Trying to save a few dollars isn't worth it.

We've been trying to buy an ETF, but it hasn't gone through because it went up slightly over our buy threshold. We're pretty hands-off, so after two weeks of it not going through, we decided to put in a market order for the fund. This way the buy will go through no matter what. That's what we get for trying to be cheap bastards.

Now let's talk about the DEATH CROSS, which, despite sounding like a rad metal band is actually a real thing:

The blue line in the chart above is the current price for SPY. The orange line is the 50 dma (daily moving average). You can think of this as how things have gone in a fairly recent time frame. The purple line is 200 dma, which is how things have been doing in the longer term.

Watching how these lines are doing in relation to each other is a standard tool for assessing price changes over time. These trend lines could be used to let you know when increases and declines are happening in a sustained way. In the chart above, the three lines appear to be converging. When the blue line is crossing one of these dma lines, it means that the price is under what is has been for the last 50 or 200 days. So when the 50 dma crosses the 200 dma that means that prices are steadily going down. That's our friend, the "death cross". Crossing the 200 dma with the daily price for a few days is a first sign to take defensive action. The "death cross" is when you should really think about or should have already done something. Defensive action doesn't mean we have to dump everything into cash, but potentially the portfolio balance should be change slightly.

Next time, let's talk about what this defensive action may look like. We have a fairly diverse portfolio, so we may already be partially prepared for this.

Profit!

Old MacDonald has a server farm

We've been doing this for nearly ten years, very lazily on and off. Huh.

ICLN is the etf that we decided that we were going to buy. So do we? It is up 13% since a year ago and meets our criteria. Honestly, it takes us so long to buy that it's weirdly anticlimactic realizing that we've made a decision. Of all the ETFs and stocks in the world why this one? We're in this for the long term and we feel a sustainable energy ETF is a good choice. This one meets our criteria within that.

Buy buy buy!

INFY, our last buy, is up. Good job. Almost 20%! Our original intent was to buy this on a perceived drop and then dump it for cash. That means that is probably time to sell. That also means that there's some potential tax implications We may have to pay capital gains tax on this. Since we've had it less than a year, it just adds to the adjusted gross income of the account holder. We're a small time operation, so that will just impact one of our members (not all that much). The tax laws for long term capital gains tax are changing so that folks at the lower income tax brackets won't have to pay any long term capital gains.

Here's some more info about the changes to the tax code. Bascially, if adding it into your income keeps in the lowest two brackets, you do not pay any taxes on those capital gains. However, if it pushes you up into a 25% or 35% tax bracket you pay capital gains tax and it goes up from there.

For us, selling doesn't impact us that much. We're going to end up paying around 15%. We could reinvest to avoid that, but we move so slowly that it's not gonna happen.

Profit!

Waiting.

Brexit? Apparently the Brits don't know much about it either. As far us as though, we'll have to wait and see. We're not so Euro-centric in our portfolio, so it probably won't have too much of an impact on our buying.

Infosys is in executive free fall. The founder and the board have been fighting over how the company has been run, but it doesn't seem to be tanking the stock price so who knows? We still have not triggered our auto sell, order (which had to be re-upped).

And EWZ, you are always on our minds:

You want out now?  No... Ok...

This chart shows EWZ's continued descent into the toilet or right where it was in 2009. Unfortunately we bought it when it was in the 70s.

Here you can see the up and down a little more zoomed-in. There is still movement on it, but it is beyond us as to what that might mean. Basically, there's a lot of theory that drives how people analyze movement on stuff. These tools are "more for short term trading looking for hyper volatile instruments," says a friend of ours who knows about these things. There a bit of risk, because it "comes down to timing as opposed to valuation fundamentals" he goes on to say.


More for short term trading looking for hyper volatile instruments. I'm not a big fan because it comes down to timing as opposed to valuation fundamentals

As far as a buy, if we like the idea of SPY, there are a few dividend options for something related. We like stability, and we like dividends. We like stable dividends.

Profit!

We bought this thing, so when do we sell it?

We're talking exit strategy

We bought Infosys at $14.45 and now it is currently at $14.36, so we've only lost about $2.50 on it. Before we say oops, we have to remember that we've only had it for about a week. Hopefully with some more time, this strategy will bear out better results for this. The next question, is to probably set some sort of automated out both on the high and low end. This would allow us to cut our losses, which is a first for us.

Sorry EWZ...that's the prime example of inaction biting us in the butt.

So when do we get out? If it gains 4%, that would cover our trading costs. Is 10% enough? Sure 10% would be great. As far as a loss point, maybe 10%? It's kind of arbitrary, but at this point it seems like we have to recognize that we don't have a really great handle on how this works, so maybe having something automated is best to give us a direction. We can always revise our strategy as things go along. After all, learning is the primary goal here for us.

We were able to set a three month automatic buy/sell trigger, so we can set it and forget it for a while. Scottrade has all sorts of nifty options for doing this:

We purchased this on the hopes that it was a short term panic. If that's the case, the price will bounce back. However, if it is a more long-term adjustment, it will be going down. We'll see.

Profit!

I Choo-Choo Choose You

It's buy time again. 

One of our members recently had some contract work done on his house, and he found that it was interesting how many levels of people were doing the work. His contractor essential subcontracted to a subcontractor to have something done. There were some communication breakdowns, even if everything eventually got sorted. So watch out when you have work done, and don't be afraid to ask questions about who exactly is doing the work on your house.

But onto our task at hand. It's buy time, and we've been toying around with a biggest loser strategy. 

Last time we picked the most recent day the market was open and looked at the biggest losers. Here's the list from Google Finance: 

The idea behind this strategy is to try and catch stocks that suffered a large hit yesterday, without any long term drop before. The thinking is that maybe the loss is the result of some panic or short-term incident. We are thinking we could catch it before it bounces back. 

Discovery is out because there seems to be a lot of different places that have good reasons to downgrade the stock. 

GameStop gives us pause, because they have been in a decline for some time. Apparently the drop might be linked to poor holiday sales reports, which dropped Friday. It appears that more people are purchasing games online. This doesn't bode well for GameStop bouncing back. It looks like this is a combination of people freaking out and also the company declining. That said, they will be selling a new console in the next few months, which should cause a slight bump. We would have to watch it especially closely to get out before the bump busts. 

Wins has seen such explosive growth recently that it doesn't fit our strategy because we're assuming it is done or close to done growing. 

The problem with Generac is that the basic headlines surrounding it caused us more confusion, and we got scared off. It seemed like a whole thing trying to sort out. 

Infosys is the largest in the group, and the earnings per share slightly more than analysts projected, but the revenue was lower than expected. For some reason this caused the stock to drop. 

Based on the stocks we looked at, Infosys and Gamestop are the most interesting. While GameStop took the bigger drop, Infosys is the larger company. In theory this makes Infosys more stable, and maybe explains the smaller drop. Also, GameStop doesn't look good long term. So considering our risk-averse and slightly lazy approach, Infosys makes the most sense. We could probably make a little more with GameStop, but the chances of us sleeping on something and screwing up are high. 

Given the likely volatility of the Trump Presidency, we could hold off until next Friday. However, by this logic we could hold off indefinitely. Basically, we need to make a decision, so we choo-choo-choose you Infosys!

Profit

Ew...

EWE is not one of the funds we're considering

Since AAIT (general Asia infotech) is no longer active, we can narrow our choice down to:

EWY--South Korean ETF
EWT--Taiwan ETF
VGT--Vanguard infotech ETF

Although EWY and EWT are country funds, they both are heavy in infotech and financials, because those are the major exports of each country. Here's the sector breakdown of each:

Ticker	Expense	Yield	Risk Vs Category	Current Price	Top Sectors	Top Companies
EWT	0.6	2.14%	Low	13.64	Info Tech - 52% Financial - 17%	Taiwan Semi - 20% Hon Hai - 6%
EWY	0.62	1.38%	N/A	48.58	Info Tech - 36% Consumer Cyc - 16% Finance - 14% Industrials - 13%	Samsung - 22% Hyundai - 6%
VGT	0.12	1.14%	Average	103.08	Tech - 88% Financial - 5%	Apple - 16.8% Microsoft - 8.1%

VGT looks like it has been the most stable overall. When there was a dip in October, VGT is the one that bounced back the most. Our strategy is to lean toward the most down of the three in the hopes of getting something on the upswing.

As an aside, we've been looking at EWT and EWY for quite some time.

We looked at how each would effect our portfolio balancing. We are about 4% for both infotech and discretionary. You can see in the chart above how they would effect our balance. As far as sector weighting is concerned, this leans us toward EWY because it also has some consumer cyclical, which we are low on. It won't unbalance us as much. If we're looking for balance, this will just leave us short on energy and industrials.

If we are wanting to be more balanced and we want the stock that's suffered the most in the last year, EWY is a winner. Apparently we're crazy about EW things.

Profit!

Lets Buy Some Tech

As we lick our wounds from the recent bloodletting in the market, we find ourselves needing another buy. We would like add a little more tech to our portfolio.

One way to think of the tech sector is as a domestic emerging market. It is high risk, with a potentially high reward. Throw in the explosive growth expectations, and you have something that can be exciting or disastrous. We're looking at your Pets.com--we had such high hopes.

So we need to decide between foreign and domestic tech. Right now a foreign tech company is attractive because it doesn't expose us to the craziness of the American market. A few months back we looked at some Asian Tech. Basically, we need to choose between either one of the Asian tech funds (EWY, AAIT, EWT) or the Vanguard Tech ETF (there's gotta be one, right?).

Profit!

Shut up and buy something

We are finally putting in a purchase order for  three sector-specific ETFs: VNQ (real estate), VHT (a healthcare), VAW (materials).

There are different types of settings for purchasing a stock through a broker such as Scottrade:

Market order--sets the purchase or sell price at the price that the stock is currently trading at. If the market is currently closed, the transaction will go through when it is open again.

Limit order--sets the purchase or sell price at a specific amount. The transaction will only go through when the market value hits the specified amount. If a stock is set to $50, and you set your limit order to $55, then you buy it at $55. Conversely, if you set a limit order to buy at $49, you won't purchase the stock until it hits $49. Usually you can set a duration for the limit. If your limit expires before it reaches the specified price, you simply don't buy the stock.

There are even fancier options, but we won't get into them here.

For next week, we plan to take a look at something to shore up our tech weighting. It might be international, but right now we're just deciding on some options. We're going to compare VGT, a Vanguard tech ETF, with some worldwide tech or possibly some Asian tech funds.

Profit!

The gang buys the Mordor ETF!

Members present: Brian, Bickford, Danak

One of our members recently got hired for a new position, and he was able to have a conversation with his new employer about his internet footprint. Interestingly, his new employer is friends with one of his former colleagues on Facebook, and so she was able to take a look at multiple layers of his presence online. The good news is that he apparently had been a responsible and not-too troubling netizen. However, the real story, if any, in this is that even the precautions of locking things up tight may expose some cracks, say from unintended and unknown relationships. It seems best to use the Babysitter's club axiom of not writing anything down that you wouldn't want copies posted around school of.

Apparently, in late June we earned a 2% dividend on EWZ, so that means we have 2% more of disappointment.

SPY and T are on their way up. EWZ is floating.

It is decision time, and here's our shortlist: ENZL, NORW, and HILO

Comparing ENZL and NORW with respect to percentage changes (see below) shows that ENZL seems a little less volatile. The comparison to HILO (not pictured) shows ENZL to be the least volatile.


So we decided to go with ENZL, partially because it seems like a good buy and partially because we just needed to make some sort of decision. It doesn't feel like a hasty one, but we have had a tendency to sit on money and just let it pile up.

But wait!

As we were about to buy ENZL, we noticed that there was a difference in price between the bid and asking prices. These are the prices that you get and will pay, respectively. The discrepancy between these two is called the spread. A large spread can be the result of a low trading volume for the product or for a product that is not actively being traded.

*More information here.

So the question became, is this worth it? In other words, are we going to be able to make up the spread in the long run? We thought we would, so we went with it. Another fun thing with trading during nights and weekends is that the market is closed, so technically when we click buy, nothing has officially been bought until it goes through when the market is open. There are several buying options, including market and limit.

Market: you agree to purchase the stock/fund at whatever the market price is
Limit: you set the limit for what you will buy or sell at

You can also set the window in which the trade can take place.

This opens up some interesting options for automating your transactions to a certain extent. You can go as deep as you want to with these, however make sure that you don't set up something disastrous or you could end up defaulting or getting your trades restricted. Trade safe, America!

So I guess that means we have a piece of New Zealand, but the real question is, why isn't the symbol LOTR?

Profit!