The Disciplined Dividend Investor: 2008-10-19

Saturday, October 25, 2008

The Closing Bell

The Closing Bell

10/25/08

Statistical Summary

Current Economic Forecast

2007
Real Growth in Gross Domestic Product: 2.0- 2.5%
Inflation: 2 - 2.5 %
Growth in Corporate Profits: 6-8%

2008 (revised-again)
Real Growth in Gross Domestic Product (GDP): -1.0 - +1.0%
Inflation: 2-3%
Growth in Corporate Profits: 0-5%

Current Market Forecast

Dow Jones Industrial Average

2008
Current Trend:
Short Term Trading Range 7853--?
Long Term Trading Range 7100-14203
Year End Fair Value (revised): 13450-13850

2009 Year End Fair Value (revised): 13850-14250

Standard & Poor’s 500

2008
Current Trend:
Short Term Trading Range 839--?
Long Term Trading Range 750-1527
Long term Up Trend 1317-1797
Year End Fair Value (revised): 1533-1577

2009 Year End Fair Value 1595-1635

Percentage Cash in Our Portfolios

Dividend Growth Portfolio 24%
High Yield Portfolio 21%
Aggressive Growth Portfolio 24%

Economics

The economy is a neutral for Your Money. There wasn’t enough data reported this week to alter anyone’s opinion of economy or its direction. We did get some positive news in housing--although weekly mortgage applications were down, existing home sales in September were up a solid 5.5% versus expectations of being unchanged. Inventories were down which is good, as were home prices. The latter may not sound all that great but it is a brutal necessity in healing the housing market. Another bright spot was the leading economic indicators which were up .3% in September. The bad news: retail sales were down and jobless claims were up.

A review of the existing home sales data:
http://calculatedrisk.blogspot.com/2008/10/existing-home-sales-nsa.html
http://calculatedrisk.blogspot.com/2008/10/existing-home-sales-increase-in.html

While we still haven’t reached the point where the economy can be statistically defined as in recession, it seems clear from the weekly figures that we have been receiving that likely a matter of when not if the recession begins. While I have built in the possibility of an economic downturn into our forecast, perhaps the more important issue is the magnitude of any decline; and given that 2008 is almost over, that measure will show up in the 2009 numbers. To be honest, I can’t get a grip on a 2009 forecast because I am still not sure whether it is poor investor psychology that is having an undue negative influence on professional observers’ forecasts or the strong likelihood of a severe recession that is making investors so pessimistic. This week’s lack of data gives me another chance to procrastinate.

For the moment, our forecast remains (1) a stagnant economy--conceding that conditions may require a more pessimistic assessment (2) with inflation subsiding as a near term problem though the recent massive injection of liquidity into the financial system poses a major risk of future price pressures.

Inflation and real yields:
http://www.capitalspectator.com/archives/2008/10/inflation_worri.html

The Economic Risks:

(1) the economy is weaker than expected.

(2) Fed policy (reading the data correctly).

(3) a disruption in global oil supplies (It is not the price of oil but its availability that will cause severe economic dislocation.).

(4) protectionism (Free trade is a major positive for world and US economic growth.).

(5) fiscal profligacy (Government spending as a percent of GDP is too high and the looming explosion in entitlement expenditures will make it worse. There is no good solution save spending discipline.).

(6) a rising tax and regulatory burden (Government has never proven that it could solve economic problems efficiently or satisfactorily.)

Politics

Both the domestic and international political environments are a negative for Your Money.

Recent comments from Iran:
http://www.haaretz.com/hasen/spages/1030279.html

The Market-Disciplined Investing

Technical

Despite more violent volatility and the inability of the indices to hold the very tentative support lent by the October 10 to present short term up trend, both indices (DJIA 8378; S&P 876) still closed in what I am still hypothesizing is a new trading range (DJIA 7853--9707; S&P 839--1062). The big question remains, will those October 10 intraday lows prove to be the bottom? I was wrong about the July lows; the risk is that I am wrong again.

Fundamental-A Dividend Growth Investment Strategy

The DJIA (8378) finished this week about 38.3% below Fair Value (13583) while the S&P closed (876) around 43.5% undervalued (1550).

Last week I concluded:

‘Bottom line: I believe that the problems of the supply/demand imbalance in equities created by margin calls and/or redemptions and the fear and loathing spawned by the complete freeze up in the global financial system are past their peak. However, the repercussions of both will likely be felt in the pace of economic activity; we just don’t know the extent. As a result, stock prices will probably remain quite volatile and trendless until we gain some visibility as to the magnitude and length of any downturn.’

Less fear and loathing over a freeze up of the financial system--Si. And the process continued this week, the rampant pessimism notwithstanding.

Fewer problems with margin calls and redemptions--No. Much of the damage done this week was simply more of the indiscriminate forced selling resulting from margin calls and redemptions that we witnessed before. In the end, that trumps everything including fundamentals. Our Valuation Model and everyone else’s are and will continue to be almost meaningless in this environment. Having said that, I do think that Friday’s pin action held a small (this being the operative word) kernel of hope: as you know, stock futures were lock limit down going into the Market opening, but stocks while opening down didn’t dip nearly as far as the futures had implied. That does suggest that the supply/demand balance between buyers and sellers shifted somewhat, at least for that day, i.e. sellers didn’t totally overwhelm buyers.

That notwithstanding, it does seem as though stocks are going to test their October 10 lows (DJIA 7853, S&P 839) and perhaps soon. When that happens, as gut wrenching as it will be, our Portfolios will be Buying stock. At Market extremes, I just don’t think that we should do nothing. Indeed, as stocks traded from the upper end my hypothesized trading range to the lower end, our Portfolios sold shares of some of their stocks that had traded below their October 10 low and they bought shares of some of the stocks that appeared to be building a support level. Granted all of these transactions were small; but they hopefully accomplished our goals of gradually adding stability of principal and positioning our Portfolios for the move up whenever that comes.

As long as stock prices in general hold their October lows that will continue to be our strategy.

Our investment strategy includes:

(a) manage our cash assets between 15% and 25%; but remain aware that defense is still critically important and will be become more so if I am wrong about the October 10 lows,

(b) use price weakness as an opportunity to buy the stocks of attractive companies at attractive prices; use price strength to take profits when a stock’s price moves into its Sell Half Range or to move out of those stocks that traded below October 10 lows and can not recover,

(c) on a longer term basis, recognize that there remain fundamental factors that argue for caution and therefore to proceed carefully with our Buying, keeping a larger than normal cash position in anticipation of valuation and strategy changes that could result from a potentially new domestic economic agenda.

DJIA S&P

Current 2008 Year End Fair Value* 13650 1555
Fair Value as of 10/31//08 13583 1550
Close this week 8376 876

Over Valuation vs. 10/31 Close
5% overvalued 14262 1628
10% overvalued 14941 1705

Under Valuation vs. 10/31 Close
5% undervalued 12903 1473
10%undervalued 12224 1395
15%undervalued 11545 1318
20%undervalued 10866 1240
25% undervalued 10187 1162
30% undervalued 9508 1085
35% undervalued 8829 1007
40% undervalued 8150 930
45% undervalued 7471 852

* Just a reminder that the Year End Fair Value number is based on the long term secular growth of the earning power of productive capacity of the US economy not the near term the cyclical influences. The model is now accounting for somewhat below average secular growth for the next 3 to 5 years with somewhat higher inflation.

The Portfolios and Buy Lists are up to date.
Company Highlight:

Sigma-Aldrich Corp develops, manufactures and distributes a wide assortment (130,000 products) of biochemicals, chromatography products and diagnostic reagents in over 150 countries. The company has grown earnings and dividends at a 15%+ annual rate over the last 10 years while earning approximately 20% on its capital. SIAL should be able to continue this performance because:

(1) its business is immune from economic slowdown,

(2) its program to procure raw materials and services more efficiently and better manage inventories,

(3) the acquisition of faster growing add on companies in the rapidly growing pharmaceutical and biotech industries,

(4) its ability to raise prices with little risk of the loss of business.

SIAL is rated A by Value Line, has only an 11% debt to equity ratio and its stock yields 1%.
http://finance.yahoo.com/q?s=SIAL
10/08

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 38 years of investment experience includes institutional portfolio management at Scudder. Stevens and Clark and Bear Stearns, managing a risk arbitrage hedge fund and an investment banking boutique specializing in funding second stage private companies. Through his involvement with Strategic Stock Investments, Steve hopes that his experience can help other investors build their wealth while avoiding tough lessons that he learned the hard way.

Friday, October 24, 2008

10/24/08

Economics

This Week’s Data

Weekly jobless claims rose 15,000 versus expectations of a 1,000 decline.

Other

More on the current tax structure--this from the congressional budget office:

http://www.american.com/archive/2008/october-10-08/america-has-a-highly-progressive-tax-system

A historical look at recession longevity:

http://bespokeinvest.typepad.com/bespoke/2008/10/us-economic-recessions-1900---2008.html

Politics

Domestic

Thursday, October 23, 2008

10/23/08

Economics

This Week’s Data

Weekly mortgage applications fell 11%.

Other

Paying the price for protectionism:

http://www.ibdeditorials.com/IBDArticles.aspx?id=309394436809825

A brief look at the role of the rating agencies in the credit crisis:

http://bigpicture.typepad.com/comments/2008/10/ratings-agencie.html

The argument for why we have been in a recession for months:

http://bigpicture.typepad.com/comments/2008/10/happy-birthday.html

Some data suggest that the credit crunch isn’t as bad as is being portrayed:

http://mjperry.blogspot.com/2008/10/what-credit-crisis.html

Politics

Obama and McCain on taxes:

http://www.realclearmarkets.com/articles/2008/10/tax_credits_arent_path_to_econ.html

Democrats and Fannie Mae:

http://online.wsj.com/article/john_fund_on_the_trail.html

Domestic

The NY Times on ACORN:

http://www.nytimes.com/2008/10/22/us/22acorn.html?_r=1&partner=permalink&exprod=permalink&oref=slogin

International War Against Radical Islam

The Market

Technical

The magnitude of this decline in perspective:

http://bespokeinvest.typepad.com/bespoke/2008/10/the-worst-year-ever-sp-500s-worst-declines.html

**********************************************

It didn’t take long for the indices (DJIA 8519, S&P 896) to test that very short term uptrend off their October 10 low which I mentioned in yesterday’s Morning Call; but even though intraday they traded through that resistance point (DJIA 8438, S&P 887), they nonetheless closed above it. So the question is, will stock prices bounce from here or are we in for a test of the October 10 low? The volatility index (VIX 69) was at a level that would suggest a rebound; in addition, volume picked up which is mildly positive. (At 8:15am CST this morning: it looks as though the futures challenged those up trends and one again bounced.)

Here is a chart depicting the S&P price pattern:

http://bespokeinvest.typepad.com/bespoke/2008/10/sp-500-which-way-will-it-break.html

On the other hand, in yesterday’s comments I noted that at the close Tuesday there were an unsettling number of stocks in our Portfolios that were very close to their October 10 to present uptrend as opposed to the Averages which were 7-8% above them. At yesterday’s close while the DJIA and S&P held above their October 10 to present uptrend, those same stocks blew through their October 10 to present uptrend lines and are now near, at or below their October 10 intraday low.

There are at least two possible explanations for the pattern of this latest sell off:

(1) stocks in general are leading the Averages down; and if not today, then soon, will witness a violation of multiple support levels as stocks sink to new lows [think 2002: DJIA 7146, S&P 766],

(2) all stocks don’t make their lows simultaneously; the Averages made theirs on October 10, but some stocks are only now making their lows.

Overriding all of the above are stories swirling around the Street concerning the resumption of hedge fund liquidations, which if true could nullify any technical or fundamental arguments concerning the near term direction of stock prices.

Taking all these factors in to consideration, I am willing to risk the cash that our Portfolios took out of the Market at higher prices over the last two days by Buying stocks at the open this Morning. To be sure that this is all kept in perspective, that means going from roughly 22% in cash to 20.5% in cash--not an enormous bet. However, since stock prices seem to be at an inflection point, other action may be taken during the day. If so, I will notify you via a Subscriber Alert.

Fundamental

Subscriber Alert

Accordingly, small additions will be made to the following holdings at the Market open:

Dividend Growth Portfolio: Wells Fargo & C0 (WFC), 3M (MMM), Coca Cola (KO) and Home Depot (HD).

High Yield Portfolio: Reynolds American (RAI), BP (BP), Zenith National Insurance (ZNT) and Plains All American PL (PAA).

Aggressive Growth Portfolio: Balchem (BCPC), Peabody Energy (BTU), Walgreen (WAG) and Frontier Oil (FTO) nm

Here is some pretty positive commentary from Dougy Kass, who has been negative for most of the year. His key point: a sure sign of a bottom is increasing stock prices in the midst of declining earnings reports. We aren’t there yet; but that something for which I’m watching.

http://www.thestreet.com/story/10443244/1/kass-buy-it-like-buffett.html?puc=_htmlttt

The High Yield Buy List

Company Close 10/6 Buy Value Range

Pacer In’tl $10.94 $11-13

Pfizer 16.74 17-20

Plains All American PL 38.47 31-36

Reynolds American 48.16 45-52

Sanofi Aventis 28.46 26-30

Zenith Nat’l Ins 30.80 32-37

News on Stocks in Our Portfolios

Positive comments on Becton Dickinson (Aggressive Growth Portfolio):

http://www.zacks.com/blog/post_detail.html?t=15405

Positive comments on Abbott Lab (Dividend Growth Portfolio):

http://www.zacks.com/rank/zcommentary/?id=8947

ATT (High Yield Portfolio) reported third quarter operating earnings per share of $.67 versus estimates of $.71 and $.55 recorded in the comparable 2007 quarter. http://www.thestreet.com/story/10443751/1/atts-net-falls-short-update.html?puc=_txtmdb

McDonald’s (Dividend Growth Portfolio) reported third quarter earnings per share of $1.05 versus forecasts of $.98 and $.88 reported in its 2007 third quarter.

And some positive comments:

http://seekingalpha.com/article/101413-mcdonald-s-rides-high-by-pricing-low?source=front_page_long_ideas

Boeing (Dividend Growth Portfolio) reported third quarter earnings per share of $.96 versus expectations of $.98 and $1.11 recorded in the prior year’s third quarter.

http://www.thestreet.com/story/10443686/1/boeing-earnings-slide-amid-strike.html

And some negative comments:

http://www.thestreet.com/p/_htmlrmd/rmoney/industrials/10443804.html

Phillip Morris Int’l (Dividend Growth Portfolio) reported third quarter earnings per share of $1.01 versus estimates of $.90 and $.82 reported in the comparable 2007 quarter.

More Cash in Investors’ Hands

Tuesday, October 21, 2008

10/22/08

Economics

This Week’s Data

The International Council of Shopping Centers reported weekly sales to major retailers fell 1.6% versus the prior week and rose a paltry .9% on a year over year basis; Redbook Research reported month to date retail chain store sales increased .8% versus the comparable period in 2007.

Other

The variability of unemployment between states:

http://mjperry.blogspot.com/2008/10/1-of-3-states-have-jobless-rates-below.html

Politics

Domestic

Former Chicago school superintendent comments on the Annenberg Challenge:

http://jammiewearingfool.blogspot.com/2008/10/chicago-school-chief-on-annenberg-there.html

How Obama and McCain staffers are paid:

http://mjperry.blogspot.com/2008/10/political-hypocrisy-do-as-i-say-not-as.html

The significance of falling gasoline prices:

http://mjperry.blogspot.com/2008/10/falling-gas-prices-tax-cut-of-massive.html

International War Against Radical Islam

The Market

Technical

There is a pattern developing which will be helpful to me in managing our Portfolios’ cash position. In five out of the last six trading days the DJIA has either closed or traded at an intraday high in the 9270-9370 range (as opposed to the resistance level [9707] marked by its 2004 low). The corresponding S&P range is 897-1002.

In addition, both indices have made a very short series of higher lows and the up trend lines connecting those higher lows currently intersect at DJIA 8370, S&P 879. It is way too early to start pointing to either resistance or support levels as having significance; however, in the context of trying to more clearly define a trading range, these are worth watching as stock prices approach them.

This is particularly relevant today because in the case of the up trend (support) line while both the DJIA and S&P are approximately 7-8% above the aforementioned intersect points, many of the stocks in our Portfolios closed yesterday on or near their corresponding up trend (support) lines. As long as they hold those support levels, there is nothing to do; but if they suffer technical deterioration, action may be required.

Fundamental

The fundamental news this week is following the pattern that I suggested in last week’s Closing Bell, i.e. a thaw in the credit markets is proceeding apace shifting investor attention towards corporate earnings.

http://calculatedrisk.blogspot.com/2008/10/credit-crisis-indicators-more-progress_21.html

Unfortunately, several major profit disappointments have been recorded in the last couple of trading days, e.g. Hormel. I would note that an integral part of our strategy of managing the cash position (between 15-25%) of our Portfolios will be moving out of the stocks of companies that are not handling the economic difficulties as well as we would have thought and into those that have.

Subscriber Alert

Before this Market gets away from us on the downside, our Portfolios are going to do a little more selling this morning;

The High Yield Portfolio will Sell 10-15% of its holdings in Kimco Realty Trust (KIM) and Gannett (GCI. Both stocks are trading at or below their 10/10 low.

The Aggressive Growth Portfolio will Sell 20% of its holdings of Blackrock (BLK) and American Vanguard (AVD). Blackrock is selling at its October 10 low. American Vanguard has rallied dramatically, so profits are being taken.

Company Highlight

TJX Companies is a leading off-price retailer of clothing and home fashions. The company has grown profits and dividends at an 18-19% pace over the past ten years earning a 30%+ return on equity. TJX should continue this performance because:

(1) the current economic environment is beneficial to its steady growth, strong margin business model,

(a) struggling department stores offer a wider and higher quality variety of merchandise for the company to purchase,

(b) this stronger assortment of goods brings in new customers that are trading down from high priced retailer.

(2) geographic expansion. Currently, there are no major off price, brand apparel companies in Europe,

(3) an aggressive stock repurchase program. Management estimates that it will buy back $900 million in stock this year.

TJX is rated A+ by Value Line, has a 30% debt to equity ratio and its stock yields 1.3%.

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

10/08

News on Stocks in Our Portfolios

Pfizer (High Yield Portfolio) reported third quarter operating earnings per share of $.62 versus expectations of $.55. Positive comments:

http://www.thestreet.com/p/_htmlrmm/rmoney/pharmaceuticals/10443504.html

3M (Dividend Growth Portfolio) reported third quarter operating earnings per share of $1.42 versus estimates of $1.38 and $1.32 recorded in last year’s third quarter.

Blackrock (Aggressive Growth Portfolio) reported third quarter earnings per share of $1.62 versus expectations of $1.88 and $1.94 reported in the comparable 2007 quarter.

Positive comments on Abbott Labs (Dividend Growth Portfolio):

http://www.thestreet.com/story/10443388/1/abbott-labs-growth-yield-and-safety.html?puc=_htmlatb

US Bancorp (High Yield Portfolio) reported third quarter earnings per share of $.32 versus estimates of $.47.

More Cash in Investors’ Hands

10/21/08

Economics

This Week’s Data

The leading economic indicators for September rose .3% versus expectations that they would be unchanged.

http://econompicdata.blogspot.com/2008/10/leading-economic-indicators-up-02-in.html

Other

Housing data from southern California shows improvement:

http://calculatedrisk.blogspot.com/2008/10/dataquick-socal-home-sales-up-50.html

A long term chart of the dollar:

http://bespokeinvest.typepad.com/bespoke/2008/10/us-dollar-a-nic.html

Politics

Domestic

Gerrymandering and lack of term limits are part of the problem:

http://online.wsj.com/article/john_fund_on_the_trail.html

In case you missed this gem--Biden on Obama:

http://hotair.com/archives/2008/10/20/biden-obamas-inexperience-will-prompt-nations-to-test-us/

International War Against Radical Islam

The Market

Technical/ Fundamental

More technical data from Traderfeed:

http://traderfeed.blogspot.com/2008/10/buying-interest-in-stocks-improved-but.html

A look at volatility:

http://www.capitalspectator.com/archives/2008/10/volatility_less.html

An update of quarterly earnings reports:

http://bespokeinvest.typepad.com/bespoke/2008/10/third-quarter-e.html

************************************************

Stock prices continued the advance yesterday. If one were to hypothesize (which I am) that stocks are for the moment in a trading range defined by DJIA 7859--9707 (admittedly, the 9707 resistance level is iffy), then yesterday’s close puts stock prices in the upper 25% of that range.

In our current strategy that means that our Portfolios should be raising cash from their current 20.5% position toward 25%. My focus is on those stocks that have had a poor relative recovery off their lows.

Subscriber Alert

At the Market open this morning, partial positions will be Sold in the following:

In the Dividend Growth Portfolio: Johnson Controls (JCI), Colgate Palmolive (CL), VF Corp (VFC).

In addition, all of the position in Hormel Foods (HRL) will be Sold. The company announced very poor earnings and its stock closed right on its Stop Loss Price. If you can’t sell Spam is this environment, I’m not sure when you can.

McCormick & Co (MKC) is being Added to the Dividend Growth Buy List; and the Dividend Growth Portfolio will purchase a one-half position in MKC.

In the High Yield Portfolio: Kimco Realty Trust (KIM).

*********************************************

Now that we are breathing a bit easier, I need to address the utility of the Valuation Model under conditions of intense stress. You may have noticed that during the last leg down, the stock price of many holdings dipped below their Stop Loss Price but the positions weren’t eliminated. The reason is simple--the Valuation Model doesn’t function as it should at negative emotional extremes.

During occasions when investor psychology is ebullient, our Sell Half Discipline forces us to Sell a position’s size down to a normal 3% but not eliminate the entire holding. (In other words, there is a built in hedge to this part of our Discipline.) The reason that the position isn’t sold out is that while more often than not, the stock price may decline some after hitting new highs, more often than not it won’t fall enough to trade back into its Buy Value Range (so we can buy it back). Rather it will resume its rise. Experience has shown that selling out an entire position in a rising Market imposes an opportunity cost that doesn’t help our performance in the long run.

In the reverse situation, if we strictly followed our Stop Loss Discipline (which has no built in hedge), our Portfolios would be forced completely out of a large number of holdings and could very well end up at or near 100% cash. That may have sounded great two Fridays ago; but when a highly volatile Market turns, the difficulties of going from 100% cash to 20-30% cash without sacrificing performance is extraordinarily difficult because not only of my psychological hesitancy at points of maximum stress to buy back a stock that has been sold out versus scaled back but also because of the inherent trading ‘friction’ that occurs during periods of acute volatility. The solution that I learned through experience works the best for me is during periods of excessive price decline (i.e. bear market extremes), once a stock hits its Stop Loss, to average down to a 20-25% of normal size position fairly quickly, then ride out the remainder of the price fall. Granted in a perfect world, the ideal strategy would be to Sell when a stock hits its Stop Loss Price and Buy it back when the Market reverses itself; however, the ‘psychological hesitancy’ mentioned above is my own special problem, so I have to trade in a way that makes sense to me and makes decision making easy in periods of emotional duress.

The Dividend Growth Buy List

Company Close 10/20 Buy Value Range

Automatic Data Processing $35.38 $34-39

Boeing Co 46.71 42-48

Canon Inc 33.00 31-36

General Electric 20.14 19-22

Home Depot 20.78 18-21

Johnson & Johnson 64.44 63-71

Manulife Financial 24.78 21-25

McDonald’s 56.84 55-61

Nokia Inc 17.95 18-21

Nucor Inc 37.09 41-47

Paychex Inc 28.00 26-31

Pepisco Inc 56.76 52-60

Sysco Corp 26.01 26-30

UGI Corp 23.41 21-25

Wells Fargo 32.23 30-35

News on Stocks in Our Portfolios

Positive comments on Pfizer (High Yield Portfolio):

http://www.thestreet.com/p/_htmlrmm/rmoney/pharmaceuticals/10443268.html

More Cash in Investors’ Hands

Monday, October 20, 2008

10/20/08

Economics

This Week’s Data

Other

An up date on the Baltic Dry Index (indicator of world commerce):

http://bigpicture.typepad.com/comments/2008/10/baltic-dry-inde.html

Chart porn on bank liquidity:

http://econompicdata.blogspot.com/2008/10/liquidity-provided-to-banks-doubles.html

An update on the impact of rising (falling) commodity prices on the consumer:

http://bespokeinvest.typepad.com/bespoke/2008/10/commodities-fro.html

And a close look at lower gasoline prices:

http://mjperry.blogspot.com/2008/10/falling-gas-prices-save-consumers-188.html

Good news on LIBOR:

http://econompicdata.blogspot.com/2008/10/frozen-markets-become-slushy-libor-down.html

Politics

Domestic

A look at McCain and Obama’s tax plans:

http://www.american.com/archive/2008/october-10-08/dollars-and-sense

Chuck Hagel as secretary of defense:

http://www.powerlineblog.com/archives/2008/10/021822.php

International War Against Radical Islam

The Market

Technical

This is a great read for anyone that invests (must read):

http://traderfeed.blogspot.com/2008/10/when-good-trading-leads-to-bad-trading.html

A look at past lows:

http://traderfeed.blogspot.com/2008/10/will-we-know-when-weve-made-low.html

A week with the volatility index:

http://econompicdata.blogspot.com/2008/10/vix-it-has-been-heck-of-week.html

Weekly update of indicators from Traderfeed:

http://traderfeed.blogspot.com/2008/10/indicator-update-for-october-20th.html

82 of the S&P 500 have reported third quarter earnings as of the close Friday. Their dollar weighted earnings have decline 9.1%; however, 59% of the companies reporting have been expectations.

Fundamental

Buffett’s New York Times editorial:

http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=1&ref=opinion&oref=slogin

Subscriber Alert

The High Yield Portfolio will utilize the recent strength to Sell the small remainders of its holdings in Magellan Midstream Ptrs (MMP) and Nustar Energy (NS).

News on Stocks in Our Portfolios

Positive comments on the coal stocks (Peabody Energy--Aggressive Growth Portfolio):

http://www.zacks.com/newsroom/commentary/index.php?id=8895

A positive write up on Lowe’s (Aggressive Growth Portfolio):

http://www.thestreet.com/p/_htmlrmd/rmoney/retail/10442810.html

Schlumberger (Aggressive Growth Portfolio) reported third quarter earnings per share of $1.25 versus expectations of $1.29 and $1.09 recorded in the third quarter of 2007.

Stryker (Aggressive Growth Portfolio) reported third quarter earnings per share of $.66 versus estimates of $.67.

Positive comments on CR Bard (Dividend Growth Portfolio):

http://www.zacks.com/newsroom/commentary/index_pdf.php?id=8915

VF Corp (Dividend Growth Portfolio) raised its quarterly dividend per share from $.58 to $.59.

Kinder Morgan Energy Ptrs (High Yield Portfolio) raised its quarterly cash distribution from $.99 to $1.02.

More Cash in Investors’ Hands

The Disciplined Dividend Investor

Saturday, October 25, 2008

The Closing Bell

Friday, October 24, 2008

10/24/08

Thursday, October 23, 2008

10/23/08

Tuesday, October 21, 2008

10/22/08

10/21/08

Monday, October 20, 2008

10/20/08

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