Strong Portfolio in a Weak Market

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

It was a down week for U.S. markets last week, with the Dow Jones down 0.56%, the S&P 500 falling 0.02% and the NASDAQ dipping 0.14%. The MCSI Emerging Markets Index continued to outperform and was up 0.36%.

Your Alpha Investor Letter portfolio had a considerably stronger week, with the bulk of your positions moving higher.

Big gainers in your Alpha Investor Letter portfolio included the Market Vectors Biotech ETF (BBH), which gained 5.23%; Skyworks Solutions Inc. (SWKS), which added 3.73%; and Actavis plc (ACT), which rose 2.34%. Union Pacific Corporation (UNP) also began to recover by rising 1.90%.

Three positions hit a new 52-week high. These included the PowerShares DB US Dollar Bullish ETF (UUP), Skyworks Solutions Inc. (SWKS) and the Market Vectors Biotech ETF (BBH).

The Vanguard Global ex-US Real Estate ETF (VNQI) moved back above its 50-day moving average and is now a BUY. The iShares S&P Global Timber & Forestry ETF (WOOD) fell below this level and is now a HOLD.

In yesterday’s edition of The Global Guru, I wrote about the reforms in India that have turned that market back into the top-performing one of 2015 so far. These reforms, combined with a surprise interest rate cut, have powered your watch list position in India’s ICICI Bank (IBN) back above its 50-day moving average since last week. As a result, I am recommending that you re-enter this position, and place your stop at a wide $10.00.

Despite the solid week in your Alpha Investor Letter portfolio, global stock markets have gotten off to a slow start in 2015. That makes it the second year in a row where the much-vaunted January effect, during which stocks rally strongly, has proven to be a dud. Sentiment indicators are back at “extreme fear” levels, even as broad consumer sentiment has not been this high since the start of the financial crisis. The former indicator is bullish; the latter is bearish.

Finally, I look forward to meeting many of you personally at the Money Show in Orlando this year on February 4-7 at the Gaylord Palm Resort & Convention Center. To register for free admission to the investment conference as my guest, click here or call 1-800-970-4355 and mention you are my subscriber. Use priority code 038045.

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Portfolio Update

Vanguard Global ex-US Real Estate ETF (VNQI) gained 1.14% during the four-day holiday week. Your bet on global non-U.S. real estate notched a second week of gains last week, rising above its 50-day moving average (MA) to become a “Buy” in your portfolio. This exchange-traded fund is also paying a 4.10% dividend as global real estate continues to gain steam for a move higher. VNQI is now a BUY.

Vanguard Russell 2000 Index ETF (VTWO) dipped 0.91%. VTWO touched down to its 200-day MA last week and immediately bounced higher. Looking back a bit, this is VTWO’s third bounce from this resistance level since mid-December — a technical sign that VTWO is likely to continue higher. VTWO is a HOLD.

Markel Corp. (MKL) gained 0.95% last week. MKL is a bet on a specialty insurance company that models itself after the success of the gigantic insurance component of Berkshire Hathaway. MKL will report last-quarter earnings on Feb. 11, after markets close. Although MKL did move high enough to breach its 50-day MA from below, it dipped slightly lower in afternoon trading to keep MKL as a HOLD in your portfolio.

PowerShares DB US Dollar Bullish ETF (UUP) continued its winning ways last week to add another 0.98%. This slow and steady gainer also hit a new 52-week high. The International Monetary Fund (IMF) lowered its forecast for global growth just yesterday, putting further pressure on the major rival currencies. This will likely continue pushing investors into dollar-denominated investments and bodes well for continued UUP gains. UUP remains as a BUY.

Skyworks Solutions Inc. (SWKS) added 3.73% in the last four trading days and hit a new 52-week high. SWKS will report earnings tomorrow after markets close, giving you a better look as to the future profits this position may yield. Collective analyst sentiment for SWKS is firmly set at a “Strong Buy.” SWKS is a BUY.

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Union Pacific Corporation (UNP) rose 1.90% last week. This bet on railroad profits will also garner an earnings report tomorrow, before markets open. Analyst sentiment also stands as a “Strong Buy.” Trading below its 50-day moving average, UNP remains a HOLD.

Market Vectors Biotech ETF (BBH) gained 5.23% for its first week in your portfolio and hit a new 52-week high. BBH is one of the two latest Alpha Investor Letter recommendations on the booming biotech sector. This highly diversified exchange-traded fund is one of the safest ways to reap gains as the biotechnology bull market continues into 2015. BBH is a BUY.

Actavis plc (ACT), the other new biotech addition to your portfolio, gained 2.34% last week. Although I highlighted ACT’s big name “Botox” brand, along with several others, in my recommendation last week, there are many more arrows in the quiver. Actavis announced positive test results just yesterday on its advanced Phase 3 testing of a new drug targeting relapsing schizophrenia patients. ACT is a BUY.

Latest Special Report

As a courtesy, I want to bring to your attention the newest version of The Top 12 Stocks for 2015, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.

Nicholas Vardy

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