2/22/08

Economics

I have been arguing that the Fed policy is not as easy as many contend that it is because growth in money supply has not measured--my point being that inflation is less of a risk. Here is some visual evidence supporting my case:

http://mjperry.blogspot.com/2008/02/stagflation-update-monetary-base.html

http://mjperry.blogspot.com/2008/02/stagflation-update-m2-money-supply.html

http://mjperry.blogspot.com/2008/02/stagflation-again-not-likely.html

Politics

Domestic

The candidates and free trade:

http://online.wsj.com/article/SB120354791005181195.html?mod=special_page_campaign2008_topbox

Clinton and Obama on the Secure Fence Act:

http://www.slate.com/id/2184672

International War Against Radical Islam

The Market

Technical

Fundamental

The High Yield Buy List

Company Close 2/21 Buy Value Range

AJ Gallagher 23.80 23-26

Martin Midstream Ptrs 34.59 35-40

Rayonier 41.70 39-45

Reynolds American 65.39 61-70

2007 Performance

I received the final accounting for 2007 year end performance figures for our three Portfolios. I am pleased to say that they all outperformed the S&P. The High Yield Portfolio beat the S&P by 70 basis points, the Dividend Growth Portfolio by 409 basis points and the Aggressive Growth Portfolio by 156 basis points. In the case of the Dividend Growth Portfolio which has been monitored (by a third party) for the longest period of time, it has on average beat the S&P by over 600 basis points annually for the last six years. (FINRA rules state that I need to remind you that past performance is no indication of future performance.)

Company Highlight

A.J. Gallagher & Co provides insurance brokerage, risk management and employee benefit services to a wide variety of commercial, industrial, governmental and institutional organizations. The company received a lot of negative publicity from the lawsuits filed by Elliot Spitzer several years ago. Predictability, the stock reacted negatively to this. However, the company has not been charged in any of the suits and an internal probe has found no evidence of wrongdoing. The company has a strong balance sheet, generates a 25% return on capital and has raised its dividends and earnings an average of 12% over the last 10 years. AJG should continue to grow as a result of its aggressive acquisition strategy and stronger investment income. Currently, the stock yields 5%+.

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

News on Stocks in Our Portfolios

More Cash in Investors’ Hands