Question : How can i search for Vanguard ETF's (Exchange Traded Funds)  on SEC (Securities and Exchange Commission) Search tool EDGAR?

Answer : ETF's can be searched under the Mutual Funds search  of EDGAR.  EDGAR documentation at https://www.sec.gov/oiea/Article/edgarguide.html quotes : "You can use the Mutual Funds tool to also search for ETFs. You can search for other types of funds as you would search for public companies."

Searching for Vanguard ETF's in Edgar. There is a trick to it. Vanguard ETF's can be found as 'Series' under a master Vanguard CIK. 

As an example, searching for the famous  Vanguard Information Technology Index Fund  with it's symbol 'VGT' does not bring back any results. This is because the ETF is registered as a Series under CIK #0000052848 for 'VANGUARD WORLD FUND'. Hence, Search for this ETF with it's name rather than it's Stock symbol .

Stock Market and Inflation

Stocks have been on a roller coaster as the Fed Chair, Jerome Powell talks about upcoming monetary policies.  Historically, developed nations have been facing less of an inflation than developing countries. I often get asked, why this may be the case. In simple terms, inflation is linked with production; production is linked with automation. Commodity prices stay in check as long as there is enough production chasing the supply of money floating in the economy. As soon as the productivity per dollar goes down, the same dollar now has reduced buying power. 

Red Ink in Financial Markets!

February 26 2021. What generated the red ink in Financial Markets?

Key indices including NASDAQ (down 478 points), S&P (down 96 points) and DOW Jones (down 560 points) had their roughest day in last couple of months. Lets take a look at what happened. 

Two Year treasury yields rose by 5 basis points and three year yield was up by 10 basis points this morning sending markets tumbling down! The daily treasury yield are published  here.

Fear of Fed tightening monetary policy and increasing rates raised concerns around slowing economic growth.  US Government seems to be getting more and more confidant about vaccination and herd immunity to put the pandemic behind, triggering the rise in treasury yields.  

 Where are the Bull and Bears Headed! 

Lets take a look. The stock indexes are a barometer of the economy. How sweet a drink is can be measured by the amount of it's sugar content. What would you measure to gauge the feel of  the market indices. 

Lets look at some of the published metrics tracked to gain insight into what drives health of the market. Interesting enough, the metrics we review here apply globally and not just to 'A Specific Country'. 

Metric #1 GDP or the Gross Domestic Product. The GDP number identified the monetary value of total amount of 'Finished Goods' and 'Services' produced by the total population of a country. 

Total GDP of the United States in 2020 was $20.93 Trillion.

The total amount of GDP for 2020 from Government sources is available here. Forecast for GDP growth is available here.

Metric #2 Total Amount of Money Supply in circulation in a Country.

Total amount of money supply in the United States in Jan 2021 was $5.2479 Trillion.

Data for the total amount of money supply in easy to understand format is available here. Data for total amount of money supply in the US from the Government is here.

General Rules of Humanity 

1. You can't consume Money.

2. You can consume what what is produced as finished goods and services.

As long as #2 > #1, there should be enough usable inventory of goods to be consumed by the overall population.  This translates into enough toilet paper to be purchased, enough food available and likely enough housing to keep a roof with the amount of money available. This makes everyone happy and healthy and the stock market moves upwards. 

Now take a situation where #1 <#2. More money and less goods. Not everyone can buy toilet paper or food or some other essentials. This makes for a grumpy population. People are not happy and this is reflected with Stock Market going down.

In a nutshell, if GDP projections are upwards compared to amount of money supply, stock market will grow. If a war, famine or calamity strikes, the GDP projections go down, Government tries to pump more money with Social Security programs and the stock market goes down.

Questions; Send them over to aspirincount@gmail.com or paste them in the comments section below. 

Ideas To Diversify in Retirement

I am an avid participant in our neighborhood app 'NextDoor' and came across this question from a neighbor.

"My Investments are mostly in ETF's like Vanguard VOO (Vanguard S&P 500), VGT (Vanguard Technology ETF), VCR (Vanguard Consumer Discretionary). Also have some real estate investments. Looking to get more ideas to diversify".

 

An interesting question and an ideal candidate for a blog post. Anyone looking for diversification beyond standard ETF's, there are good opportunities to understand and dig into subjects below.

(1) Tax Loss Harvesting : Wealthfront Roboadvisor is a good starting point.

(2) Bitcoins : Easiest way to buy cryptocurrency today seems to be  through Robinhood

Use the link Guaranteed Free Stock from Robinhood to sign up for a free stock to start with. Referrals from the link have been known to get a free VISA and Sprint stocks.

(3) Precious Metals : Gold (IAU, GLD), Platinum (PPLT) ETF's 

(4) Renewable Energy : "TAN" is a good ETF for Solar Energy and branching into socially responsible investing. 

(5) Derivative trading : Stay away if this term is new to you and if all delving into it, start with a straddle. Details on derivatives is a topic for another blog post. 

 Bitcoin!

AspirinCount Rating, Feb 2nd 2020 : Watch for troughs  for long term Buy

It's the Buzzword for the next generation of monetary exchange. With plenty of technical jargon available on the web, defining Bitcoin and it's variants, what determines the price of Bitcoin. Lets look at a couple of interesting factors that come into Bitcoin Valuation.

First and Foremost : Demand and Supply

The supply for Bitcoins and other digital currencies is limited. Unlike Paper Currency, there can be a maximum of 21 Million Bitcoins that can ever be mined. Another Digital Currency, Litecoin, is capped at 84 Million. 

What creates the demand for these digital currencies? 

It has been tough to find real use of Digital Currencies so far but looking at both sides of the coin, the favorable factors outweigh the negatives. 

-- Limited Supply of Digital Currencies limits it's usage as world currency reserve replacing Gold.  However, allowing more than one kind of digital currency can solve this problem, at the same time creating a standard for international currency acceptable to all & at par. With nearly 2500 Cryptocurrencies  in play today and rising, limited supply may not be a huge problem. 

-- Settlement of transactions can become very slow when volume of transactions is high. 

Second but nonetheless important : Regulation and Trust

As of 2017, FTC has already approved cryptocurrency trading platform LedgerX as the first federally regulated digital currency options exchange and clearinghouse in the U.S; this points to a positive future of cryptocurrencies in the United States. 

Interestingly, within US, Commodities futures trading commission classifies Bitcoins as commodities while IRS treats them as property. 

With Government regulation and Community trust kicking in, cryptocurrency seems to be on a trajectory of gaining ground. 

Corroboration by influential names, including Elon Musk, Mark Zuckerberg and Jamie Dimon stakes it  firmer in the ground. 

GME; Gamestop has been the talk of the town since January 25 2020.  There has been a frenzy of activities around the stock. 

The stock was trading at $20.20 on April 1 2020. On January 14 2021 it took a different turn with an uptick in price. It became cynical on Jan 27 with nearly 400% price appreciation. 

The news in Jan 2021 has it all written on the wall. Institutional investors believed Gamestop as a Corporation may be doomed. Motivated by taking profits, these investors shorted OR borrowed and sold Gamestop shares in the open markets. However, not everyone in financial markets was aligned with this idea. This started a buying ritual that snowballed into Gamestop stock and skyrockted it many hundred times over!

Penning this article today, Feb 1st 2021, the madness around this stock is still not over. Where is it headed? The most rational explanation can be found in the term Short Interest Ratio.  Short Interest Ratio is the number of Company's Shares that have been sold short divided by average daily volume of shares traded. Anyone institution or investor, who bet against Gamestop and borrowed to sell shares in open market a.k.a. short selling, would be required to cover his position prior to the next settlement. With the price of Gamestop skyrocketing, these naysayers were forced to buy shares at sky-high prices to pay for the loan and take steep losses. 

The gravity of the situation takes a turn to the worse when one realizes that the number of shares of Gamestop that were short soled is more than the total number of Gamestop shares that exist in the market. Whoaaa!!

It will be tough for pandits and SEC to not classify this as manipulation; but that will have to be seen.

The next question arises is, Who are the naysayers or short sellers? The most prominent name that has been coming up is that of  'Melvin Capital'. Melvin capital started the year with $12.5 Billion, ending the month with about $8 Billion after accounting for the losses. 

Other Institutional investors involved in the frenzy included 'D1 Capital Partners', 'Maplelane Capital', 'Candlestick Capital Management' and 'Citron Capital'.  

Information about 'Short Interest Ratios', outlining short positions in stocks is published by the stock exchange in which the company is listed. For Gamestop, the latest short interest positions can be purchased from NYSE at NYSE Short Interest Positions.

The not so current information for Gamestop' Short Interest Ratio  is also available at MarketWatch.

Politics and Finance

"Put the politicians on minimum wage and watch how fast things change." - Anonymous

Talking about impact of politics on Financial markets, presidential executive orders in the US Economy probably makes it to the top of the list of influential factors. 

Federal Register maintains a running list of presidential orders over time and is accessible for public consumption at Federal Register.

Co-relating the political agenda to financial markets is an important toolkit for savvy investors! 

Chasing the Highest Yield CD

 

For all the Fixed Income Patrons, as me, we find safe Havens in our favorite Instrument - The Certificate of Deposit of famously CD.

Texas Credit Unions seem to be pioneering the CD rates across all CU's in the country at this time of Super Low Interest Environment. Nothing Fancy, as the highest rate stand at a meagre 2.10% at  Complex Federal Credit Union. Membership is restricted, like in any other CU. 

Researching Finance

  Researching Finance

“Rule No. 1 : Never lose money. Rule No. 2 : Never forget Rule No. 1.”
― Warren Buffett

Sometimes it's intriguing that you have to hunt for investment advise.  With so much talk about finance, and so much sensitivity around it, should it not be germane to have good investment opportunities on fingertips for those who can invest. 

Amen! It actually is. Lets go onto see how...

If you are one of those investors who likes to stay ahead of the curve, read on. A good investment idea, once morphed into success, often makes it to a listing in one of the Trading exchanges, under the close watch of Securities and Exchange Commission or what we know as The SEC.  A savvy investor would like to know about it at the stroke of first ray of dawn, right when the first tinkerbell rings and the very first form to register the company is received by the commission. 

This post outlines how to research the latest and the greatest securities that apply to register with the SEC, right at the moment of their first interaction.

Staring out, SEC provides a very friendly tool, EDGAR, to search for the various forms that have been submitted by corporations. The tool is available for access at EDGAR. 

Towards the bottom of the search tool is the gem of all gems; the section 'Search For'.  Look for 'Daily Filings by Type' [Direct link : Daily Filings By Type].  Scroll to the bottom of the this page to locate a search box for entering the 'Form Id'. The two interesting forms to keep in mind are 'S-1' and 'N-1A'.

Form S-1 is an SEC registration required for U.S. companies that want to be listed on a national exchange. It is a registration statement for a company that is usually filed in connection with an IPO (initial public offering).

SEC Form N-1A is a regulatory document required to form an open-ended fund, like an Exchange Traded Fund or a Mutual Fund. In the U.S. Funds may only offer shares to the public once approval has been received.

Look for more posts in coming days, weeks and months on Search capabilities of EDGAR along with analysis and recommendations on upcoming IPO's and ETF's. 

"Consider Stock Slices like rows of car in a CarMax. When the gas prices go up, the hybrids keep making (saving) you money; when they go down, the guzzlers have their turn" - Anonymous.

Today's blog post talks about a combination of ETF's with high yield securities and bonds. There are two recommended ETF's that form the slice for today's recommendation; 'Fidelity High Yield Dividend ETF (FDVV)' & 'iShares iBoxx High Yield Corporate Bond ETF (HYG)'. 

FDVV is an ETF comprising of 107 Equities, with 'APPL', 'MSFT' and 'PG' being the top 3 holdings. The ETF yields a 3.10% at today's closing price of $33.08. Being an equity ETF, it certainly has room to grow. Dividend paid quarterly. 

Rating : Hold

HYG is an ETF comprising of '1226' bond securities with 'BlackRock Cash Funds Treasury SL Agency', 'ALTICE FRANCE', 'T-Mobile US, Inc.' being the top 3 holdings. The ETF yields a whopping 4.88% as of today's closing price of $87.36.  Dividend paid Monthly. 

Rating : Hold

Great for retirees or those looking for a monthly income stream to retire early!!