11/27/07

Economics

More on the statistics of income inequality:

http://article.nationalreview.com/?q=YWY2MDYwZGQxYmMzZTZiMTVmODljZDFhZDk4MWI0YWQ=

Politics

Domestic

International War Against Radical Islam

This could be really good news (from North Korea):

http://www.weeklystandard.com/Weblogs/TWSFP/TWSFPView.asp#3211

The Market

Technical

Fundamental

Another tough day (how many times have I said that lately?). Stock prices are at a level, both technically and fundamentally, where they should be making a bottom. Plus the negative emotion is pervasive and gut wrenching as it usually is at turning points. That said, Murphy’s Law has a way of imposing itself at times like these so that just when you think things can’t get any worse, they do. So the strategy here is to keep our Stop Loss Price Discipline very tight, add to our new positions in very small increments and keep lots of dry powder. If we are lucky enough to get a ‘big flush’, our buying will get more aggressive.

Subscriber Alert

The stock prices of VF Corp (VFC-$74) and General Electric (GE-$37) traded below the upper boundary of their respective Buy Value Ranges. Accordingly, they are being Added to the Dividend Growth Buy List. Since they are both owned by the Dividend Growth Portfolio, no additional shares will be purchased.

The stock price of Genuine Parts (GPC-$47) traded below the upper boundary of its Buy Value Range. Accordingly, GPC is being Added to the Dividend Growth Buy List. The Dividend Growth Portfolio will not Buy any GPC at this time.

The Dividend Growth Portfolio will Add to its positions (about 10%) in Sysco (SYY-$32), American Int’l Group (AIG-$56) and Paychex (PAYX-$37) at the Market open this morning.

The stock price of Paychex (PAYX-$37) fell below the lower boundary of its Buy Value Range. Therefore, it is being Removed from the Dividend Growth Buy List. The Dividend Growth Portfolio will continue to Hold its position in PAYX. As an aside, it is not unusual at Market bottoms to have stocks temporarily Sell below the lower boundary of their Buy Value Range and then bounce back. However, it is in the interest of prudence (and the always existing risk that things could get much, much worse) that they are Removed from the Buy List. If I am right and we are near a bottom, PAYX will return to the Buy List.

The stock price of Raven Industries (RAVN-$33) traded below the upper boundary of its Buy Value Range. Accordingly, it is being Added to the Aggressive Growth Buy List. The Aggressive Growth Portfolio will not Buy any RAVN at this time.

The stock price of Accenture Ltd (ACN-$34) has traded below the lower boundary of its Buy Value Range. Therefore, it is being Removed from the Aggressive Growth Buy List. The Aggressive Growth Portfolio will continue to Hold this stock.

The Aggressive Growth Portfolio will Add to its position in Schwab (SCHW-$22) and initial a new one half position in UnitedHealth Group (UNH-$52),

The stock price of Duke Realty (DRE-$25) fell to its Stop Loss Price. Accordingly, the High Yield Portfolio will Sell its position in DRE at the Market open this morning.

Finally, the High Yield Portfolio will continue to Sell its slow growth utility positions. This morning it will Sell its positions in Progress Energy (PGN-$48) and WGL Holdings (WGL-$33).

News on Stocks in Our Portfolios

Fastenal (Aggressive Growth Portfolio) announced that it was adding 1 million shares to its stock back.

EPS: 2006 $1.32, 2007 $1.55, 2008 $1.85; DVD: $.44 YLD 1.0%

http://finance.yahoo.com/q?s=FAST

A positive view of Praxair (Dividend Growth Portfolio) from Zack’s:

EPS: 2006 $3.00, 2007 $3.55, 2008 $4.00; DVD: $1.20 YLD 1.6%

http://www.zacks.com/rank/zcommentary/?id=6388

Donaldson (Aggressive Growth Portfolio) reported its first fiscal quarter earnings per share of $.53 versus $.43 recorded in the comparable 2007 fiscal quarter.

EPS: 2006 $1.55, 2007 $1.83, 2008 $2.00; DVD: $.36 YLD 1.0%

http://finance.yahoo.com/q?s=DCI

A positive write up on Illinois Tool Works (Dividend Growth Portfolio):

http://www.bloggingstocks.com/2007/11/27/illinois-tool-works-itw-growing-bigger-every-day/

Staples (Aggressive Growth Portfolio) reported third quarter earnings per share of $.42 versus expectations of $.40 and $.36 recorded in the third quarter of 2006.

EPS: 2006 $1.28, 2007 $1.45, 2008 $1.60; DVD: $.29 YLD 1.7%

http://finance.yahoo.com/q?s=SPLS

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