July 5th, 2007

Second Anniversary

Can’t believe it. Just seems like yesterday that I celebrated my first anniversary with this blog (see last year’s Anniversary posting). And now, it’s another year under my belt. And what a year it’s been.

I started writing and compiling my book. The working title is “Life Cycle Investing” and it’s about using charting to identify and leverage the longer-term, momentum swings inherent in and coming out of companies’ life cycles (birth, development, growth, maturity, decline, rebirth, etc.). I’m excited about it and need to figure out how to allocate my time between managing my portfolio, adding to this blog and researching and writing the book.

The S&P is up an incredible 18.67% between July 3, 2006 and Tuesday, July 3, 2007. And that’s with a correction of sorts (some claim there’s been no correction and that was only a hiccup) between at the end of March this year due to the correction in the far-away Chinese stock market.

I turned bullish on August 19, 2006 writing:

While on May 7 (2006) I lamented about the lack of fanfare that accompanied the Dow touching new all-time highs, the major correction that followed since then explains why. But I think the next time will be different. The advance/decline line has started to improve and up/down volume appears to support the view that an influx of cash is chasing a smaller supply of stocks. I think the market is now positioning itself for a major move to the upside that could begin in the fourth quarter. You heard it here, you’re hearing it for the first time, a new bull market is around the corner.

I jumped into the market with both feet back then and rode this bull all the way. But we seem to getting into some rarefied air at these levels. Interest rates seem to want to go higher, a sniff of inflation is in the air (although not represented in the government numbers yet) and commodities including oil still continue to be click up. The one bright light on this otherwise cautionary horizon are tech stocks. As I wrote on June 26:

There’s a group that’s been a laggard in this bull market that’s raged since the bottom was hit on March 11, 2003 (I remember the day well since it was also a milestone birthday for me). Perhaps, being the romantic that I am, I believe it would be poetic justice that the industry that caused all the pain during 2000-2002, the tech stocks, be the group that leads the assault to new heights.

I’m not sure when but I, along with you, hope that it will be relatively painless between now and then and, if any correction is forthcoming, it will be short.

It’s comforting to hear some talking heads on CNBC’s Fast Money and elsewhere begin to agree with me.

Good luck to us all as we, together, enter our third year.

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  • bodotdot

    Congratulations on your 2nd anniversary. Your observations are always interesting, and, particularly in the case of your post on steel stocks, profitable as well. I also have liked your work with the stock group movements in IBD. Please keep up the information. I find it very useful.

  • 100 Thousand Guy

    Congrats! Charts are good…but only with fundamentals. I like to see the chart but you cannot blindly follow the chart without knowing anything about the company. I know very well you do look at the earnings and revenues. Well Stockdoctor (http://stockdoctor.blogspot.com ) is also an interesting blogger like you and I have asked him million times about this. He never invests in a stock without talking to the investor relations and without going thro the revenues for past two years and then he reviews the charts.