6/25/08

Economics

Larry Kudlow on today’s Fed report:

http://kudlowsmoneypolitics.blogspot.com/2008/06/is-inner-bernanke-up-to-task.html

Housing news isn’t getting any better:

http://bigpicture.typepad.com/comments/2008/06/case-shiller-in.html

Chart porn on money supply data:

http://mjperry.blogspot.com/2008/06/are-concerns-about-inflation-inflated.html

More on oil speculators (or the lack thereof):

http://mjperry.blogspot.com/2008/06/dont-shoot-price-messenger-aka.html

Politics

Domestic

Obama and McCain on ethanol:

http://www.nytimes.com/2008/06/23/us/politics/23ethanol.html?ei=5124&en=99cda34eea075353&ex=1371960000&adxnnl=1&partner=permalink&exprod=permalink&adxnnlx=1214398979-IRucV4v7CB8RgbOYV9AMqw

The Club for Growth on the Housing Bill:

http://www.clubforgrowth.org/2008/06/senate_key_vote_doddshelby_hou.php

And a little more detail:

http://blog.heritage.org/2008/06/24/morning-bell-what-is-the-worst-part-of-this-bill/

International War Against Radical Islam

Good news from Iraq:

http://www.mudvillegazette.com/archives/030260.html

The Market

Technical/ Fundamental

Barry Ridholtz in defense of technical analysis:

http://bigpicture.typepad.com/comments/2008/06/lets-get-techni.html

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Yesterday was on the surface another ho hum day--inconclusive trading in the indices resulting in no additional clarity on their direction. However, a fairly large number of the stocks in our Portfolios got whacked really, really hard; indeed, yesterday all of our Portfolios dramatically underperformed the DJIA and the S&P--the first time that has occurred in a long time.

This dichotomy in performance could be nothing more than a random occurrence or it could suggest a couple of differing Market scenarios: (1) stocks in general are in a broad bottoming process and investors are just now getting around to selling those equities that have held up the best in this recent decline, (2) investors are starting to believe that the economy is in much worse shape than I currently believe and they are revising down their earnings assumptions and valuations of stocks in those sectors that they had previously believed would be relatively immune to a slowing economy.

My unease is somewhat enhanced because (1) both the DJIA and the S&P have barely rallied since they hit the lower boundary of their clearly defined May to present down trend; the longer we go without a rally, the more likely we are to have more to the downside, and (2) as illustrated in the chart we ran in yesterday’s Morning Call, the VIX index is trending up and that usually means lower stock prices.

I have no idea at this point which of the three aforementioned alternatives is the proper explanation for yesterday’s price action; but right now I am a very uneasy camper. Clearly, it makes no sense to alter our investment strategy based on one day’s Market performance. So at the moment I am simply pointing out an unexpected peculiarity in the performance of a sufficient number of our holdings to warrant heightened concern.

Subscriber Alert

The stock price of Colgate Palmolive (CL-$68) has fallen below the lower boundary of its Buy Value Range. Accordingly, it is being Removed from the Dividend Growth Buy List. The Dividend Growth Portfolio never bought CL, so no further action is required.

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (88.6%): Sold: none

Bought: none

Positions: Automatic Data Products, Johnson Controls, Nucor, Canon

Portfolio 2 (88.1%): Sold: none

Bought: none

Positions: Franklin Resources, Graco, United Technologies,

Mastercard

Portfolio 3 (93.0%): Sold: none

Bought: none

Positions: Nucor, Smith Int’l. ConocoPhillips, Mastercard

Portfolio 4 (85.9%): Sold: none

Bought: none

Positions: Suncor , Colgate Palmolive, Peabody Energy, General Dynamics

News on Stocks in Our Portfolios

More Cash in Investors’ Hands

6/24/08

Economics

Cramer on oil speculation:

http://www.thestreet.com/p/_htmlrmm/rmoney/jimcramerblog/10422594.html

The budget realities both candidates face:

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/20/AR2008062002889.html

Technological advances in oil drilling:

http://mjperry.blogspot.com/2008/06/todays-drilling-leaves-tiny-footprint.html

Politics

Domestic

International War Against Radical Islam

The Market-Disciplined Investing

Technical

I was hoping that yesterday the S&P would recover and close above the lower boundary of its 1982 to present uptrend/April 2008 low (which would indicate a firming of investor sentiment); or as a less desirable alternative that both major Averages would continue to fall--while not the optimum outcome, at least it would have provided clarity of direction. As you know, we got neither which means we wait for the Market to tell us which way it is going to go. I remind you that at the moment the most obvious trend for both indices is the very short term down trend off their respective May highs.

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The VIX (volatility index) and stock prices:

http://bigpicture.typepad.com/comments/2008/06/10-year-vix-cha.html

A long term chart on the bank stocks:

http://bespokeinvest.typepad.com/bespoke/2008/06/bank-index-bkx.html

Fundamental-A Dividend Growth Investment Strategy

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (87.5%): Sold: none

Bought: none

Positions: Automatic Data Products, Johnson Controls, Nucor, Canon

Portfolio 2 (87.5%): Sold: none

Bought: none

Positions: Franklin Resources, Graco, United Technologies,

Mastercard

Portfolio 3 (92.4%): Sold: none

Bought: none

Positions: Nucor, Smith Int’l. ConocoPhillips, Mastercard

Portfolio 4 (85.3%): Sold: none

Bought: none

Positions: Suncor , Colgate Palmolive, Peabody Energy, General Dynamics

Options-Covered Writes

At the Market open this morning, the following call options will be Sold against one quarter of each Portfolio’s position:

In the High Yield Portfolio:

Alliance Resources Ptrs July 60 Calls at $1.625

In the Aggressive Growth Portfolio:

Peabody Energy July 95 Calls $1.375

Bucyrus Int’l July 90 Calls at $.50

Smith Int’l July 90 Calls at $.875

Subscriber Alert

Visit www.strategic-stock-investments.com to learn about our dividend based investment strategy, subscribe and find out what we are buying/selling today.

News on Stocks in Our Portfolios

A positive write up on Peabody Energy and Bucyrus Int’l (both Aggressive Growth Portfolio):

http://www.thestreet.com/p/_htmlrmd/rmoney/jimcramerblog/10422695.html

UPS (Dividend Growth Portfolio) guided analysts $.15 per share lower for second quarter earnings. The stock will get whacked on the opening. I will be monitoring.

More Cash in Investors’ Hands

6/23/08

Economics

Tax rates Clinton vs Bush:

http://gregmankiw.blogspot.com/2008/06/effective-tax-rates.html

Here is some interesting trivia on Al Gore’s electric bill:

http://mjperry.blogspot.com/2008/06/al-gore-energy-hog-do-as-i-say-not-as-i.html

Politics

Obama’s vote on Chief Justice Roberts:

http://hughhewitt.townhall.com/blog/g/54e1dc7e-9217-4772-9706-13a499b0b549

Domestic

An analysis of the (soon to be) new FISA law:

http://article.nationalreview.com/?q=ZTM1MjU4NjI0M2JiMjg2YmYxNGYwN2FiODg4NmZiOTg=&w=MA==

International War Against Radical Islam

The Market

Technical

The level of bearishness doesn’t appear to be high enough to signal a bottom:

http://www.marketwatch.com/news/story/towel-hasnt-been-thrown-yet/story.aspx?guid=%7BAF4600C4%2DD354%2D4A9F%2DBA58%2D9CB21630E33B%7D

Fundamental

Subscriber Alert

The stock prices of T Rowe Price (TROW-$60), Colgate Palmolive (CL-$70) and C.R. Bard (BCR-$88) have traded below the upper boundary of their respective Buy Value Ranges. Accordingly, they are being Added to the Dividend Growth Buy List. The Dividend Growth Portfolio already owns TROW and BCR. It does not own CL but no purchases will be made at this time.

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

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

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

A note on C.R. Bard. For long time subscribers, you know that BCR has been one of the best performing stocks in the Dividend Growth Portfolio. Indeed, the Portfolio has Sold (in value) more stock than was originally invested and it still owns a position that is now about 80% of a normal sized holding. The stock has traded down in this Market into its Buy Value Range. However, its yield is below the minimum 1.5% for initiating a position in the Dividend Growth Portfolio. Our Discipline waives that requirement for a long term holding. The Dividend Growth Portfolio will be looking to build this position back to a 3%.

The stock price of Proctor and Gamble (PG-$63) has traded below the lower boundary of its Buy Value Range. Therefore, it is being Removed from the Dividend Growth Portfolio. The Dividend Growth Portfolio will continue to Hold PG.

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

At the Market open this morning, the Dividend Growth Portfolio will Buy additional shares in United Technologies (UTX-$69), McGraw Hill (MHP-$43) and Automatic Data Processing (ADP-$43)

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

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

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

The stock price of Rayonier (RYN-$45) has fallen below the upper boundary of its Buy Value Range. Accordingly, RYN is being Added to the High Yield Buy List. The High Yield Portfolio already owns a position in the company. So further purchases will be made at this time.

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

At the Market open this morning, the High Yield Portfolio will buy additional shares of Martin Midstream Ptrs (MMLP-$33) and Nustar Energy LP (NS-$48).

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

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

CNBC Million Dollar Portfolio Challenge

Portfolio 1 (86.2%): Sold: none

Bought: none

Positions: Automatic Data Products, Johnson Controls, Nucor, Canon

Portfolio 2 (87.9%): Sold: none

Bought: none

Positions: Franklin Resources, Graco, United Technologies,

Mastercard

Portfolio 3 (91.4%): Sold: none

Bought: none

Positions: Nucor, Smith Int’l. ConocoPhillips, Mastercard

Portfolio 4 (81.9%): Sold: Dow Chemical

Bought: Colgate Palmolive

Positions: Suncor , Colgate Palmolive, Peabody Energy, General Dynamics

News on Stocks in Our Portfolios

More Cash in Investors’ Hands

CME Group announced a $1.1 billion stock buy back.