12/14/07

Economics

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.). They just don’t seem to learn:

http://www.usatoday.com/news/washington/2007-12-11-earmarks-freshmen_N.htm

Politics

Domestic

International War Against Radical Islam

Some details on the assassinated Lebanese general:

http://counterterrorismblog.org/2007/12/lebanons_officers_under_axis_t.php

This is more philosophy than politics; but I thought it an interesting discussion of the unintended consequences of an aggressive foreign policy (taking out Saddam):

http://tcsdaily.com/article.aspx?id=121207A

The Market

Technical

Fundamental

Two brief and somewhat contradictory points: (1) thank God for our Price Disciplines; after listening to the ranting and raving of my hedge fund buddies on the incompetence of the Fed and the havoc it would wreak, by the end of the day Wednesday, I was ready to sell everything, then slit my wrists. But once again, those Disciplines served their purpose--taking emotion out of the investment decision making process. Nevertheless, even though all those threats of selling and shorting from the hedgies didn’t seem to impact yesterday trading very much, I do think that we are going to see another spike in volatility; so an important part of our strategy now is to keep a tight grip on our emotions, (2) that said, the more I reflect on the logic (or lack thereof) of the Fed’s actions, the more discouraged I get. The big question in my mind is, how long before the Fed acknowledges its policy error and does what needs to be done? I have no answer. So the bottom line is that our Price Disciplines rule but the needle on my caution meter remains near the red zone; and I will give no quarter to a stock that gets even near to its Stop Loss Price, in particular, a financial stock--even though I might be proven twice wrong for buying these stocks too soon.

Subscriber Alert

The stock price of Paychex Inc (PAYX-$39) has fallen below the upper boundary of its Buy Value Range. Accordingly, it is being Added to the Dividend Growth Buy List. Since the Dividend Growth Portfolio already owns this stock, no additional action will be taken.

The stock price of Chevron (CVX-$93) has risen above the upper boundary of its Buy Value Range, Therefore, CVX is being Removed from the Dividend Growth Buy List. The Dividend Growth Portfolio never bought this stock.

The stock price of Alliance Resources Ptrs (ARLP-$36) has fallen below the upper boundary of its Buy Value Range. Accordingly, it is being Added to the High Yield Buy List. Since the High Yield Portfolio already owns this stock, no additional action will be taken.

The stock price of Plains All American LP (PAA-$50) has fallen below the lower boundary of its Buy Value Range, Therefore, PAA is being Removed from the High Yield Buy List. Since PAA’s stock price remains well above its Stop Loss Price, the High Yield Portfolio will continue to Hold this stock.

The stock price of ASTA Funding (ASFI-$33) has fallen below the upper boundary of its Buy Value Range. Accordingly, it is being Added to the Aggressive Growth Buy List. Since the Aggressive Growth Portfolio already owns this stock, no additional action will be taken.

The stock price of Abercrombie & Fitch (ANF-$82) has risen above the upper boundary of its Buy Value Range, Therefore, ANF is being Removed from the Aggressive Growth Buy List. The Aggressive Growth Portfolio never bought this stock.

The stock price of Fastenal (FAST-$43) has risen above the upper boundary of its Buy Value Range, Therefore, FAST is being Removed from the Aggressive Growth Buy List. The Aggressive Growth Portfolio will continue to Hold this security.

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