Weighing the Week Ahead: Where is the Fear?

With a light economic calendar, there is plenty of air time for pundit pontification. The record-setting market still has many shaking their heads. Many, after noting the many world problems, are asking:

Where is the fear?

Last Week Recap

My last edition of WTWA (two weeks ago) asked whether earnings season could spark a big rally. That was a pretty good topic to consider over the last two weeks. (And it is still quite relevant).

The Story in One Chart

I always start my personal review of the week by looking at this great chart from Doug Short via Jill Mislinski. She notes the gain of 0.86% on the week, as well as other key comparisons. Once again, it was a week of very low volatility.

Doug has a special knack for pulling together all the relevant information. His charts save more than a thousand words! Read the entire post for several more charts providing long-term perspective, including the size and frequency of drawdowns.

Personal Note

Mrs. OldProf and I enjoyed our weekend away, and she thanks readers for the birthday good wishes. The only bad news for her was the loss of one of her favorite football players (second only to Jordy). When we got back, my calendar included a webinar featured by Brighttalk, which readers might enjoy.


If you missed my “Monty Hall” post, you might want to check it out. I cite some modern applications of the classic three-door problem.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations. I avoid using my personal preferences in evaluating news – and you should, too!

The economic news has been mostly positive. 

The Good

  • Industrial production rebounded from last month’s decline to a gain of 0.3%, beating expectations.
  • Corporate earnings have been solid, with 76% of S&P 500 companies beating expectations. (Factset).
  • Conference calls have been positive. Avondale has detailed notes. Corbin Perception also notes strength in industrial sentiment. More than half regard industrial equities as fairly valued, with “overvalued” declining. Tax reform or infrastructure spending are not priced into the market.

  • Philly Fed
    index of 27.9 rose significantly from last month’s 23.8
  • Existing home sales registered a slight beat of expectations with an annual rate of 5.39 million. Calculated Risk treats anything over 5 million as “solid.”
  • Jobless claims declined to 222K. (Bespoke) New Deal Democrat’s hurricane adjustments for this series have proved accurate.


 

The Bad

  • Housing starts declined to a seasonally adjusted annual rate of 1127K, a decline from August and a miss of the expected 1160K. (Calculated Risk).
  • Leading indicators declined 0.2% after last month’s gain of 0.4%, missing expectations by 0.3%.

 

The Ugly

The 1987 market crash and allegations that 2017 is similar. LPL Research has a nice explanation of the differences, including the charts below. The first is a version of one popular among those who want to make sure you are scared witless. The second uses percentage changes for a valid comparison.



A Chuckle

Charlie Bilello makes creative changes in some classic market slogans. Here are the first few “Aphorisms in the Year of the Bull”:

Buy in May and Stay Leveraged Long

Buy the Rumor, Buy the News

Buy the Dip, Buy the Rip

Be Greedy When Others Are Greedy

 

The Week Ahead

We would all like to know the direction of the market in advance. Good luck with that! Second best is planning what to look for and how to react.

The Calendar

We have a fairly light week for economic data, featuring new home sales and the first report on Q3 GDP. Earnings season continues in full swing. And of course, we do not know what Twitter will bring us, but we can be confident that it will be something!

Briefing.com has a good U.S. economic calendar for the week (and many other good features which I monitor each day). Here are the main U.S. releases.


Next Week’s Theme

This week features a pretty light economic calendar. This always provides extra time for pundit pontification. Record-setting markets get daily attention, but it requires little time to take note of the new high. Attention quickly turns to questions about when the rally might end and what could be the spark. Most important of all might be investor attitudes.

Expect the punditry to be asking:

Where is the fear?

Statista cites the biggest current fears.


 

  • Stocks are wildly overpriced – little future and crash potential. There is no fear among complacent investors.
  • Stocks will decline, but….there might be a melt-up first. (I’m seeing this carefully hedged prediction more often).
  • Nobel Prize winners do not understand current stock prices. (see Tim Duy below).
  • Stock prices have increased in line with increased earnings (Brian Gilmartin) and economic confidence (which encourages a higher multiple). Bloomberg.

 

As usual, I’ll have more in the Final Thought, where I always emphasize my own conclusions.

Quant Corner

We follow some regular featured sources and the best other quant news from the week.

Risk Analysis

I have a rule for my investment clients. Think first about your risk. Only then should you consider possible rewards. I monitor many quantitative reports and highlight the best methods in this weekly update.

The Indicator Snapshot


 

The Featured Sources:

 

Bob Dieli: Business cycle analysis via the “C Score.

RecessionAlert: Strong quantitative indicators for both economic and market analysis.

Brian Gilmartin: All things earnings, for the overall market as well as many individual companies.

Georg Vrba: Business cycle indicator and market timing tools. It is a good time to show the chart with the business cycle indicator.

Doug Short: Regular updating of an array of indicators. Great charts and analysis.

Guest Sources:

Seeking Alpha Editor Mike Taylor highlights a strong academic report on recession forecasting. In a phrase, the yield curve does better than the stock market when looking at a lead time of more than two quarters. This is supportive of our methods, and shows why economic indicators do better than the market.

 

Insight for Traders

We have not quit our discussion of trading ideas. The weekly Stock Exchange column is bigger and better than ever. We combine links to trading articles, topical themes, and ideas from our trading models. This week’s post compared momentum and dip-buying methods, with several interesting trading ideas. Blue Harbinger has taken the lead role on this post, using information from me and from the models. He is doing a great job.

Insight for Investors

Investors should have a long-term horizon. They can often exploit trading volatility!

Best of the Week

If I had to pick a single most important source for investors to read this week it would be Tim Duy’s analysis of “newly minted” Nobel laureate Richard Thaler’s take on risk and the stock market. Prof. Thaler, while not “understanding it” believes that we are in the “riskiest moment of our lives” while the stock market is napping. Prof. Duy notes the many past historical risks, including, for example, the Cuban missile crisis. He also cites the record of another Nobel Prize winner and acclaimed expert on bubbles, Prof. Shiller.

 

Ex-Prof. Miller agrees with Tim Duy. The well-deserved Nobel prizes do not imply expertise on everything, apparently including the Wall of Worry concept.

Stock Ideas

 

Stone Fox Capital explains how to analyze IBM. Hint: Drop the focus on the revenue decline.

Gold? A China play? The “mad hedge fund trader” explains.

Blue Harbinger provides some careful analysis in support of his recommendation of Triton International (TRTN). Take a look at his deep dive into the business model as well as the strong (4.7%) dividend.

Chuck Carnevale continues his discussion of Dow stocks with an analysis of several that he regards as “fairly valued.” Those in the “bubble” camp, should be taking a careful look at this series. It illustrates how a sophisticated analyst can discover value in a market at all-time highs.

Total return ideas for 2018 (from Merrill via 24/7).

Lessons from Trading

We frequently feature Dr. Brett Steenbarger when we talk trading. He is the leading expert on psychology, performance, and many other related topics. His conclusions for traders are often quite apt for investors as well. Consider this week’s post on trader mistakes. It describes many investors as well.

The one refrain I’ve heard from those active traders over the past two years is:  this is going to turn around.  Stocks are too expensive.  Rates are too low.  Volatility is too cheap.  Everyone wants to catch the turn and profit from the break.  So stocks dip, VIX bounces, put/call ratios go to the moon, and the trends continue.  Moderate growth with modest inflation and low interest rates that make stocks a desirable carry instrument mean that SPY has ground higher and vol has ground lower.

Traders’ forecasts for reversals in stocks and vol have had more of a psychological grounding than a logical one.  Hope is not a business plan and it’s not an edge in markets.

Dividend stocks

David Fish has a nice update on the dividend increases from the “champion” group. He also has related updates for challengers and contenders. For those seeking a consistent stream of dividend income, this is a great source to follow.

The Next Big Thing

How is value created over time? “Davidson” via Todd Sullivan provides both theory and some examples.

 But, how does one forecast inventions such as the iPhone, the Internet, a cure for Hepatitis C or preventative for HIV which force forecasters to revise all their previous assumptions of earlier forecasts. How does one forecast the future of markets if one never anticipated such evolutionary discoveries? The answer lays in not trying to predict the details of the ‘next great discovery’ but resides in understanding how individuals and society thinks and behaves.

 One begins by identifying how value is created over time. Once one delves into the process of value creation, it forces one to conclude that value occurs when producers successfully meet the needs of society’s relentless desire to improve its standard of living.

Big winners from autonomous driving, and what is blocking the way. (24/7)

Morningstar takes a look at stocks in their Exponential Technologies Index. They cite important themes, rapidly growing technologies, and motes. That said, the resulting names are speculative.

Identifying the “next big thing” before it takes off takes a lot of skill, a little luck, and a leap of faith. After all, if you wait until a new product or technology is flying off the shelves, investors’ optimistic expectations of future growth are likely already reflected in the stock’s price.

Here are some current ideas, which include choices that will surprise many.


Personal Finance

 

Seeking Alpha Senior Editor Gil Weinreich has an interesting topic every day. His own commentary adds insight and ties together key current articles. As usual this week he had several good articles, but my favorite is his post about whether people should work longer before retirement. Gil emphasizes the help this provides for retirement expenses, and that is important to consider. I would add that enjoying your work is crucial. Some would like to continue, but with fewer hours. Others might find things they always wanted to do, and which provide a little extra income. This is really a great topic.

Tadas took a well-deserved vacation. As usual,
Abnormal Returns featured some interesting questions with answers from financial bloggers. They are all well worth reading. This is information that is useful, but difficult to get in any other way. I always enjoy reading the answers from colleagues and reconsidering my own. I am a little disappointed in the answers to “changing minds.” Many of the participants have been wrong about both methods and results. Maybe they should be doing some re-examination. Consider the answers to the Buffett bet question. If you do not think you can improve on an index fund, you must take a hard look at the value of your service. Mr. Buffett himself says that if markets were efficient, he would be on a street corner selling pencils from a tin cup. He would take his own bet! Eddy Elfenbein highlights some key answers.

 

Watch out for….

Nvidia (NVDA). Great company. Brilliant execution of strategy. A great company does not always make a great stock. Price is important. (Dividend Sensei).

 

Final Thoughts

 

There are several errors in the mainstream analysis of fear.

  • Just because the market has low volatility does not mean that investors are complacent. The market does not consist of a single, uninterested investor or trader. It is the result of millions of decisions, reflecting a range of viewpoints and objectives.
  • Asset prices of stocks are reasonable if you look at the premium of expected returns over inflation.
  • There are many frightened investors on the sidelines.
  • So many assume that a long business cycle must mean we are near the end. Wrong! No one knows how much longer it might last.

There is a lot of lightweight analysis and it is all very popular. It caters to popular conceptions of economics, markets, and experts. The challenge for investors is to look at evidence in an open-minded fashion.

What worries me…

  • The number of ETFs and the lack of liquidity in many.
  • Excessive speed. Faster communications and a shortened news cycle seem fine in principle, but too many decisions of all types are made impulsively.

…and what doesn’t

  • The Fed. We are still more than a year away from when changes in Fed policy will be important for stocks, despite the popular focus on this topic. It also does not matter (in the short run) whom President Trump selects to be the new Fed Chair, or his other appointments.
  • Low VIX readings. The so-called “fear gauge” is low because actual trading volatility is low.

 

 

 

Stock Exchange: Are Momentum Trades Better Than Dip Buying?

The Stock Exchange is all about trading. Each week we do the following:

  • Discuss an important issue for traders;
  • Highlight several technical trading methods, including current ideas;
  • Feature advice from top traders and writers; and,
  • Provide a few (minority) reactions from fundamental analysts.

We also have some fun. We welcome comments, links, and ideas to help us improve this resource for traders. If you have some ideas, please join in!

This Week: Are Momentum Trades Better Than Dip Buying?

The answer to that question depends, of course, on a variety of factors including your trading personality, your timeframe, how you manage risk, and market conditions, to name a few. Our models (as shown in the following table) have been developed to take advantage of opportunities depending on all of the above factors. And we’re having continued success, but more data and evidence is never disparaged. After all, trading style can work well; until they don’t.

As the above table shows, some of our trading models utilize momentum strategies (Felix, Oscar and Athena) while others use some form of dip buying (Holmes and RoadRunner). For some perspective on how momentum stocks have been performing recently, here is a look at the iShares momentum index (MTUM) versus the S&P 500 (SPY), year-to-date.

As the chart shows, the momentum trade is basically lapping the strong performance of the S&P 500 this year. And regarding our models, momentum strategies (Felix, Oscar and Athena) have been outperforming dip buying models (Holmes and RoadRunner), which is not surprising considering the strong performance of MTUM. However, our dip buying models have been holding their own. And when the models are combined, they’ve been outperforming the market, with a low correlation to the market (a very attractive quality). However, as mentioned previously, more data and evidence is needed.

When implementing our models, we generally allow them to do their thing with limited human interaction—after all, we designed them to avoid many of the common mistakes that human traders often make, such as complacency, data overload, fear, unrealistic expectations, disciplined entry and exit points, and position sizing, to name a few.

And with regards to models working well—until they don’t; one of the biggest factors that could cause a shift from momentum and possibly to dip buying is a business cycle peak. Alternatively, one of the biggest upside chances from the market could come from a market-friendly policy environment, which could provide a healthy foundation for stocks with plenty of upside. In fact, we covered these topics (and more) in our recent webinar presentation: The Most Important Year-End Questions for Investors. You may have to take a moment to “sign up” before accessing the webinar, however we believe there is a lot of good information worth reviewing.

(webinar link)

Without further ado, here are this week’s model picks…

Expert Picks from the Models

This week’s Stock Exchange is being edited by our frequent guest: Blue Harbinger (also known as Mark D. Hines). Blue Harbinger is a source for independent investment ideas focused on value and income opportunities.

Holmes: This week I bought Vipshop Holdings (VIPS). Are you familiar with this company?

Blue Harbinger: Yes. It’s a Chinese company and it’s an ADR. It’s basically an online discount retailer for brand names. They have flash sales where they have a limited amount of brand name products to sell.

Holmes: Well the stock’s dip over the last month is the sort of set up I like to see. From the chart below you can see it is below its 50-day and 200-day moving averages. And it has attractive upside over the next six weeks.

BH: This company’s revenue has been growing rapidly in recent years. From the FastGraph below you can also see the earnings per share has been growing too, so that is a good sign. Do you know what this company’s total addressable market is?

Holmes: Total addressable market is difficult to quantify. However, my typical holding period is about 6-weeks, so I’ll be in and out of this one long-before total addressable market becomes an issue. Besides, China is big.

BH: Remind us Holmes, what exactly is your style?

Holmes: My style is based on dip buying and mean reversion. I’m really into protecting assets too. My process drastically reduces vulnerability to drawdowns while attempting to stay invested for the longest possible period of time. I use a mix of advanced trading techniques (including profit taking, stops, and trailing stops) and technical analysis to help protect if the stock price starts to fall from.

BH: Well listen, Holmes. This stock has pulled back significantly since the summer (the dip-buying opportunity you’re talking about), and it’s not just random noise. Vipshop just had a disappointing earnings announcement last quarter. Plus there is a lot of competition in the Chinese online marketplace.

Holmes: There may be a lot of online competition in China, but as you already mentioned, Vipshop’s revenues and EPS continue to grow. Talk to me in about six weeks, and we’ll see how this pick has done.

BH: Deal. How about you, RoadRunner. What have you got this week?

RoadRunner: I like Hertz (HTZ) this week. As you know, I like to buy stocks that are at the bottom of a rising channel, and if you look at the chart below you can see why I like Hertz this week.

BH: Interesting pick, RoadRunner. If you recall, Athena picked this stock back in early August, and considering she typically holds for about one month, it looks like she nailed it.

RR: I’m happy for Athena, but she could have let this winner run for about four more weeks—that’s my typical holding period.

BH: RoadRunner, Hertz looks like a disaster to me. Not only is the price down, but the earnings are way down (they’re actually negative), the short-interest remains extremely high (around 31.2%), and I just don’t see how they’re going to turn things around anytime soon considering the company is working so hard to reduce its car rental fleet size (i.e. they’ve got more cars than customers). I suppose you could say Hertz has been “Ubered” or perhaps “Lyfted” considering those ride sharing services have really decreased the demand for car rentals. For your reference, here is a look at the FastGraph from Chuck Carnevale. Chuck’s tools are the best, however that appears NOT to be the case for Hertz.

RR: You’re not thinking like a trader, Blue Harbinger. My holding period is typically about four weeks, not four years. I’ve been having a lot of success buying stocks in the lower end of a rising channel. It’s a mean reversion trade within a broader momentum theme.

BH: Interesting, RoadRunner, did you also know that Felix picked Hertz back in late June, but considering he usually holds for about 66 weeks, the jury is still out on his trade.

Felix: Hertz is still interesting, and we could actually see one heckuva short squeeze at some point. Especially, if those ride sharing services you were talking about start facilitating significant purchases from Hertz’s fleet for their drivers. However, this week I have something else for you.

BH: Oh yeah, what’s that?

Felix: This week, I’ve run all 30 of the Dow Jones stocks through my model, and you can see how they ranked below:

BH: That is interesting, Felix. Based on your ranking, it’s pretty clear you are in fact a momentum trader. You’ve ranked many of the best performing Dow Jones stocks at the top your list, and many of the worst at the bottom. For your reference, here is the recent performance for all 30 Dow Jones stocks.

Felix: My strategy is based on momentum. As you already mentioned, I typically hold things for about 66 weeks. I exit when my price target is achieved, and I use macro factors and stops to control risks.

BH: Well, I suppose you and I are more similar than some of the other models because your average holding period is over 1-year. That is sort of long-term, I guess. However, we disagree on methodologies. For example, you have Caterpillar ranked near the top of your list, and I actually just recently sold my Caterpillar shares for a big profit after holding them for about 19 months.

Felix: You need to learn to let your winners run, Blue Harbinger. How about you, Athena. Do you have anything this week?

Athena: I don’t have any specific stock picks this week because I don’t like to force anything when the opportunities are not right. However, since you ran the 30 Dow Jones stocks through your model, Felix, I did the same. Here you go.

BH: Interesting, Athena. I can see you too are a momentum trader considering you’ve ranked Boeing (the best performing Dow stock this year) at the top of your list and General Electric (the worst performing Dow stock this year) at the bottom of your list.

Athena: There is a lot more to the rankings than simply performance. Plus, my trading process uses price targets, I only hold positions for about one-month, and I manage risks with stop orders. And I have a growing track record of success.

BH: Regarding your bottom ranked stock, General Electric (GE), we could see some fireworks from them over the coming few weeks considering all the expedited leadership changes lately, earnings announcement today, and big investor presentation from the new CEO John Flannery scheduled for November 13th. I actually wrote about this company just this week: GE: How to Play the Dividend Cut Fear.

Athena: I’ve heard about all the things you mentioned, but they’re not my biggest concern considering there are plenty of Dow Jones (and non Dow Jones) stocks I like more than GE.

Conclusion

With regards to momentum and dip buying, one is not necessarily better than the other, but there are times (market conditions) when one works better than the other. Depending on individual investor needs, we find that using a mix of both trading styles can improve results by delivering strong, often market beating returns, with significantly low correlation to the broader market. We don’t apply our strategies by buying all the stocks in a specific universe like an index or and ETF would. Rather, we use our models to select attractive individual stocks, and we continue to have growing success.

Background on the Stock Exchange

Each week, Felix and Oscar host a poker game for some of their friends. Since they are all traders, they love to discuss their best current ideas before the game starts. They like to call this their “Stock Exchange.” (Check it out http://dashofinsight.com/background-stock-exchange/  for more background). Their methods are excellent, as you know if you have been following the series. Since the time frames and risk profiles differ, so do the stock ideas. You get to be a fly on the wall from my report. I am usually the only human present and the only one using any fundamental analysis.

The result? Several expert ideas each week from traders, and a brief comment on the fundamentals from the human investor. The models are named to make it easy to remember their trading personalities.

Getting Updates  

We have a (free) service for subscribers of our Felix/Oscar update list. You can suggest three favorite stocks and sectors. Sign up with email to “etf at newarc dot com”. We keep a running list of all securities our readers recommend. The “favorite fifteen” are top ranking positions according to each respective model. Within that list, green is a “buy,” yellow a “hold,” and red a “sell.” Suggestions and comments are welcome. Please remember that these are responses to reader requests, not necessarily stocks and sectors that we own. Sign up now to vote your favorite stock or sector onto the list!

Stock Exchange: Can Model-Based Trading Beat The Market?

The Stock Exchange is all about trading. Each week we do the following:

  • Discuss an important issue for traders;
  • Highlight several technical trading methods, including current ideas;
  • Feature advice from top traders and writers; and,
  • Provide a few (minority) reactions from fundamental analysts.

We also have some fun. We welcome comments, links, and ideas to help us improve this resource for traders. If you have some ideas, please join in!

Review

Our previous Stock Exchange discussed different methods for selecting stocks. Considering the many thousands of publicly traded securities, most traders have a preferred process to sift through the universe. If you missed it, a glance at your news will show that the key points remain relevant.

This Week: Can Model-Based Trading Beat The Market?

The advantages of model-based trading seem clear. For example, models are much more disciplined in their decisions than are humans. For example, we’ve written about this previously by describing the importance of disciplined entry and exit points for your trades, as well as using disciplined position sizing. Further, model-based trading eliminates emotion. For example, according to Dr. Brett Steenbarger, evidence shows that emotions can really screw up your trades (especially if you are a newbe), but they can also be used to help increase your focus if you know what you’re doing. And on that note, we’ve written previously about the importance of making sure your trading process fits your style.

And considering the wide accessibility of model resources (such as data and modeling applications as simple as Microsoft Excel), many of the things human traders seek can be accomplished easily with models. Further still, there should be plenty of incentive to build such models considering the profits that are available.

Please note: This week’s Stock Exchange is being edited by our frequent guest: Blue Harbinger. Blue Harbinger is a source for independent investment ideas focused on value and income opportunities. Please also note: this week our models have no new specific stock picks to share. Instead, we review our model scorecard.

Our Model Scorecard:

Not surprisingly, our models based on momentum (i.e. Felix and Athena) have been working the best lately, while our models based on mean reversion and dip buying (Holmes and RoadRunner) have performed less well. We say “not surprisingly” because momentum stocks (MTUM) have been performing very well recently (relative to the S&P 500) as shown in the following chart.

For more perspective on the recent strength of momentum, James Picerno provides a lot of details in this recent article: Momentum Continues To Lead US Equity Factor Strategies.

However, despite the strong performance by momentum, our other models have held their own. For example, over the last four months, our results (including commissions and fees) are approximately even for Holmes and RoadRunner and up approximately 20% for Felix and Athena. And if you had an equal weighted portfolio of these four models you’d have roughly doubled the S&P 500’s return during the time period. Obviously, short-term success of an approach varies a great deal. And in a few months, the results could be just the opposite (i.e. momentum could underperform). However, one strength of Holmes and RoadRunner is that they outperform over the long run with a low correlation to the market. This is important for volatility reduction purposes (i.e. risk management).

And for a little more color on momentum, here are the previous “Stock Exchange” series write-ups on a couple of Felix’s previous recommendations that have been doing quite well (Felix is our momentum model with an average holding period of 66 weeks):

Hertz (HTZ): Felix’s pick from the week of June 29th

Urban Outfitters (URBN): Felix’s pick from the week of July 20th

And if you are curious, here is a current list of some of the most attractive Russell 1000 stocks according to Felix:

Please note, the above list is very different than the list we’ve been showing readers in previous “Stock Exchange” articles. Also, as a reminder, readers are welcome to send us specific stock ideas that they’d like us to run through our various models, and we’ll happily share the results as we are able.

Conclusion:

At the moment, our models are doing well. And ultimately, extending our longer-term track record of success is most important. We cannot share all of our model picks in this forum, however we believe sharing our approach is interesting and worth discussion. We’re also able to share more information with a few of you that are interested in investing in our models. And also worth mentioning, we’re doing a webinar next Thursday covering our current market views. We hope you enjoy and evaluate our approach and ideas.

Stock Exchange Character Guide

Background on the Stock Exchange

Each week, Felix and Oscar host a poker game for some of their friends. Since they are all traders, they love to discuss their best current ideas before the game starts. They like to call this their “Stock Exchange.” (Check it out http://dashofinsight.com/background-stock-exchange/  for more background). Their methods are excellent, as you know if you have been following the series. Since the time frames and risk profiles differ, so do the stock ideas. You get to be a fly on the wall from my report. I am usually the only human present and the only one using any fundamental analysis.

The result? Several expert ideas each week from traders, and a brief comment on the fundamentals from the human investor. The models are named to make it easy to remember their trading personalities.

Getting Updates

We have a (free) service for subscribers of our Felix/Oscar update list. You can suggest three favorite stocks and sectors. Sign up with email to “etf at newarc dot com”. We keep a running list of all securities our readers recommend. The “favorite fifteen” are top ranking positions according to each respective model. Within that list, green is a “buy,” yellow a “hold,” and red a “sell.” Suggestions and comments are welcome. Please remember that these are responses to reader requests, not necessarily stocks and sectors that we own. Sign up now to vote your favorite stock or sector onto the list!