Conventional Electricity Industry: It's Time to Face Reality

October 14th, 2013

by Steven Bauer

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.


My Logo is: "Investing Wisely."

The Conventional Electricity Industry Groups is one of several within the Utilities Sector. It is clear from my forecasting that over the past several months that there has been notable deterioration in this Industry. Knowing this it is a matter of close monitoring of all the component companies within any grouping such as Conventional Electricity. When there is an increasing number of companies breaking down, it soon becomes very clear on the graphic or chart for that Industry Group. With this in hand Investment decision-making (Buy / Sell / Hold) becomes quite easy.

I continuously preach that Selectivity is what it is all about. When buying I select the current best and when selling or shorting I select the current worst. I then wait until there are clear signs that the Company / Industry Group is deteriorating and eroding my profit objectives. You might want to read my "Being Selective" article for further insight into my investment methodology. In my last article on Banking I offered an article on my "Rotation Model." I said: "As the marketplace cycles from Bull to Bear typically the participating securities "rotate" into favor and back out of favor. This produces an entirely new batch of both Industry Groups and individual companies / ETFs on my asset management lists from month to month." That is simple refined into my analytics of being very selective when Buying / Selling or Shorting / Covering.

Staying on top of all of this in an ever-changing world of economics is quite a trick and requires much time these days. Some do their jobs well and others do not; it is just that simple.

A Special Note for Seniors / Retired & Income Investors

My Mission is to provide guidance and direction for conservatively providing consistent annual and superior dividend and growth results for each Formal Recommendation I make to my Clients. Utility companies often provide very good dividend payments and in good times growth of your investment dollars. Unfortunately, my current forecasts for many Utility companies are not going in the right direction with regard to growth of your principle. At these times in the ever cycling of the stock market I suggest that holding cash, for selected Utility companies is currently the most prudent investment strategy.

My Basic Views on the Conventional Electricity Industry

The Utility Market Sector still have positive Industry Groups, Companies and ETFs all doing well. The Conventional Electricity Industry Group is one of those that has turned the corner to be Un-Favorable. My Forecasts suggest that the good times of the past are waning along with the Utility Sector itself.

My current Forecast for the Conventional Electricity Industry has remained Favorable now and for nearly five years. That appears to be changing and is suggesting that selectively holding cash is more prudent than holding companies that have begun to resend in price. So, I do have an Initial Bearish "Warning" in place, but specific investment recommendations are only activated when I see some possibilities of again taking profits as being the current best investment strategy. The real serious time frame becomes one when I move to a Strong Bearish "Warning." When that occurs, soon thereafter I will definitely be taking profits. (We may be close to that happening). This does not mean that I am equally comfortable with all the component Utility Sector Companies. I am a Very Cautious Asset Manager about preserving profits once I have them going for me.

Table

The Table below shares several of my Component Industry Group Indicators and a couple ETFs of the overall Conventional Electricity Industry. At this time all are doing well, but more and more often there are some clear negative variances or divergence in my Analytics of how they Forecast.

Note: There are many more combinations of the above information in my Forecast before any investment decision can be prudently made. My Notes for Table will offer help to understand my Methodology of "Investing Wisely." I hope this will provide you with guidance.

Prudent Investment Decisions

Is it too late to Buy? At this time, the answer is "Yes". You just might want to wait until there is the next Bullish General Market / Utility Inflection Point to do so. I believe this should this be your current investment strategy for the foreseeable future. I would be both cautious and highly selective in my securities choices you choose to hold.

My work/analytics starts with Forecasting and ends with very selective Formal Recommendations to Buy/Sell and Short/Cover. In between it is a matter of holding cash and waiting for the next General Market / Conventional Electricity Bullish or Bearish Inflection Point to invest your money wisely.

Charts

A Five Year Perspective on the Conventional Electricity Industry ($DJUSVE)

It has NOT always been like you are being told by so many who do not take the time to do their homework and practice "Investing Wisely."

You will quickly note that the Conventional Electricity Industry has taken a big hit – study the year 2008. You will also note that it has not even come close to replicating the S&P. There are many and currently clear reasons why, if you take the time to study this Industry Group closely and its relative performance to the S&P 500 Index. I hope you do.

Compare a Few Companies (from a Percent Point of View)

Perspective is a very profitable investment tool and seldom used effectively to maximize profits. There were clear reasons both fundamentally and technically for these particular securities to both out-perform and to under-perform. This is true about all Companies / ETFs. Identifying those that have the prospect of out-performing is obviously of incredible value and my rather Accurate Forecasting Methodology is always ahead of the fact. I hope you know what I mean about "ahead of the fact."

Articles for Staying "Ahead of the Fact"

Should you wish to read my latest article on Forecasting the following Companies and ETFs. Just Click on the Symbol. You will be taken (Linked) to my most current article as well at my last 20 articles on that Company or ETF. (May I suggest that it is an excellent way to gain insight into the accuracy of my Forecasts and Opinions). By doing so, you will have access to over 1,700 articles where I share my Analytics and Forecasts.

I hope you will find my "stuff" well worth your time and discover that it is very Accurate – "Stuff." Please Click the symbol links below for specific commentaries that I have written:

AAPL, ABX, AMZN, BAC, C, CAT, CSCO, CVX, D, DIS, F, FB, GE, GOOG, HPQ, IBM, INTC, JNJ, JPM, KO, MSFT, PFE, SBUX, SLW, SO, T, VZ, WMT, XOM, GLD, SLV, UCO

Supporting Articles for Further Understanding of My Forecasting - Methodology

  1. Please consider reading my article on "News." Any of the above Conventional Electricity Companies / High Profile Companies / ETFs is like most all of them. They like to tell "Stories" or share "News" that they believe the "Financial Analysts / Financial Media" will want to pick-up upon. That promotion often is not supportive to "Investing Wisely." It also directly correlates to the Rise or Fall of Price Movement of that Company.

    I learned in my doctoral studies one thing, amongst many others, that has proven to be very worth-while (profitable) for over 50 years of managing other people's money. Please have a look at this Flash Update.

  2. I believe this article on the Conventional Electricity Industry, and my "Flash Updates," like so many that I write, requires a supporting article with Additional and Specific Information and Details. Please have a look at the following commentary on Identifying Tops and Bottoms and Inflection Points.

  3. My "Flash Updates" are definitely either "Alerts" or "Warnings" and can often be a leading or "Heads-Up" to eventually making or not making a Buy or Sell – Formal Recommendation to my Clients. I have a unique Methodology for my own guidance to make such decisions that I offer some insight into in the following article: Buy / Sell And Short / Cover – Formal Recommendations.

To Email Me with your questions or thoughts: senorstevedrmx@yahoo.com

Concluding Remarks

At this time I must reiterate my Initial Bearish Warning and Strong Caution and prudence for holding many of the component securities of the within this Conventional Electricity Industry Group. Perhaps after a notable pull-back, I will once again be more proactive with my views on this Sector and Industry Group -- but even then you will want to be highly Selective with you choices of investment securities.

Since the U.S and World economies remains quite weak, and the positives are most-often off-set with further negative economic data and the stock market itself is very over-valued and currently very over-bought. Interest rates are on the rise again! This does not bode well for investing wisely. TAKING PROFITS (and HOLDING-CASH, if you have any), is currently the best place to be. If you don't have any CASH, I suggest you get some!

Oh yes, I have my exceptions, on my Bullish List, but it is diminishing almost daily. Holding with the focus on selling is my recommendation at this time.

There will again be fantastic investment opportunities if you will just be patient and disciplined with the management of your portfolio.

Most analysts remain overly optimistic, I believe my work / analytics deals with Reality, I hope you agree.

Smile, Have Fun, "Investing Wisely,"

Dr. Steve

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