Keith Richards
Portfolio Manager at ValueTrend Wealth Management
Member since: May '09 · 2592 Opinions
Rating Card
Premium content| All | 
Rating
| 
Big Win
| 
Win
| 
Neutral
| 
Loss
| 
Big Loss
|  |
|---|---|---|---|---|---|---|---|
| 4.65 | 235 29.97% | 182 23.21% | 147 18.75% | 150 19.13% | 70 8.93% | ||
| 1 Month | 4.59 | 24 12.97% | 42 22.70% | 70 37.84% | 47 25.41% | 2 1.08% | |
| 6 Months | 4.67 | 36 20.11% | 51 28.49% | 36 20.11% | 42 23.46% | 14 7.82% | |
| 12 Months | 4.68 | 48 29.45% | 43 26.38% | 19 11.66% | 34 20.86% | 19 11.66% | |
| 2 Years | 4.69 | 59 42.14% | 33 23.57% | 11 7.86% | 18 12.86% | 19 13.57% | |
| 5 Years | 4.64 | 68 58.12% | 13 11.11% | 11 9.40% | 9 7.69% | 16 13.68% |
Stock Opinions by Keith Richards
It's really a risk/reward assessment, not a market-timing tool to buy "now" or sell "now". It tells you your relative tradeoff. He looks at 11 factors, some are trend and some are value, such as sentiment and breadth. Each factor gets a score and the Bear-o-meter registers from 0-8.
0 means run for the hills, very risky on a relative basis. And 8 means back up the truck. We're at about 3 right now, which is OK but not wonderful. It's been pretty much there all year so far.
Note that this tool looks at the S&P 500, not at the TSX. All 11 factors are based on US markets.
S&P is up ~7% so far this year, rather a mediocre year. Really good for the TSX.
The Bear-o-meter hasn't been saying run for the hills, but it has been choppy. There's certainly the potential for continued volatility. We'll have to keep an eye on it.
August, September, and October typically show higher VIX levels (higher volatility) than at any other time of the year. So you want stocks with lower beta.
There's something called smart money/dumb money, which is data on stuff like insider or institutional buys/sells and commercial hedging. Big institutions hedge if they feel there's more risk. He gets data on all that.
If smart money (the more sophisticated investor) is less bullish and retail money is more bullish, that's generally a bad sign. If the Warren Buffetts of the world are selling, and Joe Schmoe is buying, that usually indicates not as good a risk/reward.
In addition to the 200-day MA, he looks at peaks and troughs. Look at the last low and the last high. The next high hit the previous high, so that's two relatively similar peaks. The stock may be below the 200-day MA (1st rule to sell), but it hasn't dropped below the last trough (2nd rule to sell). As long as it holds above the last trough, you're safe.
Don't go into full panic right now. Hold for now; if it breaks that second rule, then get out.
Trapped in no-man's land, just like many of the other oil stocks. In a swing-trading range; buy near the bottom, sell at the top. If there's a breakout and it seems as though it's staying, he'll actually add more. But if it starts to roll over, he sells. Might be a bit more upside, but don't pile in at this point because it's so close.
His big theory in the market is that hard assets are coming into a big cycle. Likes natural gas more than oil. Government in Canada is very encouraging on nat gas. European markets are very strong for nat gas.
Nat gas is making a nice bottom; higher highs and higher lows, has broken out from the base. Quite bullish on nat gas as a longer-term theme, and it should translate to the producers over time (with some lag). If you hold gas over the next year or so, it should play into that longer-term cycle.
Typically the commodity will lead the producer, because the market wants to see if the commodity move will add to profitability for the producers.
