I will take a break from publishing another energy industry blog unless something major happens, however, I will still post the weekly model results this weekend on my energy page. Although my energy page gets the most attention please spread some love for my Consumer Staples Industry Investment Model which tracks the slow but steady Consumer Staples Select Sector SPDR ETF (XLY); model results are also updated weekly. My goals is to eventually have all ten industry models up so we will have a macro view of the economy and which industries to invest.
Below I will highlight three things I'm working on, my complete to-do list is at the very bottom. Wish I could dedicate more time to thinning down my ever growing list.
1. I tweaked the Consumer Discretionary Investment Model which measures the price of the Consumer Discretionary Select Sector SPDR ETF (XLY). Please see a taste of model development results below. The two alpha model versions modestly increases accuracy over the original development model on my consumer discretionary industry page Version 1 uses merchant wholesaler data (sales and inventory) while version 2 uses retailer data (sales and inventory). I still need to tinker more to increase accuracy. Once I'm satisfied I will publish results on my blog
2. "Is The Consumer Staples Industry Just Spinning My Wheels?" I wasn't able to spend time on this blog entry last weekend, but I will try my best this weekend to move it along. The premises is that lately the Consumer Staples Select Sector SPDR ETF (XLP) has been stuck trading in the $47 to $50 range. Is this trend going to persist? I intend to make this a beefier consumer staples article compared to my weekly updates I normally publish. Here is the Yahoo Finance screenshot I have that shows it struggling to find a direction since December.
3. Backtest my Stock Market Investment Model. Going back in time to look at some data is the name of the game. The purpose of this backtest is to validate model accuracy in a different time period before I can have more confidence it works properly and that I haven't missed any key drivers of performance. Part of it involves looking at historical data for the Index of Consumer Sentiment. Check out the below. A healthy stock market generally registers at least a 90 on the consumer sentiment index. What this chart shows can also be useful in helping my research in market tops and bottoms.
My outstanding to-do-list in order of priority:
- Finish my article: "Is The Consumer Staples Industry Just Spinning My Wheels?".
- Build the Stock Market Investment Model (backtesting now).
- Finish building the Consumer Discretionary Industry Investment Model.
- Investigate why the price estimate of my Energy Industry Investment Model is much lower than the Energy Select Sector SPDR ETF's (XLE) price. I'm looking for evidence to support my hypothesis that dividend investors are propping up energy industry stocks.
- Investigate dot com era, dot com crash, and subsequent recovery effects on both the energy and consumer staples industry investment models.
- Investigate why merchant wholesaler inventory levels affects consumer staples industry stocks. I suspect two reasons: higher merchant wholesaler inventory levels equate to higher profit margins for consumer staples retailers or inventory levels is a result of future sales expectations.
- Write an article about lessons I learned from Mohegan Sun casino.
- Write an article about how to identify stock market tops.
Thank you for reading.