Timer Update 05/30/08

 

Both my Canadian and US timers remain long.  The tables below provide the compound annual growth rates (CAGR) that would have been achieved by applying my timers to 2X ETF's (HXU for the Canadian market and QLD for the Nasdaq).

 

 

Timer	Signal	HXU	Gain / Loss	Value
Date
				100,000
9/05/07	Long	29.34	0.7%	100,716
11/09/07	Cash	29.55		100,716
2/13/08	Long	27.49	1.4%	102,108
3/11/08	Cash	27.87		102,108
4/04/08	Long	29.50	16.9%	119,414
5/30/08		34.50
		CAGR=	27.4%

 

 

 

Timer	Signal	QLD	Gain / Loss	Value
Date
				100,000
8/02/06	Long	63.55	24.4%	124,359
3/01/07	Cash	79.03		124,359
3/21/07	Long	84.10	18.2%	146,953
7/26/07	Cash	99.38		146,953
9/05/07	Long	99.57	15.8%	170,169
11/07/07	Cash	115.30		170,169
2/25/08	Long	70.59	-3.1%	164,841
3/04/08	Cash	68.38		164,841
4/01/08	Long	76.28	18.6%	195,549
5/30/08		90.49
		CAGR=	44.4%

RiskGrade Review Update

I run my US stock and ETF screens every weekend and record the stocks and ETF's that pass as well as the RiskGrades.  It is much too early to make strong conclusions but thus far it appears that the best stocks are those having a Riskgrade between 250 and 400 and the best ETF's are those having a RiskGrade between 125 and 175.  At first I didn't recognize the importance of requiring stocks and ETF's to have a minimum RiskGrade but in hindsight it makes sense.  Why buy an ultra-safe stock or ETF (i.e. an investment with a very low RiskGrade)?

My observations are based on buying and holding the stocks and ETF's for two months.

My Canadian Stock Timer Applied to Horizons BetaPro 60 Bull Fund

As with my US stock timer, signals from my Canadian stock timer will be either long or cash henceforth.  Horizon BetaPro Funds are intended to capture double the exposure to a given market even though that doesn't always happen.  However, it is the only double exposure ETF available as it relates to the broad Canadian market.  These funds have been available only for a short period of time and therefore my table below is of limited use.

 

Buying or selling HXU at the open on September 06, 2007 and then selling and repurchasing as per my timer times provides a CAGR of 28.1%.  In comparison, buying and holding XIU would have produced a CAGR of 14.8% (dividends not included) whereas buying and holding XIC would have produced a 10.1% CAGR (dividends not included).

 

 

Timer Date	Signal	HXU	Gain/Loss
09/05/2007	Long	29.34	0.7%	100,716
11/9/2007	Cash	29.55		100,716
2/13/2008	Long	27.49	1.4%	102,108
3/11/2008	Cash	27.87		102,108
4/4/2008	Long	29.50	16.9%	119,345
5/23/2008		34.48
		CAGR=	28.1%

My US Stock Timer Applied to Proshares Ultra QQQ

I publish the signals for my timer here on this blog.  Some of the commercial timers that are available provide three signals: long, short and cash. At times I have issued a short signal but after reviewing the timer's performance, it appears that my timer should only provide two signals - long and cash.  The timer does not use input from the value of the Nasdaq and therefore is not optimized or curve fit to the Nasdaq.  It just turns out that when applied to the S&P500, the DOW, the Russell 2000 and the Nasdaq, my timer works best for the Nasdaq.  I therefore prepared the following table by applying the long/cash signals to the Proshares Ultra QQQ to achieve maximum performance.  For simplicity, I have not included commissions nor interest earned while in cash.  Since August 02, 2006, this strategy has earned a CAGR of 39% versus roughly a 9.4% CAGR for the Nasdaq. That is, had I bought $100,000 of a Nasdaq ETF on August 02, 2006, that ETF holding would be worth roughly $117,600 today.  However, as seen in the table below, had I purchased $100,000 of QLD on August 02, 2006 and then sold and repurchased as per my US timer, the value of my QLD holdings today would be roughly $181,568.

 

Of course there are caveats.  This timer could fail to perform as well in the future as it has in the past.  Past performance may be a statistical fluke.  As well, holding QLD can be gut wrenching given the wild price swings.

 

Timer Date	Signal	QLD	Gain/Loss	Value
8/2/2006	Long	63.55	24.4%	124,359
3/1/2007	Cash	79.03		124,359
3/21/2007	Long	84.10	18.2%	146,953
7/26/2007	Cash	99.38		146,953
9/5/2007	Long	99.57	15.8%	170,169
11/7/2007	Cash	115.30		170,169
2/25/2008	Long	70.59	-3.1%	164,841
2/25/2008	Long	70.59	-3.1%	164,841
3/4/2008	Cash	68.38		164,841
4/1/2008	Long	76.28	10.1%	181,568
5/23/2008		84.02
		CAGR=	39.1%

 

The QLD prices are the opening prices the next morning after a signal is generated by my timer.

Abandoning Ship

I bought TBSI on April 10 at $33.60 and Dry Ships on April 18 at $75.59.  The stellar performance of both stocks has pushed me to take my chips off the table.  On Friday, I sold TBSI at $58.53 for a 74% gain and Dry Ships at $108.15 for a 43% gain.  Whether the stocks continue upward or soon sink like a stone is of no concern to me.  I made exceptional profits in a short period and am happy to cash in.

 

 

Canadian Weekly Dividend Report. 05/12/08

Barrick Gold Corp...........(ABX) Annual dividend increased by 33.3% from $0.30 to $0.40
Calian Technologies.........(CTY) Annual dividend increased by 25% from $0.48 to $0.60
Cineplex Galaxy Income Fund(CGX.UN) Annual distribution increased by 5% from $1.20 to $1.26
Clairvest Group.............(CVG) Special dividend of $0.10
Finning Int'l Inc...........(FTT) Annual dividend increased by 10% from $0.40 to $0.44
Freehold Royalty Income Fund.(FRU.UN) Annual distribution increased by 20% from $1.80 to $2.16
McGraw-Hill Ryerson.........(MHR) Annual dividend increased by 6.7% from $0.90 to $0.96
Melcor Developments.........(MRD) Annual dividend increased by 25% from $0.40 to $0.50
Methanex Corporation.........(MX) Annual dividend increased by 10.7% from $0.56 to $0.62
Power Financial Corp........(PWF) Annual dividend increased by 7.2% from $1.25 to $1.34
Seamark Asset Management.....(SM) Annual dividend decreased by 12.5% from $0.32 to $0.28
Wajax Income Fund........(WJX.UN) Annual distribution increased by 3.0% from $3.96 to $4.08

Bankers Petroleum

I bought shares of BNK on April 29 and have enjoyed a superb 28% return in less than two weeks. Such a spectacular price increase would normally encourage me to sell at least some of my holdings but the darn thing is that BNK still passes my most successful buy-and-hold for two months search. Also, over the past year there has been net buying by insiders in the amount of $616,088. I have researched some of Bankers' peers and could not find another similar company with net insider buying over the past year. Some of the insider purchases of Bankers shares were made only one month ago.

From the Bankers' website:

Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on maximizing the value of its heavy oil assets in Albania and shale gas assets the United States. The Company is targeting growth in production and reserves through application of new and proven technologies by a strong experienced technical team. Bankers operates in two distinct international areas, Albania (located northwest of Greece in South Eastern Europe) and the United States through its subsidiaries, Bankers Petroleum Albania Ltd. and Bankers Petroleum (US) Inc. The majority of the Company's revenue is currently generated from its operations in Albania.

From a presentation Bankers prepared last month, their forecast Albanian productions for 2008, 2009 and 2010 are 7,000bopd, 14,000bopd and 20,000bopd respectively.

The recent comments by experts as reported at Stockchase have all been favourable. Some of the talking heads suspect that the price may fall back after rising so rapidly. If that happens, they suggest buying the stock.

Timer Update

My US timer went long on April 01 and since that time the Russell 2000 is up 1.3% since then while the Nasdaq is up 3.5%. My Canadian timer went long on April 04 and since that time the S&P/TSX is up 6.2%. Both timers are still long.

Investment Books Ordered

I haven't bought any investment books yet this year so I decided to follow up on some recommendations. After reading the reviews at Amazon, I ordered "Come Into My Trading Room: A Complete Guide to Trading" by Alexander Elder and "Trading in the Zone: Master the Market With Confidence, Discipline and a Winning Attitude" by Mark Douglas. Links to the reviews at Amazon are here and here.

Canadian Stock Purchases

Yesterday I bought Gentry Resources (GNY), Hillsborough Resources (HLB) and Horizon North Logistics (HNL) for short term holds.





Yesterday I bought Gentry Resources (GNY), Hillborough Resources and Horizon North Logistics for short term holds.

Gemcom Software Has Been Sold

Gemcom announced that they have agreed to be bought out. I sold my shares at the open this morning for a 8% gain in two days.

Gemcom Software

My latest Canadian purchase is GCM. Gemcom provides mining software spanning exploration through production management. The Company’s software enables its clients to interpret geological deposits, develop and optimize mine designs and plans, schedule and manage production. Gemcom's website is here.

Interim revenue is up 68%, interim EPS is up 33%, the TTM P/E is 22, the TTM P/S is 2.7 and its RiskGrade is 190.

Canadian Weekly Dividend Report

Algoma Central Corp..........(ALC) Annual dividend increased by 28.6% from $1.40 to $1.80
Canadian Oil Sands Income Trust.(COS.UN) Annual distribution increased by 33.3% from $3.00 to $4.00
Nexen Inc....................(NXY) Annual dividend increased by 100% from $0.10 to $0.20
Talisman Energy Inc..........(TLM) Annual dividend increased by 11.1% from $0.18 to $0.20