Week of November 8th 2019 (Bull or Bear Report- Fantastic Five)

www.thebullorbearreport.com

By Karl Hormann

 

WEEKLY REPORT FOR

11/08/19

Trend: Uptrend

 

If anyone was in doubt that we are in a bull market, this week made it’s point that we are in it. Markets kept grinding higher all week on hopes of a final phase one trade deal, even after news broke Friday that the US never agreed to lift existing tariffs. Seems that no one cared, and markets closed at all time highs. What is this telling us? It’s telling us that cash is sloshing all around the world looking for returns, and this news wasn’t bad enough to scare it away. New highs attract new money it seems. Let’s see if we can trust this rally.

 

After 18 months of being in a huge trading range with a 20% melt-down last December, a massive recovering and finally a small break out this fall, is the trading range purgatory finally over? Have we paid our dues? I definitely think so.  Many stocks are trading below their highs of two years ago, with only a handful of techs finally breaking out. Apple and Microsoft have been leading the charge higher to all time record highs. But now we are seeing the rest of the stocks trying to break out now. Applied Materials, QCOM, and others are just about ready to break out to new highs.

 

The IVW which I recommend as a core holding has it’s #1 position with Microsoft with an 8.13% weighting. Take a look at Microsoft chart this past two years, it’s a direct line from the bottom left to the top right. Amazing. IVW is right under the previous high of 185 and about to break above. If it does, it’s game on for the market to go much higher. What’s going on? What happened to the recession the Media has been calling to happen since last year? Now they are admitting that maybe we won’t get a recession even in 2020? I’ve never seen a group of people trying to call a recession so bad in all my life.  Honestly, I think many of these pro’s are severely under invested, hold way too much bonds, and have large cash positions. Personally, I am holding 5% of my portfolio in cash at the moment. I just don’t feel good chasing stocks at these prices with new money and I nibbled a little profit on QCOM this week and some Apple Calls I owned. It’s never wrong to take a little profit off the table if your stocks are making a massive all time high to help build up a little cash reserve for the rainy day pull-back.

(IVW Chart)

 

The real question is, when is another correction or bear market going to come? Many have been asking that. But with the new global massive money printing scheme that central banks all around the world have embarked on since 2010, I think this bull market can go on for another decade. Actually, I consider the bull market reset from last December because we declined by minus -20% and washed out many weak holders of stocks that are still holding large cash positions. There was never a recession coming last December and I wrote that over and over. It was fear of a stupid Fed that spooked everyone. And he mended his ways and went onto a rate reduction program. Remember, the Fed will support inflation, and declining stocks only causes more deflation in the US. Therefore, stocks MUST rise much higher, to stoke the inflation the Fed wants to see.

 

This week Qualcomm reported strong earnings and an upbeat forecast for the 5G rollout. That sent QCOM to a 52-week high and up over 12% on the week. At this point I would be taking half profit on that position and rolling it into CBS a new pick. That stock has been beaten down due to the VIACOM merger announcement but has a great asset of content. Eventually the sentiment will shift back into CBS’s favor and send the stock up again. The key to investing is buying the out of favor names like QCOM when it was $49 and $50 and everyone HATED it, and ride it up the new highs like today when upgrades are now rolling in. Buying at a discount is the key to successful investing.

 

Stay bullish on America and I hope everyone has a great weekend.  I’ll see you next week.

Best regards

Karl Hormann

 

 

My short-term trend oscillator continued to rise higher again this week from 1.26 last week, to 1.29 today. This signals an uptrend. We are not even close to being in overbought territory.  Any reading below 1.00 indicates we are in a short-term downtrend. Anything above 1.0 indicates an uptrend (A reading of .30 extreme low, to 1.60 extreme high)

 

Our Fantastic 5 Portfolio is 80% invested at the moment with one slot open.

 

As you know, I never advocate timing the market for the bulk of our portfolio. Our Fantastic 5 portfolio is the only mini portfolio I use that utilizes strict money management rules which generate an above average return, while minimizing risk.  Below are our current holdings.

 

Rules for investing I live by:

  • Save at least 10% of your income every month and allocate it to investing for your financial freedom. Your monthly “Mortgage Payment to Financial Freedom”.
  • Get out of personal debt and stay out of debt as much as possible
  • Always stay diversified in your investments, never putting more than 15% of your money into any one position unless it is an already diversified ETF.

 

Fantastic 5 Portfolio Update below.

80% Invested:

 

GOOGL (Alphabet Inc)              Purchase Date  8/05/19  @ $1,173.06   +8.46%

WBA  (Wallgreens Boots)      Purchase Date 7/17/19   @  $55.69         +3.03%

SHW  (SherwinWilliams)        Purchase Date 9/13/19  @ $536.11         +8.12%

CHTR  (Charter Comm)           Purchase Date 9/13/19  @ $425.52         +12.09%

 

 

4 POSITIONs. 80% Invested Currently

2017 Total Gains: +40%

2018 YTD Returns:  +11.98%

2019 YTD returns: +6.60%

 

 

Many other core holdings which I have in my personal portfolio continue to be:

IVW (S&P 500 Growth Fund ETF),  #1 core holding of mine.

DVY  (iShares Select Dividend ETF)

DIA (Dow Jones stock exposure)

BRK.B (Berkshire Hathaway),   buy under $200

BGCP (Real Estate play paying a nice dividend),

QCOM (Holding.  Pays a 4.3% dividend while you wait.) **SELL ½ at $94+, roll into CBS**

AA, ARCN (Alcoa & Arconic for recovering economy play)

GILD   (Gilead. Great future medical play that pays dividend.)  Buy under $78.00

AAPL:  (Apple Computer) Buy under $175.00  (pays a 1.76% dividend while you wait)

MO:  (Altria Group)  Buy under $46.00  (now pays a 7.72% dividend at $44.33 on 10/19/19)

NWL:  (Newell Brands) Buy under $20.00 (pays 4.2% dividend) rec 8/25/18

AMAT: (Applied Materials) Buy under $40.00 (Pays a 2.45% dividend) rec 8/25/18

X:  (US Steel)  Buy under $15.00 (Pays 1.04% dividend)  rec. 3/8/19

SNAP (Snapchat) Buy under $11.50   rec. 5/1/19    (target: $20+)

WBA:  (Wallgreens) Buy under $52.00.  rec 6/8/19  (Target: $75.00) pays 3.39%

ABBV: (AbbVie Inc.) Buy under $65.50  rec 8/23/19 (Target: $90.00) pays 6.49% (small position)

KHC: (Kraft Heinz):  Buy under $28.50 rec 9/29/19  (Target: $38.00) pays 5.75% (2-3% position)

UNH: (Unitedhealth Group): Buy Under $220 rec 9/29/19 (Target: $350.00) pays 2.01% (2-3% position)

CBS:  (CBS Corp)  Buy Under $38.15   rec 11/9/19  (Target: $57.00)  pays 1.89% div.

 

 

Thank you and have a great Weekend. Stay Bullish on America!

Best regards

Karl Hormann Jr.

Email:  karlsfantasticfive@gmail.com

1(914)668-5090 (office day)

 

 

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