Investment wrap up 8/21/2015

Short summary, everything was horrifyingly bad in the U.S. Market. The Dow Jones entered correction territory, dropping by more than 3%, following yesterday’s 2% drop. This is the first time in more than 4 years we have seen a correction. All 10 major market sectors were down. 

September 30th / October 1st continues to be a key turning point for the Economic Confidence Model from Armstrong Economics. Volatility alternating between strongly up and down looks to happen in September. I urge everyone to read this article. We’ve broken key support on a weekly basis, and that portends more downside ahead. If you are not familiar with Martin let me just say I gave up on every other economic theory after reading his work.

Dow Sharp Drop – CAUTION Highly Warranted

Armstrong Economics

The Dow has been dropping sharply ever since it elected the first two Weekly Bearish Reversals at 17732 and 17510. The next key Weekly Bearish Reversals to pay attention to today are 16910 and 16680. A closing below both would signal a sharp decline into next week; holding may warn of a temp low this week.

My investment ideas once we hit some kind of bottom:

AAL – American Airlines, world’s largest airline

AAPL – Apple, premier technology company

F Ford, auto manufacturer famous for the F-150 truck

DIA – Dow Jones ETF, tracks Dow Jones index

GILD – Gilead, Biotech famous for HIV and Hepatitis C drugs

IBM – Big Blue, enterprise services company

VLO – Valero, largest oil refiner in the U.S. 

All are cheap on a Price to Free Cash Flow basis, with yields on market value equal to 9-10% or above (except DIA). What’s Free Cash Flow? Generally, it’s the amount of money available to shareholders after a company pays all its bills. Specifically, it’s cash from operations on the cash flow statement minus capital expenditures. I like using Yahoo to calculate the numbers. I’ll add a link to Valero’s cash flow statement when I am in front of a desktop.

Good luck and stay financially safe out there!

Vijay @ smilingdad 

Published by smilingdad

My story is one of tragedy and redemption. We've made many mistakes along the way regarding our money. Our goal here is to show you how to take care of your money life long, and as much as we can, help the Earth along the way. I call it sustainable personal finance and ethical capitalism. Currently, I am a part time writer for Cleantechnica and part-time licensed financial professional, along with being a full-time dad.

5 thoughts on “Investment wrap up 8/21/2015

  1. Definitely not a good day for the markets! The only thing left to do is make a shopping list. I’ve been working on it throughout the evening and I agree that Apple is one to buy more of. I am also not afraid to increase some of the oil stocks. Still not sure when to hit the buy button where I believe we may see another drop come Monday.


    1. Definitely wasn’t! Yes, Apple is a great choice, chronically undervalued. I personally won’t buy oil stocks, from what I know oil will continue to go down and stay down. There are exceptions to every rule. If you find a good oil stock let me know! That’s why I picked Valero to watch. Oil has gone down more than the refined products.

      Liked by 1 person

    2. From what I have learned about buying stocks in a down draft investors that buy later in a value stock do better than earlier investors. I plan to wait until things stabilize some before buying. Plenty of chances up ahead.

      Liked by 1 person

      1. I do agree Apple is overvalued but most stocks are at this point. I generally don’t market time and do a pretty good job of ingnoring the media and all the hype. Not listening has really paid off…Lol…we will see how this one goes. Could be the first signs of another Great Depression for all we know. Great blog by the way!


      2. I personally think Apple is undervalued. I think for the stock market it really is a market of stocks, with some getting very cheap and others expensive. Good job on ignoring the media! I try to market time, with mixed results. I am using profits to buy and hold stock for the next two years. Not yet and I hope not! Thank you, I appreciate your support!

        Liked by 1 person

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