Market Forecasts: Phases & Cycles had an excellent year of forecasting the major direction of both the New York and Toronto markets.
As the year began, our January 5th, 2016 Market Comment pointed the way: “THE OUTLOOK FOR 2016: THE BULL MARKET IS BRUISED BUT STILL INTACT.”
As the markets sold off in January and February, we suggested that: “THE BULL MARKET BENDS SOME BUT DOES NOT BREAK”; by mid-March we declared that: “THE TONE OF THE MARKETS HAS TURNED TO POSITIVE. IT COULD LEAD TO A BREAK-OUT TO NEW HIGHS.” and our April 5th issue confirmed that “THE LONG-AWAITED LEG 5 IS IN FULL FORCE.”
We called for a CHOPPY AND CORRECTIVE ACTION in mid-May, forecasted a SUMMER RALLY in mid-June, and in mid-July we declared that “THE BULL MARKET IS ALIVE AND WELL AND A SIGNIFICANT BREAKOUT IS UNDER WAY.”
The early September Market Comment suggested a “BIG SURPRISE FOR 2016 MIGHT BE A MAJOR UPSIDE THRUST and a month later we declared that: “THE MARKETS ARE ON TARGET TO END THE YEAR ON A HIGH NOTE.” And this is exactly what happened!
The S&P 500 gained 9.5% for the year and 23.6% from the January low.
The S&P/TSX gained 17.5% for the year and 32.6% from the January low.
A proud achievement for Phases & Cycles!
Stock Selection: We had an outstanding year of timely and accurate stock selections, as the Investment Ideas statistics demonstrate (not including dividends).
20 of the 22 Ideas were closed out at a gain for a Success Ratio of 91%.
Early in the year we suggested and closed out a number of Gold Stocks, among them Detour Gold (with a gain of 55%) and Agnico-Eagle (47%).
Canadian Banks were added at the end of May and closed out mid-December with an average gain of 14.6%.
Other large gains included Rogers Communication (19.5%), CAE (17.3%) and Manulife (22.2%).
Negative results came from Extendicare (6.7%) and Stantec (8.2%).
Our U. S. Ideas were less fruitful, but still achieved a 67% success ratio.
The best results included Winnebago (35.8%), Commercial Metals and Worthington (both at 31%). Others included Linear Technology (23.4%), Microchip Technology (14.1%) and Johnson and Johnson (17.3%), while Tupperware (-14.7%) had the worst result.
A number of Consumer stocks were added in the first quarter and closed out at profit at the end of the third quarter including General Mills (15.2%), Tyson Foods (25.0%); while others were added too late to benefit from the gain in this Sector: Lowe’s (-6.6%), Campbell Soup (-6.2%) and Philip Morris (-1.4%).
Thanks to Nancy, Monica, Carolyne and David for the great results.
Phases & Cycles Inc., 2020 Boul. Robert-Bourassa, Suite 1903, Montreal, QC H3A 2A5
Tel.: (514) 393-3653 E-mail: RonMeisels@phases-cycles.com www.phases-cycles.com