August 14, 2019

Volatility, volatility, volatility: that has been the theme of this market since January of 2018.  I would never invest without the HCM-BuyLine Alpha because there is real risk out there that needs to be managed. The market is still above the HCM-BuyLine Alpha, so we will maintain our equity holdings until the market falls below the HCM-BuyLine Alpha.

 08-14-2019 currentalpha

Morningstar released a statistic on managers’ tenure:

  • Average tenure of a fund manager is 8.3 years for large funds. For smaller funds, the tenure is even lower.
  • Over half of all managers have never seen a bear market, and they have never seen a rate cut.

08-14-2019 20-Year

If that does not wake you up, nothing will. A lot of managers have never seen a market cut in half, such as during the bear market of 2000/2002 and the devastation of 2008. They have never seen an investor spend 4-8 years getting back to even. At HCM, we have never sat through a bear market thanks to the HCM-BuyLine® and the HCM-BuyLine Alpha. The HCM-BuyLine Alpha was designed to compete with computer-programmed trading.

This week’s HCM Optimized Trend Indicator (OTI) stock of the week is Macy’s, Inc. (M). Yahoo Finance says, “Macy's, Inc., an omnichannel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of April 1, 2019, it operated approximately 680 department stores under the Macy's and Bloomingdale's names; and 190 specialty stores, such as Bloomingdale's The Outlet, Bluemercury, Macy's Backstage, and STORY in 43 states, the District of Columbia, Guam, and Puerto Rico.” This stock started the day down more than 15%, taking a beating after a poor earnings call. Fortunately for OTI users, there was a sell signal on this stock in October 2018 when it was trading around $33/share. With the current price of roughly $16/share, we imagine OTI users are thrilled with the fact that they didn’t lose roughly 50% on this position. The OTI has done what we think is a great job on this stock, and the chart below speaks for itself. Way to go OTI!



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