Weekly Risk Report 04/27/2009
SignalPoint’s various portfolios continued in the Sell mode last week with REIT investments beginning to capture some profit and rebuild cash reserves. We are seeing some signs of stress as the markets have moved upward strongly in the last 13 weeks. The stress has been relieved within our portfolios as we take small amounts of our holdings and convert them to money market funds. Overall cash reserves remain historically low, but appropriate for the market risk as we are measuring it currently.
The market tends to react in a reflex manner after severe declines like the ones we saw in early March. Since then we’ve seen our Speculation measure return from very bullish to its current Neutral rating. In Value Line this week, all 41 stocks in their “Best Performers” list have gained over 100% and the “best” is up over 500% in the last 13 weeks. When we compare that to the start of 2009 it is rather remarkable. The year started with no stocks in Value Line’s 1700 with a 13 week gain of over 90%. We see the same in Value Line’s Expanded Edition. All of the 50 stocks in their “Best Performers” list are also up over 100% in the most recent 13 weeks (the best up 500+% also).
Only Speculation is currently showing a Neutral ranking; all other components are currently still “bullish” even if they are rising slightly in risk. P/E ratios remain low, short term interest rates are also very low. We continue to keep a close watch on each component of our various portfolios with an eye on limiting market risk exposure and capitalizing on profit opportunities as they appear. Short term LIFO gains are being used to fund our money market reserves.
While pockets of the economy remain very depressed, many have maintained profitability during this remarkable recent 6 month period. It is a credit to corporate management that they have been able to respond as well as they have under the extraordinary circumstances. It may be a while before the markets fully appreciate this staying power. We continue to monitor all the major business sectors, income markets as well as the U.S. Dollar against major foreign currencies.
