Ms. Park will be a guest on BNN with Micheal Kane at 835am EST on Wednesday April 22. The clip can be viewed here on BNN.
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Cory’s Chart Corner
Ms. Park will be a guest on BNN with Micheal Kane at 835am EST on Wednesday April 22. The clip can be viewed here on BNN.
Cory’s Chart Corner
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Hi Danielle, I watched you this morning on BNN – very interesting comments! As you mentioned, there are exciting renovations regarding efficient energy. How would you take advantage of this new change? Maybe through some of the US technology stocks? What's your preferred ETF for US Technology stocks?
Your comments are much appreciated.
There are a few green energy ETFs recently introduced which may be ok for inidividuals although liquidity may be too light for trading purposes. There is a water management ETF, and many more in the US: see this article for more ideas http://seekingalpha.com/article/36094-the-green-investor-choosing-an-alternative-energy-etf.
For the technology sector we like the QQQQ, and SMH for holdings and liquidity. For health care there are a few different ETFs, again mostly US, most liquid is PPH. But basically they are still all equity units so you need to be very careful around your buy and sell points to protect your capital from market downturns. Once the next cyclical bull starts though, the inflows will be strong again.
Hi Danielle,
In regards to your more positive outlook on corporate bonds, what do you think of the XCB (heavily weighted in financials-over 50%) and the LQD which trades in New York? Are they good options or do you play this sector with different etf's? And would you consider shorting treasury bonds in the US? The yields have not been dropping despite the quantitative easing. It would seem that the dam is about to burst and yields have the potential to rise quickly. Thank you for considering my questions and have a wonderful day.
Daryl
The XCB is high quality corporate bonds, and yes it is a good unit to access Canadian corp bonds, albeit with a lower yield than high yield units which have more market risk. We dont follow the LQD. We do not short. You may be right about prices falling soon but shorting is more risk than most are equipped for.
Hi Danielle,
I have heard that the FDIC has taken over 4 banks today on Friday, April 24. The total number this year siezed so far is around 30. I am wondering what you think of this and what exactly becomes of these banks? I know that deposits are protected up to a certain amount. But where does the FDIC keep getting all this money from? And do they ever run out? Your comments are always appreciated.
Thanks,
Parm
FDIC, from their web site:
“An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure.
The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $45 billion, the FDIC insures more than $5 trillion of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.”
See: http://www.fdic.gov/bank/individual/failed/banklist.html
And yes they list 4 failed banks added Friday.
They have not run out of money in the past, and they would be a prime bail out candidate if need be. Given they underwrite 5 trillion of deposits off 45 billion of capital, it is potential area for concern.
Danielle,
The amount of information you pack into an interview is amazing and very much appreciated.
I've been thinking a lot about what rules I want to use for exiting a position, so I was interested in your comments about possibly not being able to keep all of our gains from the current market advance.
In Juggling Dynamite you talk about taking your profits before the top is reached, based on your metrics. As an unsophisticated investor, I'm not sure how to implement that, but I can do a self-monitored trailing stop loss pretty easily. For example, if a position drops 5% off its recent high, I begin to watch closely; if it drops 10%, I sell.
Like you, I'm more concerned with keeping the bulk of the gain than with wringing every last penny out of it. Is there a reason that you prefer to sell just before the top rather than just after? Or do you have any other comments on how to decide when to sell?
I have been an avid reader of your blog and your book for several months–thank you very much for your candid and helpful comments.
J, our rules do not always get triggered just before a top sometimes it is somewhat after but that is due to the combination of metrics and rules that we use. You need to set your own and stick them. If you are going to set stops and follow them out that is a decent approach. The question then becomes, what rule set will you use to buy back in case it is a whip-saw in the midst of a continued rally. Setting your buy and sell rules in advance is the key. This paper may give you some further ideas: http://www.venablepark.com/documents/AQuantapproachtotacticalassetmgmt.pdf
Remember that every system will look wrong part of the time, it will never be perfect. What you are looking for is a method to capture at least a thrid of the uptrend and avoid 2/3rds of the downtrend, if you can do that, you will outperform most people over time.