11/26/07

Economics

protectionism (Free trade is a major positive for world and US economic growth.). The next free trade agreement up for a vote is with Columbia. A view of that agreement:

http://article.nationalreview.com/?q=ODU4YmU2NDU0NzZlNTBkNjIwNzFlZTYwMDc0Y2E4ODM=

An expert’s view of the state of the credit market:

http://www.thestreet.com/p/_htmlrmw/rmoney/tcrescenziblog/10391424.html

Politics

Domestic

International War Against Radical Islam

The Market

Technical

Fundamental

The DJIA ended last week at 12980 (1) close to the August low close [12850] and (2) about 2% undervalued; while the S&P closed at 1440 (1) near its 1404 August low close and (2) around 5.5% undervalued.

It would be great if the big down Wednesday (-211 down) followed by the almost equally big rally Friday (+181 up) signaled an equity price bottom; certainly it had the price behavior of a bottom. Unfortunately, the volume wasn’t there--too many people on vacation; and volume is important because it signals mass capitulation--every investor who has any thoughts of selling any stock does just that. So even if the guys who were around on Wednesday threw in the towel, those on Thanksgiving break didn’t.

The point here is despite the current undervaluation of stocks, we probably still haven’t seen the price lows for this down move.

The Dividend Growth Buy List

Company Close 11/23 Buy Value Range

Johnson & Johnson $66.88 $60-69

Abbott Labs 55.49 51-59

Illinois Tool Works 54.62 53-61

MDU Resources 26.64 25-29

Canon 50.76 47-54

3M 82.75 78-85

Eli Lilly 50.79 49-53

Graco 36.85 37-41

Commerce Bancshares 46.08 43-48

Paychex 38.19 38-42

Sysco 31.87 30-33

Chevron 86.67 79-87

Linear Technology 30.47 29-32

Marathon Oil 56.37 56-62

Bank of Nova Scotia 50.17 45-51

Avery Dennison 50.50 46-51 Automatic Data Processing 45.73 44-49

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