2/19/08

Economics

Understanding recessions:

http://bigpicture.typepad.com/comments/2008/02/anecdotal-shopp.html

A short primer on credit default swaps:

http://bigpicture.typepad.com/comments/2008/02/cds-and-financi.html

The impact on tax revenues of the flat tax in Russia:

http://bespokeinvest.typepad.com/bespoke/2008/02/sp-500-and-sect.html

Politics

Domestic

Clinton and Obama on NAFTA:

http://gregmankiw.blogspot.com/2008/02/dems-dis-nafta.html

Clinton and Obama on solving the mortgage crisis:

http://reason.com/news/show/125030.html

International War Against Radical Islam

A recap of events in Syria last week:

http://www.powerlineblog.com/archives2/2008/02/019799.php

And some good news:

http://iraqpundit.blogspot.com/2008/02/sunni-extremism-is-now-in-retreat.html

More good news from Pakistan:

http://www.captainsquartersblog.com/mt/archives/017025.php

The Market

Technical

Fundamental

An update of fourth quarter corporate earnings:

http://bespokeinvest.typepad.com/bespoke/2008/02/sp-500-and-sect.html

Medtronic (Aggressive Growth Portfolio) reported its third fiscal quarter operating earnings per share of $.63 versus $.61 recorded in the comparable 2007 fiscal quarter.

WalMart (Dividend Growth Portfolio) reported fourth quarter earnings per share of $1.02 versus $.95 reported in its 2006 fourth quarter.

Accenture (Aggressive Growth Portfolio) has acquired Maximine which provides testing and optimizing services to help companies improve marketing effectiveness and financial results from website and other digital marketing investments.

Company Highlight

Avon Products is one of the world’s largest manufacturers and marketers of cosmetics, fragrances, skin care, toiletries and fashion accessories. The company earns a return on equity of over 50% and has grown profits and dividends at an 11%+ rate over the last 10 years. AVP is in the midst of a multi year restructuring which has improved its long term outlook by:

(1) repositioning the Avon brand, expanding into the Beauty category via a large number of new product offerings while exiting under performing business lines like toys and Avon Salon and Spa,

(2) rapidly expanding into developing markets such a Eastern and Central Europe, China, Russia and Latin America,

(3) focusing on cost reduction programs, specifically, lowering SG&A expenses, rationalizing its global manufacturing strategy, achieving supply chain efficiencies in procurement and distribution and outsourcing services to low cost countries

The company is rated B++ by Value Line but has more debt (60%+ of capitalization) than I like. Its stock yields 2%.

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

News on Stocks in Our Portfolios

Medivation (10 Bagger) reported year end results:

http://www.marketwatch.com/News/Story/Story.aspx?guid={85A91FF5-514B-43B5-8245-808750F0AC04}&siteid=nbs

More Cash in Investors’ Hands

Comcast is buying back $7 billion in stock.