56 in June. In this environment that means Janet Yellen will be raising interest rates and investors want out of stocks, for today at least. When the economy is strong stocks will continue to go up because earnings are rising. Yea I know, it makes no sense why professionals are selling. But then again, most times professionals are lagging indexes. So I’m not really surprised by their short term action.

 

In either case we respect the trends and currently we are in a bearish short term trend. If you have winners tighten up stops, if you have individual companies you bought, respect stop losses or tighten them up to even 3% trailing. Protect gains and cut losses early. If a Bull trend returns soon, we can always get back in. But use these dips to build up your Core holdings.  These are the times you start to go shopping.

 

Remember, 2/3’s of your portfolio should be long tem “Core Holdings” that you hold for your long term game plan. Make sure they  are diversified and some of them pay dividends. I list at the bottom of my newsletter and in my “how to diversify” tab, how I divide up my portfolio and some choices to pick from.  Let’s see if this market can hold up or if it deteriorates further.

Stay safe. We are in it for the long term, don’t worry so much about these short term moves.

 

(This is the shorter mid-week reports as I mentioned)

Full report posted on Saturday before 12 noon.

 

SIGNAL – Our BTI Signal has changed to “CAUTION” mode tonight. Our BTI System allocated funds will change to 100% CASH on tomorrow mornings 9:30 open. This trade is only for our BTI signal allocated funds. (I allocate 1/3 of my account to trading along with the BTI Signal.) The rest of the portfolio is made up of Long Term Core holdings which we do not sell, like IYM, Berkshire Hathaway (BRK.B), CVY, DVY, IWD, etc…   We continue to hold all Long Term CORE positions.

Short Term Trend Oscillator, Today:   .81

8/4: .84,      8/1: .84,     7/31: .90,     7/30: 1.01,     7/29: 1.03,     7/28: 1.06

 (.65 oversold to 1.6 overbought range)

 

Remember, I try to hold off on adding to any Long Term Core positions with cash you may have until the short term trend oscillator reaches under 1.0, bottoms and starts to rise again.  I have seen this indicator bottom at .98 and I have also seen it bottom at extreme selling in the past 15 months near .67.  So it’s up to you where you decide to nibble and add at your Core positions.  But as long as it’s near an oversold area I would not worry since these will be multi-year or decade holdings.  Just watch the short term trend to pick your spot.

 

Check out my many recommendation at the bottom of my report to get ideas on what you could pick from to diversify your portfolio.

http://www.usdebtclock.org/

*We continue to hold our Long Term Core holdings which should account for about 66-70% of your portfolio.*

 

Note:  My portfolio is made up of 70% Core long term positions with dividend paying ETF’s and stocks, Gold/Silver per my sample portfolio & the other 30% to my BTI Trend signal.

The 30% of my portfolio that is dedicated to the BTI signal I trade 50/50 between QQQ & IWM (Russell 2000 etf) so half of my position has less exposure to Apple and more exposure to smaller cap stocks.  IWM will usually appreciate higher during Bull markets that we expect to be continuing like the one at the moment. Depending on the size of your portfolio you can cut down your holdings to less until the funds grow or you continue to contribute to your savings/investment account.

** Any last minute evening Signal changes will be emailed to you by 7:30am the next morning via auto alert update.

 

GOLD/SILVER— I believe we are on the cusp of a bullish upside move.  I continue to watch and wait patiently with our precious metals holdings.  Just remember to keep your allocation of Gold/Silver and some miners to less than 20% of your portfolio.  We don’t know the future and don’t want to get over invested into any one sector.

 

With RISK CAPITAL, on June 6th, 2014 I took the little funds I wanted to gamble with and purchased a mix of 6 Royalty streaming companies.  They are listed below. I put equal money into each stock and in three years from now we’ll see how it plays out.  They say invest in what is most shunned and in my view this sector just reeks of hatred by the investment community.

Royalty Trust Companies:   (Group of 6 currently +15.04% as of 8/05 since we bought them.)

Is this the canary in the coal mine of much higher commodity prices to come? Maybe….

FNV,  GG,  RGLD,  SLW,  TCK,  VALE

 

(Royalty Streaming Basket Equity graph)

Good luck and remember, only 100% risk capital for these stocks.  Keep it to a minimum in your portfolio.  These positions I will not follow any money management rules.  I will just buy them and forget about them until 2017.  Then I’ll look back and see how they did. Like a lottery ticket. These are all good profitable companies, but I just want to own these as another sliver of my portfolio exposure to metals.

We continue to hold all our metals (20% maximum of our portfolio) and very very small mining positions if you have any.

Oil ETF complex I like: USO, XLE & IEZ.

 

Shopping list:

(New Bull trend as of last week and CEF crossing back over $15.20)

SLW Deep in the money Call Leaps. (I continue to hold)

SLW  (I continue to hold some shares)

SSRI, ANV, GDX, SIL, EXK, IAG,

Keep the total of any of these trades to under 3-5% of your portfolio value if you do decide to get involved.  See my sample sector allocation section of the web site to see how much you should have total exposure to Gold/Silver and miners.

 

FINAL THOUGHTS—  Full in-depth Reports posted on Saturday’s by 12 noon, about market conditions, the economy, market trends and what we should be doing to profit from this once in a lifetime liquidity driven Bull Market.  Stay tuned.

 

Everyone have a great weekend and I’ll see you all back here Monday by 8:45pm. (Weekday schedule)

Best regards,

Karl

The Bull or Bear Report

(Newsletters put out every evening before 8:30pm daily.  You will receive email notification once posted)

 

MARKET UPDATE:    

Dow:  Down -139.81  (-.84%) 16,429.47 (BULL:Caution)

Transports:  Down -89.55 (-1.10%) to 8,059.53

NASDAQ:  Down -31.05 (-.71%) to 4,352.84

S&P 500: Down -18.78 (-.97%) to 1,920.21

Gold:  December Gold Up +.90  (+.07%) to 1,289.80 (as of 6:00 pm EST.)

Silver:  September Silver Down -.363  (-1.79%) to 19.870 (as of 6:00 pm EST)

US Dollar Index:  Up +.185 (+.23%) to 81.590

Crude Oil Futures:  September Crude  +.24 (+.25%) to 97.62/barrel

Decliners beat Advancers (from 8K+ stocks) by: 5,004 decl. to 2,370 adv.

 

Our Recommended Popular Holdings

QQQ  Down -.58 (-.61%) to 94.74 as of 4:00 pm

IWM   Down -.22 (-.20%) to  111.44 (Russell 2000 etf)

IYM  Down -.84 (-.97%)  to 85.69 (Good long term Core position. Basic Materials etf)

MOO Down -.15 (-.28%) to 53.02   (Good Agriculture industry holding)

GDX   Up +.19 (+.73%) to 26.14 (Large Gold mining etf)

SIL   Down -.05 (-.36%) to 13.71  (diversified way to own the Silver miners.)

GLD  Up +.01 (+.01%) to 124.00  (or you can substitute with:  SGOL)

BRK.B:  Berkshire Hathaway’s Class B Shares. [12-18 month target:  $162.00]

July 31st at: $116.21,     Sept. 24th at:  $115.05,     Oct. 9th at:  $111.77   (Book Value: 1.36),      November $114.87,      December 7th at: $116.62,   Feb 5th 2014 at: $108.83,  Mar 5th 2014: $119.02  April 18th $127.18,        May 7th 127.50 ,                June 25th  127.13,           July 15th $128.45

**BRK.B IS A GREAT CORE HOLDING FOR LONG TERM AND FOR PEOPLE WITH LIMITED FUNDS THAT CAN ONLY HOLD A FEW POSITIONS.  BUY ON THE DIPS AND HOLD.  Berkshire is a great buy at a Book Value at under 1.1 to 1.2***

Other good diversified Conglomorates like Berkshire but a bit riskier are: LUK, Y, SEB & APLCY

iShares Russell 1000 Value ETF:  IWD  (pays 2% dividend)

       Oct 17:  $89.25,      Nov 21: $92.37,    Dec 28: $93.74  April 4: $96.43

 

Healthcare ETF’s below. (Great for Core position holdings)

XHS at $75.36 on 4/25/13 (Health Care Services etf. I like more.  Good Core holding)

IYH   at $100.00 on 4/25/13 (Health sector such as J&J, Pfizer, Amgen…, Dividend: 1.42%)

 

(CVY highly recommended for diversified safer yield)

CVY  Down -.26 (-1.03%) to 25.04  (start of year 24.71)

Div Yield 5.00%,  2014 YTD ETF performance: +1.33% (+ dividend yield)

2012 Return: +7.48% + 5% Dividend= +12.48%  (VERY GOOD)

2013 Return: +11.17 + 5% dividend=  +16.60%  (VERY GOOD)

DVY   (another great dividend earning etf)

IWD   (Russell 1000 Value Fund. Pays 1.9% dividend while giving you exposure to equity inflation)

VYM  (Blue Chip high yielding stocks etf)

XLE   (Energy Sector ETF.  Good on pull back’s for rising energy exposure. Pays +1.68% div.)

 

Extra Suggestions :

BGCP:  Target  $10.50  (Real Estate broker play) Dividend 6.7%+  (Stop close below $6.88)

EXG:   Target  $12.00 (Global High Income Fund) Dividend  10.22%  (Buy under $11.00 on dips)  we are up +13.68% since 7/15/13.

HMC  (Honda Motorsport):  Long, Target: $55.25; (Stay out under $32.50)  Pays 2.39% dividend

CHK (Chesapeake Energy): Target: $41.00  (stop: Stay out below $26.00)  Pays 1.24% Dividend)

HUN (Huntsman Corp):   Target:  $35.00  (stop: get out if below $24.10)

NYMT (NY Mortgage):  Buy near $7.58,  Target: $10.00,  **14% Dividend Yield** (I will advise if this is removed from my list)

TGP (Teekay LNG Partners): Buy under $45.00, 6.49% dividend. (I will advise of changes)

NSLP (New Source Energy Partners): Buy under $24.00, 3.51% dividend, (Fair value: $27.00+)

GGN (recommended 6/23/14): Buy under $11.25  (pays 9.9% dividend, monthly pay out!)  Looking for 20 to 40% gain if commodities continue higher.

 

 

Little Riskier Bank/brokerage plays below

KKR:  Target: $34.00,   Dividend: 6.91% (Stop: stay out below $22.05)

BX:  The BlackStone Group,  Target: $51.50 , (Stop: stay out below  $29.50)

 

HIGHER RISK MINERS PICS
Allied Nevada Gold (ANV):

Mesabi Trust (MSB):   Target: $31.40,  pays +2.33% Dividend  (NO POSITION YET)

SLW (Silver Wheaton):

DEEP IN THE MONEY CALL OPTION STRATEGY I AM TRADING from 4/22/13.

Buy  Jan 2015 SLW (Silver Wheaton) 15 Strike Calls for around $9.00

You have almost 2 years for Silver to get back over $50.00/oz. At that price your Calls would be worth $35.00.  I think there is a high probability to get at least a 200% to 350% return on this trade.  It is a form of a synthetic Long because we are Deep in the money.  Of course if Silver Wheaten closes below $15.00 two years from now, the call option will go to zero.  So only use pure risk capital on this trade.  And as soon as you get a double sell half of your investment to take your original money out of the trade.  Good luck.

 

 

Abbott Laboratories (ABT):  Target:  $35.04,  Dividend 1% only.  Recommended at $33.79.

Current price: 38.15 on 11/25/13  (Stop: Close below $34.00)

 

MSB, BGCP, TAL (high debt but stable shipping transport business) riskier,

* FDL (First Trust Morningstar Dividend Leaders Index ETF) yields 3.5% from Blue Chip large caps.  Good to buy AFTER major market corrections.  Very conservative income generator.

 

Permanent Portfolio (PRPFX)

2012 Gain: +6.02% (PRPFX is a well diversified holding fund.  Has stocks, bonds, Gold, Silver, etc…)  Great place to conservatively put retirement funds or to park cash Long Term.  The only issue I have with this is the US government Bond Allocation of the fund.

 

IMPORTANT NEWSLETTERS BELOW FOR QUICK REFERENCE 

July 20th 2012: Real Estate Special Discussion Edition

Nov 19th 12012: How to insure your portfolio

Nov 6th 2012: How to make $200K per year

 

*****TURBO MINI PORTFOLIO STRATEGY*****

Check out my new mini portfolio below called TURBO MINI STRATEGY.  It’s a purely mechanical computer generated investment model that picks superb S&P companies that have positive cash flow, positive earnings, accumulating interest and are leaders in the S&P for growth. This is a bit more of an aggressive portfolio, but if you have a large investment account then it could be a great way to supercharge a portion of those funds.  Last year in 2013 it only made about 6 trades and currently holds the 5 stocks listed below.  I will list the changes as they occur in 2014. Of course past performance is no guarantee of future results, but if the Fed will continue to print to infinity or face collapse, you can guarantee these monster growers will continue to accumulate the worlds growing cash supply and cause their stock to rise further.  And if one company fails to perform or falls off of its many growth criteria, that particular holding gets cut and replaced with another up and coming company.  I’m very excited about this new addition to our Bull or Bear Report.  Good luck, stay diversified and invest safely.

I will update these as changes need to be made. I will make a note at top of newsletters to changes to TURBO MINI PORTFOLIO.

TURBO Mini Portfolio G/L for today 8/05/14: (-.43%)

Portfolio Gains from 1/1/13- 8/04/14:   +73.05%  (live trades)

UNP: Union Pacific, (1.94% Dividend Yield) Long 3/25/14 @ $188.56   +3.90% 

AZO: Autozone,  Long 11/12/13  @ $448.27    +15.57%

AAPL:  Apple, Long 8/12/13  @ $457.03   +45.69%

BX: Blackstone Group, Long 6/27/14 @ $33.11  (-2.02%)

Holding 20% Cash for 5th slot for now.

 

(Portfolio Graph I will post each weekend.)

 

 

HISTORICAL TRADES BELOW for 2014

Holding the proceeds of GWW in Cash for now.

7/17/14:  Sell to Close GWW (Grainger) at (9:30 am open price) @$242.25

6/27/14: Buy Long BX (Blackstone Group) at (9:31 am open price)

6/27/14: Sell Entire PCP on open (9;30 am) sold @ $251.34

6/6/14: Buy PCP on open (9:30 am) $270.08

6/6/14: Buy GWW on open (9:30 am) $265.45

4/23/14: Covered Short GDP on close (4pm)  26.44

4/16/14: SHORT GDP on open 4/16 (9:30 am) 24.85 Open.

4/16/14: SELL WYNN at open 4/16 (9;30 open) to close position.

*****

4/9/14: COVER OFIX at open 4/10 (9:30 open) to close.

4/7/14:  SHORT OFIX at open  4/7  (9:30 am open) to open

4/7/14: SELL GOOGLE at open 4/7 (9:30am open) to close.

3/25/14: Replaced Priceline with (UNP) Union Pacific at 9:30am open price

3/24/14:  REPLACED NETFLIX with  (WYNN) Wynn Resorts Ltd. at 9:30am open price