November 2015: Tear Sheet Nov 2015

November 2015
Morningstar & Technical Guidance
Tear Sheet Nov 2015

Publishers Commentary: Nov 1, 2015
Page 2
Stocks staged a strong rebound in Oct.
First Trust Advisors offers an interesting analogy

to NASAs space program of the 1960s. Page 2
Dont forget to consider investment risk
tolerance.
Page 3
Morningstar Sector Fair Market Valuation;

Margin of Safety
Page 11
Moving Averages and P&F Charts
Page 11
Laymans Interpretation.
Page 13
Best Stocks of the Month
Major oil firms continue to get slammed as

quarterly profits, or lack thereof, are reported.
Page 4
GATX: Quality Small Cap Value Core Holding

with Acceptable Yield. GATX, founded in 1898,
is the one of the largest global railcar leasing
firm with control over 149,000 cars.
Page 14
MLPs, as a group, finished the month with a 9.7%

total return, breaking a 5-month losing streak
Page 5
Stock Ideas off the Radar Screen Wisdom

Tree asks, What do the Fed and BBQ have in
common?
Page 16
Capital outflows from Sovereign Wealth funds

are starting to pinch asset managers.
Page 5
Notes from the Top
Page 5
Och Ziff (OZM) is struggling.
The strong dollar is affecting exporters earnings,

consumer spending continues to rise.
Page 6
Walgreens is winning on its patent front. Page 7
RBC is bullish on the overall market, but
earnings reductions are a headwind.
Page 8
Guiding Mast Stock Rankings

Full Speed Ahead and Power Up;
Stocks Moving Up and Down in Ranking Page 9
High Ranking Stocks by Sector;
Value and High Quality Market Plays
Page 10
Walgreens Boots (WBA) share price is down, but

far from outKinder Morgan (KMI) issued a
short-term, mandatory preferred which trades at
a 10% yieldExelon (EXC) announced quarterly
earnings were 6% above last year and 17% above

consensusSherwin-Williams (SHW) earnings
rose on the strength of its consumer business

As it relates to Berkshire-Hathaway (BRK.B), Bill
Ackerman has brought the Great Salad Oil
Swindle of 1963 to the forefront again. Page 18
Strategic Subject of the Month

The Austrian Oaks Six Rules for Successful
Investing.
Page 20
About Us
Subscriptions, How to Use Your Newsletter Page 22
1 Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com
We Help You Better Manage Your Money
2015
Publishers Commentary November 2015

Guiding Mast Investments
Commentary: Nov 1, 2015
"It's not how much money you make, but how
much money you keep, how hard it works for you,
and how many generations you keep it for." Robert Kiyosaki
Stocks staged a strong rebound in Oct. U.S.
stocks close out their best month in four years.
For all of October, the Dow gained 8.5%, the S&P
500 8.3%, and NASDAQ 9.4%. David Moenning,
Heritage Capital Research, offers a nice 6-month
chart with comments concerning investors
worry about underlying economic growth.
Below is a 6 month chart of the S&P 500:
Financials rose the most on a relative valuation

basis. Using the Morningstars Fair Market
Valuation, the financial sector rose from Fair
Valuation of 0.81 at the end of Sept to 0.99 at the
end of Oct, or a 22% increase. Basic Material was
second with a 15% rise in relative valuation,
followed by Energy and Real Estate at 11%.
The recent strength of the markets has moved it
back into the Caution levels with the Equal
Weighted S&P 500 (RSP) at $78.70 and it lies
between its 75-day Moving Average of $79.86
and its 200 day Moving Average of $77.59. In
addition, the Point and Figure charts turned
bullish on Oct 20, with a tentative price objective
of $93. However, the margin of safety is quite
slim with reversal markers on moving averages
being a mere 1.5% below current trading levels.
First Trust Advisors offers an interesting analogy
to NASAs space program of the 1960s. From
their latest weekly update: The US stock market
reminds us of Alan Shepard in 1961. Exasperated
by the long wait in his Mercury Spacecraft
Freedom 7 while NASA engineers fiddled, he
said, Why dont you fix your little problem and
light this candle? They finally did and he became
the first American to go into space.
Since hitting a short-term double bottom in late

Aug and again in late Sept, it seems investors are
warming to the idea that a profit recession in
some sectors will not spread and that the Feds
will continue to delay the inevitable rate
increases.
2
These days, the Pouting Pundits of Pessimism are

like NASA, constantly finding a reason to delay a
Federal Reserve liftoff er, we mean rate hike. All
the while, the stock market, like Shepard, isnt
worried and gets annoyed by delay.
So, last weeks Fed statement was welcome relief.
The Fed eliminated its worry about economic
problems abroad (which means China).
Additionally, the Fed shifted language
Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

dramatically regarding how it views the timing of
a rate hike.
demand from home buyers will remain robust

despite slightly higher mortgage rates.
Markets took this as a sign that a December liftoff is really on the table. Stock prices increased
sharply. In effect, saying, light this candle.
What rate hikes will do is push longer-term

interest rates higher, because the market cannot
permanently project low short-term rates. Also, it
rips the legs out from under the gold market. We
still think gold is worth about $950/oz.
And guess what, the Fed is highly likely to get

what it needs. Plugging recent data on
unemployment claims and consumer spending
into our models suggests payrolls expanded
about 240,000 in October, much higher than the
consensus expected 180,000. Moreover, after our
piece last week on benefits hiding wage increases
(link), the Wall Street Journal reported the same
thing today (link). We think the Fed is looking at
this too, and rate hikes are on the way.
Some investors think next years election will keep
the Fed from raising rates, but the Fed raised
rates in 1984, 1988, 2000, and 2004, and the
incumbent party won three times and essentially
tied the fourth.
The scary part for some investors is the
assumption that equities will sell off when the Fed
raises rates. But thats an odd assumption given
what happened last week and given the fact that
the market dropped 7.2% in the two weeks after
the Fed decided not to raise rates back in
September.
These pundits are thinking backward. A rate hike
will ratify the fact that the economy has
improved.
Rate hikes wont hurt stocks, which are being
lifted by profits, and they also wont kill housing.
As rents grow faster due to tight inventory,
So, as the Fed lights the candle, look for stocks to

leave bonds and gold on the launch pad, just like
Alan Shepard left earth
Dont forget to consider investment risk
tolerance. From RBCs latest market review,
Invest in the US The Least Worse Alternative
by Robert Keiser, Vice President, Global Markets
Intelligence: Going forward, the question is
whether stocks will continue to offer superior
returns to bonds and thus justify investors
increased risk taking. Despite the weakness
currently evident in the manufacturing-centric
portion of the U.S. economy, we believe that highquality U.S. equities should generate about 10%
average total returns over the multi-year balance
of the current economic recovery cycle. From this
perspective, stocks remain the best asset
allocation alternative for intermediate- to longterm horizon investors with average risk
tolerance. Nonetheless, for investors who have
correctly been overweight equities on a riskcomfort basis since the Fed announced QE3, this
could be a good time to reduce portfolio risk if you
believe that the relative average outperformance
of stocks could narrow to approximately 500 bps
from the 1,300-plus bps recoded since September
2012
More importantly is their observation of the
dilemma for many investors:

Because bond market yields are so low, investors
are increasingly being pushed further out on the
investment risk curve in search of a rate of return
that they can live on. The fact that the S&P 500s
dividend yield (2.2%) is currently on par with the
yield-to-maturity of the 10-year Treasury note
(2.1%) illustrates the dilemma facing many
investment
income-oriented
investors.
Unfortunately,
when
addressing
the
aforementioned issue, we cannot simply compare
dividend yields to yield-to-maturity since
consideration must be given to an individuals risk
tolerance, investment horizon, and real-time
requirement for positive inflation-adjusted
investment income.
Below is their current asset allocation
recommendation. S&Ps allocation could offer a
comparison point for investors to compare their
own allocation profile as the year-end
approaches.
Major oil firms continue to get slammed as

quarterly profits, or lack thereof, are reported.
From oilprice.com weekly commentary: Third
4
quarter earnings capture some of the worst losses

recorded since the downturn in oil prices began
last year. Oil prices have displayed great volatility
over the last twelve months, rallying to $60 per
barrel in the second quarter before dropping back
down to current levels in the mid-$40s. That has
contributed to some large impairment charges
and quarterly losses for the worlds biggest oil
companies. Here is a quick snapshot of some of
the quarterly figures:
Hess (HES) reported a net loss of $291 million,
or a loss of $1.03 per share. Production jumped,
however, from 318,000 boe/d in 3Q2014 to
380,000 boe/d in 3Q2015.
Marathon (MRO) became the first large U.S.
shale producer to cut its dividend, slashing it from
21 cents to 5 cents per share, or a cut of 76
percent. When you see major companies cutting
dividends, thats telling you things are bad, Carl
Larry of Frost & Sullivan told Bloomberg. Theyve
been placating investors by saying the dividends
are fine, youre still going to make money, dont
worry about it. Now theyre facing reality here.
ConocoPhillips (COP) reported a $1.07 billion
loss, or $0.87 per share, the largest in six years.
ConocoPhillips doesnt have much exposure
downstream, which has helped some other
integrated oil companies offset upstream losses.
Conoco says that it will maintain its dividend.
Production also rose increased by 5.5 percent to
1.55 million boe/d
Royal Dutch Shell (RDS.A) revealed a huge $6.1
billion loss for the quarter, which included
impairment charges of $7.9 billion. Shell ditched
its drilling campaign in the Arctic and also wrote
off assets in Canadas oil sands. Stripping out the
huge one-off losses, Shell earned $1.8 billion, still
down 70 percent from the third quarter of 2014.

ExxonMobil (XOM) posted a reasonable $4.24
billion profit, or $1.01 per share, beating
expectations and outperforming its peers.
However, profits are still half of the $8.07 billion
from last years third quarter, and the year is
shaping up to be the companys worst
performance since 2009. Exxons upstream sector
saw profit plunge by 79 percent, but that was
offset by the doubling of earnings downstream to
$2 billion.
Chevron (CVX) earned $2 billion for the

quarter, or $1.09 per share. That is down by 35
percent from year ago figures. The company also
announced it would lay off 6,000 to 7,000 workers
and it would sell off $5 to $10 billion in assets by
the end of 2017.
Even PetroChina (PTR), Chinas largest oil and
gas producer, reported miserable numbers.
Earnings fell to 5.2 billion yuan, or 0.03 yuan per
share. That is about one fifth of the level from a
year ago. The performance was the worst for
PetroChina on record.
MLPs, as a group, finished the month with a
9.7% total return, breaking a 5-month losing
streak and was just the third positive month since
August 2014, a 14-month span. On a total return
basis, this past month was the second best on
record, just missing Oct 2011s 10.3% return.
October is historically a strong month for MLPs,
which is consistent with their quarterly cycles.
The first month of a quarter is typically the
strongest, with the second month being the
weakest due to distribution timing and
subsequent yield-related selling. November
returns could be a tossup as it is the month for
distributions but the sector has strong
momentum going into trading.
Capital outflows from Sovereign Wealth funds

are starting to pinch asset managers. As low oil
prices decrease revenue inflows for oil-producing
states, their Sovereign Wealth Funds are cashing
out of investments in order to return capital back
to their governments. For example, The Financial
Times has reported the Saudis have pulled $70
billion from their wealth managers. Larger asset
managers will be hit the hardest, since large
sovereign wealth funds tend to prefer wellknown brands. From FT article: Our view is that
if the oil price stays where it is, oil-rich funds will
continue to take reserves back. Longer term,
thats a trend we view to be negative for the asset
management sector. That is bad news for
companies like Blackrock (BLK) and State Street
(STT), large wealth management companies.
State Street saw $65 billion in capital outflows
from its management in the second quarter of
2015. State Street manages $662 million from the
Azerbaijan sovereign wealth fund, but the
Azerbaijani fund plans on bringing all of that
asset management in-house. Blackrock suffered
$24 billion in capital outflows. JPMorgan (JPM),
Deutsche Bank (DB), and UBS (UBS) are also likely
to be negatively impacted, but are keeping
figures close to the vest. A manager from one of
the latter companies conceded that the decision
by sovereign wealth funds to pull out cash hit a
little close to home for us.
While the financial sector has been strong
recently, alternative asset managers have not.
Low asset growth internationally coupled with
asset outflows will continue to be the lessobvious problems of many wealthy managers.
Och Ziff (OZM) is struggling with overall
performance growth, but offers unparalleled
value. While assets under management (AUM)

has been rising, 2015 earnings per share
estimates have declined from $1.40 to $0.76.
Utilizing a 2 and 20 pricing strategy, OZM
collects a quarterly fee based on value of assets
under its control along with a annual higher fee
on account appreciation, but only if it breaks a
high-water mark established from the years
previous value. OZM collects its annual fee at the
end of the year, reports it as a 4th qtr. item and
dispenses a variable distribution the following
February. This annual fee causes the uneven
nature of OZM earnings and distributions. With
weak global equity prices, investors are reducing
their expectations for 4th qtr. earnings and
distributions, reflecting lower performance fees.
Share prices have fallen out of bed, declining
from the $11 to $13 range to $7. Generically,
OZM performs well with rising international asset
price appreciation.
Year to date, the Dow Jones Global Stock Index,
Ex US is down -3.1% and the total Global Index is
down -1.3%. While OZM has a large European
fund and Europe has been strong YTD, investors
fear it may not be sufficient to exceed last years
high-water mark. Morningstar offers its highest
rating of 5 Star on OZM, with the following
synopsis:
Bulls Say: For investors interested in multistrategy hedge funds, Och-Ziff is one of the best
choices available with its low-volatility returns
approach. Och-Ziffs hedge fund model means
that it does not have to engage in constant
capital-raising efforts to replace assets that
would normally exit a private equity fund once a
company is sold to another buyer. Och-Ziff is
typically more aggressive than peers with regards
to paying out dividends, with an economic net
income payout ratio of 80%-95% versus the 40%50% of peers.

Bears Say: Och-Ziff has consistently stated that it
will wait on developing a fund for the individual
investor market, which we fear will place it
significantly behind more aggressive competitors.
We question whether Och-Ziff has the scale
needed to successfully increase real estate AUM
and position itself to grab the best opportunities,
given the heated competition in the space. The
U.S. Department of Justice is investigating OchZiff's activities in Africa for potential Foreign
Corrupt Practices Act violations.
OZM 4th qtr. looks like it will be a disaster.
Quarterly estimates came down from $0.75 three
months ago to $0.13 currently, vs a lackluster
$0.50 4th qtr. 2014.
As expected, OZM
announced $0.13 for the most recent quarter,
based on sub-par management fees and higher
expenses. Assets under management declined
5% from 2014, in step with industry. 2016
estimates are also moving lower, from $1.60
three months ago to $1.35 currently. Along with
earning estimate reductions, distribution
expectations have fallen as well. If OZM earns
$.71 for the year and pays out 80%, the
distribution would decline to $0.56 and offer a
yield of around 8.0%.
OZM comes up high on our list due to its above
average yield, low PEG ratio and it is well liked by
analysts. However, it has not prevented current
investors the pain of falling share prices. For
patient investors looking for higher current
income (coupled with a higher risk profile), I am
still bullish on the alternative asset manager
sector and endorse our top financials, especially
OZM, KKR (KKR) and BGC Partners (BGCP).

The strong dollar is affecting exporters
earnings. According to the St. Louis Fed's tradeweighted dollar index, the US Dollar is at its
highest Oct close in 12 years. US dollar strength
translates into lower exports and lower export
profits, so expect companies with large foreign
income to report lower earnings. The other side
of the coin will be consumer stocks which focus
on domestic markets, and domestic healthcare.
down from 3.9% in the 2nd qtr., consumers

continue to spend, albeit at a slightly lower pace.
During the first quarter 2015 the US dollar was

also strong, stocks in the industrial, financial,
energy and utilities sectors posted negative
returns. The best S&P 500 sector performers at
the time were healthcare and consumer
discretionary names. These sectors may be the
best performing until the Dollar weakens.
A strong dollar is just one of the conundrums for
the Fed. As US rates climb vs competitive rates
abroad, it lends added strength to the currency,
aggravating profits for large multi-national
companies like Caterpillar (CAT), IBM (IBM), 3M
(MMM), and Johnson and Johnson (JNJ).
A higher dollar also negatively affects commodity
prices, reducing profits at mining companies and
keeping pressure on low oil prices. Adding to the
differential is the positive impact on the strength
of US consumer spending that usually accompany
low oil prices.
Staying on the consumer story, consumer
spending continues to rise. As shown in the
following chart from RBC Wealth Management
outlining y-o-y spending growth over the
previous 10-years, consumers continue to
support the overall economy. While the 3rd qtr.
GNP looks like it expanded by a measly 1.5%,
Walgreens (WBA) is not only gobbling up

competitors, it is also winning on its patent
front. Retailers are increasingly filing patents
whats up with that and why should I care? The
world of technology patents is starting to
incorporate retailers and banks that have
invented new ways to access, create, and utilize
internally generated data. From an article
published on ciodive.com, Equifax has patented
a system for monitoring child identity theft and
Walgreens won a patent for integrating
pharmacy and health data. Meanwhile, Bank of
America has increased its efforts to win patents in
the last five years. In 2014, according to data
from the U.S. Patent and Trademark Office, the
company received 232 patents.
These innovations may help companies like WBA
justify acquiring competitive retailers. As an
alternative, innovations could create an
additional revenue stream if they are offered to
other companies as licenses.

RBC is bullish on the overall market. Below is a
chart showing the rising channel for the S&P 500,
going back to the depths of 2009. As shown
below, the markets have fallen from the high end
of the channel to the lower end, but has not
penetrated the lower end limits of the channel.
forward PEG ratio. Below is a recap of the sector

earning estimate reductions on a month-end
basis for various sectors Aug to Oct 2015
Oct - 50
Sept - 24
Aug - 45
%
Total
Reductions Reductions Reductions Revisions Revision
Finanical
16
5
10
31
26%
Energy
10
9
10
29
24%
Industiral
11
3
10
24
20%
Basic Materials
4
4
5
13
11%
Tech
4
2
4
10
8%
Consumer
3
1
2
6
5%
Health Care
2
0
1
3
3%
Utilities
0
0
3
3
3%
50
24
45
119
Source: Guiding Mast Investments
From RBCs most recent Global Outlook Weekly,

Currently, the following industries appear
attractive to us based on technical and
fundamentals: electric utilities, regional banks,
consumer staples, foods, telecom, technology,
Internet, aerospace and defense. From both a
technical and fundamental perspective, we
believe the bull market is in the early part of a
much longer secular (long-term) bull market that
may have the potential to equal or exceed the
performance of the past six years.
Flying in the face of these upbeat assessments is
the trend of downward earnings revisions. On
our list of followed companies are 135 firms of
various sizes and sectors. One matrix we closely
follow is this years and next years earnings
estimates, and this information is used to
calculate other fundamental valuations like the
Over the previous 3 months, there has been a

large number of earnings estimate reductions
119 downgrades and 35 upgrades. It may be a bit
surprising the number of financial sector earnings
reduction is higher than for energy companies.
70% of these revisions has been in the Financial,
Energy, and Industrial sectors. While these
sectors have seen the most damage to their
earnings, overall sector valuation seem to be
Fairly Valued, according to Morningstar.
Selectivity in these sectors is preferred.
Recommended list changes.
Based on
comparative valuation, revised earnings
projections and the recent market strength, eight
stocks moved up to a Full Speed Ahead or Power
Up rating and eight moved down to Neutral. This
is an unusually high number, and demonstrates
the shift in valuation during the most recent rally.
Defensive stocks in Health Care and Consumer
accounted for 3 of the 8 upgrades, 2 of the 8 for
Financials, and 1 each Industrial, Energy and
Tech. Of those falling to Neutral, 2 were in Tech,
2 in Industrials and the balance 1 each across the
board of sectors.
Guiding Mast Stock Rankings Nov 2015

Guiding Mast Stock Rankings
Guiding Mast Rankings are based on price to forward
earnings growth ratios, current dividend yield, forward
earnings yield, S&P Equity Ranking, and consensus of
broker timeliness. The investment time horizon for Guiding
Mast Rankings is 3-years. The list below comprises the top
30 stocks, in order, of the 132 equities followed by Guiding
Mast Investments. These are worthy of additional research.
The highest Navigator Ranking is Full Speed Ahead,
followed by Power Up, Neutral, and Power Down
Full Speed Ahead

KKR KOHLBERG, KRAVIS, ROBERTS
FIG
FORTRESS INVESTMENT
OZM OCH ZIFF
BGCP BCG PARTNERS
HIFR INFRA REIT
UNH UNITED HEALTH
PWCDF POWER CORP
GMT GATX
BNS BANK NOVA SCOTIA
EXC EXELON
JCI
JOHNSON CONTOLS
ITC
ITC HOLDINGS
DM
DOMINION MIDSTREAM LP
HOG HARLEY DAVIDSON
TRN TRINITY
Power Up
BRK-B BERKSHIRE HATHAWAY
BDX BECTON DICKSON
WBA WALGREENS BOOTS
JPM JP MORGAN
LOW LOWES
RICK RCI HOSPITALITY
UTX UNITED TECHNOLOGIES
SHW SHERMAN WILLIAMS
DMLP DORCHESTER MINERALS
MS
MORGAN STANLEY
FLEX FLEXTRONICS
CBI
CHICAGO BRIDGE
TXT
LNC
HI
TEXTRON
LINCOLN NATIONAL
HILDENBRAND
Stocks Moving Up and Down in

Guiding Mast Rankings
The following are stocks that moved up to or
down from the top two buy tiers over the past
month:
UP
BDX Becton Dickinson
WBA Walgreens Boots
JPM JP Morgan
RICK RCH Hospitality
SHW Sherman Williams
DMLP Dorchester Minerals
FLEX Flextronics
LNC Lincoln National
MERC
CTSH
TGT
BA
CWCO
FLR
CNI
Down
Mercer Intl
Cognizant
Target Stores
Boeing
Consolidated Water
Fluor
Canadian National
Noteworthy Near Misses

As our methodology has a relative focus (Firm A is
mathematically higher ranked than Firm B, and then review
the top 30) rather than an empirical focus (all firms over a
preset number), near misses are a great place to find ideas
worthy of further research. In addition to those moving
down only a few points, this months noteworthy near
misses are:
HD
Home Depot BAC
MOV Movado
SYK
Bank America
Striker
Guiding Mast Stock Rankings Nov 2015

Highest Ranking Stocks by Sector
*= New this Month
Basic Material: Mercer Intl (MERC), Glencore

(GLNCF)
Consumer Discretionary: Harley Davidson (HOG),
Lowes (LOW)
Consumer Staples: Walgreens Boots (WBA)*
Hildebrand (HI)
Energy: Dominion Midstream (DM), Dorchester
Minerals (DMLP)*
Financial: KKR (KKR), Fortress Investments (FIG)*
Health Care: United Healthcare (UNH), Becton
Dickinson (BDX)
Industrial: GATX Corp (GMT), Sherman Williams

(SHW)*
Tech: United Technologies (UTX)*, Textron (TXT)
High Quality and Low Valuation

Market Plays
*= New this Month
Standard and Poors S&P Capital IQ Research Services

offers an Equity Quality Ranking system that rates
companies on two factors: Consistency in 10-yr Earnings
Growth and Consistency in 10-yr Dividend Growth. A+ is
the Highest with B+ considered Average. Of the 4,000 or
so companies followed by S&P (of which 450 have equity
ratings), there are only 47 firms qualifying for A+ ranking,
and 132 with an A+ or A ranking. Listed below are
companies with A+ or A ranking and highest on our
Guiding Mast Recommendation List:
A+
BRK-B Berkshire Hathaway
UTX United Technology
UNH United Health
WBA Walgreens Boots
BNS
SHW
BDX
JCI
A
Bank Nova Scotia
Sherwin Williams
Becton Dickinson
Johnson Controls
Utilities: InfraREIT (HIFR), Exelon (EXC)
10
M* and Technical Guidance Nov 2015

Morningstar Sector
Fair Market Valuation
Morningstar offers Market Fair Value calculations for
sectors it follows. When valuation is 1.00, the sector is
fairly valued, when over 1.00, the sector is overvalued and
when below 1.00 the sector is undervalued. Below is a 4month table of each sector as of the end of the month.
2015 2015 2015 2015

52 wk
July Hi/Low
0.90 1.01-0.80
0.97 1.11-0.88
0.94 1.05-0.81
0.94 1.16-0.89
1.02 1.08-0.93
1.04 1.11-0.89
0.98 1.17-0.95
1.04 1.06-0.94
0.82 1.03-0.73
1.02 1.14-0.91
1.02 1.17-0.92
0.97 1.06-0.88
0.94 1.07-0.87
1.02 1.15-0.90
0.97 1.05-0.84
1.02 1.11-0.94
0.96 1.07-0.89
Sector
Oct Sept Aug
Basic Material
0.91 0.80 0.88
Consumer Cyc
0.96 0.88 0.93
Financials
0.99 0.81 0.86
Real Estate
0.99 0.89 0.93
Consumer Def
1.03 0.97 0.96
Healthcare
0.95 0.89 0.99
Utilities
1.02 0.97 0.97
Telecom
1.01 0.94 1.01
Energy
0.98 0.88 0.84
Industrials
0.98 0.91 0.95
Technology
1.01 0.93 0.97
All M* Stocks
0.96 0.88 0.93
NYSE
0.95 0.87 0.92
NASDAQ
1.00 0.90 0.96
Cyclical Stocks
0.92 0.84 0.90
Defensive Stocks 0.99 0.94 0.98
Sensitive Stocks
1.00 0.91 0.94
* New High/Low During Last 30 days
Source: Morningstar, Guiding Mast Investments
Margin of Safety
The following table outlines the difference between the
current market vs. the corresponding technical
support/resistance levels of Moving Averages and Point &
Figure charts. These numbers are offered as a % over or
under the respective trend indicators. This could be
described as the Margin of Safety, or the percentage
movement until a technical reversal is reached.
Month
End
Oct 15
Sept 15
Aug 15
July 15
June 15
May 15
April 15
Mar 15
Feb 15
Jan 15
Dec 14
Nov 14
Oct 14
RSP
$ 78.70
$ 72.96
$ 76.58
$ 80.30
$ 80.25
$ 81.97
$ 81.38
$ 80.66
$ 82.40
$ 77.72
$ 80.03
$ 80.16
$ 77.05
75-day 200-day
MA
MA
P&F
-1.5%
1.4% 2.4%
-7.6% -9.8% 1.3%
-5.1% -5.2% 4.7%
-1.5%
0.0% 1.6%
-2.0%
0.5% 1.6%
0.1%
3.2% 2.4%
0.9%
3.5% 2.9%
0.5%
3.3% 2.1%
2.9%
6.1% 4.1%
0.0% -1.0% 0.9%
3.0%
4.9% 3.8%
4.0%
6.1% 4.0%
1.2%
3.6% 4.0%
Source: Guiding Mast Investments
Technical Market Trends:

Caution
The top four sectors offering the best value are

Basic Materials
Health Care
Energy
Industrials
New 52-Week Fair Market Value Highs and Lows
Highs: None
Lows: None
11
RSP Chart 1-Yr, 75-day MA in Gold,

200-day MA in Blue

Guiding Mast Investments utilizes the 75-day moving average
(MA) and the 200-day MA as reference points for mediumterm market trends. We rely on the Equal-Weighted S&P 500
ETF (RSP) as the market indicator. With an equal-weighted
index, each component is rebalanced to an equal amount
quarterly to reflect price movements and offers a broader
reflection of overall market trends than the market-weighted
S&P 500 ETF. When the current price is above both the 75and 200-day MA, the trend is Green or Positive. When the
current price is below the 75- and above the 200-day MA, the
trend is Yellow or Caution. When the current price is below
both the 75- and 200-day MA, the trend is Red or Negative.
Current Price RSP

75-day MA
200-day MA
$78.70
$77.59
$79.86
Last Month $73.06

Last Month $78.47
Last Month $80.08
Point & Figure Technical Chart of RSP

Guggenheim S&P 500 Equal Weight ETF
Courtesy of StockCharts.com
A Point and Figure Chart is a simple graphic that provides a

bit longer history than many conventional charts. The chart
is maintianed in a series of columns with boxes
representing the stock price. When the price movements
goes up to the next box, a x is marked. When the price
movements goes down to the next box, a o is marked. Each
time there is a movement of more than 3 boxes, a trend is
established. If it is reversal, then another column is added
to the chart. Once you get the hang of it, P&F chaarts are
very useful in tracking trends.
A bit of additional explaination concerning P&F chart
trends: There are over a dozen P&F signals, but only two
basic signals. X's represent advancing columns and O's
represent declining columns. P&F columns alternate as
prices reverse and change direction. A basic P&F buy signal
occurs when a column of X's exceeds the prior column of
X's. A basic P&F sell signal occurs when a column of O's
exceeds the prior column of O's. It's that simple.
X indicates stock is achieving a higher price level
0 indicates stock is achieving a lower price level
P&F Pattern: Double Top Breakout on Oct 20

Tentative Bullish Price Objective $93
Reversal of Bullish Trend: Below $76.99.
As the most common signal in the P&F universe,
Double Top Breakouts are also the most prone to
whipsaw and failure. Double Top Breakouts
should be viewed in the context of the bigger
picture. It is important to employ other aspects of
technical analysis when using signals as common
as Double Top Breakouts.
More information on P&F Charting:
http://stockcharts.com/school/doku.php?id=cha
rt_school:chart_analysis:pnf_charts
12

Laymans Interpretation
Based on the Equal-Weighted S&P 500 Index ETF
(RSP): RBCs technical notes for Nov is titled:
One Extreme to Another. We believe that the rally
by the Dow Industrials and the S&P have been
pretty remarkable over the past month, and is
evidence the volatility is still running high,
although it is not as noticeable when stocks are
rising. But it does still suggest that when a
pullback does arrive, it could be a fast one, as
moves to the downside in the market tend to be
quite a bit sharper than rallies.
The market is up into the area of heavy resistance
that was created from a year of trading within a
band of about 17,30018,300, so we should not
be surprised if the current rally slows down into
more of a trading range and consolidation period
that could last a month or two. We think the fact
that most of the rest of the market is lagging the
performance of the DJIA and the S&P is an
indication more time will be needed for the
broader market to build into a longer-lasting
uptrend.
The current strong market upswing has been on

the backs of larger cap stocks and has been
limited in strength.
The current number of
stocks trading above their respective 200-day
moving averages, or the average price over the
past 50 weeks, is at 51%. The 75- day MA of this
ratio is 41% and the 200-day MA is 57%. While
the current number of stocks above their 50week trading average and is above its short-term
MA, it lags its longer-term MA, another sign of
caution.
A broader market advance would indicate more
residual momentum. Look for the small cap
index to play catch-up for the market to advance
further. The Russell 2000 Small Cap Index (RUT)
should break above 1250 to signal its
participation. It currently trades at 1150. If the
market advance does not broaden, a trading
range should develop until year end.
The smaller stocks have lagged the performance

of the larger stocks in the recent recovery, and a
more healthy uptrend will usually see the small
stocks lead to the upside. See chart of Russell
2000 Index over the previous 4 years.
Stay ready.
13
Best Stocks of the Month Nov 2015

GATX: Quality Small Cap Value Core
Holding with Acceptable Yield
Earnings could be cooling but GATX (GMT) offers
great value. GATX, founded in 1898, is the one
of the largest global railcar leasing firm with
control over 149,000 cars.
GATX buys new railcars and leases them using
multi-year contracts. Customers include GMTs
market cap about matches its revenues at $2
billion. The Company competes with Union Tank
Car Company, CIT Group Inc., General Electric
Railcar Services Corporation, First Union Rail, and
Trinity Leasing. GATX leases tank cars, freight
cars, and locomotives in North America; tank cars
and freight cars in Europe, and freight cars in
India. GATX also has interest in a developmentstage affiliate in China.
GATX owns 125,000
railcars in North America, 28,000 in Europe and
manages a portfolio of 5,000 for third parties.
GMT prefers full-service leases, where the
company maintains the railcars, pays ad valorem
taxes and insurance, and provides other ancillary
services. Their portfolio of railcars have
estimated useful lives of 25 to 44 years and an
average age of approximately 19 years. The
average lease renewal terms for all North
America railcars during the 3rd quarter was 5.0
years, compared to 4.5 years in the 2nd quarter
and but is below the average of 5.6 years in the
3rd quarter of 2014. The original lease is for
terms usually ranging from 5 to 10 years and
renewal periods of 3 to 5 years.
GATX has a diverse customer base, serving over
1,050 clients with 700 customers in North
America and 250 internationally. In 2014, no
14
single customer accounted for more than 4% of

North America's total lease revenue, and the top
ten customers combined accounted for
approximately 20% of total revenue. The
economys European business is more customer
concentrated with two customers accounting for
10% of revenues each, and the top 10 customers
generated 64% of 2014 European revenues.
Rail car utilization rates in North America for its

125,000 car fleet last quarter was 99.2%. Let that
number sink in. This ratio of customer retention
coupled with professional forecasting of demand
should be appreciated by most all business
managers. Of the 125,000 railcars operated at
the end of June 2015, only 1,000 sat idle.
Earnings per share have grown from $3.59 in

2013 to around $5.27 in 2016, with $5.25

expected this year. The company recently
announced it was selling its Marine boat and
barge business and took a $0.61 non-cash writedown of this non-core business. This produced
earnings of $0.91 a share for the most recent
quarter and $3.33 year to date. The Marine
group contributed 17% of total 2015 YTD
revenues, and a reduction corresponding in 2016
earnings is expected to the units accompany
asset write downs.
In addition to a plateau of earnings due to the
exiting of the marine business, management is
facing a few oversupply problems. From the
most recent earnings comments, the CEO states,
Looking longer-term, the growing over-supply of
tank cars is decreasing tank car renewal rates and
making it more difficult to place new tank cars
delivering in 2016. Our early recognition of the
impending changes in the tank car market was
the backdrop for our strategy to lock in attractive
lease rates for longer terms and maintain a
disciplined investment strategy. As a result of this
strategy, our committed lease revenues are at
record levels, and this base of stable cash flow will
serve us well when the environment for more
attractive investment opportunities develops.
Also of investor concern is the potential impact of
growing government regulation of railcars
carrying oil and other flammables. Moodys
Credit Services comments as of last Dec were:
GATX maintains its position of competitive
strength in full-service rail car leasing,
particularly in tank cars where it maintains the
second highest market share in both North
America and Western Europe. About 13,000 of
GATX's North American tank cars (10% of the
North American fleet) are used to transport
flammable liquids, including 4,900 (4%) in crude
15
and ethanol service. The US Department of

Transportation and Transport Canada are
considering implementing new safety standards
for tank cars engaged in such service. The rules,
not yet finalized, could require that existing cars
in flammable liquid transport service be
retrofitted to meet the new standards. As an
alternative to incurring the potentially significant
expense for retrofitting the cars, GATX could
redeploy the cars into alternate service, sell the
cars, or scrap them. We expect that GATX will be
able to take the steps necessary to fully comply
with the new rules when implemented and that
the associated expense will not significantly
weaken the firm's long-term financial
performance and condition.
Management has also addressed the flammable
railcar issue with the following comments:
Instead of aggressively pursuing the crude-by-rail
business like many of our competitors, we
capitalized on the high-demand environment for
tank cars in the last few years to order different
tank car types and deploy them into other
commodities for long lease terms at record rates.
Also in recent years, we sold a number of our cars
deployed in flammable liquid service, or we
transitioned them into carrying less-volatile
commodities. These actions should continue to
serve us well as conditions for the tank car market
develop in 2015.
The potential pause in its business growth is not
going unnoticed by investors. Share prices have
fallen from a 52-wk high of $65 to $46. This
decline offers investors an opportunity to climb
aboard a very well managed railcar firm at value
pricing.

As a leasing company, GMT survives by
purchasing new railcars and leasing them out on
a long-term basis. Since the end of 2009,
management has generated $1.8 billion in
operating cash flow. However, to build its
portfolio of railcars, management has spent $3.4
billion on capital expenditures over the same
timeframe, creating a cumulative negative -$1.2
billion in free cash flow. This is showing up as
higher long-term debt growing from $3.0 billion
to $4.1 billion. This trend seems to continue with
GATX taking multi-year delivery of over 8,600
new railcars starting in March of this year.
S&P recently upgraded management 10-year
performance in generating profit and dividend
growth from an average rating of B+ to above
average A-, and represents confidence S&P
places in GMTs ability to continue.
The current yield is 3.15%, substantially above
the S&P Financial ETF at 1.94% and dividend
growth has average 3.5% over the previous 5
years.
GMT offers investors an acceptable yield and
growth potential, along with the steady income
attributes of industrial and transportation
leasing. Management has a proven track record
of generating shareholder returns and should be
considered as a core financial and industrial small
cap.
Stock Ideas off the Radar Screen
Some higher dividend, income, and capital gain-oriented

equities are intriguing and may not part of our investmenttracking list. These may include ETFs, MLPs, REITs, or
Preferred issues. Follow-ups may or may not be available in
the future.
Wisdom Tree asks, What do the Fed and BBQ

have in common? Their answer is, The phrase
low and slow commonly refers to the proper
method for cooking barbecue. Cooking over low
heat for a long, long time is the pathway to BBQ
bliss. These days it feels like the Fed is applying
the same philosophy to normalizing rates-the
terminal rate being lower and the process taking
much longer. Corporate credit spreads have
recently been pushed higher by liquidity and
growth concerns to attractive levels, in our view.
With rate looking to start their cyclical turn next
month, Wisdom Tree is betting on corporate
bonds to outperform. With a higher yield than
their Treasury counterparts, Wisdom Tree
believes the higher risk of corporates over
virtually risk-free Treasuries is more than
compensated by a higher income across the yield
curve.
Source Wisdom Tree, Bloomberg
16

As shown above, the yield spread between
Corporate and Treasury bonds is at recessionary
levels while the underlying economic data does
not indicate a recession is eminent. Going back to
1986, the spreads have surpassed 3.0% only 6
times, in 1986-1987, 2001-2003, 2008-2009,
2010, 2011, and currently.
If the better bet is corporates over Treasuries and
investors are concerned about duration (or the
sensitivity bonds have to rate changes), date
specific bond ETFs may be an avenue. As a rule,
the higher the duration factor the higher the
volatility during times of interest rate changes.
This is especially important for bond mutual fund
investors as these almost always trade on a pure
yield basis.
Guggenheim offers an array of bond ETFs whose
underlying portfolio consists of bonds maturing
in the same year. For example, the Guggenheim
BulletShares 2024 Corporate Bond ETF (BSCO)
consists of 119 bonds with either a call date or
maturity in 2024. The yield to maturity, or SEC
Yield, of this ETF is 5.46%.
A list of other Guggenheim Date-Specific
Corporate Bond ETFs with symbol and SEC Yield
are:
BulletShares Corporate 2018 (BSCI) 1.68%
BulletShares Corporate 2019 (BSCJ) 2.02%
BulletShares Corporate 2020 (BSCK) 2.39%
BulletShares Corporate 2021 (BSCL) 2.82%
BulletShares Corporate 2022 (BSCM) 3.20%
BulletShares Corporate 2023 (BSCN) 5.07%
resulting portfolio would have the following

characteristics:
Yield to Maturity
Effective Duration
Holdings (#)
Portfolio Range
2.88%
4.88 yrs.
1616
2018 - 2024
The strategy would be to move maturing ETF

capital to the next longest date.
In reality, as the date-specific ETF accumulates
maturing capital waiting for the Dec distribution
date, the portfolios cash balance grows
substantially.
For example, the Corporate
BulletShare maturing in Dec 2016 (BSCG) already
has 88% of assets in cash whereas the 2017 ETF
has no cash assets. This high cash balance
reduces the overall income until final
distribution. The best strategy is to sell these
ETFs a year before their maturity.
Income investors looking to build a ladder of
bonds as an alternative to the traditional openended bond mutual fund should consider these
ETFs. More information on using these ETFs as a
laddering tool can be found at the Guggenheim
website.
http://guggenheiminvestments.com/products/e
tf/bondladder?utm_source=intermediary&utm_
medium=button&utm_content=bond%20ladder
&utm_campaign=BulletShares%20Home#Overvi
ew
With these ETFs, it is easy to build a ladder with

annual maturities for capital to roll-over. If an
investor were to build a ladder of these seven
ETFs, with an equal weighting of 14% each, the
17
Notes from the Top Nov 2015

Notes from the Top
Walgreens Boots (WBA) share price is down, but
far from out. WBA announced a $17 billion
takeover of Rite Aid and the potential to sell
between 500 and 1,000 stores where overlap is a
concern. The current total store count is 8,000
for Walgreens Boots and 4,600 for Rite Aid.
Walgreens believes the deal would strength its
market position in the Northeast and Southern
California, two areas of current weakness.
Forbes reports that Walgreens is expecting to
gain substantial leverage with health insurance
companies, large employers and government
health programs given its network of pharmacies
will grow. Walgreens chief executive officer
Stefano Pessina sees the U.S. market as ripe for
consolidation as the government becomes more
involved in paying for health care, particularly
due to the expansion of benefits under the
Affordable Care Act.
Even considering a potential divesture of
locations, WBA would surpass rival CVS Health
(CVS) in store count. Share prices are about 11%
off their high at $86.
Kinder Morgan (KMI) issued a short-term,
mandatory preferred which trades at a 10%
yield. Late last month, KMI issued a Series A
Mandatory Convertible Preferred share with a
9.75% coupon and a $50 par. The stock currently
trades on the OTC using the symbol KMGNP but
anticipated a NYSE listing with the symbol KMI-A.
The preferred is mandatory converted into
common shares in Oct 2018 using a collar of a)
1.554 common shares if share prices are above
$32.38 or b) 1.81 shares if the common is below
$27.56. Between the collars, the ratio is $50
18
divided by the common share price.

KMI recently upped its common dividend by 16%
to $2.04 annualized, and the common shares
offer a 7.4% yield. The preferred is trading at
$48.65 for a 10% yield. Income investors may
be interested in the steady income of the
preferred over the next three years while giving
up the potential for common appreciation over
$32 a share.
Exelon (EXC) announced quarterly earnings
were 6% above last year and 17% above
consensus. In addition, Exelon raised its 2015
adjusted earnings per share guidance to the
range of $2.40 to $2.60 from the prior guidance
of $2.35 to $2.55. Management also believes its
olive branch to the city of Washington DC in the
form of more money should win the day and the
merger with Pepco (POM) should be completed
within a few months. In the first nine months of
2015, net cash flow from operating activities was
$5.674 billion compared with $3.643 billion in the
year-ago period. EXCs capital expenditure was
$5.4 billion compared with $4.1 billion in the first
nine months of 2014.
While much maligned due to a dividend cut in
2013 forced by the collapse of its non-regulated
commodity electricity business, aka merchant
power. Over time, EXC has not only increased its
regulated earnings from 20% of the total to
around 60% after POM merger, the 3-yr rolling
auction process in its major merchant power
markets is adding a reliability premium for
consistency in power generation. This premium
favors nuclear power generation and will add to
EXCs commodity profits over time. On the
downside, however, the trend is for older nuclear
plant to remain unprofitable as low natural gas

pricing sets the tone of power generation
markets. EXC may join Entergy (ETR) in closing
several of its nuke plants.
Sherwin-Williams (SHW) earnings rose on the
strength of its consumer business. Highlights of
its press release are: Consolidated net income as
a percentage to sales of 11.9% in the quarter was
an all-time high; Diluted net income per common
share increased 18.5% to a record $3.97 per
share in the quarter and increased 22.3% to a
record $9.04 per share in nine months;
Establishing EPS range of $1.70 to $1.95 for 4Q15;
Increasing FY15 EPS guidance to $10.75 to $11.00
per share vs. $8.78 per share in 2014.
Of interest to investors should be the new
antibacterial paint for hospital and doctors
offices. Branded as Paint Shield, it was developed
in consultation with infectious disease experts
and actually kills bacteria on the surface after two
hours. It has been proven to be safe and effective
through third-party testing and has been certified
by the U.S. Environmental Protection Agency to
kill over 99.9% of bacteria, including Staph, E. coli,
and MRSA.
While paint is not usually known for product
advancement, SHWs CEO believes that Paint
Shield is one of the most significant technological
breakthroughs in the companys nearly 150-year
history. Sherwin-Williams currently has an 11.3%
share of the paint manufacturing market, the
second biggest portion behind PPG Industries
21.3%.
SHW offers a high exposure to the consumer
through its Paint Store Group, which added 45
new locations since the first of the year, and its
Consumer Group, which is mainly sales through
19
Lowes (LOW). These two segments generated

80% of 3rd qtr. revenues. International business
was hurt by the strong USD, as revenues declined
11% for the quarter with the commonly used
reason being currency headwinds.
Investors looking for diversity in their defensive
consumer portfolio may want to review Sherwin
Williams.
Becton Dickinson (BDX) continues its winning
ways. An article in Forbes offers a good recap of
its investment thesis, as told by Allen Bond, fund
manager at Jensen Quality Growth Fund (JENSX).
Founded in 1897, BDX is a global medical devices
company focused primarily on the design and
manufacture of needles and syringes for use in
hospitals, clinics and doctors offices. The
company also operates smaller businesses in
diagnostic testing and bioscience research tools.
Over the past 10 years, Becton posted annualized
earnings per share growth of nearly 10% while
generating average return on equity in excess of
24%. Bectons robust free cash flow generation
has supported both growth in the business as well
as consistent returns to shareholders, reflected in
its 42-year track record of increasing its dividend.
The primary competitive advantage for Becton is
largely a function of size and scale. The company
enjoys a globally dominant position in the
needles/syringes market. Becton produces more
than 29 billion of these products per year. And we
estimate its global market share in this business
is in excess of 60%.
The companys investment profile also benefits
from the disposable nature of its products,
resulting in recurring revenue in 80% of the
business. We expect the company to produce

stable, consistent growth due to increasing global
healthcare utilization and product innovation
focused on safer needles and faster, more
accurate diagnostic tests.
Chicago Bridge and Iron (CBI) exits most of its
nuclear power plant construction business.
While the sales of this business to its partner
Westinghouse, along with the transfer of all past
and future liabilities, will generate a $1 billion
non-cash write-down this quarter, investors liked
the news, driving up the stock by 19% on the day
it was announced. Credit Suisse upgraded the
stock to Outperform. CBI was partnering with
Westinghouse on two large nuke construction
projects for Southern Company (SO) and Scana
(SNG). These projects have been hampered by
cost overruns and extensive construction delays.
This move take a large overhang out of the stock,
clearing the way for the company to focus on its
$30 bil in project backlogs.
1964. This led an enterprising Warren Buffett to

scoop up 5% of the company for around $20
million, an investment that would see him earn a
10-fold return in a decade. A current 5% stake in
AXP is worth about $3.6 billion.
The next time you are pouring oil and vinegar on
your Cobb salad, remember the Be Fearful
mantra of the Oracle of Omaha.
As it relates to Berkshire-Hathaway (BRK.B), Bill

Ackerman has brought the Great Salad Oil
Swindle of 1963 to the forefront again. This
history is a great example of Buffetts strategy of:
"Be fearful when others are greedy, and be
greedy when others are fearful.
In 1963, a vegetable oil commodities trader
defrauded 51 companies out of loans that had
been backed by supposedly huge holdings of
vegetable oil, also known as soybean oil and an
important ingredient in Italian Salad Dressing.
The tanks purportedly full of collateralized
vegetable oil, it turned out, were mostly full of
water. As a result, the loans went bust. American
Express (AXP) was one of the companies that got
caught up in the scandal and in response the
stock fell 43% from $65 in Oct 1963 to $37 in Jan
20
Strategic Subject of the Month Nov 2015

The Austrian Oaks Rules for
Successful Investing
Arnold Schwarzenegger gave an interesting
speech recently at the Global Transformation
Forum in Kuala Lumpur, Malaysia. The speech
was short, and was an outline of his six rules of
success. Whether you like the Austrian Oak or
not, it is difficult to argue with his level of success.
The rules are simple and directly apply to every
investor. Take a few minutes to see how you are
implementing the Austrian Oaks guidelines.
1. Have a vision.
If you know where you're going everything will
fall into place.
2. Never think small
It takes the same amount of energy to think big,
as it takes to think small. So might as well.
3. Ignore the nay-sayers
Take the words 'it's impossible' and 'it can't be
done' out of your vocabulary. Everything the naysayers say is a liability, will only prove to be an
asset to you.
4. Forget plan B
As soon as you start telling yourself that you
have something to fall back on, this is the most
dangerous thing, because it means you're already
doubting yourself. Don't take your eye off the
ball, don't take your eye of plan A, there is no plan
B!
5. Work your ass off
You never want to fail because you didn't work
hard enough. None of my rules will help you,
unless you're willing to work, work, work! You
21
can't climb the ladder of success with your hands

in your pocket.
6. Don't just take, give something back
We must serve a cause greater than ourselves.
All of us need to create change. Don't just work
on 'me', work on 'we'
Success in accomplishing any financial goal
begins with an objective and plan how to get
there. If the vision is to have sufficient funds
saved and invested upon retirement in 30 years,
development of a plan with benchmarks along
the way will aid in its attainment. Markets go up
and markets go down, and what seemed very
achievable in strong markets may not seem so in
market declines. But staying the course with a
clear destination in sight will help offset shortterm negative investment psyche.
Developing a successful portfolio management
and investment plan incorporates most of the
above attributes. Determining your specific level
of risk and overall investment goals will ensure a
better portfolio outcome. If you are risk adverse,
buying a speculative utility stock with a higher
dividend, justifying it as an income play, may not
suit your overall needs. Overweighting in a few
industrial sectors may not be a bad strategy,
unless it is done unintentionally.
Time and efforts spent to expand your knowledge
of finance always pays off in the long term. It is
important to know what you know and to know
what you dont know, and then to stay within the
comfort zone of what you know. As your
knowledge expands, so does your comfort zone
of investment strategies and options.
Strategic Subject of the Month Nov 2015

Thanks to a good friend, Mr. Bugs Tan, a
renowned industrial inventor from Kuala Lumpur,
for bringing this short speech to my attention.
Thanks, Uncle Bugs.
A link to the one minute speech:
https://www.youtube.com/watch?v=tFsUeUJiA9
k&feature=youtu.be
22
Subscriptions, How to Use Your Newsletter, About Us

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How to Use Our Newsletter

Guiding Mast Investments newsletter comes in two
parts 1) the written commentary and 2) the
spreadsheet of the companies we follow. #1 is
pretty simple. #2 is a bit more complicated and may
need a bit of explanation.
Part 2 is an excel spreadsheet in a pdf format. This
lists the companies we follow and a bunch of
fundamental analysis calculations. Starting at the left
column:
23
Stock ticker symbol,

stock name,
stock price,
2015 estimated EPS,
2016 estimated EPS,

+ or indicates a movement up or down since
last updated,
anticipated 5-yr EPS growth rate,
last updated,
Forward PEG (price to earnings growth) ratio
based on 2016 EPS estimates,
Guiding Mast Ratings,
Guiding Mast Recommendations,
last updated,
S&P Quality Equity Rating with A+ being the
highest, B+ as average and NR for Not Rated,
current broker consensus for timeliness,
current dividend,
dividend yield,
industrial sector,
Guiding Mast handicap based on S&P Quality
Ranking,
2015 and 2016 EPS yield,
2-yr consensus price target,
% gain to price target,
anticipated annual total return based on the
price target and current yield.
Our formula used in evaluating these factors locates

companies that have the following characteristics:
Reliability in generating increase earnings and

dividends for the previous 10 years (S&P
Quality Rating);
Value based on 2016 price to earnings
growth, with PEG ratios of 1.0 to 1.2
considered fully valued
Well liked on Wall Street for timeliness
Higher dividends
The Guiding Mast Ratings are listed in numerical

order with higher numbers indicating more favorable
ratings.

The perfect stock would be rated A+ by S&P, would
be trading at a 2016 PEG Ratio less than 1.0, would
have a broker timeliness consensus ratio of at least
2.5, an earnings yield of 8%, and would have a
dividend yield of 5% or higher. As stocks move
above or below these fundamental criteria, the
Guiding Mast number changes. For instance, a
company rated B+ for Quality carries a handicap of
12 while an A+ company has no handicap.
The top 15 companies of the 132 followed qualify for
Full Speed Ahead classifications while companies
numbered 16 to 30 are listed as Power Up.
Comparatively, these stocks should offer better total
returns for the risk taken. The bottom 20 stocks are
classified as Power Down and could be candidates
for sale. The balance of stocks are listed as Neutral,
which is neither a buy nor a sell.
Reviewing stocks with higher Guiding Mast Ratings
and higher anticipated total annual returns based on
consensus price targets should produce a list of
companies worthy of consideration for your
investment portfolio.
financial decisions. An understanding of the tools

used to assess ones personal risk factors and the
methods of finding investments that meet these
factors can be easily incorporated in most individual
portfolio construction.
Guiding Mast Investments offers both a monthly
newsletter and multi-part financial and portfolio
education training with the advantage of personal
communication. Topics include Assessing Personal
Risk, Asset Classification and Diversification, Equity
Research, Value Fundamentals, and Portfolio
Implementation.
Fisher is a Seeking Alpha contributor and SA has
published over 330 articles since 2010. Fisher also
contributes to the financial website TalkMarkets.com.
He occasionally uses the pen name Jon Parepoynt. A
list of his previous SA articles can be found at:
http://seekingalpha.com/author/george-fisher
However, as always, conduct your own due diligence

to determine if a particular investment is right for
your portfolio construction and your appetite for
risk. All investments, even safe bonds, carry a
particular risk to your invested capital and that risk
should be appreciated prior to investing.
About Us
George C. Fisher, founder and publisher of Guiding
Mast
Investments,
believes
methodically
incorporating overlooked equities in a diversified
portfolio approach is far from rocket science. Guided
by the framework of Modern Portfolio Theory, Fisher
locates equity investment opportunities using widely
distributed value indicators and advocates a
minimum three-year investment horizon for most
24
Fisher is the creator of the 1997-2004 investment

newsletters Power Investing with DRIPs, focused on
timely selections of dividend paying stocks. Fisher has
published two books through McGraw-Hill,
All About DRIPs and DSPs, and The StreetSmart Guide
to Overlooked Stocks.
Fisher has experience as a Registered Investment
Advisor, a financial author, and an entrepreneur.
Fisher brings a variety of expertise to his clients, from
corporate operational appreciation, to personal

investment planning and management to stock
market analysis skills.
Fishers work experience covers a variety of fields.
Prior to being a RIA, he spent 15 years as a corporate
manager at Georgia-Pacific Corp before venturing out
on his own, operating several businesses from
manufacturing to export marketing management.
President Ronald Reagan appointed Fisher to the
National Advisory Council overseeing the US Small
Business Administration from 1988 to 1991.
For a complete list of equities followed by Guiding
Mast Investments, please contact us.
Much like a guiding mast light assists in safe passage
for the captain and owners of sailing vessels,
GuidingMastInvestments.com helps teach the tools
financial experts use in portfolio design and
management.
More information is available at:
www.GuidingMastInvestments.com
Read our Equities and Market blog at:
http://www.GuidingMastInvestments.com/news/
Guiding Mast Investments logo is a register trademark
and used exclusively by permission from
aceboater.com
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November 2015: Tear Sheet Nov 2015

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November 2015: Tear Sheet Nov 2015

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November 2015

Morningstar & Technical Guidance

Tear Sheet Nov 2015

Stocks staged a strong rebound in Oct.

First Trust Advisors offers an interesting analogy

Morningstar Sector Fair Market Valuation;

Best Stocks of the Month

Major oil firms continue to get slammed as

GATX: Quality Small Cap Value Core Holding

MLPs, as a group, finished the month with a 9.7%

Stock Ideas off the Radar Screen Wisdom

Capital outflows from Sovereign Wealth funds

Notes from the Top

Och Ziff (OZM) is struggling.

The strong dollar is affecting exporters earnings,

Guiding Mast Stock Rankings

Walgreens Boots (WBA) share price is down, but

earnings were 6% above last year and 17% above

rose on the strength of its consumer business

Strategic Subject of the Month

1 Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com

We Help You Better Manage Your Money

Publishers Commentary November 2015

Financials rose the most on a relative valuation

Since hitting a short-term double bottom in late

These days, the Pouting Pundits of Pessimism are

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

demand from home buyers will remain robust

What rate hikes will do is push longer-term

And guess what, the Fed is highly likely to get

So, as the Fed lights the candle, look for stocks to

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

Major oil firms continue to get slammed as

quarter earnings capture some of the worst losses

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

Chevron (CVX) earned $2 billion for the

Capital outflows from Sovereign Wealth funds

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

income payout ratio of 80%-95% versus the 40%50% of peers.

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

down from 3.9% in the 2nd qtr., consumers

During the first quarter 2015 the US dollar was

Walgreens (WBA) is not only gobbling up

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Publishers Commentary November 2015

forward PEG ratio. Below is a recap of the sector

Source: Guiding Mast Investments

From RBCs most recent Global Outlook Weekly,

Over the previous 3 months, there has been a

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Guiding Mast Stock Rankings Nov 2015

Full Speed Ahead

Stocks Moving Up and Down in

Noteworthy Near Misses

Guiding Mast Investments Saratoga Springs, NY geo@GuidingMastInvestments.com 2015

Guiding Mast Stock Rankings Nov 2015

Basic Material: Mercer Intl (MERC), Glencore

Industrial: GATX Corp (GMT), Sherman Williams