#HYHRD: The more things change, the more they stay the same

I was ‘tweaking’, ‘fine-tuning’, and/or otherwise changing several of the procedures that I use to find stocks, rate them, and buy them.

I thought I’d outline some of them;

Screening: Several changes here. I no longer use barchart.com, finviz.com, sharebuilder.com (now capitaloneinvesting.com), or seekingalpha.com (primarily used to screen for etfs/etns). My primary site for screening is now fidelity.com, with several different changes in tack that are readily available for my use. I no longer screen for ETFs/ETNs, as I was not using the results.

These are just some of the different tacks that I might follow (from my recent “screening” post;

I use a FREE stock screener on fidelity.com (you need to register to save your screens, but it’s worth it, IMHO).

This “Top20/40IndustryVeryBullish” fidelity screen is the least forgiving and probably most ‘accurate’, and I place quite a bit of trust in it’s results, or lack thereof. I am finding the results produced by the fidelity screen follow the criteria even more closely than any other screen, which is why I use it *almost* exclusively. This also means that this screen is almost ‘perfect’, which may or may not be a good thing. I look for; Dividend Yield (Annualized) Is highest/lowest % in industry (Highest 20%), Security Type Is One Of: Common Stock, Common Stock (REIT), Price Performance (52 Wk, 13Wk, 4Wk, 5 Days) Is highest/lowest % in industry (Highest 40%), Exchange is One Of (AMEX, NASDAQ, NYSE), Company Headquarters Location Is United States of America, and Equity Summary Score from StarMine Very Bullish (9.1 – 10.0).

OTHER CRITERIA USED

From time to time, I use slightly different criteria when I screen. They include, but are not limited to;

“Top40Bullish” – Dividend Yield (Annualized) Is highest/lowest % in industry (Highest 40%), Security Type Is One Of: Common Stock, Common Stock (REIT), Price Performance (52 Wk, 13Wk, 4Wk, 5 Days) Is highest/lowest % in industry (Highest 40%), Exchange is One Of (AMEX, NASDAQ, NYSE), Company Headquarters Location Is United States of America, and Equity Summary Score from StarMine Very Bullish (9.1 – 10.0).

“Top40Bullishmarket” – Dividend Yield (Annualized) Is highest/lowest % in market (Highest 40%), Security Type Is One Of: Common Stock, Common Stock (REIT), Price Performance (52 Wk, 13Wk, 4Wk, 5 Days) Is highest/lowest % in market (Highest 40%), Exchange is One Of (AMEX, NASDAQ, NYSE), Company Headquarters Location Is United States of America, and Equity Summary Score from StarMine Very Bullish (9.1 – 10.0).

“Top20Bullish” – Dividend Yield (Annualized) Is highest/lowest % in industry (Highest 20%), Security Type Is One Of: Common Stock, Common Stock (REIT), Price Performance (52 Wk, 13Wk, 4Wk, 5 Days) Is highest/lowest % in industry (Highest 40%), Exchange is One Of (AMEX, NASDAQ, NYSE), Company Headquarters Location Is United States of America, and Equity Summary Score from StarMine Bullish or Better (7.1 – 10.0).

There’s other criteria that I use, and that further limits the number of stocks that will pass each screen. I believe that all of this criteria, when considered together, yields ‘higher quality’ results.

Charting: Several changes here as well. I no longer look for higher highs in each subsequent period as I think a higher low would be a much better ‘tell’ and a better ‘starting point’ for an investment.

From my recent “charting” post (amended for next week but not posted as amended, so these changes are really new!);

UPDATE: I recently posted a video showing the old method for looking at the charts, which basically looked at just the price trend(s) over time. I have stumbled upon a new method for looking at the charts that includes the old method and adds classic patterns with price and timeframe predictions and combines the process into a single pass solution (so I don’t need to go over the charts for the weekly periods after the daily periods) and looks back over many charting timeframes; 6 month 1 day, 1 year 1 day, 2 year 2 day, 3 year 2 day, 4 year 3 day, and 5 year 3 day.

NEW Method

For an investment to be in what I consider a ‘nice uptrend’ for longer timeframes, it has to have a clearly defined trendline showing stock price moving up in all 6 charting periods (6 month 1 day, 1 year 1 day, 2 year 2 day, 3 year 2 day, 4 year 3 day, and 5 year 3 day). It also must be making higher lows in each subsequently shorter time period.

For an investment to be in what I consider a ‘nice uptrend’ for shorter timeframes, it has to have a clearly defined trendline showing stock price moving up in the 3 most recent charting periods (6 month 1 day, 1 year 1 day, and 2 year 2 day). It also must be making higher lows in each subsequently shorter time period.

I like stocks paying ‘qualified’ dividends for our joint (taxable) account.

I like ORC in our tax-advantaged accounts for the monthly dividends, which are quite high.

I like NYMT in our tax-advantaged accounts for the quarterly dividends, which are quite high.

I like MORL but only for our Roth IRAs because the monthly dividends are quite high but taxed as regular income, so it’s only good for the Roth IRAs where it’s tax status matters not a whit. This is a new ETN from UBS, and I would suggest reading up on it on the Seekingalpha website. Some good articles there (and some not so good). Read and learn.

I do NOT like LP, MLP, or LLC stocks, partly because they issue a tax form called a K1, and they usually come after the filing deadline, which necessitates filing an amended return, which adds to the cost, both of time and money. So, no thanks to ‘partnerships’! (I am still ‘investigating’ this, because there are some who think these are still good investments even with the added time and cost of preparing tax returns, and amending returns already filed. There are also those who think these are not good investments for the reasons I mention, as well as other considerations. So, while the ‘jury’ is still out on these investment vehicles, they are still ‘taboo’ for our portfolio. More as it develops…)

Based solely on this look at the charts, it is clear to see that some stocks are trending down, but some are trending up. There are a few new opportunities from the watchlist stocks. The current holdings are down quite a bit. It may be a good time to catch some ‘bargain’ prices on my current holdings, or build up cash reserves (‘dry powder’) for later deployment into other opportunities. There may be many other opportunities ahead, and I am watching and waiting.

For longer term growth, these dividend stocks stand out as trending up in all 6 charting periods and coming up off a dip with ‘buy signals’; cnmd, wstg, wtba

For longer term growth, these dividend stocks stand out as trending up in all 6 charting periods; ancx, cnmd, fcap, wstg, wtba

For shorter term growth, these dividend stocks stand out as trending up in the 3 most recent charting periods and coming up off a dip with ‘buy signals’; vgr, aos, fnlc, gd, has, leg, nwl, sptn, swk, two

For shorter term growth, these dividend stocks stand out as trending up in the 3 most recent charting periods; bgcp, loan, nymt, vgr, aos, apts, avx, brkl, fnlc, gd, has, leg, mrcc, nwl, nycb, rrd, sptn, swk, two, wu

I define stocks that are “coming up off a dip, with ‘buy signals'” as stocks showing uptrends as previously defined in this post and showing an upturn in MACD, Parabolic SAR, and price trend with a confirmation of increased volume and a positive Linear Regression Reversal.

Shopping (#BuyList) Several changes here as well. I have changed the steps, and re-ordered some of them, and some have been eliminated.

From my recent “shopping (#BuyList)” post (amended for next week but not posted as amended, so these changes are also really new!);

Then, I apply this method (slightly changed yet again on 6/27/2015);

  1. 1st look at actual yield (of current holdings) – select top 3 – orc, nymt, ai
  2. then look at equal weight (of current holdings) – select top 3 – nrz, orc, loan
  3. then look at score (of current holdings) – select “in the green” – nrz, loan, bgcp, orc, vgr, morl
  4. then look at current holdings and select symbols with gains – nymt, vgr
  5. then look at chart results (giving preference to stocks in uptrends for 6 periods over 3 periods;
    • select longer term growth results coming up off a dip, with ‘buy signals’ – cnmd, wstg, wtba
    • select shorter term growth results coming up off a dip, with ‘buy signals’ – bgcp, loan, vgr, aos, apts, fnlc, gd, has, leg, nwl, sptn, swk, two
  6. if any congruence with chart results (and ‘in the green’ on the spreadsheets);
    • First, ‘weed out’ any overweight current holdings and exclude them from further purchases – ai, cnsl (ind-PandA only), cys, morl, nymt, orc
    • then add to underweight current holdings with gains – vgr
    • else, may be time to initiate new positions from watchlist – cnmd, wstg, wtba, brkl, has, leg, nwl, nycb, sptn, swk
    • else, may be time to add to underweight current holdings – bgcp, loan
  7. then I choose 3 stocks paying ‘qualified’ dividends for the taxable account – vgr, cnmd, wstg
    • These 3 stocks are invested weekly in the taxable joint account held at Capital One investing (starting 7/7/15).

I define stocks that are “coming up off a dip, with ‘buy signals'” as stocks showing uptrends as previously defined in the “#HYHRD: Charts for w/e…” post and showing an upturn in MACD, Parabolic SAR, and price trend with a confirmation of increased volume and a positive Linear Regression Reversal. I define “‘in the green’ on the spreadsheets” as stocks showing a total (of % yield & % return, or “annualized return”) above 25% (i.e.; “in the green”). I further define “underweight current holdings” as those appearing on the “Equal Weight” spreadsheet that are NOT ‘overweight’ (in each account, by dollars invested).

So, you can see there have been some changes already implemented and some that will be implemented and posted next week.

This is not advice, and I am posting it purely for entertainment purposes. Do your own due diligence and remember, YMMV!

About PandA Trader

I am, I think... "Disobedience, in the eyes of anyone who has read history, is man's original virtue. It is through disobedience and rebellion that progress has been made." -- Oscar Wilde
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