Week 38 Performance.....A Rising tide of Apple helps to lift all boats

It is a familiar story about Apple especially within the DWCM fund.  We initially began holding a position in Apple late 2011.  Since then we have been in and out of some call option call, been long the stock (which we currently are) and have taken some profits from time to time.

But with the release of the iPhone 5 in stores yesterday, the Apple machine just keeps pushing ahead crossing over the $700 per share mark and setting fresh 52 week highs.  It's not just Apple stock either.  Technology as a whole continues to do quite well this Fall season with most tech names participating in the rally.  However, one big name missing from the party has been Intel.

Intel is down 11% over the past 1 month and 13% over the past 3 months.  What gives?

In our view Intel is a very stable company one that carries a solid balance sheet, provides a nice size dividend, and can usually whether a tough storm.  All the qualities we like in a company that we consider to be a core holding.

We believe the concern with Intel is over the lack of demand in PC's which Intel is the dominant player.  While it has branched out into the smartphone and tablet arenas, Intel may be getting unfairly punished while other semiconductor names who are solely in the smartphone and tablet space are riding the wave of success off of Apple's coattails.

Regardless, we believe that both companies can offer shareholder's additional upside which is why we currently have positions in both and are looking at adding to our position in Intel.  Currently Apple makes up about 10% of our total portfolio which is relatively high while Intel only makes up 1.4%.

As they say in the markets, "the trend is your friend until its not".  As the most hated rally in history continues along, the DWCM Fund marked it's 10th straight week with positive gains.  In a week where the markets felt a little hungover from the Fed's new QE Unlimited program, all four major equity indices finished lower on the week.

We saw this type of success earlier in the year with the DWCM Fund.  If you remember we started off the year with a 9 week winning streak which came to an end as things started becoming a little more volatile in the spring months.


In our Q1 Newsletter Investing is Simple But Not Easy, we talked about that at certain times within the market stock picking can look easy because everything goes up in value.  Investing becomes harder and more challenging when you really have to start developing your own strategy and executing that strategy even in the face of down markets.

We believe that we have built and will continue to build a portfolio that will be able to create value for clients in trying markets.  By taking profits off of the table at times and cutting back on losses, one of our goals is to have a positive absolute return in any market condition.


The Week Ahead
The release of new economic data really heats up again this week with the release of new housing data, Fed surveys, orders, and probably most important GDP figures this Thursday.

With the Fed's decision to launch it's latest round of QE, it's hard to determine how markets will react to new economic data.  The Fed is going to be pumping money into the economy whether it is doing good or bad.  So it essence waters down the economic data and to some degree renders it not very useful.

With that said, we think that you still need to pay attention to the data but we're just not sure yet what the markets will do with it.

• Mon -  Chicago Fed National Activity Index,  Dallas Fed Mfg Survey
• Tue -  S&P Case-Shiller HPI,  Consumer Confidence,  FHFA House Price Index,  Richmond Fed Manufacturing Index,  State Street Investor Confidence Index
• Wed -  New Home Sales
• Thu -  Durable Goods Orders,  GDP,  Jobless Claims,  Pending Home Sales Index,  Kansas City Fed Manufacturing Index
• Fri -  Chicago PMI,  Consumer Sentiment

DreamWorks Capital Management

I would like to thank everyone who was able to attend the DreamWorks Capital Management LLC financial lecture, “How to Balance Your Changing Investment Needs” this past Tuesday at The Community House.  We had a great turn out with an extremely knowledgeable and interactive group which made for a great event.

I hope that you were able to take away some key action items and principles that will help you on your wealth management journey.  As I noted, “bite the elephant one bite at time”.  The wealth management journey can become overwhelming at times, but if you stay focused on your goals and apply the “SMART Principles” you will increase your chances of success in order to have the financial life that you envision.

Paul Fenner, ChFC

President