Current trends of August 2015

Now this is a section of this blog that would be novel and more in line with a free analyst letter. But rather than recommendations, I would just outline the macro trends and put them out here .. we are not analysts and do not have their means of getting the CEOs on chair to talk. We dont attend the earnings call or look too deep into stats measures. However, we do notice the macro trends and maybe take some positions accordingly. The whole idea is to steady the strategy boat of investing. That means things could be fast or slow or steady depending on what it warrants. But never wavering. Never confusing or filled with anxiety. While analysts get a good closer look, the rest of us are not burdened by tunnel vision and can have a fresh perspective backed by numbers. We could be more reactive compared to them but we are also less bias prone and more diversified. From this vantage point, we can be closer to the truth and reality that on one's own dime there is little that any manager can do to actually beat the market substantially. However, on other people's dime you can make bank by drawing on expenses, commissions and brokerage and that is where essentially the meat is. From this vantage point, you are free to create. Create stuff or create money or create projects that are really useful and world changing.

So current trends indicate a worsening of oil prices. Hurray ! (Except for gas drivers from california where you continue to pay high:( ). This is reflecting in low prices of XOM, CVX and COP and similar stocks. Is this the low ranges and a good time to buy ? Maybe . Not to get to much into timing lest we worry about whether it will go down further or will it go up suddenly next month? Since we dont have answers to this, let us look at the stats measures. The pe is low for the sector. It seems good buys and no matter what we could hold it for some time. 

Maybe we need sector bellweathers so that we look at xom for energy and then based on this we can take positions in 2/3 stocks in this sector.

A quick look at the sector for this month from the google fiinance:

Energy: seems to be going down.

Finance: still looks awry and stinks of 2008

Tech: better off with the tech etf here .. too many changes

Industrials/Basic Materials/ Conglomerates etc: Nothing much to write about .. same old same old.

Utilities: Now here there could be some interesting buys .. but like real estate I would do some etf buy and hold off.

Then the August last week happened. The stock market saw some extreme volatility on account of Chinese stocks. Good time to buy some. Then there was a 1000 points downturn!! Nice opportunity if you had put some limits on stocks. But better off holding for now .. since these are testing levels. It recovered and then again sank and then again up and down. I would recommend holding positions in cash till august end. Sooner or later, this domino will fall. And even if it goes up , there is less room to expand signficantly unless someone tweaks the formula and gives more weight to certain stocks and pushes them high.