VERY Concerned

The G-20 meeting sure smacks of the times before the darkest days of the Hoover Administration when The US became protectionist. Now it seems that it is everyone else in the world that wants to pull back of stimulus. At this point I would only buy the most conservative and highest paying stable companies I could find. Utilities like Southern Company and Dominion Resources ae about as good as they come. I have moved into the bearish camp and would keep most of your powder dry until we see clear signs of economic expansion.

Be Safe

The Truth of the matter

The truth is that the market (as measured by the Dow) is at the same level it was 10 years ago. So the important way to invest is not by investing in the "market" You do not buy whole grocery store when you go food shopping and neither should you buy the stock market. By selecting individual issues that give you what is right for your appetite you can live a long and healthy life.

For some AT&T and Royal Dutch Shell because of strong dividends and balance sheet are good investments. For me, I love to look at companies that have come from the fires of hell and show great long term potential (currently long term for me is a year). Right now I have 7 stocks in my trading portfolio. 6 are not doing well (down a little and up a little), but one (Las Vegas Sands) is doing so well that it is making up for the others and giving me a great overall return. The key to investing, in addition to all that I laid out in the list of 10 last week, is ask ask ask. If you are conservative buy conservative stocks if you are a trader, buy trading stocks. The only way you will know which is which is do your home work. My biggest laggards right now are CitiBank and Ford. Am I going to sell them, Absolutely not, I will buy more if the price goes lower. These stocks are an easy double or triple in the next two years. How about Ruby Tuesdays, next time you are hungry stop in and look at how many tables are full at dinner time. Ask the manager how business is doing compared to last year. Ask him if people like the new menu. Soon you will be looking at where you do business in a different light. Ask yourself. If I could buy the entire company would I? If the answer is yes, go look at the earnings on the internet. Are they growing? Is debt beging reduced? Are same store sales increasing. Buy buy buy. Oh and just a word to the wise, do not believe the talking heads on TV. They are selling advertising time, not stocks.

Say amen somebody

Told you

Now, tell you friends to sign up as a follower. Who knows they may even pay me for something.

Up-ward trend is in the offing

A little knee jerk reaction yesterday just to trap some bears. Positive report on economic activity in China should fling the overall market to a nice level today. There was a solid jump off the S&P support level after King Ben spoke on Tuesday and here is the line for the day: We will not visit that support level again for a long long time. Dow 12,000 here we come, even if it takes awhile to get our footing. (Young bulls do not run far from there mothers, util they get their legs} You can quote me on that.

Fed Speak

Finally, Big Ben, the chairman of the Federal Reserve said this morning that we are not going into a double did recession. All the indicators for the last 6 months confirms this or should I say he confirmed what the indicators have been saying. Hopefully, the street can now start focusing on the positive and stop the foolishness that has kept us all on edge.

Even my labrador acted like she was feeling better today. And that is a great indicator.

What me Worry?

Those were the infamous words of Alfred E Newman. And for the record yes, I worry every day. you see it is impossible to out smart the markets with timing, intelligence or fraud. At some point the market will and does humble us all. My point is if you invest you have to follow certain long time edicts:

1. Invest not thy whole wad.

2. Always keep some dry powder.

3. Buy on bad news sell on good.

4. You never loose money by taking profits

5. Never make an investment decision based on tax consequences.

6. The best way to get rich quick is to invest for the long term.

7. Buy companies that make or service products you know and love.

8. Diversify, own some stocks, bonds, CD's with some coming due each quarter,

9. Do not get married to a particular investment, when it is time to sell it is time to sell.

10. Get a companion dog, like a labrador, that will love you even if they have to eat dog food.

Most importantly, remember do not make investment decisions based on fear or greed, you will aways be on the loosing side. When you are totally worried that the world is falling apart and you are going to loose everything do not sell. When everyone around you is telling you to buy something like gold, a particular stock etc, smile and just say you will look at it, then sell it if you already own it.

have a great week

Bruce, still waiting to be able to retire

Great One year CD rate

If you want to wait out the Churning Urn of Burning Funk in the stock market I have found a better then market rate from a solid community bank Check out Franklin County United Bank headquartered in Dechard, TN 1.95% apy for one year term from a well run and capitialized bank. In view of full disclosure I am a stock holder in the bank. But, that does not detract from a good rate that is FDIC insured. Check them out.

So you think your sexy and blah blah blah

Sometimes it is just not good to get out of bed. Long term investors and traders hate flip flops. Up one day down the next. No trend is no friend. I am still standing behind my recommendations and predictions made at the beginning of the year. When this market gets legs to the up side it will be when everyone thinks that there is no way in hell they would ever invest in stocks again. For the record, I was a broker in October 1987 when the market dropped 508 points in one day and the next day there was not market. IBM could not find a buyer at 15.00 a share. Most stocks just had no bids period. The market rebounded from around 700 on the dow to over 14,000 before that rally was finished. One of my clients became a millionaire on just 200 shares of Microsoft. Oh yes, I know this time it is different. It is aways different except if you buy when no one else wants what you are buying and sell when every wants what you have. You too will be a millionaire.

It is ugly right now and it will get uglier and there is no place to get a decent return without serious interest rate risk. ie: ten year treasuries etc.

Buy now, ford, general electric, P&G, Los Vegas Sands, Alcoa, Caterpillar, John Deere, Bank of America, Citibank.

But do not do not do not put a nickel in BP and for that matter do not buy their gas either.

Now become a member of my Blog and I will try better to keep it going. I just need to know I am not writing to myself. Look at the bottom of my profile for sign up information

Buy Ford (F) Now

Holy mackerel cat fish, I know that the UAW is turning over a lot of ford stock to pay for benefits that they took on from Ford, but Ford is kicking competition but in selling cars and trucks here and in europe. Buy it now for a very very good return by years end. Just do it.

Kicking the Pro's butts

Well let's see Ken Fisher Investment Portfolio up 6% for the first quarter, Bruce up 18% for the quarter and 22% year to date. Las Vegas Sands has been a good bet up 26% since I told you to accumulate just a couple of weeks ago.

Fidelity and Janus Funds

Here you go.  I have been writing about a lot of trading during the last few months and we have had some solid winners.  Alcoa and Ford are just really getting their lets.  Look for some solid gains in them for the year and dividends shortly there after.  Right now it is time to move your long term money into the areas that have not participated.  

Janus Balance Fund was just named by Lipper as a top rated fund.  (I bought three days before the announcement)  I did that by research.  The Ticker is   JABAX  pull it up on Yahoo.com  Finance.  It is a balanced fund meaning that it has some cash, bonds and stocks.  

For the more adventuresome Look up two real estate funds  FRIFX and FRESX, for software and computer services try FSCSX and for Materials check out FSDPX all of these are from Fidelity. 

All of the above funds are free of sales commission if you keep them for a year.  I recommend you keep them for three years or more.

Now go make some money

las Vegas Sands

As mentioned a couple of days ago  Las Vegas Sands  (LVS) in fact broke out to new highs.  I still recommend this stock and expect at least another 20% out of it in the short term.

I think now is the time to be seriously looking at Tech and Real Estate mutual funds particularly no loads like Fidelity.

Still with me

Alcoa is building a base and is about to show you all what I think will grow to a 20% or better return for 2010.  Home Depot with a 3% dividend is poised to move higher as the economy moves forward in spring.  Las Vegas Sands (LVS) is building a nice support level here in the mid 19's.  This stock has made me a bunch of gains in the last year as a short term trade between 15 and 18 now it is getting ready to move to the mid 20's and beyond.  Buy in 20% increments of your intended total investment in this company (buy 100 shares out of desire to buy a total of 500)  If it moves down buy more if it moves up buy more.  Do this no more often then once per week to the aggregate.  

A new Paragraph for Ford (F).  By it period!  Ford is winning and will show great sales going forward.  It is my largest position and I have owned it from just over $6 per share.  

Start looking for REITS for a good IRA investment vehicle  HRP, WRE    and HPT deserve a look.  I do not like them for non IRA accounts because of the Tax forms that can come as late as the end of March each year.  

I as still standing by my 12,000 DOW predication for 2010   Have fun

Airlines

Sold AMR Jet Blue and US Air.  gain over 26% on AMR and US Air gain of 3% on Jet Blue all in 17 days   Take the money and run.  Wait for next pull back and buy again

Buy the company not the market

In December, I make a statement about airlines flying high and suggested buying on dips.  Well, I took my own advise and after watching American, Jet Blue, and U S Air raise rates again, it was time to jump in.  The result, even though the stock market has been languishing in uncertainty, has been amazing.  I bought on February 1st and as of February 12, the growth of my investments thus far:  American Air lines up 21.14%, Jet Blue up 1.79% and US Air up 22.93%.  Those are not annualized returns, they represent just 2 weeks.

I had also said that Alcoa was going to be a winner.  And it will be Buying at current levels is something I am looking very closely at.  

I had predicted that jobs would grow in January, well I missed that one by just 22,000 jobs.  Okay I will take a hit on that one, but I think I missed it just by a month.  Watch for February it should be the turning point.  

Also, just in case you missed it.  Ford Motors is about to break to the upside again.  My target is 15 plus per share.  I think by the end of 2011 they will even reinstate a dividend.

American Tel and Tel is being held back right now by the ongoing directed competition with Verizon, I still like the stock and love the dividend.

Meanwhile CD rates still are sucking wind.  Look to local credit unions for one year rates of 2:00%.  Rates should start up during the second half of the year.

Know when to hold them, know when to fold them

This market requires traders to get in a rhythm and longer term investors to buy and hold on the dips like yesterday and today.  The most important thing is do your home work,  look at earnings going forward and looking back, revenue growth and book value.  There are aways screaming buys in the equities market, you just have to get in the flow.  Buy on dips.  

ibm

It has broken below 130 and is very close to a support trend line this morning.  It may be a good time to stick your toe in the water/

IBM

IBM is down almost 2% in after hours trading.  I would not jump at it tomorrow.  Give it some time to digest and see what they have that is new that can take the stock higher.  If you traded out today, you are in the money

IBM

Looks like IBM has been driven up quite a bit in the last week and is at resistance. I traded out of some 125 July Calls this afternoon as I think we will see an INTEL style pull back on the great earnings that everyone is expecting on IBM/   I still think she has a way to go in the next quarter or so, but I think you may get a great buying or buy back opportunity in the next day or so.  

  

Alcoa Looking Good

Alcoa was the first to report earnings and they surely looked good to me.  The market will be coming to this stock in the next few months.  The market was expecting earnings of .06 per share on earnings of 4.82 bil revenue. What they got was rev of 5.4Bil but the per share was only .01

I expect earnings to continue to improve as auto building, aeroplane construction and infrastructure demand increase worldwide.

Remember Alcoa dropped like a rock last year and it is now a very tight rubber band.  Look for some great price appreciation as the year progresses.

My Alcoa position is up 33 % over the last 8 months or so.   I am adding to my position at the lower price on Tuesday. 

Hey, their revenue was almost $500 mil over estimates.  They expensed items this quarter and that hit the per share earning.  This is a screaming buy.  Get my drift.

Stocks should show some solid top line earnings

It is the beginning of the earnings reports for the fourth quarter and I am expecting some pretty good reports.  These positives should propel the market even higher, but selective buying at these levels is a must.  Know what you are investing in and be convinced by your research that the momentum is going to be there to carry your portfolio to new heights.  GE, Alcoa, IBM are my favs for this week.  

If you are getting nervous and want to move some money to bonds, please don't.  It is okay to sell and take some money off the table, but stick with the low yielding money markets as a place to reinvest.  I am very leery of bond funds or individual long term (over five year) bonds right now because as interest rates start their march higher in the next few months, the value of your principal will will decline at a rate greater than your interest return   Be careful.

Airlines fly high, IBM looking good

As I pointed out a few days ago, you buy airlines on bad news.  Sell when they start to discount. I hope some of you bought some last week when they were weak due to the security scare.  Well guess what they raised fares and the stock prices rose by 10% Plus today on the ones I recommended.  You may have missed a great opportunity, but all is not lost.  Buy on dips going forward and reap some good returns.  

IBM pulled back today, but they are scheduled to report fourth quarter earnings on the 19th of Jan.  They beat third quarter by a penny or so and I expect even with the huge earnings number estimated for the fourth quarter they will beat that as well.  I am looking for a price target of at least 135 by mid March.  Tomorrow may be a great buying opportunity for this bluest of blue chips.

First time Home buyer

Q:  I currently rent in southern california, I have received a settlement that will give me some money for a down payment is this a good time to buy?

A:  The question really is can you afford the monthly mortgage payment.  Currently bungalow style houses in your area are priced at around $275,000 for an 800-1000 square foot home.  That is down from over $400 K just a couple of years ago.  Your settlement and the current $8,000 first time tax credit means you will finance around $250,000.  At todays rate of 5.34% your monthly payment will be about $1350/mo not including tax or insurance escrow.  Tax and Insurance cost are readily available from your lender.  (you can pull up a loan calculator off the web)

In summary, You have four things solidly going for you, You have a down payment that is close to 20%, you have a job, it is a buyers market and interest rates are historically very low.  If you can realistically afford the monthly mortgage (which is probably not much more then your current rent)  Buy Buy Buy and  thank you for the question.

Index Funds Vs individual stocks or managed funds

Q:  I have had some Vanguard Index funds for several years diversified by large Cap, Small Cap and International.  I recently did a review and found that even with dollar cost averaging I have only earned about 3% per year.  What do you think?  Capt. John, Nashville

A:  Well Capt. John the good news is that you are ahead for the period, while the S and P is virtually flat for the last ten years. (Gold is flat for thirty years)  But I digress.  Up until just a few years ago, very few fund managers could routinely beat the S & P Averages year after year. The S & P represents 500 stocks of companies with Capitalization from large to small, but no international (about 65% of the income does come from multinational companies).  Anyway what I want to say is:

I love individual stocks and have time to watch the news on them, research competition, and use my gut to tell me when enough is enough. Managed funds like American Funds, Fidelity in various size and sectors will probably out perform the index funds during certain short periods, but they are hampered by the shire number of shares that they have to move in and out of to make a difference in there performance.  Effectively you have hired a manager to move you in and out of individual stocks for you. Your hope is that he (she) is in the right ones at the right time.  The index fund stays in the same stocks except for when a company has been added to or taken out (or reduced ) within  the underlying index.  This means a investment company like Vanguard does not care what the news is in the short term.  These are long term investments.  I believe that continuing with investments in the index funds on the same dollar cost averaging strategy that you have been employing will, by the time you retire (in almost 19 years), give you a very nice nest egg.  

To summarize:

For the investor that is looking for long term positive performance within equity investments, the index fund will continue to shine into the future.  More good news, from what I could ascertain, the majority of non-hedged non-shorting managed mutual funds, fell a greater amount in the June 2008 to March 2009 then did the indexed funds. 

I don't have any money to invest!

You would not believe how many times I have heard that over the years from rich people and poor people.  Some are just telling a big tail, but most are being honest.  The problem is:  whose fault is it you do not have any money to invest?  Look in the mirror.  Just think of all the money you wasted last year or for the last ten years or more on stuff that just did not make a difference in your life.  I am not saying "don't go out and have a good time", because this is not a dress rehearsal.  When you are dead you are dead.  It does not matter how much you have when you die, it matters that you do have money to get there.  What I am saying is: if you do not put some money away every time you get paid, you will never be able to do the things you need to do when you need to do them.  Car repair, home emergency, health emergency, a friend in need, vacation etc.  Let's get on the bandwagon for 2010.  Start saving even a little bit and understand what ever you do save is more than you had before you started.  

With interest rates where they are right now (near zero on most savings accounts) you can put the money in a coffee can and not be losing anything.  After you build some savings then go to a credit union and join up.  

Make it your vow, "I am going to be worth more next year then I am right now."

Now what are you waiting for, go empty the couch, the car, your drawers of all the coins that have taken rest there and take them to the bank and get some folding money for your coffee can.  See you feel better already.

Happy New Year