Chapter IV: A look at Traditional Seasonal Analysis of Caterpillar Historical Prices identifies the best and worst months to be invested. |
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| A non-typical Seasonal Pattern is shown by Caterpillar. Usually, the lowest prices occur in the Fall Months. CATshows a strong seasonal bias of 12.61 percent, when averaged over the last 30 years. For this chart, price plots for each year are traced on top of each other. Each month's value is adjusted to the mean price for the particular year. The orange line represents the average monthy price expressed as a portion of the annual price. |
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| Investors in Caterpillar should consider staying in cash during June. Here, the profitability of the month is defined as the percentage change between the mean price on the first day of the month and the mean price on the last day of the month. So the figures displayed here refer to the average change during each month, rather than changes between months. By this measure, the month of April appears favorable, offering a quick return averaging 5.39 percent. |
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| The 'Monthly Profitability' discussed above applies to holdings during the course of a single month. Another, perhaps more realistic evaluation is the one charted here. Here the value evaluated is the highest price reached at anytime during the next quarter. Caterpillar speculators who have taken positions starting in March gain 16.7 percent, judged by the maximum price attained during the next three months. |
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This plot of the average monthly price as a proportion of the average yearly price removes the year-to-year secular trend. However the within-year trend is still intact, so it is expected that the December value might be higher than the January average, for a healthy company. The potential gain has been 12.61 percent from January to the next August. This is 21.62 percent when converted to an annual return. On the other hand, those who catch the seasonal wave wrong, can loose money at an annual rate of 30.3 percent. Before making any decisions based on the standard 12 Month Seasonal Calendar, be sure to check the characteristics of the 24 Month Political Election Calendar. Research shows that many characteristics of the traditional seasonal averages are actually induced by events in the 24 month political cycle, so the characteristics of even versus odd numbered years may be quite distinct. |
Much Deeper Market Timing Analysis with CAT roadmap and Summary of most effective indicators: |
| Thursday, March 18, 2010: We have news on MicroSoft, ticker symbol MSFT. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Mylan Inc. and Goldman Sachs Group, Inc.. From the News Archive: (3/17/2010 ) A favorable event happened at Pall Corporation. Meanwhile, bad news came from PPL Corporation, Patterson Companies, Inc., and Prudential Financial, Inc.. |