High Heeled Traders
  • Contact email: charmel@highheeledtraders.com

Girl Power Trading

I know, the last few days have been volatile and opening minutes of April 1 stocks have been falling, for investors this could be the perfect time for bargain-hunting, BUT given the unsteadiness of the market with the rate rise and we are allowed to question is there there any good investment. If there is anything to pick up, might as well those with “sure money” in the form of dividends right? I’ll have some of that. Here’s a great list from Dow Jones Newswires that mainly discuss Tech stocks — they argue that technology sector “has a solid free cash flow margin of 21.3%, along with an average free cash flow yield of 6%, which he said is significantly higher than the average of 3.6%.

We pared the list to 20 tech stocks with market values of more than $500 million and dividend yields of over 1%, with the highest “headroom” for dividend increases, based on their free cash flow over the past 12 months:

Company Ticker Closing price – March 30 Free cash flow per share – last 12 months Free cash flow yield Annual dividend Dividend yield “Headroom”

Computer Sciences Corp. US:CSC $66.45 $9.07 13.64% $0.920 1.38% 12.26%

InterDigital Inc. US:IDCC $51.26 $6.20 12.10% $0.800 1.56% 10.54%

Seagate Technology PLC US:STX $53.08 $7.21 13.59% $2.160 4.07% 9.52%

Xerox Corp. US:XRX $12.84 $1.46 11.37% $0.280 2.18% 9.19%

Corning Inc. US:GLW $23.24 $2.59 11.15% $0.480 2.07% 9.08%

EMC Corp. US:EMC $25.52 $2.72 10.66% $0.460 1.80% 8.86%

Science Applications International Corp. US:SAIC $55.70 $5.91 10.62% $1.120 2.01% 8.60%

Leidos Holdings Inc. US:LDOS $42.24 $4.89 11.58% $1.280 3.03% 8.55%

Hewlett-Packard Co. US:HPQ $31.57 $3.38 10.70% $0.704 2.23% 8.47%

SanDisk Corp. US:SNDK $64.98 $6.24 9.61% $1.200 1.85% 7.76%

NetApp Inc. US:NTAP $35.38 $3.30 9.33% $0.660 1.87% 7.47%

Insperity Inc. US:NSP $52.80 $4.70 8.90% $0.760 1.44% 7.46%

Lexmark International Inc. Class A US:LXK $43.13 $4.65 10.79% $1.440 3.34% 7.45%

ManTech International Corp. Class A US:MANT $34.01 $3.29 9.66% $0.840 2.47% 7.19%

Marvell Technology Group Ltd. US:MRVL $15.18 $1.28 8.40% $0.240 1.58% 6.82%

Apple Inc. US:AAPL $126.37 $10.26 8.12% $1.880 1.49% 6.63%

L-3 Communications Holdings Inc. US:LLL $126.69 $10.95 8.65% $2.600 2.05% 6.59%

Teradyne Inc. US:TER $19.11 $1.49 7.81% $0.240 1.26% 6.55%

Brocade Communications Systems Inc. US:BRCD $11.79 $0.87 7.42% $0.140 1.19% 6.23%

Western Digital Corp. US:WDC $92.93 $7.78 8.37% $2.000 2.15% 6.22%

Source: FactSet

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And while the markets are falling with some of your holdings, take a deep breath, relax and listen to this!

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Predicted a downtrend a couple of days ago and here it is! Yesterday’s fall was just spectacular my bargainista friends must sure be excited. But hold on to your wallets, it is getting cheap, but could be cheaper! Checked Apple’s PE and it’s standing at 16.62 around the same as Microsoft at 16.73. At this stage in the market, with the quarter just about to end even with US GDP being reported tomorrow we have to consider that there’s about 2 weeks days to go before the Earnings pour in, so expect volatility and it looks like we got a lot more trip down the slides. Apple’s PE was around 13 when they reported their Earnings last quarter so my short and sweet tip for today is that there’s going to be bargains galore but it hasn’t hit the floor…. Wait up for the next quarter earnings to roll in (Around Apr 8) for the first major company Alcoa … before you really go shopping for the bargains. For those who want to get the brainwork that leads to my market predictions, join my webinars and workshops, email at charmel@highheeledtraders.com or keep posted in this blog!

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Going Bananas

March 20, 2015

What a relief! US Fed had been listening to me :) and decided, rightly, that it’s not time to raise rates given the weak inflation and penny-wage growth. Now, understandably a lot of investors are cheering that on (because borrowing money is still cheap and companies / households can borrow cheaply), but as yesterday’s market indicated, not everyone is staying excited with US stocks and if you can take a step back and look wider in the global financial universe, they are saying US is good but Europe is better, and sending funds flowing over there. Why this happens is explained in my Low-Risk High-Reward Investing Workshop and webinar series coming up in April. Email charmel@highheeledtraders.com to signify your interest!

Mainly, they say European stocks are cheap after the hammering they got last year due to low-growth almost recessionary era, but now with massive US-inspired QE unleased by the European Central Bank, everyone is hoping that it will follow that the economies will also grow and there’s that pull of “bargain buying” (just ask women how difficult it is to leave a shoe sale!), plus of course the promise of growing earnings from growing economies. So do have a read on why possibly “Everyone Hates US Stocks”

For me, the stock to beat is Apple, you’ve heard the news of Apple Watch, Apple TV services bundling cable channels, Apple Pay – all new product lines that will usher in earnings. If you like bargain hunting, prepare for the next two-three weeks when we transition to the next earnings season. AAPL now still valued at a fair PE 17.18 but could go lower, so my strategy now is to quickly take profits with any long position, to make sure I’ve got the cash for cheaper prices.

I project that it will be volatile with the tug of war between high valuation, weak data (Housing) and CPI and Friday next week we get the GDP reading in which investors could do the “bad news is good news” routine.

And yes, challenges make life exciting, watch this challenge to Apple Watch:

http://www.bloomberg.com/news/videos/2015-03-19/how-tag-heuer-will-create-a-smartwatch-with-google-intel

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Apple Shake

March 13, 2015

Still buzzing with Apple Watch? No? After the stock plunged to horrible depths so quickly following its launch I won’t blame you if you have second thoughts about the success of Apple (AAPL). But let me just say, if you have observed the wider market, it is going on this volatile period (again!) as we are ending the earnings season and so the love-hate relationship is not just on AAPL. Looking forward, big week with the Federal Reserve Open Market Committee (FOMC) meeting that may or may not talk about raising the interest rates. Jobs are definitely growing in number, but the wages are not. There is also the inflation, retail sales, housing and manufacturing weakening, so FOMC if you’re listening to me, no rate rise yet please. :)

Yesterday, it looked like the market has fallen out of love with AAPL and soon after the open the price dipped early to 121.63. I was wondering at that time if it is worth the risk and with the other major indices being green, it is always wise to confirm that the selloff is already confirmed to reverse, I know this could be tricky to gauge by “how much”, you have to study the volatility of the stock on a very short time periods, my low-risk idea, would be a price recovery above yesterday’s closing, you enter provided that there is still that 2-3R reward that is worth the risk. I show this in my live-trading webinars so I do hope you join the next runs. Email charmel@highheeledtraders.com to sign up.

If there is one thing about AAPL, it is continually growing, BUT it is a VERY profitable company. Just look at the Price / Earnings ratio which at $124.45 yesterday is 16.77 (so at the day’s low it would be around 16.30 or so) — few would boast that kind of value. So for those fearing the worst about AAPL, shake it off! The market may be falling fast but it will be a buying opportunity for those with volatilility-based systems and robust business plan. Today, US consumer sentiment will be reported at 10am, following the inflation-related Wholesale / Producer prices that looks like bad news (not much inflation > but good news for those who want to delay the interest rate hikes) it looks like another swingingly volatile day. Enjoy the ride or if you’re a newbie, stay out of it, paper trade or only put very small positions to get the feel of the market.

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Watch It!

March 10, 2015

To celebrate International Women’s Day I’d like to invite you all to Like my Facebook Page and get the free 100-page preview eBook of “High Heeled Traders” For those who already have the book, send me a message through that Facebook page so I can give you the updated Trading Procedure so you can get started right first time!

As I am writing this, there is a tense wait watching out for the “Apple Watch” launch in San Francisco 10am Pacific — it’s easy to be carried away by the hype or the bashing, but the truth remains that
1) this is an all-new product category (in the world!) that even I, a confessed-non-watch-wearer am excited to wear! It is a feature-rich watch that will help with everyone’s health, help with instant and fun communication
2) The range in the teasers is quite extensive, covers a lot of markets with the external designs, from the gold edition for the parents, to the sporty teener type, down to what looks like a Mickey watch for the kids. Plus it all needs an iPhone, so now all of the family needs to upgrade!
3) Apple Pay will be included as a feature and this is a new revenue stream as well for Apple.

Stock moved up early today, but half down from it’s peak, it’s good for short-term traders to get in again at another entry opportunity.

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1st of March… glad I made steady progress on my Peak Performance course and I want to share with you this snippet of learning, that I thought sums up what is important for success in investing / trading.

“I thought that by knowing the market you could be successful. I spent a long time learning about the market, the indicators and stuff, and even the psychology of traders” … I found that you really have to know yourself much more than you have to know the market. You have to believe in yourself and you have to do what you think is right”… “The market hands you opportunity. You don’t have to go looking for it. It stays there and it screams at you and it’s there for you to do. But you have to have the internal strength to pick up the ball and do it.”

As I always say, the Peak Performance Course by Dr. Van Tharp is brilliant! For months, I had been less than eager to do my trades, which is a step up to a whole new level of trading, I am now feeling more confident about this next phase, so grateful to have done this refresher! That is also one of the fine points in trading / investing – acknowledging your emotions. We are not robots. To say that you have no emotion when trading is wrong. You do, you have it all the time, it’s just for you to know and find out. One of the attendees of my “Investing in the US Stockmarket Workshop” shared that he is either afraid to lose money on his investment or afraid to lose his profits. Fear is stopping you to make a big mistake because the risk is too big or you don’t really know enough :) Fear is good. After all, when you know the risk is low and know what you are doing, the fear fades.

Just an alert that the greatest investor of all time – Warren Buffett has sent out his Golden Jubilee Newsletter. Enjoy!

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Yeah baby! Greece deal finally done. For 4 months. All the US Major Indices jumped to record highs as AAPL also did. (Article here). Hurray for those who have ridden this wave thus far! Me, I’m on track with my Peak Performance Course and just keeping tabs on the market.

With that Greece issue pretty much gone for now, we look forward to next week’s economic calendar. It’s going to be dominated by housing and consumer news, and add speeches by Federal Reserve officials (Ms Yellen semi-annual testimony at the Senate Banking Committee). For sure this will move the markets). Recent job gains could be a highlight but wage earnings and inflation not on target yet so we expect continued “accommodative” policy for a few more months. Central banks around the world either cutting rates or stimulating their economies is pushing the dollar higher. These are going to be supportive of stocks. And enough to help the markets to their record highs.

http://www.bloomberg.com/news/articles/2015-02-20/germany-turns-up-pressure-on-greece-as-cash-crunch-looms

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Apple is High in Sugar

February 19, 2015

The Apple of my eye just went on to it’s record high as well, ending $128.75 . AAPL seems unstoppable, but I think it is due for a little rest. It’s taking some step back from its intra-day highs, it is getting more volatile. There is a divergence now among the major indices (only NASDAQ ended green today). See if not for the positive sentiment from FOMC minutes, AAPL was mostly in profit-taking situation pushing it into negative territory several times in the day. I’d be careful for any positions to the upside, to take profit with tight trailing stops. George Soros reported that they exited AAPL and moved out to Asian and European stocks (bargain hunting possibly). Nonetheless, with continuing innovative products, Apple Pay and Apple Watch, (I surely hope they make the Apple Car) … Also from reviewing Dr. Van Tharp’s Peak Performance course I’ve been finding out about the chemical balance that supports our investing / trading performance — get this, too much sugar gives a boost in energy but absorbed quickly by musles and liver and eventually leaving no energy source for the brain. Best to consume complex carbs found in whole grains, fresh fruits and vegetables that provide steady flow that provides more stamina and mental energy. Apple is high in sugar, the good kind that lasts. BONUS : Rich and Generous companies – AAPL one of 10

TOO EXPENSIVE?
US stocks flirting with record highs. Professional fund managers, including David Einhorn are saying prices are getting stretched. S&P500 which reached a record Tuesday (and ended just a bit shy from that at Wednesday’s session) is trading 18.5 times reported earnings. That’s a bit above the 17 number representing “fair” valuation already. (Article here)

I heed this “warning” for sure, but know that the earnings calendar is not yet done (with retailers still about to report), more dovish talk from US Federal Reserve would also serve more sugar. Last night’s FOMC Meeting Minutes had definitely given comfort that rates are on hold for a while yet — Globally – where else do we see growth ? Very few places, you could say the global climate even darkened than last year – with Japan, China, Australia, Canada, EU cutting rates or setting accommodative policies, but that means they are all nervous about growth. Oil prices, back up to $50 but still no promising demand growth. Wages are also far from being able to support more robust spending — all those wage increases can afford are donuts and not yet a whole cake. Article here.

It’s like New York Fashion Week got it all in one trend — it’s back to BLACK. As in dark, and foreboding! Check out the trends here. Nonetheless, you can’t say they are boring, with all those frilly add-ons and interesting angles perking up the eye, it’s the same in the financial market with those rate cut announcements and possibly on-hold rates for the US for longer. Enjoy the sugar…

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All Time Highs

February 15, 2015

More to come? AAPL reaching it’s all time high comes just when S&P 500 Index reaches it’s all time high too! Before we all get excited be aware that it’s not happening to all companies, so choose well. Here’s the recommendation from a Bloomberg article here.

> Majority of earnings in US
> Positive free cash flow (good cheap companies)
> Geared towards disinflationary global environment

Volatility feels high but it’s “back to normal”

They have a video that discusses the current market so be sure to catch that one. They talked about the volatility that we are having so it’s not a straight up march to more all time highs. I myself believe that AAPL will continue to grow (a fund manager even said it will be a Trillion dollar company) but it will not happen overnight. I’d keep watch on valuations and AAPL’s PE stands right now at 17.12 so it is fairly valued. Earnings season still on the way so we could likely see some boost on company earnings performance but I say the majority of the move had already happened, so be on alert, be sure you set your stops to take profit.

Meantime, I’m going back to reviewing Dr Van Tharp’s Peak Performance course … been doing self-tests relating to stress and I’m all perked up discovering where else I should improve! So everyday living got it’s stressors, but we all just have to protect ourselves more with focus on health and nutrition, exercise, recreation… I can’t wait to get back to the course. Just amazing,,, don’t stop me now!

ll

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I’m Worth It!

February 9, 2015

Look away and it’s gone! Last week saw the major Indices reach month-high record highs, but it was not to last. The last few days saw strong gains so it looked like it was ripe for profit-taking. Still, I was one of those who thought that the prices could still go up because of the strong jobs data. We have to get used to this volatility, and take profits quick. I told you I was reviewing the Peak Performance Homestudy Course of Dr. Van Tharp and in the Tasks of Top Trading, he discusses that one of the tasks should be a daily debriefing — this is the task of determining whether one made a mistake in following one’s trading rules. I have made a habit of writing down on my trading diary what are my emotions on the trading day, and one of my biggest mistake is making a small loss balloon to a bigger loss, or not following proper position sizing. By now, we realize that we can not win in all our trades, my last performance review showed that I had a 50% win rate, the key is to control the loss to the the Initial Risk and ensure that the opportunities chosen would yield more than 3x your Initial Risk or Stop — if you do the math, it’s something like this

For 30 trades, where Initial Risk (R) is $100
15 losses of -1R ($100) = -1500

WINS
5 wins of 2xR (2 x 100) =1000
8 wins of 3xR (3 x 100) =2400
2 wins of 5xR (5×100) =1000

Gross Profit = 4400
Less cost of all trades = 3000 (if you use 100 for each of the 30 trades)
Balance = 1400 or 46% of the 3000

The above results are highly achievable, first you take only the opportunities that are sure to generate huge reward, that are worth at least 3x what you risk. Majority of your wins may just even be on target, and only need a couple of big winners to make your performance stellar. It matters greatly that you control your risk when you are wrong. I know it’s easy to get excited about an opportunity – - but we really have to be selective. Imagine if all your opportunities are only going to give you 2x your Risk — you won’t make money *even make losses because of all the fees, taxes etc.

So again, remember to take only the opportunity that says “I’m Worth It!”
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(Reuters) – Asian shares wobbled on Monday after dismal Chinese trade data eclipsed a strong U.S. jobs report, raising concerns about a deepening slowdown in the world’s second-largest economy and sending the Australian dollar sliding.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.3 percent with Australian shares .AXJO down 0.5 percent in early trade. U.S. stock futures also shed 0.4 percent ESc1.

Japan’s Nikkei share average .N225 bucked the trend and rose 0.7 percent on the back of a weaker yen.

Data published on Sunday showed China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels while imports tumbled 19.9 percent, far worse than analysts had expected. The data highlighted deepening weakness in the Chinese economy.

“Given that there were more business days in January this year than last year due to the difference in lunar new year dates, that was pretty dismal data,’ said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

The Australian dollar, often seen as a proxy on bets on Chinese economy because of the country’s trade link to China, fell 0.4 percent in early trade to $0.7775 AUD=D4.

The poor China trade figures took some of the shine off robust U.S. jobs growth, with payroll gains of 257,000 in January. Hourly wages also rebounded, increasing 12 cents last month for a 2.2 percent increase from a year earlier, the largest such gain since August.

U.S. debt yields shot up, with the benchmark 10-year yield hitting a four-week high of 1.965 percent US10YT=RR. Money market futures <0#FF:> have fully priced in a rate increase by September with some chance of a move as early as June.

U.S. stocks, which initially cheered the solid jobs data, sold off in late trade, with S&P 500 .SPX ending down 0.3 percent after having hitting a five-week high earlier on Friday.

The prospects of an earlier U.S. rate hike could hit Asian shares and currencies even harder, as investors could bring some of their invested money back to the U.S. markets.

The euro remained vulnerable as the new Greek leader Alexis Tsipras rejected the bailout, setting himself on a collision course with his European partners.

In his first major speech to parliament since storming to power last month on Sunday, Tsipras rattled off a list of moves to reverse reforms imposed by European and International Monetary Fund lenders.

The euro traded at $1.1325 EUR=, little changed but near last week’s low of $1.1280.

The U.S. dollar’s index against a basket of six major currencies maintained its 1.1 percent gain on Friday and stood at 94.740 .DXY =USD, edging closer to an 11-year high of 95.481 hit last month.

The yen hit four-week lows of 119.23 to the dollar JPY= on Friday on the back of rising U.S. bond yields. It last stood at 118.96 in early Monday trade.

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