Stock Market Commentary

I am making the following buys in my portfolio:

SLV 300 @ 31.95
EIRL 400 @ 24.24
SI 100 @ 104.56
IRE 1,600 @ 6.45

I also am selling ESEA 8,500 @ .95

Earlier today I also sold FCX.

I just sold 275 shares @ FCX for 31.15 in my portfolio. I had about a 5% gain on this position and then yesterday it gapped down huge and fell 15%. The company announced that it was going to buy two other companies - MMR and PXP that are in the energy production and exploration business. The CEO of FCX sits on the board of directors of both of these companies and owns millions of shares in them so it smacks of a conflict of interest. Wall Street obviously does not like the deal as it is punishing FCX stock.

I talk with Dave Skarica just about every single day on the phone about the markets. He helped me realize the value of buying into GREK in August and it has become one of my best investment positions. I talked with him yesterday about what is happening in the markets and we both came to the conclusion that stuff in Europe is in the process of breaking out right now. Funny thing is CNBC is totally ignoring this and most investors are too - to their detriment.

I just read this email question I got:

"mike, thanks for sharing so generously your opinions on the market! i am in metals. mlps and reits. my lowest high "dividend" stock pays about 8%. i feel that these high dividend stocks are doomed due to the coming seemingly set in stone dividend tax on high earners. what do you think? thanks!"

For the most recent spread sheet file with portfolio positions click here.

For the most recent spread sheet file listing all portfolio trades click here.

Yesterday the stock market had a nice up day and today is poised to gap up thanks to twitter posts by President Obama saying a fiscal cliff deal needs to be made. You can't make this stuff up.

It is now done. The IMF, ECB, and Euro Leaders have given their ok to the Greece debt/austerity deal. According to Reuters:

Investors have been selling stock funds and buying bonds that yield nothing. They have been doing this all year, but as the market has dropped have done so even more:

According to Reuters:

The stock market has been in a correction for weeks, but last Friday went up a little from a very oversold position. It seems likely to me that the market will bounce for a few days and then drop again to bring a final panic washout bottom either next week or the week after.

Interestingly enough the historical market trend is for the stock market to rally in the days leading into Thanksgiving, the day immediately after, and then to drop two days after Thanksgiving.

Yesterday was another nasty day for the stock market as the DOW fell 185 points. The stock market has been in a correction since September within a cyclical bull market that began in 2009. We have seen corrections like this before as they have happened at least once every year for the past three years. The last time one happened was back in the Spring when the market peaked in March and made a bottom in June.

I sold three positions in my portfolio this morning:

670 SSRI @ 13.791
380 IAG @ 12.26
1500 HL @ 5.66

For the most recent spread sheet file with portfolio positions click here.

For the most recent spread sheet file listing all portfolio trades click here.

Looking at the short-term trend I don't like the action of the past few days. After a big dump like we saw on the 330 point DOW down day last week normally you see the stock market make a big bottom or else pause a few days and then drop again. It seems like the latter is more likely. Yesterday the S&P 500 was even while the VIX fell over a point. That is the type of action you see during a correction that makes it look like it is not over.

I am selling the following positions in my portfolio:

NEM 450 @ 49.18 commission 2.25
MT 600 @ 15.070 commission 3.00
TI 1k @ 8.88 commission 5.00
FTE 1.5k @ 11.05 commission 7.50
TNK 4.9k @ 3.35 commission 22.70.

One of the stocks I own, SCCO, recently announced that it is going to pay a dividend of $2.75 to shareholders on record on November 7th. Of course the stock has gone up on this news and the dividend is so large that it gives the company an annual dividend rate of 28.9%. Incredible.

The company is one of the largest copper produces in the world with operations in Mexico, Peru, and Chile.

The Greece PM Minister and international bankers have agreed to austerity measures for Greece and its bailout package. According to CNN:

"Debt-stricken Greece has agreed on final details with its international creditors on the terms for the next installment of a bailout deal, the prime minister said Tuesday."

Due to the hurricane the New York Stock Exchange and Nasdaq are both closed today. They were going to do electronic trading, but decided to shut it too. They may be closed tomorrow.

I just took an investment position in Ireland through the New Ireland Fund, trading under IRL on the NYSE.

I just bought 2,300 shares of IRL at $8.48. I will put together a full report about investing in Ireland for WSW Power Investor members on Sunday.

For the most recent spread sheet file with my portfolio positions click here.

I've been following the Mebane Faber blog now for the past few months. He has written a book that is well worth your time reading called the Ivy Portfolio about how to use funds to construct a portfolio that can beat the market.

Today he posted this data on his site showing the cyclically adjusted P/E's of various countries at the end of the 3rd quarter:

Yesterday the DOW dumped over 200 points and the VIX got near 20. The put/call ratio went above one again and the ratio of down to up volume on the NYSE reached 95% for most of the day. Yes this is more panic selling. The fear is also showing up in investor surveys and even emails I'm getting from people now. This morning's Investors Intelligence poll shows that the number of bulls fell again in this past week while the bears have gone up. The numbers now stand at 41.5% bulls and 27.7% bears.

Reuters reports that:

On CNBC yesterday investment thinker Marc Faber stated that he thinks that there will a big mess in the markets and global economy in 5-10 years due to the growing government debt crisis. "I think the regimes will try to keep the system alive as it is for as long as possible, which means there's no fiscal cliff, there's a fiscal grand canyon," he said.

"I think the deficit here (in the United States) - irrespective of who is in the White House - will stay above a trillion dollars per annum for at least as far as the eye can see," Faber said.

New purchases in my portfolio today:

MT 600 @ 16.39
HL 1,500 @ 6.53
ESEA 8,500 @ 1.171

For the most recent spread sheet file with my portfolio positions click here.

For the most recent spread sheet file listing all portfolio trades click here.

I did this video after the close yesterday.

Last night I went through the market and found several stocks that look like compelling buys. I wrote about them in a special PDF Power Investors only report. If you are a member just go to the right sidebar and type the username and password to login to read it. If you aren't a member join the group now by going here.

I just bought EWP 700 shares @ 28.78

and EWI 1,600 shares @ 12.799.

I consider this part of my core investment positions of ETF's and funds. The others include EWK, EWO, RSX, GREK, GDXJ, GLD, GCC, and GNT. These are all funds invested in cheap European markets just starting bull markets or gold and commodity related issues. For a great article on using valuations to invest in world markets and beat the overall market check out this article.

I bet you have forgotten all about Greece. It seemed up until recently the debt crisis in Greece was the nonstop talk of the news and at times was causing scary gyrations in the the financial markets. The Greece stock market actually put in a bottom in the spring and has been the strongest rallying market in the world since then. I personally bought in the Greece market back in August and it has been one of my own top gaining positions ever since.

Even during this rise I got emails from people scared of Greece. Talk about climbing a wall of worry.

I'm opening up the WSW Power Investor Service to new members. That's what I want to show you if you are not already a member. To find out what this is about click here.