5/13/08

Economics

The latest consensus numbers on 2008 among economists:

http://bespokeinvest.typepad.com/bespoke/2008/05/consensus-econo.html

A chart on the growth of commercial and industrial loans:

http://mjperry.blogspot.com/2008/05/what-recession-what-credit-crunch.html

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.). The Farm Bill:

http://www.clubforgrowth.org/2008/05/open_letter_to_john_boehner.php

Politics

Domestic

More on the polar bear ‘problem’:

http://www.american.com/archive/2008/may-05-08/are-polar-bears-really-an-endangered-species

McCain’s cap and trade plan:

http://www.clubforgrowth.org/2008/05/mccains_capandtrade_plan.php

International War Against Radical Islam

The Lebanon dilemma:

http://article.nationalreview.com/?q=M2JmODNjMWJmODZlMDQ4NmIxYTllNGM5ZDE5MWJlZjI=

The Market-Disciplined Investing

Technical

Yesterday gave us at least a bit of clarity at the technical inflection point I discussed in last weekend’s Closing Bell. Both the DJIA (12876) and the S&P (1403) bounced decisively off their March 2008 to present up trend lines (DJIA 12745; S&P 1389). The DJIA also traded through the October 2007 to present down trend line (12812) while the S&P closed right on its October 2007 to present down trend line (1403). For the moment the March 2008 to present up trend remains the dominant trend.

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A bear’s view of the low volume rally:

http://bigpicture.typepad.com/comments/2008/05/lowest-nyse-vol.html

Fundamental-A Dividend Growth Investment Strategy

Subscriber Alert

The stock price of Worthington Industries (WOR-$19) traded above the upper boundary of its Buy Value Range. Accordingly, it is being Removed from the High Yield Buy List. Since the High Yield Portfolio never Bought WOR no action in needed at this time.

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

In line with our strategy of Selling stocks that have traded in the no man’s land between the lower boundary of their respective Buy Value Range and their Stop Loss Price but have been unable to recover in the current up trend, at the Market open this morning, the High Yield Portfolio will Sell its remaining shares of Pfizer (PFE-$20) and Reynolds American (RAI-$55) and the Dividend Growth Portfolio will Sell its remaining shares of General Electric (GE-$32).

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

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

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

The High Yield Buy List

Company Close 5/12 Buy Value Range

AJ Gallagher $26.23 $23-27

Bank of Nova Scotia 48.22 43-49

Buckeye Pipeline Ptrs 49.26 49-56

Kimco Realty Trust 40.29 39-45

Nustar Energy 51.84 47-54

Rayonier 44.36 39-45

Company Highlight

Nustar Energy LP transports crude oil, refined products and ammonia through its pipelines, and sells bunker fuel to marine vessels. This partnership has grown profits and dividends at a 7-10% annualized rate over the passed five years earning a return on equity between 8-15%. The company should continue to grow its dividend at an 8%+ rate in the future as a result of:

(1) an aggressive acquisition program. NS recently purchased Kaneb Pipeline and Citgo’s asphalt operations.

(2) strong organic growth opportunities. The company is spending heavily on upgrading its pipeline, terminal and storage facilities which will make significant contributions to future cash flow.

Nustar is rated A by Value Range, has a debt to equity ratio of 45% and its partnership units yield over 7%.

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

News on Stocks in Our Portfolios

WalMart (Dividend Growth Portfolio) reported its first fiscal quarter’s earnings per share of $.76 versus expectations of $.75 and $.68 reported in the comparable prior year’s quarter.

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

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