3SOF

You know I like to buy issues with relative strength. If I am a bull on the world, the countries I would prefer to invest are those that show medium term relative strength.

The S&P500 is pointing to new highs, but the Nikkei is very close to new 2005 highs already. EWJ   is a conservative buy for the 3 Stocks on Fire Portfolio.

The next and last buy will be more of a speculative one, with great short and medium term potential.

The Nikkei closed at a new high above 14,000 points today, not seen since 2001, so we know EWJ will be up today, reflecting its holdings performance.

You can learn about this ETF composition here.

It is a very broad base, representative measure of the Japanese market.

At a new high, first in the developed world to make new highs, so that's what I want to hold at the 3 Stocks on Fire Portfolio.

QuoteThe Nikkei closed at a new high above 14,000 points today, not seen since 2001, so we know EWJ will be up today, reflecting its holdings performance.

What a mistake I've made on this update on Thursday, I forgot to take in consideration the exchange rate effect. When the USD rises versus the yen that makes the EWJ fall.

So EWJ is not just a Japanese play, it is also a yen play. But I'm not all that much bullish on the yen, as a matter of fact, I don't know what to think of the yen versus the dollar at this point.

I know I'm generally bullish on the USD, but in comparison with the yen? I have no idea

The yen fall may have a bigger effect on EWJ than the rise on the Nikkei so I don't think I want to continue holding this one here. But I don't feel I need to get out in a rush, taking a loss, even though it would be very small.

I'll try to sell it with a 1% profit, sell it at $12.44.

David:

In ETF's I believe you colud take a look at EWB  ILF and EWO 

BRgds

jorgegr

Quote from: jorgegr on November 07, 2005, 09:13:53 AM
David:

In ETF's I believe you colud take a look at EWB  ILF and EWO 

BRgds

jorgegr

Thanks for the suggestion jorgegr  I couldn't find EWB, IFL is for investing in the Latin America markets and EWO is for investing in Austria. That's curious, why in the world would I want to invest in Austria? I wonder what Jim Rogers says about Austria now, I know he made a killing there some 20 years ago, I've read it on his book «Motorcycle something ...».

Well, I don't know, ETF's are traded in USD, so the Forex market has a great influence on ETF's performance. I really love macroeconomics, but it isn't the scope of 3 Stocks on Fire. Only if there was a truly attractive macro opportunity, both in terms of the country's publicly traded companies and currencies.

I'm bullish on the USD and bullish on the Nikkei. These two forces work against each other on the ETF performance, so probably EWJ won't rise all that much, even if the Nikkei rises.

So I'll continue with my plan of selling EWJ at $12.44.

Sorry David:
Made a typing mistake. I meant EWZ instead of EWB.
Regarding EWO look at its last two years performance.
Something happened with the EWO index from 2003 onwards (price 8.88)
breaking a resistance of 9 and from there on had a constant upward trend
with a great acceleration after Sept 2004. I made good profits up to March
2005 when it topped 25.
I thought EWO was better than EWJ which I owned and also Optimist Japan
Opportunities (OJO) which is a low liquidity fund I got out and dont recommend.

If you compare  EWJ vs. EWO last five years performance there is over 200%
difference in favor of EWO.

jorgegr
 

Thanks for your comments jorgegr, I'll look into ETF's details later.

The Nikkei rose 0.25% and the yen is up 0.27% versus the USD at this time, so probably today I'll be able to sell EWJ at $12.44 for just 1% profit. I've explained why I'm selling on previous posts on this thread.

David,

Do you have any opinion on MTU?  It is now the worlds largest bank after a merger between Tokyo Mitsubishi bank and UFJ bank in Japan. 

I have held it in the recent past and had decent gains.  It seems to me like it will be a good long term investment in Japan.  I was just out there last week and the general consensus is that the real estate market has bottomed there.  This should have a good effect on banks.  The question becomes getting individuals in Japan to invest in general.

Cramer has been advocating the stock, and it seems to be in a downtrend at present, but could be attractive soon.

Quote from: tokyopua on November 09, 2005, 11:40:49 AM
David,

Do you have any opinion on MTU?  It is now the worlds largest bank after a merger between Tokyo Mitsubishi bank and UFJ bank in Japan. 

I have held it in the recent past and had decent gains.  It seems to me like it will be a good long term investment in Japan.  I was just out there last week and the general consensus is that the real estate market has bottomed there.  This should have a good effect on banks.  The question becomes getting individuals in Japan to invest in general.

Cramer has been advocating the stock, and it seems to be in a downtrend at present, but could be attractive soon.

Thanks for your comments tokyopua  No, at this present moment I don't have an opinion on MTU, but I also feel generally bullish on Japan and its financial system.

I'm selling EWJ (@ $12.44) because of foreign exchange rates. The ETF is going south now and I couldn't sell it at $12.44. I'm just going to wait some more time to see if the Nikkei goes up more than the yen goes down.

GDP in Japan was higher than expected and that helped to lift the Nikkei 0.53% today. The yen was little changed versus the US dollar.

I don't see much risk holding this ETF and I think I'll be able to get out at a small profit. Unless I want to invest in something new and the opportunity cost rises, I'll wait some more time to sell this at $12.44.

EWJ rose near to my selling levels, but it couldn't reach them. Today the Nikkei was down 0.28% and the yen is also down 0.1%, so probably EWJ will be down something like 0.4%, or about 5 cents to $12.29.

I could sell this right away to buy something new, since I don't have more cash available at the 3 Stocks on Fire Portfolio. But I don't feel like taking a loss here, when I'm pretty positive that if I just wait a little longer I'll be out with a small profit. Just to improve my win/loss ratio.

The bull market is in full force now, and I wouldn't like to take any losses now. Kind of a stupid thought, maybe only analysts think this way, maybe if I were just a trader or a speculator I would sell this right away to free some cash.

Well, let's give it just a couple of days more, today I'll be  trying to sell at $12.44.

I've changed my mind, I'll sell EWJ at the open because of the opportunity cost. I need to buy something else that I think it will bring above average returns to the 3 Stocks on Fire Portfolio.

QuoteBut I don't feel like taking a loss here, when I'm pretty positive that if I just wait a little longer I'll be out with a small profit. Just to improve my win/loss ratio.

This is understandable. I actually count trades where I lose 1% as a win. I track my trades in a spreadsheet and the default setting of course is that negative numbers show as red and positive numbers show as green. But I set it up using the conditional formatting feature in Excel so that as long as my loss does not exceed 1%, it shows as green LOL.