Welcome back, Meta-Traders.The first quarter of 2012 is in the books with the major averages turning in the best first quarter performance since the dot come bubble back in the late 1990's. As for the major benchmarks, the Dow-30 returned +6.28%, the SP-500 returned +11.28% and the Nasdaq returned a stunning +18.97%! My return in equities was +11.97, so I came in better than the S&P but well short of the Nasdaq.
On the topic of Apple, the stock is showing signs of topping action breaking the 600 mark for the 2nd time in 2 weeks, but failing to close meaningfully higher. An interesting tell happened on Monday 3/19 when Apple declared a dividend and major stock buyback. This news provided only a short-term boost in the shares. But this event was an important shift in psychology where Apple crossed the line from a growth stock to a value stock. We saw the same thing back when Microsoft and Intel were added to the Dow 30. It was the death of those issues as growth stocks. These types of changes are subtle, but important milestones and worth mentioning. Also, the character of the price action has changed, and that means for the meantime, I am avoiding the shares.
On the plus side, we had breakouts to new, all-time highs this past week in portfolio holdings DFS, FDO, IBM, ICUI and YUM brands. I also started new positions in Health Care provider Metropolitan Health Networks (MDF) in addition to the ill-fated SNX mentioned above. These new additions were a result of my "New High, Positive Earnings, Low PE" scan detailed a few weeks back which are all working out well.
The big story for the quarter was Apple computer which started the year at $405 and closed the quarter at just under $600 gaining +195 points or just under 50% in a 3 month period! With 900 million shares outstanding that represents a gain in wealth of 157 billion dollars or 157,000 million dollars. This value change in itself exceeds the entire annual GDP of about 60% of the world's countries.
On the topic of Apple, the stock is showing signs of topping action breaking the 600 mark for the 2nd time in 2 weeks, but failing to close meaningfully higher. An interesting tell happened on Monday 3/19 when Apple declared a dividend and major stock buyback. This news provided only a short-term boost in the shares. But this event was an important shift in psychology where Apple crossed the line from a growth stock to a value stock. We saw the same thing back when Microsoft and Intel were added to the Dow 30. It was the death of those issues as growth stocks. These types of changes are subtle, but important milestones and worth mentioning. Also, the character of the price action has changed, and that means for the meantime, I am avoiding the shares.
Historically, after periods like this, I get sloppy and start to make avoidable mistakes. I had one such mistake this week where I started a new position in high-flyer Synnex (SNX) , just for it to gap down 6+ points the next day on good earnings that otherwise fell short of expectations. This is a classic newbie mistake, buying stocks on breakouts to new all-time highs without any regard for the upcoming earnings! Dumb!
On the Forex side, it has been a rough first quarter. I added it all up, and I'm down about $500 or 2% of my 20K investment. We had some spectacular action in Atipaq Full Portfolio, which at one time in the quarter was up as much as 20%. A recent string of losses has given half of that back and for now is starts up about 9.15% on the quarter. I don't think there's much to read into this other than the fact that some investments go through bad periods when others are doing well. But its clear that my 30% to 60% per year performance goal in Forex is not happening this year. You may have individual accounts that perform that well, but on aggregate, the results are no where near that good.
On the plus side is Sunqu, our only truly adaptive trading system. This system currently has a long EUR/USD position which, if closed would put it into the positive for the year. This one will be interesting to watch.
That's all I have for you. I have been busy at my day job taking on entirely new computing platforms and devices. Its a lot of fun, but also a lot of work. So I don't have much extra time for forex development.
Enjoy your weekend.
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