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Captain Calls: Buffett, Rich, Pring

There are lots of ideas out there on what to trade. The trick is synthesizing news-you-can use from the noise. Choosing ideas from veterans doesn’t make it a sure thing. But listening to ol’ timers…well, there is so much to be learned from experience. And I love to learn which is why I scan and cull and cultivate a short-list of traders/investors I follow and their trading/investing ideas. Sometimes an idea appeals so I make it my own.

Themes I’m watching right now from experienced captains and where they are going on their fishing expeditions:

Martin Pring: Subdued response to great housing numbers is a bullish sign

When a stock doesn’t drop from a downgrade, I notice. It’s a sign of strength, albeit subtle. It’s also a sign the auction of buyers and sellers may have found a floor.

In the same way, Pring draws attention to something the media and traders may have ignored:

“a blockbuster increase in housing starts was reported but attracted miniscule attention. Part of the jump was due to a depressed September number, so some could argue that it was not so significant. Even so, the new numbers pushed starts into a new post-financial crisis level high. But why am I making such a big thing about this? The reason is that housing starts are a really long leading indicator. Financial indicators usually move before starts, but starts are the first thing to reverse that you can touch and feel, and that means that we have a reliable piece of evidence that the economy has emerged from its corrective path of the last two years and is set for an improvement in its growth rate.”

How I Interpret Pring’s Analysis

Everyday I go through the SPDR ETFs to size up money flow. The Housing...