Dines 2015 Forecast Issue, and Thoughts on 2015 Year To Date

by JDH on January 10, 2015

Back in the day, everyone read The Dines Letter.  The most popular post I ever wrote on this site, back on January 16, 2010, was my post on The Dines Letter 2010 Annual Forecast Issue, with over 6,200 views.  I’m still a subscriber, although I find most of what he writes somewhat formulaic, and late last night The Dines Letter 2015 Annual Forecast issue landed in my e-mail inbox.  I haven’t had time to read all 45 pages, and I’m not going to reveal any specific stock recommendations he makes (you can subscribe for yourself if you want that), but I’ll give you some quick thoughts.

My issue with Mr. Dines, as I explained back in the above referenced post back in 2010, is that he has a good track record with spotting trends and buying stocks, but a less than stellar record when it comes time to actually sell.  I gave the example of a stock that went from 80 cents to $16, but the sell signal from Dines didn’t arrive until the stock was back in the $2.50 range.  You can read all about it in my post from 2011 on Dines sells Pinetree! That’s Amazing!

And yes, I understand that Dines constantly tells you to set your own sell strategy.  Only you can decide to sell, and he suggests that you have a strategy such as selling 10% of your holdings every time the stock goes up 10%, to lock in your gains, so he would argue that his subscribers would be selling all the way up.  That’s fine, but one of the reasons an investor would subscribe to an investment newsletter is to get advice on when to buy and sell.

Of course other newsletters are the same.  Casey is also a lot better at buying than selling, which is why a newsletter should be used as an “idea generator” and nothing more.  You must do your own thinking.

So what does Dines see for 2015?

Government debt will continue to increase.  Not going out on much of a limb there.  He agrees with my view that the U.S. dollar will continue to be the best of the worst, and will continue to increase against other currencies (although he covers his bases by saying that a “near term decline is possible”; way to go out on a limb there; it might go up, or down).  I agree, so as a Canadian I am shifting a significant component of my assets out of Canadian dollar denominated assets and into U.S. dollar assets.

NOTE TO CANADIANS: I didn’t realize this, but you can actually open a U.S. dollar denominated RRSP and TFSA account at your broker, which I have now done.  I have one RRSP, but it now has Canadian and U.S. dollar “sub accounts”, and I can transfer funds between them.  I have two U.S. dollar holdings at the moment:

I have switched these holdings to my U.S. dollar accounts, so that if I want to buy and sell them I can do so without losing money on the exchange converting back to Canadian dollars.

This is where I diverge from Dines.  He believes that the U.S. Treasury Bone market is “overdue for a crash”.  I agree that a crash is inevitable, but I don’t think it will be today, or tomorrow, or next month, which is why I will continue to hold TLT until it starts to crack.

Oil will continue to fall, due to world events.  Hard to argue with that one.

The market is going through internal deterioration.  He gives as examples stocks like Google and Amazon that are off their highs.  He’s not wrong, but as long as the government keeps printing money, it will go into the stock market, and while there may be some sector or stock rotation, the trend is still up.

He’s not sure what to expect with uranium.  It’s showing recent strength, but could be a bull trap.

As for gold?  He wrote three pages on it, and I’m not sure what he thinks.  Perhaps someone else can translate for me and let me know.  It might have bottomed, or not, but long term it’s good, I think.

There’s lots of other of his ramblings to read, which is as good a way as any to spend a cold winter’s evening, so I’ll light the fireplace tonight and read through it in detail.  Feel free to post your comments over on the Buy High Sell Higher Forum.

As for me, it was a good week.  I discovered that there are options that mature every week on TLT – iShares 20+ Year Treasury Bond ETF, so my plan on Monday, as I did this past week, is to do a covered write and sell options that are two dollars or so out of the money.  If the shares increase by $2 in a week I lose my shares, but I make $2 plus the option premium, which will be around another $1, so that’s a good week’s work.  This week the stock was up just under $2, so I keep my stock and pocket the premium.  Gotta love that.

Thanks for your predictions for 2015; I’ve summarized them and we’ll see how we do.

Thanks for reading; see you next week.