retirement interruptus: That Was The Week That Was-3rd Week October

According to Mark Hulbert in his MarketWatch blog of 10-11 the easiest way to pick a winning stock is by choosing the ones that are the most profitable. A Professor Robert Novy-Marx, finance professor, gives an example of Apple: Total Sales in 2012 were $156 billion, versus $88 billion cost of goods. When divided by total assets of $176 billion the gross profitability percentage was 39%, putting Apple in the middle of the profitability pack.

Another method is a simple chart to buy stocks that are ready to run. This is by watching a stock’s short-term moving average breaking above its longer moving average. Below is a chart from Investopedia that shows the 50 day SMA crossing over the 100 day.

Some traders use a 30 day SMA and watch for the 10 or 15 day SMA to cross before they buy. Others maintain that if you buy anything that is crossed over the longer moving average the stock will continue to run until the shorter term moving average falls below the longer. As with anything neither of the above are guaranteed of success and are to be used in conjunction with other fundamentals.

Whispers –CNBC Squawk Box Conversation Monday -Some Believe We Are 1/2 Way Through a Bull Market Recovery and S&P 500 will reach 2000 in 2014.

That’s How it Ended But First:

Monday Markets Dove 100 Points Early on The Dow Ended Up Positive at the Close.

Bob Schieffer on CBS News Monday 14th explained how he believes the government will reopen and default will be avoided…until next year. We’re not creating great Statesmen in Washington, Schieffer said, but some of the world’s best can kickers. U.S. officials have criticized the EU for just the same tactics. Remember?

What Sectors Were The Best Performing The Last Four Times The Market Declined Over 15%:

Consumer Discretionary
Finance
Technology
Industrial

CEO of BlackRock Lawrence Fink said in an interview Monday 10-14. on CBS, about the government shutdown when asked if he thought the politicos understood what they were doing. Not only do they not understand the consequences but also a complete lack of grasping the enormity of what could happen for such a small inconsequential demand. A U.S. default would throw the world into a massive recession. paraphrased from the Scott Pelley interview on CBS news.

John Feehery, one-time Congressional Aide, on CBS News Monday 10-14, The Warning to both parties on the possible loss of voter trust.

The Republicans should not think that the government shutdown won’t come back to haunt them in 2014.

No Deal on Debt Ceiling or opening the government Last Monday in Washington and Markets Fell over 130 Points on the Dow.

Lots of Pressure Being Put on So-Called Politicos by Unions and Business. Surmising that campaign money may be waved or held back as a carrot, Still getting the arch-conservatives to do the right things caused the House to throw in the towel on a compromise bill late last Monday. Months of negotiation have been wasted and no end in sight as Tea-Party types have dug in their heels on so-called principal. With re-election for many of them right around the corner Irwin Kellner wrote his commentary Monday in MarketWatch that in a recent poll a great many Republicans and quite a few Democrats are unlikely to be re-elected come 2014. Kellner suggested that Wall Street get in the game and only a ‘stock market crash’, such as the one in 2008 would catch these people’s attention. Yes, a great many of these pols have investments and hitting them in the wallet is the only way to catch their attention. Unfortunately it burns the global markets at the same time and all of us. While most investors are still optimistic, even at this late stage, the worry of such an actual crash is seeping into the markets. Global tensions are real enough.

Note that for 2 weeks concentration of this blog is about politics and not the economy and money management.

At the last minute politicos pulled the plug on a possible default and the President signed it around midnight Wednesday.

YOU CAN’T FIX STUPID. DEFAULT AVERTED AT LAST SECOND. Angry voters may keep Republicans in the minority for a long time. World wide grumblings and disgust on political mischief caused by threatening global depression by key Tea Party representatives. I would expect contributors, business leaders and moderate Republicans to clean house before the 2014 elections.

Thursday Markets Celebrated With S&P 500 Hitting All-Time High.

China Growth Speeds Up GDP up 7.8%. European Markets Cranked Out Wins For 7 Straight Sessions Ending Thursday On China News. Bloomberg 10 18 2013.