STLA - Seraphic Cash-Cows On Plateau Prairie

2023-12-18 05:43:43 ET

Summary

• The best performance of the bull plateau is to advance steadily, not to move monotonously, and support for loyal cash cows.
• The article discusses winners in various categories such as Mega-Cap Group, Large-Cap Group, Small-Cap Group, Top Gains, All Times, and Most Multiples.
• The data from Charles Schwab and TD Ameritrade is analyzed. Schwab data provide more detailed information than TD data.

The Best Performance of the Plateau

The best performance of the bull plateau is 1) not to move up too stiffly in a few weeks, as Oct 30 (Monday) through Dec 8 (Friday), 2) not to move monotonously, without a steady uptrend, in a few years, as the famished years from Mar 2020 to Mar 2023, and 3) to steadily and aggressively support the loyal cash cows in every cession.

The Focus

The post documents a number of the trophy winners in the various categories, such as a "MCG" (Mega-Cap Group), a "LCG" (Large-Cap Group), the "SCG" (Small-Cap Group), the "TG" (Top Gains), "AT" (All Times), and the "MM" (Most Multiples) in H2 (the second half) (Jul - Dec).

The Data

Last time I introduced "79CCs" (79 Cash Cows), which attracted investors highly, so I am encouraged to give more data out, and to provide the results of the analyses on new data from Charles Schwab, and "82CCs" from TD Ameritrade, which is too long, so it placed in Reference after the main text, because 2 summary Tables (Table 4 and Table 5) are too brief.

Schwab data (113 Days), however, didn't go to Reference, not only it is cumbersome, but we can assume that 3 summary Tables (Table 1, Table 2, and Table 3) are enough to grasp the essences of new data fully.

I have used both Charles Schwab and TD Ameritrade since the early 1990s. Schwab merged TD recently, but two good brokerages operate independently. TD brokerage is still partially owned by TD ("Toronto Dominic") Bank which is the largest commercial bank in Canada.

During over 3 decades I ran across several brokerages, but fortunately I have the most successful 2 brokerages now: Online trading is free and their excellent services are recognizable.

The TD data vs. the Schwab Data

TD data was collected from "Cost Basis" file which has ticker symbols (in alphabetic order), proceeds, gains/losses, and G/L%. It's very easy to bring into my article. Schwab data, on the other hand, in "Realized Gain/Loss" file where costs and proceeds are available, but no gain/loss figures and no G/L% are given, so some manipulation is needed.

TD data are very friendly but no resources to analyze further are available, while Schwab data are voluminous, but a scrutinizing process can easily move ahead. We can see the difference between 3 Schwab Tables and 2 TD tables: The former are lucid, but the latter is very simple.

Table 1 (Charles Schwab)

Table 1 is very interesting. Schwab data is like a dairy, showing each sell record every session. All Turns column is filled by 1. TD data have the aggregated numbers are in the Turns column, so we can't analyze about the daily actions.

Pay attention on the second line. Roku, Inc. (ROKU) made +8.35% gain on Nov 2, that was the second best. As I said in my previous article. before the market open, my Roku holding spiked very high, and I sold it. A big short sale had a big buy-back order in the pre-market: It was very unusual. Roku made another gain, +4.23% on Sep 6.

On the first line, Roblox Corp. clinched the top-gain spot, registering +10.32% on Nov 8. [[RBLX]] added +4.68% on Oct 24.

Table 2 (Charles Schwab)

The Table 2 aggregated the multiples, as TD Table. Here, Roblox and Roku logged 3 and 2 in Turns, and 7.50% and 5.15% in Gains, respectively. [[CRSP]], [[W]], [[OOTO]], and [[NVAX]] follow.

An interesting story about Wayfair, Inc which was bought at a high price ($85.325) on Aug 8. After that W has been floating about a half price of the cost basis. Whenever a strong signal of a buy is detected, a buy turned out to be a big gain.

One thing must be careful is to avoid a "wash sale", that is a gain is denied when a purchase of any security is bought at a lower price than the cost basis before 3 months. Therefore, 2 accounts are better. Also, we must wait for 3 months. W is older than 3 months, so any account can buy now.

Table 3 (Charles Schwab)

Table 3 (Schwab) summarizes 7 "MM" (most multiples), printing 1) [[FANG]] (8), 2) [[MSTR]] (5), [[STLA]] (4), 4) [[ROKU]] (3), 5) [[CRSP]] (3), 6) [[W]] (3), and 7) [[NVAX]] (3).

Table 4 (TD Ameritrade)

Table 4 ((TD)), reports 7 "MM" (Most Multiples) as 1) [[JNJ]] (22), 2) [[ROKU]] (19), 3) [[DKNG]] (15), 4) [[FNGD]] (12), 5) [[ARKK]] (10), 6) [[NVAX]] (10), and [[CAN]] (8).

Table 5 (TD Ameritrade)

Table 5 [TD] prints 8 high gains: ) [[CRSP]] (+$5.38), 2) [[TAN]] (+$5.12), 3) [[ANGI]] (+$4.98), 4) [[APE]] (+$4.95), 5) [[NVAX]] (+$3.90), 6) [[W]] (+$3.72), and 7) [[BB]] (+$3.01), and 8) [[HOOD]] (+$3.01). Here, HOOD did the same role, as W did in Table 2, Table 3, and Table 4.

Table 6 (Trophies)

We honored 11 trophies to: 1) [[RBLX]] for SCG, 2) [[ROKU]] for LCG & TG, 3) [[CRSP]] for LCG, 4) [[W]] for LCG, 5) [[DKNG]] for MM, 6) [[NVAX]] for SCG & AT, 7) [[FANG]] for MM, 8) [[MSTR]] for MCG & MM, 9) [[STLA]] for MM, 10) [[FNGD]] for MM, and 11) [[ARKK]] for MM.

Table 7 (Momentum/Trend)

The S&P 500 made 3 unusual consecutive advances: 1) A 8-day rise in a row from Oct 30 to Nov 8, 2) a 5-day ascent in a row from Nov 14 to Nov 20, and another 5-day surge in a row from Dec 8 to Dec 14.

The U.S. Economy and the Fed (Federal Reserve)

The S&P 500 Index (or the Economy or SPY) ratcheted upward again to the 4,700 level on Dec 13 (Wednesday), closing at 4,707.09, and stayed a bit better level until Friday (Dec 15) when the S&P 500 was flat (actually down by 0.36 or -0.01%), as shown in Table 7.

The current long (14.5 years) upswing (started in Jun 2009) was inherited by the legacy of Ben S. Bernanke, and the outstanding maneuver of Jerome Powell and John Williams of the Fed, equipped with the internet, AI (Artificial Intelligent), and machine learning.

As a consequence, the Economy will continue to grow in a few years, and the Fed is compliant, in other words, it rests in near future, not in a data-driven mode, but an "auto-landing" mode, because it doesn't want to disturb the current optimized and balanced situation.

A low environment is expected: A low growth, a low inflation, and a low interest rate in the foreseeable future. It must be a goldilocks case. Real (inflation adjusted) GDP (Gross Domestic Product) and GDI (Gross Domestic Income) are 2%, the (target) inflation is 2%, and the neutral interest-rate is 2%. NGDP (nominal GDP) is 4%-4.5%, interest rates are also 4%-4.5%. and inflation is 2%-2.5%.

The Concluding Remarks

The Fed will rest for longer than most investors and analysts expect. In my view the Fed is not on a big story on press until 2026 (or much longer unless the problem of the financial system or an escalation of the regional conflicts happen). The main reason is that the FOMC (Federal Open Market Committee), the New York Fed (Trading Desk), and Treasury Department are working together 24/7 online. It's not eventful, but routine every moment.

What we must follow the bull plateau which is a Vaulted Securities is: 1) Do Not make big beds, by buying any security heavily to expect big gains in a short term. On a Plateau you cannot succeed that way. 2) If you are an all-time bull, try to buy a couple of securities which sank, or sell your holdings gain a little bit (i.e.,1-2% up). The way of making money on a Plateau is make a small and multiple buys/sells repeatedly. 3) I anticipate that the current Plateau will be with us for a few years, albeit bears expect the "bear-market rally" is transitory.

After a few years with the bull plateau, I predict a "bear market" and about six months later a "recession". The stock market is a leading indicator and the business cycle is a coincident indicator.

As a result, a leading indicator, a Bear market, Leads a coincident indicator, a Recession, not the other way around.

Reference: "Cash Cows"

For further details see: