Tag Archives: nyse

MaziValue February Performance And March Outlook

PORTFOLIO PERFORMANCE Note : Mazi Ume Capital LLP does not exist right now, but if I do run a hedge fund in the future, that’s what it will be called. Mazi Ume Capital LLP is just my personal portfolio for now. Click to enlarge Below, is a chart from Interactive Brokers’ Portfolio Analyst comparing my performance (Consolidated) to the Russell 2000 (RTY), S&P 500 (SPX), and the Vanguard Total World Stock Index ((NYSEARCA: VT )) since inception of the portfolio on December 10th, 2015. I believe the performance of the Indexes include dividends. My portfolio’s return (Consolidated) is after interest and fees. Interactive Brokers charges interest when you buy a security in a different currency, and fees are trading fees. My portfolio is most comparable to the Russell2000, since every stock on the long side (90% of total portfolio) has a

New Trend-Following Fund Limits Your Downside

By Alan Gula, CFA Paul Tudor Jones (PTJ), a legendary trader and hedge fund manager, essentially predicted the stock market crash of 1987. In a PBS documentary, PTJ asserted, “There will be some type of a decline, without a question, in the next 10 to 20 months… it will be earth shaking… it will create headlines that will dwarf anything that’s happened up to this point in time.” On October 19, 1987 the S&P 500 dropped 20.5% in a single day. Many investors were eviscerated, and some traders were completely wiped out. That month, PTJ’s fund was up an astonishing 62%. PTJ is an ardent proponent of trend following. That is, you always want to be positioned with the prevailing price trend. If a security or futures contract is trending higher, then be long. If it’s trending lower, get flat (no position) or be short. So how do we determine the predominant trend? In an interview with Tony Robbins for Money: Master the Game , PTJ revealed that his preferred metric is the 200-day moving average of closing prices. Regarding the 1987 crash, Robbins asked, “Did your theory about the 200-day moving average alert you to that one?” PTJ responded, “You got it. It [equity index] had gone under the 200-day moving target. At the very top of the crash, I was flat.” The following chart helps illustrate what PTJ saw: Trend following has been around for ages. But now funds are popping up that automate the process. For example, the Pacer Trendpilot 750 ETF (BATS: PTLC ) was launched in June 2015. This exchange-traded fund (ETF) alternates exposure to the Wilshire U.S. Large-Cap Index (Index) or U.S. Treasury bills (T-Bills) depending on the trend indicators. Here are the allocation rules: Positive Trend Established: When the Index closes above its 200-day simple moving average (NYSE: SMA ) for five consecutive trading days, the exposure of the fund will be 100% to the Index. In other words, the fund will be fully invested in equities. Negative Trend Established: When the Index closes below its 200-day SMA for five consecutive trading days, the exposure of the fund will be 50% to the Index and 50% to 3-month T-Bills. Negative Trend Confirmed: When the Index’s 200-day SMA closes lower than its value from five business days earlier, the exposure of the fund will be 100% to 3-month T-Bills. These rules are designed to keep the fund invested when the stock market’s trend is up but to protect capital with the safety of T-Bills during down trends. Also, the rules attempt to minimize fund turnover during periods of high volatility. PTLC seeks to replicate the performance of a trend-following index. The chart below shows its back-tested results. The trend following index has outperformed over the long term with much smaller drawdowns (peak-to-trough declines). The benefits of trend following as a form of risk management can clearly be seen during the equity bear markets in 2001-2002 and 2008-2009 (yellow circles). The expense ratio of 0.6% for PTLC is a bit high, but the ETF does conveniently simplify the trend-following process. It’s worth noting that the ETF’s current exposure is 100% T-Bills, meaning that a stock market downtrend has been confirmed. The 200-day moving average is such a simple indicator that few people believe it offers valuable information. Also, with so much focus on daily catalysts and short-term moves in the media, the big-picture trend gets lost amid the din. The last time the S&P 500 crossed below its 200-day SMA was at the very end of 2015. I doubt PTJ was caught off guard by this year’s 10.5% decline through February 11.

ETF & Stocks In Focus On Sizzling February Auto Sales

After a lackluster start to the year, the auto sector rebounded in February on regained vigor in the economy and fresh signs of increasing consumer confidence. This is especially true as sales climbed 6.9% year over year to an annualized 17.51 million units in February, as per Autodata Corp. This represents the best month for American auto sales since February 2000. Five of the six major American and Japanese automakers reported solid sales growth last month. Ford Motor (NYSE: F ) led the way with 20.2% growth, followed by sales increases of 12.8% for Honda (NYSE: HMC ), 11.8% for Fiat Chrysler (NYSE: FCAU ), 10.5% for Nissan ( OTCPK:NSANY ), and 4.1% for Toyota (NYSE: TM ). On the other hand, General Motors (NYSE: GM ) sales fell 1.5% year over year last month. Robust growth was driven by deeper Presidents’ Day discounts, cheap fuel, easy availability of credit at lower interest rates, and rising income. In addition, higher demand for sports utility vehicles, a plethora of new models, fuel-efficient and technologically packed vehicles, and the need to replace aging vehicles added to the strength. This trend is likely to continue in the coming months. With this, 2016 could be another record year for vehicle sales (read: Mixed Auto Earnings Put This Car ETF in Focus ). The solid data propelled the auto stocks higher and spread bullishness into the entire industry across the globe. Given the solid jump in auto sales, investors may want to take a closer look at the ETFs and stocks from this corner that they could ride on. ETFs in Focus First Trust NASDAQ Global Auto ETF (NASDAQ: CARZ ) This fund offers a pure play global exposure to 37 auto stocks by tracking the NASDAQ OMX Global Auto Index. It is a large-cap centric fund and is highly concentrated on the top four prime automakers – Ford, Toyota, General Motors and Honda – that combined to make up for 32.2% share. In terms of country exposure, Japan takes the top spot at 35.8% while the U.S. and Germany round off the next two spots with 23.8% and 18% share, respectively. CARZ has a lower level of $39.6 million in AUM and trades in a small average daily trading volume of around 11,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. Stocks in Focus While all the auto stocks are in focus for the coming days, we have highlighted stocks that have the potential to move higher than its peers amid recovering sentiments. To accomplish this, we have used Zacks stock screener to spot two stocks that have a Zacks Style Score of ‘A’ for Growth, Value and Momentum each. These when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential with strong momentum, cheap price and robust growth (read: 3 Momentum Stocks & ETFs to Play ). Cooper Tire & Rubber Co. (NYSE: CTB ) Based in Findlay, Ohio, Cooper Tire is engaged in the manufacture and marketing of replacement tires worldwide. It is the fourth largest tire manufacturer in North America and the eleventh largest in the world. The company saw solid earnings estimate revision of 37 cents for the current year over the past 30 days and is expected to grow at an annual rate of 4%. Further, the company delivered positive earnings surprises in the three of the past four quarters, with an average beat of 26.23%. The stock currently has a Zacks Rank #1. Lear Corp. (NYSE: LEA ) Based in Southfield, Michigan, Lear Corporation is a global leader in designing, developing, engineering, manufacturing, assembling, and supplying automotive seating, electrical distribution systems, and related components primarily to automotive original equipment manufacturers worldwide (see: all the Consumer Discretionary ETFs here ). The stock saw positive earnings estimate revisions from $11.89 to $12.18 per share for 2016 over the past 30 days, representing a year-over-year increase of 12.21%. It delivered an average positive earnings surprise of 9.05% in the last four quarters. The stock has a Zacks Rank #2. Bottom Line A slowly recovering economy and reviving consumer spending will continue to drive auto sales higher, making the above-mentioned ETF and stocks compelling choices for investors to play in the months ahead. Original Post