Seeker Newsletter - Week of Sept 21st 2020

Good Morning,

I hope everyone had a great weekend. I relaxed over the past week with my family, so I was a little quiet on Twitter, but I am back and hopefully back in time for some buying opportunities.

Stock Market Update

Last week we saw the market volatility continue to close the week, but overall the major indices were near flat on the week. I have continued to monitor the earnings multiple for the S&P 500, which has historically traded around 15x. After last week, we saw the multiple again click down to 28.5x, suggesting even with the sell-off the major average is still quite expensive. Earnings have been slow during the pandemic, so on a forward looking basis the S&P 500 is closer to 20x, which is much more reasonable.

The FAANG names (Facebook, Apple, Amazon, Netflix, and Google) were all laggards on the week. The stocks performed as follows for the week:

FB: -5.4%

AAPL: -4.7%

AMZN: -5.3%

NFLX: -2.6%

GOOGL: -4.1%

Value again got a small boost with investors again moving out of technology for the time being. The Vanguard Value ETF (IVE) saw a move higher of 1.1%. This ETF has top positions such as, BRK.B, VZ, JNJ, UNH, and T.

In other news, we saw a lot of new IPO’s hit the market this week, which could also be a contributing factor to the technology sell-off, given that many of these companies going public were in that sector. What happens is many of the ETF managers what a piece of these new companies, so they have to sell certain positions to make room for these new ones. Funds selling positions are usually sizable transactions.

Let’s take a look at how the major averages performed last week and YTD.

YTD/Previous Week:

Dow: -3.1% Dow: 0.0%

S&P 500: +2.7% S&P 500: -0.6%

Nasdaq: +20.3% Nasdaq: -0.6%

Another week of all three major US averages being in the red. The S&P 500 ended the week closing below the 50 day moving average, which could mean some more selling is coming in the week ahead. $3,250 appears to be the next support level down with the 100 day moving average at $3,230. Those would be two levels I would keep my eye on in the weeks ahead if we continue to fall further.

A strategist from Oppenheimer, John Stoltzfus, put it nicely, “It’s probably not a bad time to consider looking for some babies that have gotten thrown out with the bath water, however, do not back up the truck just yet.”

I agree that it may be worth layering into some of these technology names that have been on your buy list, but kept running higher. Many of these names have dropped considerably the past 2-4 weeks. I will be looking at a few names I am keeping a close eye on in my “Quick Picks” segment.

Seeker Portfolio

The Seeker Portfolio was started at the beginning of August and I have now funded $21K to this real-time portfolio and hoping to add some more this week. The idea of this portfolio is for subscribers to be able to follow along as I construct a new portfolio. This past week I did not make any changes while I was away with family for the majority of the week.

Here is an updated look at the current portfolio:

We saw the portfolio perform quite well this past week, boosting our gains in the past 1.5 months to 9.6%, and nice bump from last week being 7.9% ITD.

The portfolio is now projected to earn $863.93 in annual dividends and has a portfolio dividend yield of 4.1%.

In terms of watchlist, I have a lot of names I will be taking a look at this week, which include:

ABBV, MO, AMZN, MSFT, O, LMT, GD, RTX, GOOGL, DOCU, JNJ, WMT, V, NNN, STOR, DLR

As always, if you have any questions at all, please feel free to DM me on Twitter or simply email me at [email protected].

If you are looking to gain a better understanding on Dividend Stocks and how I value you them, take a look at my eBook, which I will be offering $10 for subscribers all day.

Click here to get $10 OFF!

Have a great week!

Mark