Succinct Summations of Week’s Events for 6.21.19 (plus Sell Rules to Build Your Stock Investing Performance)

The usual weekly summation can be found below, the positives being a very good week for the market based mostly on the Fed doing what investors wanted. Ironically again the negative is the flip side of the FOMC position that by keeping rates low there could be political blowback which could develop into a problem.  This Sunday's bonus is a follow up on yesterday when I presented an article on how to determine when to buy.  Now I submit another article from AAII (#22 or 40) on using the CANSLIM method to determine when to sell.  Hope everyone enjoyed this beautiful weekend. 

Succinct Summations of Week’s Events for 6.21.19

June 21, 2019 4:00pm by Barry Ritholtz

Succinct Summations for the week ending June 21st, 2019

Positives:

1. Markets continued their rally, adding 3 percent for the week.
2. FOMC did not think the economy was soft enough to warrant a rate cut. They left the Federal funds rate target level unchanged at  2.25% – 2.50%.
3. Same store sales rose 5.4% w/o/w, higher than the previous increase of 5.0%.
4. Crude oil inventories fell 3.1M w/o/w from 485.5M to 482.4M.
5. Jobless claims fell 6k w/o/w from 222k to 216k.
6. Housing starts came in at 1.269M for May, above the expected 1.239M.

Negatives:

1. Trump is politicizing what an apolitical bureaucracy. Recall he complained in 2015 that the FOMC was “keeping interest rates unjustifiably low.”
2. To protect their own institution, the FOMC is resisting POTUS political pressure; this could develop into a problem.
3. Existing home sales came in at 5.340M in May, lower than February’s 5.480M.
4. Housing market index came in at 64 for June, below the expected 67.
5. MBA mortgage purchase and refinance apps fell 4.0% w/o/w after previous increases
6. The US current account came in at $-130.4B for Q1, larger than the expected deficit of $124.3B.

TOP40: Article 22

Sell Rules to Build Your Stock Investing Performance Considering that one-half of each stock transaction involves a seller, it is amazing that investment reference books and literature tend to completely omit or lightly treat the question of when to sell. Ask any investor for their criteria for buying and more often than not you will receive a well-thought-out thesis. However, a similar request for sell techniques frequently results in a pause and a mumbled response to the effect that stocks should be sold “before they become bad.” In reality, many investors are still holding stocks after they become bad and in many cases after financial rigor mortis has set in. What objective guidelines can be used to determine a selling point? Like the rules for stock purchase, there is no way to quantify the exact time and price at which to sell. However, the precise application of any given guideline is not as important as its creation and use on some consistent basis. The article Sell Rules to Build Your Stock Investing Performance is by investing legend William J. O’Neil, founder of Investor’s Business Daily and creator of the CAN SLIM stock selection methodology. He starts off with a reassuring observation—you can be successful as little as 30% of the time in investing but still do well for yourself. The main caveat, though, is that you need to cut your losses quickly to fight another day. O’Neil offers some sell guidelines that he has used successfully, including: Using stop-loss rules to limit your losses Fundamental variables you can use to decide whether it’s time to sell Technical indicators that can help you decide when to sell When to sell to take profits Using the overall market to decide when to sell Lastly, O’Neil suggests that you get in the habit of reviewing every trade you make to see what went right or wrong. He argues that this process will help improve your decision-making ability. For many investors, their greatest weakness is not knowing when to sell. The article Sell Rules to Build Your Stock Investing Performanceoffers tips to turn this weakness into a strength, thereby improving your investment returns. Stay tuned: Tomorrow I highlight an AAII Journal article that delves into bond investing basics, explaining why bond prices go up and down. Read the full article now — Sell Rules to Build Your Stock Investing Performance