Open Trade in .......XLF

[ducati998]

The entry was actually June 7'th and is the example used in the article.
Now this is just a paper trade, as the P/E criteria was missed, and we are using an approximate entry price as I can't remember what it actually was.

So assuming a $100K account.
We will place 20% of the account in this ETF.

Entry Price .............$29.20
Position...................700 shares
Cash.......................$20,440.00
Stoploss.................no stoploss
Target.....................$43.80

XLF quote Real-time quotes
After Hours: 29.47 unch Vol. 172,700
29.47 -0.19 -0.64%
Volume 3.946 Mil XLF Intraday Chart
5d 1m 3m 1y 3y 5y 10y

Data Source: CSI 09:04 PM ET


Avg Daily Volume NA
Day's High 29.85
Day's Low 29.44
Open 29.85
Previous Close 29.66
Bid 29.08
Ask 29.83
52 Week High 30.79 Market Cap. NA
52 Week Low 27.00 Tot. Shares Out. 34.91 Mil
Instit. Ownership NA Exchange AMEX
P/E NA Forward P/E NA
Earnings/Share NA Sales NA
Div/Share NA Return on Equity NA
Current Div. Yield NA Beta 0.96

I'll update once a week
cheers d998

 

[roguetrader]

A look at the composition of the fund, and the component weightings.


Company Name.................................................................Ticker....................Index Weighting

1 Citigroup Inc....................................................................... C ............................10.92%
2 Bank of America Corp...................................................... BAC ..........................8.47%
3 American International Group Inc.................................. AIG ............................6.81%
4 JPMorgan Chase & Co.................................................... JPM ..........................5.68%
5 Wells Fargo & Co.............................................................. WFC...................... ...4.69%
6 Wachovia Corp.................................................................. WB.............................3.60%
7 American Express Co...................................................... AXP............................2.81%
8 MORGAN STANLEY ..........................................................MWD .........................2.62%
9 FANNIE MAE .......................................................................FNM ..........................2.56%
10 U.S. Bancorp ....................................................................USB ..........................2.42%
11 Merrill Lynch & Co. Inc.................................................... MER...........................2.36%
12 Goldman Sachs Group Inc.......................................... . GS .............................2.04%
13 FREDDIE MAC .................................................................FRE............................2.02%
14 Allstate Corp..................................................................... ALL.............................1.81%
15 Washington Mutual Inc................................................... WM.............................1.60%
16 Prudential Financial Inc................................................. PRU...........................1.55%
17 MetLife Inc........................................................................ MET............................1.50%
18 Lehman Brothers Holdings Inc................................... LEH............................1.23%
19 St. Paul Travelers Cos. Inc........................................... STA.............................1.21%
20 MBNA Corp. .....................................................................KRB........................... 1.20%
21 SunTrust Banks Inc. ......................................................STI...............................1.12%
22 Bank of New York Co. ....................................................BK...............................1.02%
23 Countrywide Financial Corp. .......................................CFC.............................1.01%
24 Hartford Financial Services Group Inc. ......................HIG..............................1.01%
25 BB&T Corp...................................................................... BBT..............................1.00%
26 AFLAC Inc........................................................................ AFL..............................0.98%
27 FIFTH THIRD BANCORP .............................................FITB..............................0.98%
28 SLM Corp. .......................................................................SLM..............................0.95%
29 National City Corp......................................................... NCC.............................0.92%
30 Progressive Corp.......................................................... PGR.............................0.87%
31 Capital One Financial Corp......................................... COF.............................0.84%
32 Golden West Financial Corp...................................... GDW.............................0.83%
33 Chubb Corp................................................................... CB.................................0.75%
34 State Street Corp.......................................................... STT ...............................0.73%
35 Regions Financial Corp.............................................. RF..................................0.71%
36 Simon Property Group Inc.......................................... SPG...............................0.71%
37 PNC Financial Services Group Inc............................ PNC..............................0.70%
38 Franklin Resources Inc. ..............................................BEN...............................0.69%
39 Marsh & McLennan Cos.............................................. MMC..............................0.66%
40 KEYCORP....................................................................... KEY...............................0.61%
41 Equity Office Properties Trust .....................................EOP...............................0.61%
42 NORTH FORK BANCORP ...........................................NFB...............................0.59%
43 Charles Schwab Corp................................................. SCH...............................0.58%
44 ACE Ltd. ..........................................................................ACE...............................0.58%
45 Moody's Corp................................................................. MCO..............................0.56%
46 Loews Corp.................................................................... LTR...............................0.56%
47 Principal Financial Group Inc...................................... PFG...............................0.55%
48 Mellon Financial Corp................................................... MEL...............................0.55%
49 Bear Stearns Cos.......................................................... BSC...............................0.53%
50 EQUITY RESIDENTIAL................................................. EQR...............................0.47%
51 XL Capital Ltd. ...............................................................Cl A XL............................0.47%
52 M&T Bank Corp.............................................................. MTB................................0.47%
53 Comerica Inc................................................................. CMA.................................0.45%
54 Marshall & Ilsley Corp................................................... MI....................................0.43%
55 AmSouth Bancorp .........................................................ASO.................................0.42%
56 Northern Trust Corp..................................................... NTRS...............................0.42%
57 CIT Group Inc. ...............................................................CIT....................................0.40%
58 Synovus Financial Corp.............................................. SNV...................................0.40%
59 Lincoln National Corp.................................................. LNC...................................0.37%
60 Sovereign Bancorp Inc. ...............................................SOV....................................0.37%
61 MBIA Inc. .........................................................................MBI.....................................0.36%
62 Aon Corp........................................................................ AOC....................................0.36%
63 T. Rowe Price Group Inc. ............................................TROW................................0.35%
64 AMBAC Financial Group Inc.........................................ABK....................................0.34%
65 ARCHSTONE-SMITH TRUST .....................................ASN....................................0.34%
66 PROLOGIS .....................................................................PLD....................................0.34%
67 Safeco Corp. ..................................................................SAFC..................................0.31%
68 Jefferson-Pilot Corp..................................................... JP........................................0.31%
69 Plum Creek Timber Co. Inc. REIT ............................PCL......................................0.30%
70 Cincinnati Financial Corp. .........................................CINF.....................................0.30%
71 Zions Bancorp ..............................................................ZION....................................0.30%
72 MGIC Investment Corp................................................ MTG.....................................0.27%
73 Huntington Bancshares Inc....................................... HBAN...................................0.26%
74 Compass Bancshares Inc.........................................CBSS....................................0.25%
75 Torchmark Corp............................................................TMK......................................0.25%
76 UnumProvident Corp...................................................UNM.....................................0.24%
77 First Horizon National Corp....................................... FHN......................................0.24%
78 E*TRADE Financial Corp............................................ET.........................................0.23%
79 Providian Financial Corp............................................PVN.......................................0.23%
80 Apartment Investment & Management Co..............AIV.........................................0.17%
81 Janus Capital Group Inc............................................JNS........................................0.16%
82 Federated Investors Inc..............................................FII...........................................0.13%

Correct as of 06 29 05. Source http://www.sectorspdrs.com/
The sector comprises 20.31% of the S&P500.

 

[ducati998]

FINANCIAL SEL SPDR (AMEX:XLF) Delayed quote data

Last Trade: 29.50
Trade Time: Jul 1
Change: 0.03 (0.10%)
Prev Close: 29.47
Open: 29.66
Bid: N/A
Ask: N/A
NAV¹: 29.47

¹As of 30-Jun-05
Day's Range: 29.44 - 29.66
52wk Range: 27.00 - 30.79
Volume: 4,021,600
Avg Vol (3m): 7,122,170
YTD Return (Mkt)²: -3.58%
Net Assets²: 1.14B
P/E (ttm)²: 11.41
Yield (ttm)²: 2.21%


Weekly update
d998

 

[roguetrader]

Hi Ducati, I see this is a follow on from your article in the Knowledge lab which makes it all the more interesting. One thing I picked up on in your original "stoploss" thread, that paved the way for this article was the concept of tieing up capital for long periods of time. Your response there was..........

Time, and timeframes as previously mentioned is a different topic, but hugely relevant. No point placing a trade that takes 3yrs to show a profit.

Now this comment gave me the impression that you had some method of estimating a "time to target"
Now looking at this trade the target represents about a 48% increase in the current price, now if we backtrack on this stock and look at where we were when the current price would have represented a 48% increase, I make it in and around April 2003. Now in fairness the stock did reach a 48% increase in price within about a year, and has subsequently been trading in about a $4 range for the last 16 months or so, though I doubt that performance is likely to be repeated in the current climate. So the question still remains valid, how do you avoid tieing up capital for long periods of time?

 

[ducati998]

rogue

Now in fairness the stock did reach a 48% increase in price within about a year, and has subsequently been trading in about a $4 range for the last 16 months or so, though I doubt that performance is likely to be repeated in the current climate. So the question still remains valid, how do you avoid tieing up capital for long periods of time?

Well in this instance you would have 1 of 2 choices.
The first, is to stay with the system, and give it the 2yrs, which as previously referenced in the research has shown a consistent 24% compounded over a 60yr timeframe tested.

The second, is to place an arbitrary "time" or "price" stop, and exit, looking to redeploy the funds
I personally advocate choice #1, and if after 2yrs it is still not performing in any manner whatsoever, then exit.

By trading "slower" you will make more money on aggregate than the vast majority of daytraders.

Cheers d998

 

[roguetrader]

I personally advocate choice #1, and if after 2yrs it is still not performing in any manner whatsoever, then exit.
By trading "slower" you will make more money on aggregate than the vast majority of daytraders.

In and of itself that makes sense up to a point, but the question becomes Where do you draw the line between trading and investing?

 

[roguetrader]

One other point worth making if one is using ETF's, and was the reason I did the breakdown of the components of the XLF. People need to be careful to check what the ETF consists of to ensure they are getting the diversification they think they are getting. A good example of this can be seen when comparing two biotech ETF's IBB and BBH, see chart.
You will immediately be struck by a great disparity between the two, the lesson, all ETF's are not created equal. The reason BBH has done so well is that 42% is made up of one stock, DNA and as such the ETF is largely tracking the success of that stock, which is all fine and good while it is doing well but if DNA starts to underperform the sector so will that ETF. I don't know what the rules are with ETF's as to how and when they are reconfigured,but the above eample should serve as a warning to be a little bit careful, and do a little extra research.

 

[erierambler]

Hi Ducati, I see this is a follow on from your article in the Knowledge lab which makes it all the more interesting.

Could someone please direct me to this article. I'm interested as to why someone would enter here and not wait for a better entry possibly at a lower price.

erie

 

[frugi]

http://www.trade2win.com/knowledge/articles/general articles/price-earnings-hybrid

 

[erierambler]

http://www.trade2win.com/knowledge/articles/general articles/price-earnings-hybrid

Thanks.........

erie

 

[ducati998]

Interested in ETFs? Check out the ETF Center.
FINANCIAL SEL SPDR (AMEX:XLF) Delayed quote data

After Hours (RT-ECN): 29.88 0.00 (0.00%)

Last Trade: 29.88
Trade Time: Jul 8
Change: 0.30 (1.01%)
Prev Close: 29.58
Open: 29.52
Bid: N/A
Ask: N/A
NAV¹: N/A

¹As of 8-Jul-05
Day's Range: 29.51 - 29.90
52wk Range: 27.00 - 30.79
Volume: 2,273,500
Avg Vol (3m): 6,685,700
YTD Return (Mkt)²: -3.58%
Net Assets²: 1.14B
P/E (ttm)²: 11.41
Yield (ttm)²: 2.21%

 

[ducati998]

chump

By trading "slower" you will make more money on aggregate than the vast majority of daytraders."...possibly true..but consider 'crap' fa trader takes longer to lose money than a 'crap' intraday trader..however they both end up inthe same place ...a skilled fa trader trading for the long term by the same token is not guaranteed to exceed the skilled intraday trader..

Interesting challenge.
Nominate your skilled "daytrader" who is going to post his trades live, and I can continue to post my trades, or if LION is interested, we can tag team our positions, and you can have 2 traders do likewise

Of course, we will need a hypothetical bank, or an agreement that an annual % return on capital employed is the yardstick by which to measure the result. Also a reasonable timeframe.

Just as an aside, this particular trade is in relation to the article, and is for a relative novice trader/investor, it pre-supposes little or no knowledge, and little or no time spent on research.

cheers d998

 

[chump]

"Just as an aside, this particular trade is in relation to the article, and is for a relative novice trader/investor, it pre-supposes little or no knowledge, and little or no time spent on research"
yes I realise this and my statement was not related to this specific trade ,but your wider statement..
I would like to "Nominate your skilled "daytrader" because your willingness to folow through his both fair as a means of resolving the issue and objectively it probably is the only way of trying to do so.. but I only know two who would qualify , of them one is just so busy making money I know he wouldn't partake (frankly he couldn't care less about 'arguments' like this) and the other one besides trading has an additional committment that effectively rules him out even prersupposing I could persuade him to do so ....I tell you what though, I position trade so at this moment I suppose I don't qualify ,but if I develop an intraday strategy which is something that interests me I will nominate myself and come back to you on this...I still suspect all we will prove is that if we both have the requisite skill we will both make money...you however may be looking to make your point by making more money than me ? but if you think about it that would not make your point..all it would do is make the point that you were a better trader than me using the tools of your choice..

 

[ducati998]

chump

Daytrade, position trade, irrelevant to myself, your challenge your call. Really it would seem that the challenge is more to do with the merits or demerits of fundamentals in contrast to technicals.

As to making or losing money, that is the nature and reality of the financial markets, it has nothing to do with one upmanship, or ego.

What it should do is illuminate the different strategies, skill sets, and emotional requirements required in trading / investing. This of itself should be valuable to any first looking at selecting a methodology.

Let me know.
Cheers d998

 

[chump]

LOL..you seem to have escaped the fact that to position trade I use FA and to a lesser degree TA ..in other words I use at least some of the same tools you do ....where we differ is I am quite willing to accept the merits of TA...the fact that much of it does not get included in my trading is simply I see no need for it unless that is I chose to adapt my trading to a different timeframe say intraday..which brings us back to your original statement which I disagreed with...matching 'tools' for the job is my position and what motivated my earlier statement.

edit...I will still come back to you if you wish with either an intraday or at least short term strat that focuses on TA ...but be patient...I'm interested in knocking up something to complement my position trading ,but I'm not going to risk money throwing something together adhoc..

 

[LION63]

Ducati & Chump,

I am happy that you both accept that a challenge of the nature suggested above between the 'likely participants' would not in itself prove anything other than who can make MORE money in any given time frame. The challenge should be to those who say FA does not have its place and then it will be proved that they do not know what they are talking about.

Sooner or later, a couple of likely candidates will pop their heads above the parapet and if only for entertainment value, I would be quite happy and willing to participate alongside Ducati in order to prove them wrong and get a few laughs whilst doing it.

 

[ducati998]

FINANCIAL SEL SPDR (AMEX:XLF) Delayed quote data

Last Trade: 30.37
Trade Time: 4:00PM ET
Change: 0.08 (0.26%)
Prev Close: 30.29
Open: 30.38
Bid: N/A
Ask: N/A
NAV¹: 30.28

¹As of 14-Jul-05
Day's Range: 30.16 - 30.39
52wk Range: 27.00 - 30.79
Volume: 9,256,000
Avg Vol (3m): 6,485,310
YTD Return (Mkt)²: -3.58%
Net Assets²: 1.14B
P/E (ttm)²: 11.41
Yield (ttm)²: 2.21%

 

[ducati998]

FINANCIAL SEL SPDR (AMEX:XLF) Delayed quote data

Last Trade: 30.15
Trade Time: Jul 22
Change: 0.16 (0.53%)
Prev Close: 29.99
Open: 30.05
Bid: N/A
Ask: N/A
NAV¹: 29.99

¹As of 21-Jul-05
Day's Range: 29.94 - 30.17
52wk Range: 27.00 - 30.79
Volume: 4,515,500
Avg Vol (3m): 6,231,900
YTD Return (Mkt)²: -3.58%
Net Assets²: 1.14B
P/E (ttm)²: 11.41
Yield (ttm)²: 2.21%

 

[ducati998]

FINANCIAL SEL SPDR (AMEX:XLF) Delayed quote data

After Hours (RT-ECN): 29.95 0.02 (0.07%)

Last Trade: 29.93
Trade Time: Jul 29
Change: 0.27 (0.89%)
Prev Close: 30.20
Open: 30.15
Bid: N/A
Ask: N/A
NAV¹: 29.93

¹As of 29-Jul-05
Day's Range: 29.92 - 30.25
52wk Range: 27.00 - 30.79
Volume: 4,548,600
Avg Vol (3m): 5,966,750
YTD Return (Mkt)²: -2.38%
Net Assets²: 1.60B
P/E (ttm)²: 11.69
Yield (ttm)²: 2.29%

 

[erierambler]

At this time it would be nice to revisit the topic here. So be it. Bump......

erie