"I Put a Spell on You"
Growth Report


Have You Seen This?

Have You Seen This?

                                    “I Put a Spell on You”


Last week, I left you with a stock pick that my stock selection machine, TRIGR, turned up. If you recall, Canadian Solar (Nasdaq:CSIQ) had jumped over 3,000 points in TRIGR’s ranking system to take the number 3 slot.


3,000 points is a pretty big jump for a stock in TRIGR’s rankings. And that’s because of the number of variables that TRIGR measures. 155, to be exact. There are relative strength measures, relative sector strength, moving average, earnings growth, price regression analysis and so on.


Canadian Solar scores well in most of these categories. It was an analyst upgrade and subsequent earnings revisions that fueled its massive jump up the charts.


Canadian Solar opened last Wednesday, at $28.50. By Thursday morning, it was hitting its most recent high of $33.07. Played perfectly, that’s a 16% gain.


The stock is down nearly 6% today, to the $30.50 neighborhood. Still a nice neighborhood. But not as nice it was. We’ll see what happens when (if?) the market turns up.


                                  The Evil Mastermind


I have to give my senior research analyst, Benson George, a mention here. He’s the chief architect of TRIGR’s ranking system. Last week I referred to him as the “mastermind” behind TRIGR’s stock-picking prowess. Well, Benson wasn’t quite happy with being a mastermind. He wants to be referred to as “evil mastermind.”


So there you go Benson, you’re now TRIGR’s evil mastermind. Unfortunately, this probably still won’t make him happy. I think you lose some respect in the evil mastermind community if you’re happy.


Speaking of evil masterminds, I’m also going to give a mention to Robert Shiller and Karl Case. These professors from Yale and Wellesley (respectively) created a home price index, now called the S&P/Case-Shiller index. (I’m guessing this means S&P bought the naming rights to this index, sort of like my Washington Redskins now play at Fed-Ex Field, except far more annoying.)


In any event, the June S&P/Case-Shiller index (the latest one available) shows that the rate of decline in home prices is slowing. Some are taking it as a sign that the real estate market is stabilizing. You’d think that any data suggesting that home prices are stabilizing has to be the work of an evil mastermind, trying to trick investors into over-subscribing Freddie Mac’s next bond sale on Tuesday September 2.


                                   I Put a Spell on You


That’s a tall order. I’d think some witchcraft would have to be involved for investors to buy bonds from Freddie Mac when delinquency rates on its $2.21 trillion in mortgages rose from 0.93% in June to 1.01% in July. That’s $20 billion in delinquent loans. Yikes.


And it’s even worse for Fannie Mae -- $3 trillion in mortgage debt and a whopping 1.36% delinquency rate.


I don’t know which is harder to believe, that Freddie Mac managed to dump $2 billion worth in bonds on the market Monday, or that some anonymous “Wall Street” analyst, perhaps from Barclay’s, said that both Freddie and Fannie have enough cash to absorb billions in losses. At least in the near term. If the housing market stabilizes. And the bond sales go well. And employment picks up. Evil mastermind indeed.


                                         An Invitation


TRIGR’s biggest gainer in today’s rankings was Quality Systems (Nasdaq:QSII). This medical software maker jumped 4,778 points into the number 2 slot.


TRIGR first pulled up Quality Systems on August 13 at $39.53. It’s gotten as high as $45.45 since. Current price is $42 and change.


Now, I want to extend an invitation to you. I’m going to host a forum chat right here at Investor’s Insight on September 5. The chat is next Friday. The chat will be typical Q&A style. It will run during the lunch hour most likely, between 12 noon to 1 or so, Eastern Time.


Of course, I’d love for you to sit in and throw some questions my way. I haven’t decided on a topic just yet. But if you want to leave some topic suggestions in the comment space here at my Growth Report blog, I’ll definitely consider them all.


I’ll be sure to remind you next week. And the fine managers of this great website will be alerting you via email as well. It should be a fun event, and hopefully informative as well. And with any luck, we’ll get to make it a regular thing.


So till next week,


Best regards,


Ian Wyatt

Chief Investment Strategist

Growth Report                                      


PS – For more information on TRIGR, please click here


Posted 08-26-2008 4:27 PM by Ian Wyatt


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