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Steve Bauer

Steve Bauer

Steve owned a privately held asset management firm and managed individual investor and corporate accounts as a Registered Investment Advisor - for over 40 years.

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The Dogs Of The Dow - Part I

I am beginning a new series that is designed to demonstrate the incredible importance of Accurate Forecasting. I am using the 30 Dow Industrial Component Companies and 12 supporting Sectors. With a brief narrative and rather simple graphics, I will attempt to win your confidence in how I go about "Investing Wisely."

The easiest job you can give to a financial analyst is to limit his or her analytics to the Dow 30 Industrial Companies. That is because there is an over-abundance of accurate information and data available for each Company. In today's world, the Dow 30 has more words published each day than a person can be possible absorb.

Poker Dogs

The Dow 30 represents about 33% of the total market-cap of the World's Universe of Companies. At present, the NYSE has about 3,200 listed companies to choose from. And, the Nasdaq sports about 6,000 companies.

The ten Dow components I will Forecast in this article are listed in the table below.

I hope in conjunction with the supporting graphics in StockCharts Public List you will quickly come to understand how I use my Fundamental - Valuation and Technical Analysis to make very Accurate Forecasts and hence, provide my Clients with consistent annual profits in their portfolios.


Table of ten of the Dow 30 Components

Dogs of the DOW Table
Larger Image

Forecasting is My Trick for "Investing Wisely"

Forecasts


Forecasts for the above Ten Companies

These ten Companies currently do not have overly strong Valuations and Target Price Projections. The current Valuation Divergence is negative. My technicals for these Companies all have been deteriorating with regard to their Indicators and that in itself is a "Warning." Current Consensus Opinion is much too bullish. Security's valuations should be updated, and holdings reviewed as frequently as possible.

Perhaps Most Important to this Article are my supporting Graphics. They can be viewed by clicking on any of the below Symbols: AA, AXP, BA, BAC, CAT, CSCO, CVX, DD, DIS, GE, HD, HPQ, IBM, INTC, JNJ, JPM, KO, MCD, MMM, MRK, MSFT, PFE, PG, T, TRV, UNH, UTX, VZ, WMT, XOM

Sectors: $DJUSBM, $DJUSCY, $DJUSEN, $DJUSFN, $DJUSHC, $DJUSIT, $DJUSTC, $DJUSUT, $GOLD, $MSEMF, $SILVER

If you would like to page through all my Graphics, including, by far the single best General Market Indicator I have ever worked with, please click on the below URL and scroll through my "stuff." If you do it just once, I believe you will want to take a tour rather frequently in the coming weeks / months. URL: http://stockcharts.com/public/1616666


Market Status

My general market opinion is -- the fundamentals are over-valued; the technicals are over-bought, and the consensus opinion is way too bullish. Economic and financial news is very negative and not supportive of taking any Bullish positions.

I am currently a bear because my valuations are convincingly negative, the charts are breaking down daily. And, we are in a bearish cycle; it's just that simple!


Summary

Patience and discipline are more important than the above data, tables, charts and information. However, the focus is always the question: do I buy, sell or hold? My question for you is, do you have the patience and discipline to hold cash for a time? And, can you wait until you can be sure to profit?

My criterion for taking a bullish position is that the company must have the prospect within its fundamental valuation and technical charts to outperform the general market, its sector, and industry group.

It is a fact that, the stock market cycles endlessly both fundamentally and technically. It continuously moves from bullish cycle to bearish cycle and then back to bullish cycle again. Unfortunately, this is a pattern that is not well-understood or taken advantage of by most investors.

This analytic work I do each day is fun and profitable. There is always a list of the best (for buying) and worst (for shorting) companies to further valuate and study. Seeking profits by focusing on the best companies, or perhaps the worst companies is definitely a challenge. The companies between the best and the worst are never considered as a current investment. All companies rotate into favor and out of favor. Each company is in rotation taking its turn at being a profitable investment. Sometimes it is one of the best and at other times, it is one of the worst! To be consistently profitable, you must maintain lists of the best and the worst companies. This analytic work must be complete, well ahead of the next Bullish or Bearish market cycle.

I hope you like my methodology and will continue to follow my work / analytics. It won't be long before I can offer you a Bullish and up-beat Forecast once again.

Have fun, "Investing Wisely,"

 

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