Economics
Another look at oil ‘speculators’ (this is a good article):
http://www.american.com/archive/2008/july-07-08/don2019t-blame-the-speculators
Politics
Domestic
I can’t help myself. A response to the Obama editorial I linked to in Monday’s Morning Call:
http://www.powerlineblog.com/archives2/2008/07/020997.php
International War Against Radical Islam
The Market
Technical
The good news is that the volatility index is moving in the right direction (a selling climax); the bad news is that other sentiment indicators reflect too much investor complacency. My gut tells me that we are getting close to a flush but there are still too many buyers. Patience, defense.
Fundamental
The other bit of bad news is the Fed and Treasury Department’s reaction to the developments over the past week in Fannie Mae and Freddie Mac including yesterday’s appearances of the high mucky mucks of both organizations before the Senate. They (the Fed and Treasury) are trying to sell the American people (and its elected representatives) on a huge transfer of power to themselves. This would include expanding the authority of the Fed from being the manager of the money supply with some oversight of the banking system and a mandate to balance employment and inflation to some multi tasking federal entity who in addition to the aforementioned dual assignment appears to be assuming the role of regulating a much larger chunk of the financial system (investment banks and the government sponsored enterprises) and in doing so, apparently insuring that lousy business judgment doesn’t carry with it failure as a consequence.
I may be misreading their intention. Today’s House hearings will hopefully provide clarification. But if I am correct, this is not good for the long term health of the economy, it is not good for inflation and it is not good for the dollar because the Fed has a history of being only marginally successful at correctly executing its original dual functions; adding infinitely more complex responsibilities, many of which should be taken care of by market forces, will likely insure its utter failure at all.
Thoughts from Jim Rogers:
http://bigpicture.typepad.com/comments/2008/07/jim-rogers-fann.html
Subscriber Alert
The stock price of Kimberly Clark (KMB-$55) has fallen below the upper boundary of its
http://finance.yahoo.com/q?s=KMB
Visit www.strategic-stock-investments.com to learn more about our dividend based investment strategy; then sign up and learn what other stocks we are buying/selling today.
Million Dollar Portfolio Challenge
Portfolio 1 (90.9): Sold: none
Bought: none
Positions: ExxonMobil, Eaton, WalMart, Mastercard
Portfolio 2 (87.7%): Sold: none
Bought: none
Positions:
XTO Energy
Portfolio 3 (92.6%): Sold: none
Bought: none
Positions: XTO Energy, Smith Int’l. McDonalds, SAP
Portfolio 4 (88.0%): Sold: none
Bought: none
Positions: Suncor, Chevron, Nike, SAP
News on Stocks in Our Portfolios
US Bancorp (High Yield Portfolio) reported second quarter earnings per share of $.53 versus $.65 recorded in the comparable 2007 quarter.
http://finance.yahoo.com/q?s=USB
A positive comment on Johnson & Johnson (Dividend Growth Portfolio):
http://www.thestreet.com/p/_htmlrmd/rmoney/healthcare/10426609.html
Charles Schwab (Aggressive Growth Portfolio) reported second quarter earnings per share of $.26, in line with expectations and versus $.23 reported in the 2007 second quarter.
http://finance.yahoo.com/q?s=SCHW
More Cash in Investors’ Hands
Waste Management is buying Republic Services for $6.3 billion in cash.
Cleveland Cliffs is buying Alpha Natural Resources for $10 billion of which 17% is in cash.
Have you noticed the pick up in corporate merger activity? When the owners and managers of businesses think that there is significant value at current prices in other businesses that has to be a good sign that stocks are getting cheap.
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