6/4/08

Economics

Some thoughts on the commodity index funds and their complicity in pushing up prices:

http://www.poorandstupid.com/2008_06_01_chronArchive.asp#8485589573526664671

And another view of cap and trade:

http://www.realclearpolitics.com/articles/2008/06/just_call_it_capandtax.html

Some perspective on how very lucky Americans are:

http://mjperry.blogspot.com/2008/06/how-rich-are-you-even-minimum-wage.html

Want cheaper gasoline?

http://mjperry.blogspot.com/2008/06/want-cheaper-gas-here-are-4-easy.html

Politics

Domestic

International War Against Radical Islam

McCain on Israel, Iran and Iraq (warning, it’s a bit long):

http://www.realclearpolitics.com/articles/2008/06/mccains_speech_to_aipac.html

The Market

Technical

Yesterday the DJIA (12402) traded well below the August 2007 low (12511); the next support level is the April 2008 low (12263). The S&P (1377) remains above its August 2007 low (1370). Forgoing a lot of tedious technical analysis, the bottom line is that both indices appear to have further downside (DJIA circa 1%, the S&P circa .5%) to their next support level.

Fundamental

That said, this week’s economic data continues to portray an economy that is wounded but by no means dying. Further, yesterday Mr. Bernanke made a strong statement supporting the dollar which right now is a key determinant in the future direction of oil (and other commodities) prices as well as inflation. In other words, the long term economic outlook appears to be at worse ‘muddling through’ and at best improving.

http://article.nationalreview.com/?q=MTRlNzgxZjBhYjU0ZDY4NjgzMTdlNDZlMzNiZmRlMDI=

And a chart of the dollar:

http://bespokeinvest.typepad.com/bespoke/2008/06/us-dollar-marat.html

A possible source of concern is Lehman Bros--rumors of its demise and all that. It could happen; but the Fed has already shown that it won’t allow the collapse of one entity to threaten the whole economy. Further, the financial sector has been repairing itself; so it is in better shape to take a bankruptcy than it was when Bear Stearns rolled over. Nonetheless, here is the pessimistic view:

http://bigpicture.typepad.com/comments/2008/06/more-financial.html

On the other hand:

http://seekingalpha.com/article/80047-identifying-a-bottom-for-financials

Another possible fly in the stock valuation ointment is politics. Yesterday, it became clear that barring the revelation of photos of Mr. Obama and a goat in intimate discourse, that he will be the Democratic presidential candidate; and I think it is general consensus among the investor class that an Obama presidency will be more likely to result in higher taxes, higher spending, more regulation and less free trade than a Clinton presidency. As you know, about a month ago I incorporated a Democratic sweep of both Congress and the presidency into our Valuation Model and that resulted in some downward adjustments to the 2008 and 2009 Year End Fair Values of the Averages and the stocks in our Universes. It may be that investors over the last couple of days have had one of those ‘emperor’s new clothes’ moments and begun adjusting their expectations to that reality--although as I pointed out at the time, stocks generally are still below those downward adjusted Values.

In the interest of being fair and balanced:

http://www.bloggingstocks.com/2008/06/04/why-president-obama-will-be-good-for-the-economy/

Or it may be nothing more than the ‘noise’ of trading or an early preview to a long dull summer of meandering stock prices.

Subscriber Alert

Go to www.strategic-stock-investments.com to see what we are buying/selling today.

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (84.8%): Sold: CR Bard

Bought: General Dynamics

Positions: Automatic Data Products, 3M, T Rowe Price,

General Dynamics

Portfolio 2 (87.2%) : Sold: McGraw Hill

Bought: Graco

Positions: Franklin Resources, Graco, Schwab,

Luxottica

Portfolio 3 (92.3%): Sold: ExxonMobil

Bought: Illinois Tool Works

Positions: Illinois Tool Works, Ross Stores. Schwab, Federated Investors

Portfolio 4 (79.8%): Sold: Genuine Parts

Bought: UPS

Positions: Home Depot, State Street, XTO Energy,

UPS

News on Stocks in Our Portfolios

A positive note on ExxonMobil (Dividend Growth Portfolio):

http://seekingalpha.com/article/80019-exxon-mobil-worlds-safest-investment

More Cash in Investors’ Hands

6/3/08

Economics

A look at the supply/demand statistics on oil:

http://www.american.com/archive/2008/june-06-08/a-simple-case-of-supply-and-demand

a rising tax and regulatory burden (Government has never proven that it could solve economic problems efficiently or satisfactorily.) More on cap and trade:

http://article.nationalreview.com/?q=NGNkNWFjNTYwYTM2Yzc2NjIxMjMwMzE3MjNhZjc4MTU=

And the Senate vote:

http://michellemalkin.com/2008/06/02/only-13-gop-senators-voted-against-the-lieberman-warner-green-boondoggle/

Some chart porn on housing:

http://bigpicture.typepad.com/comments/2008/06/consumer-mortga.html

And another sector of the economy about which to be concerned:

http://bigpicture.typepad.com/comments/2008/06/read-it-here-fi.html

A positive sign for the dollar:

http://mjperry.blogspot.com/2008/06/return-of-king-dollar.html

Despite the rising price of gasoline, the number of refineries in the US just keeps shrinking:

http://mjperry.blogspot.com/2008/06/no-new-oil-refineries-since-1976.html

Politics

Domestic

Scott McClellan’s book is headlines. Douglas Feith’s book doesn’t get a review. Here is Christopher Hitchens on both:

http://www.slate.com/id/2192696/

International War Against Radical Islam

The Market

Technical

Yesterday the DJIA (12504) traded below its August 2007 low (12511); while the S&P (1385) did not (1370). The last time stock prices were around this level, they bounced. I have no clue if that happens again; but if it does, the August 2007 support level will gain some strength. Frankly, my inclination is that prices will go lower. But that said, stock prices are down; our Discipline is to put money to work on Market declines; so I will nibble at stocks at the Market open.

Fundamental

Subscriber Alert

The stock price of Bank of Nova Scotia (BNS-$50) has risen above the upper boundary of its Buy Value Range. Accordingly, it is being Removed from the High Yield Buy List. The High Yield Portfolio will continue to Hold this stock.

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

The stock price of Rockwell Collins (COL-$60) has fallen below the lower boundary of its Buy Value Range. Therefore, it is being Removed from the Aggressive Growth Buy List. The Aggressive Growth Portfolio will continue to Hold COL.

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

At the Market open this morning, the High Yield Portfolio will Add slightly to its Holding of Martin Midstream (MMLP-$34) and Buy a one third position in Dow Chemical (DOW-$40); the Dividend Growth Portfolio will Buy a one third position in Canon (CAJ-$54); the Aggressive Growth Portfolio will add modestly to its positions in Ecolabs (ECL-$44) and SEI Investments (SEIC-$24)

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

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

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

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

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

The High Yield Buy List

Company Close 6/2 Buy Value Range

AJ Gallagher $25.25 $23-27

Dow Chemical 38.15 38-44

Kimco Realty Trust 38.15 39-45

Nustar Energy 49.08 47-54

Rayonier 48.52 42-48

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (83%): Sold: McDonalds

Bought: 3M

Positions: Automatic Data Products, 3M, CR Bard, T Rowe Price

Portfolio 2 (86.1%) : Sold: Nokia, Ecolabs

Bought: McGraw Hill, Schwab

Positions: Franklin Resources, McGrawHill, Schwab,

Luxottica

Portfolio 3 (91.9%): Sold: WalMart, Clorox, Landstar

Bought: Ross Stores, Schwab, Federated Investors

Positions: ExxonMobil, Ross Stores. Schwab, Federated

Investors

Portfolio 4 (77.1%): Sold: Nokia

Bought: Genuine Parts

Positions: Home Depot, State Street, XTO Energy,

Genuine Parts

News on Stocks in Our Portfolios

A positive write up on Microsoft (Aggressive Growth Portfolio):

http://www.zacks.com/rank/zcommentary/?id=7765

More Cash in Investors’ Hands

6/2/08

Economics

More on oil prices:

http://dallasfed.org/research/eclett/2008/el0805.html

And the affordability of housing:

http://mjperry.blogspot.com/2008/05/housing-affordabilty-remains-high-in.html

And cap and trade:

http://jewishworldreview.com/cols/will060108.php3

Bill Gross on inflation:

http://bigpicture.typepad.com/comments/2008/06/video-2.html

The absurdity of the Farm Bill and a windfall profits tax on oil:

http://mjperry.blogspot.com/2008/06/windfall-profits-for-big-food-wheres.html

Politics

Domestic

International War Against Radical Islam

An observation from Victor Hanson:

http://corner.nationalreview.com/post/?q=OTc1ZjZkMjY1OTBhMWRhYWZkMGRiYjAyYWIwYTQ0ZGE=

The Market

Technical

Fundamental

Subscriber Alert

The stock price of Federated Investors (FII-$37) has risen above the upper boundary of its Buy Value Range. Accordingly, it is being Removed from the Dividend Growth Buy List. The Dividend Growth Portfolio will continue to Hold FII.

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

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (82.5%): Sold: none

Bought: none

Positions: Automatic Data Products, McDonalds, CR Bard, T Rowe Price

Portfolio 2 (86.6%) : Sold: Blackrock

Bought: Franklin Resources

Positions: Franklin Resources Ecolabs, Nokia, Luxottica

Portfolio 3 (92.3%): Sold: Best Buy, 3M,

Bought: Walmart, ExxonMobil

Positions: Walmart, ExxonMobil, Clorox, Landstar

Portfolio 4 (76.2%): Sold: Landstar

Bought: XTO Energy

Positions: Home Depot, State Street, XTO Energy, Nokia

News on Stocks in Our Portfolios

More Cash in Investors’ Hands