Economics
protectionism (Free trade is a major positive for world and
http://www.realclearmarkets.com/articles/2007/12/my_falling_trade_deficit_with.html
Two indicators pointing at recession:
http://bigpicture.typepad.com/comments/2007/12/wonk-attack-int.html
Politics
Domestic
International War Against Radical Islam
Another piece of good news:
http://www.nysun.com/article/68433
OK, two pieces of good news:
http://article.nationalreview.com/?q=OGY2OTc2ODg2ZGMwZWNiYjVlYTQ5N2YwMjNlYzFjYTY=
The Market
Technical
Fundamental
Options Update
The ConocoPhillips December 95 calls (Sold @ .625) and the General Dynamics December 100 calls (Sold @ 1) will expire today.
This morning the Dividend Growth Portfolio will Sell Praxair January 90 (limit 2.125) against one third of its position. The Aggressive Growth Portfolio will Sell Smith International January 75 (limit 1.50) against one third of its position.
It won’t be long till the ‘January effect’ kicks in. For subscribers who don’t know what this is, it is the tendency of stocks that have been big losers during a year to experience a bounce in January. The practical basis for this effect is that institutional fund managers sell the big losers in their portfolios in December so that these stocks are not listed in their year end reports and individual investors sell them to recognize the loss for tax purposes; then once past December 31, investors buy these stocks because they are over sold/under valued.
At the top of the list of depressed stocks this year is of course the financials. I have searched for some options that could give a 3-5 times return if the January effect works this year. While not 10 Baggers, that is a great return for a 30 day investment. So this morning, the Aggressive Growth Portfolio will Buy Citigroup January 30 @ 1.625, Merrill Lynch January 55 @ 3.5 and Wells Fargo January 32.50 @ .625. I stress that these are highly speculative. That they are being Bought in very small dollar amounts, i.e. each position is equal to the number of shares in a one third size holding; for example, a normal size holding for Merrill Lynch would be 900 shares, so 3 calls are being Bought.
Further, remember that 90% of all calls expire worthless; so our Portfolio will Sell their positions at the close of business on January 11--period.
Aggressive Growth Buy List
Company Close 12/20
Expeditors Int’l 45.72 42-48
Reliance Steel 53.72 49-55
Fastenal 41.61 38-43
Rockwell Collins 71.57 65-75
Simpson Mfg 27.11 26-30
Harley Davidson 46.43 44-50
Company Highlight
Staying with the themes of US consumer staples and companies with a strong international presence, today’s highlight is on Expeditors International.
Expeditors International (EXPD) is a third party logistics provider offering worldwide consolidation services for air and ocean freight as well as custom brokerage and import services. The company runs 168 full service offices, 60 satellite locations and 50 international service centers in more than 50 countries on six continents. It has an outstanding record of earnings and dividend growth (10-20% and 33-34% respectively) and earns 20%+ return of equity. EXPD should continue to achieve this kind of economic success as a result of:
(1) the continued growth of the world economy in particular the strong trade between the
(2) the expanding global trade, the multinational diversification of supply chains, the need for technological innovation and trade regulations make it difficult for companies to handle their own shipping, increasing the importance of EXPD’s services,
(3) operating margins will improve as additional freight capacity comes on line and EXPD’s costs decline,
(4) as a global leader, EXPD should increase its market share in this highly fragmented industry,
(5) finally, the company’s brokerage and import services business should also benefit from the growth in freight forwarding to
http://finance.yahoo.com/q?s=EXPD
News on Stocks in Our Portfolios
A positive write up on Praxair (Dividend Growth Portfolio):
http://www.zacks.com/rank/zcommentary/?id=6565
More Cash in Investors’ Hands
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