The clock is ticking away the time before the year ends and I have only begun to sort out the possibilities. In Part 1 of this series, I discussed breaking up my potential picks into three categories: contender, on the fence, and out of the running until the 10 stocks have been identified.
Four contenders have been considered so far: American Eagle Outfitters (AEO), Anadarko Petroleum (APC), Anglo American ADR (AAUKY) and Diageo plc (DEO).
Six more are included in today's review: EZCorp Inc. (EZPW), General Electric Company (GE), Wells Fargo & Company (WFC), Annaly Capital Management ( NLY), Intuitive Surgical Inc (ISRG) plus Berkshire Hathaway (BRK.B). These include the remaining five from 2009 and one more familiar to most investors.
The market continues to befuddle the bears as the third quarter earnings and stock prices continued to move in a positive direction.
During this period Washington has taken charge of the auto industry and helped prop it up with the "cash-for-clunkers" program. They continue to subsidize the real estate market with first-time home buyers incentives, and very low interest rates. The banks are being refueled by the Federal Reserve with interest rates as low as zero, while all the time currency stability has been sacrificed. This has driven gold prices to new highs.
This is the third review of my 2009 stock picks through September 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). This years picks have annihilated index comparisons, so much so that I must attribute some of my good fortune to luck. However, I do believe the original reasoning was sound and the outlier nature of the gains certainly a result of an oversold market living in fear.
Wow! What a difference a few hours makes. At the beginning of trading today stocks and commodities were steady. Then as the morning wore on, the US dollar strengthened and it all broke loose. Let's look at the numbers: (as of 1:29 EDT)
Wall Street watchers can be excused for feeling a little whipsawed this week. After watching stocks lose ground early in the week, they roared back Thursday, riding high on a bevy of upbeat earnings reports. That enthusiasm remains partially on display this morning with two of the three major U.S. stock indexes showing a positive opening ahead of the morning bell.
At about 7 a.m. ET, the Nasdaq Composite Index and S&P 500 were slightly higher, while the Dow Jones industrial average was down by about 4 points. The Dow gained 1.3% Thursday to close the session at 10,081.31, led by the strong earnings reports from five of the benchmark index's 30 component stocks.
TheStreet.com's Jim Cramer says that as long as we're trapped in a commoditized stock market, use the futures to go bargain-hunting.
What if individual stocks want to go up, but the market wants to go down? Don't laugh. In 1982, when The Kansas City Board of Trade started trading Value Line futures (before there were S&P futures), we used to kick around in securities classes what would happen if eventually stocks became so commoditized that individual companies couldn't be removed from the gravitational pull.
For example, we know today looks like a terrible day, with Europe down horribly and our futures real soggy. But then we look and see that J. Crew (NYSE: JCG) (Cramer's Take), one of the best retailers, is not just saying that the fall season is good; it is saying it is blowout beyond imagination. The big Dow stock 3M (NYSE: MMM) (Cramer's Take) is not just saying that things are getting better; it is showing that business is very strong. The monster insurer and fellow Dow stock Travelers (NYSE: TRV) (Cramer's Take) is boosting the dividend and showing you how a responsible financial can behave.
We had a lot of big names trading up to new 52 week highs again today. The overall markets were pretty flat, with the DOW closing the day down 0.14%, the NASDAQ closing the day's trading up 0.04%, and the S&P ending the day a bit lower to finish today's trading down 0.28%.
Here are a few of the names that moved higher during the day to set new 52 week highs.
The markets had a relatively flat day to start the week, but there were some big name stocks that traded up to new 52 week highs in today's session. The DOW was up 0.2%, NASDAQ was down 0.01%, while the S&P saw the most change, closing up 0.4%.
Here are a couple of the bigger names that traded up to new 52 week highs in today's trading.
Intel Corporation (NASDAQ: INTC): Chipmaker Intel Corp. traded up to a new 52 week high today of $20.65. It set its 52 week low of $12.05 back on 2/23/09. The stock is trading higher today ahead of the company's third quarter earnings numbers, which are due out tomorrow following the market close. Analysts are expecting the company to show earnings of 27 cents per share. The company reported a loss of 7 cents per share for its second quarter. The stock closed the day up 1.1% at $20.40, up $0.23 on the day.
Dollar Tree (NASDAQ: DLTR) has more than 3,500 stores that sell its inventory of toys, durable housewares, candy, seasonal goods, and so on for a $1. Its other stores, operating as Deal$, sell most of its inventory at $5 or less.
This deep-discount retailer is generally considered to be the leader of its class and is rated a "buy" (four stars) by S&P with a target of $59.
The stock executed a major long-term bullish breakout at around $45. Technically this breakout is major and targets the stock at over $65.
One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."
In reality, my recommendations would be suitable, and perhaps desirable, for many passive investors as well.
The $50,000 is a portion of money Ms. P has set aside to purchase a home, which might happen in six months, but could also be pushed out further, depending on the economy and her situation. Basically, she wants to cover all her bases because she might need the money at any time and does not want to be caught short, while at the same time she would like to generate some revenue without taking any big risks.
The Australian move to raise interest rates sparked a surge in commodity prices, led by agricultural futures.Why is this?
The interest rate hike signaled that "all is well" in world economies, at least for the time being. So, if deflation is on the run, inflation can take over and that is happening in spades in the futures markets. Let's look at some prices:
December wheat is at $4.63 per bushel up 20.2 cents (each penny equals $50.00)
December corn is $3.64 per bushel, up 23.2 cents
November soybeans are at $9.07 per bushel up 22.4 cents
November crude oil is at $71.73 per barrel up $1.32
December S & P is at 1052.50 up 16.10
December Dow is at 9673 up 127
October cattle are at 82.40 down .275
October hogs are at 49.97 cents per pound up .925
December gold is at $1044 per ounce up $26.60 (each $1.00 equals $100 dollars)
December silver is at $17.43 per ounce up 89 cents
Why would the government want a weak dollar? To get some perspective on the dilemma facing the Fed, let's go back to the Clinton years. During the 1990s, we had a booming economy. That booming economy fostered a strong dollar policy (i.e., strong economy equals a strong dollar).
Now the tables are turned and we are in the worst recession since the 1930s. We are mired in debt and our unemployment keeps rising. The housing market, while improving somewhat, is still in shambles. Banks are short of money to lend, keeping a lid on expansion, and on and on. So then we have the reverse of the 1990s.
The market opened sharply lower this morning anticipating, perhaps, unemployment data that was worse than the data turned out to be. The September unemployment rate rose to 9.8%, exactly what most observers had been expecting.
The markets tried to gain back more than all the early losses, with all three major indexes ending slightly down. Crude oil has fallen below $70/barrel again, and gold has broken through $1,000/oz again. It could just be the case that the nearly 60% run-up since March in the S&P 500 was just wishful thinking that the economy was turning around and that consumer spending would would tick up as things improved. That thinking has not been borne out yet, so markets are likely to wobble around until the consumer decides what to do -- save or spend. The holiday season could write the ending to the story.
Late Thursday, Standard & Poor's announced a few changes to its U.S. indices. The reason for the changes are that Wyeth (NYSE: WYE) is being acquired by Pfizer(NYSE: PFE), leaving an opening in both the S&P 100 and S&P 500 (SPX). I want to focus on the stock that will replace WYE in the SPX, First Solar (NASDAQ: FSLR). In after-hours trading, FSLR jumped more than 6% in response to the announcement.
FSLR manufactures solar modules and is a major benefactor of what I like to call the "green rush" that took place during the past two years. FSLR capitalized nicely on the global environmental consciousness revolution last year, ascending as high as the $310 region. Yes, the stock has backed off quite a bit due to the economic crisis, but it could enjoy a bit of a recovery provided it can parlay this latest news into a breach of some overhead resistance.
The markets opened lower this morning and have continued to slide all day, mostly due to poor reports on manufacturing and unemployment. Still, for the third quarter both the DJIA and the S&P 500 indexes gained about 15%. Now, it appears that faith in an economic recovery is wobbling, primarily as a result of expected growth in unemployment and continuing low consumer spending. The federal stimulus program has pumped about $86 billion into the economy so far, but that hasn't been enough to shake loose tight-fisted lenders or cash-conserving consumers.
Why are Americans hoarding $3.5 trillion in cash? An interesting question. Let's dig deeper and see if we can find out why.
Here are some interesting facts about the $3.5 trillion:
After reducing money market accounts by 11% this year, investors hold cash equal to 73% of S&P 500 Index. At its peak in 2007, the buying power was at 62%.
Estimates are for GDP to increase sixfold to 2.9% in the third quarter.
In 2007 and 2008, investors placed $1.45 trillion in money market accounts. As of the week ending January 14, that number reached a record $3.92 trillion.
Investors have added $15.8 billion to domestic equity funds since March.
The clock is ticking away the time before the year ends and I have only begun to sort out the possibilities. In Part 1 of this series, I discussed breaking up my potential picks into three categories: contender, on the fence, and out of the running until the 10 stocks have been identified.
The market continues to befuddle the bears as the third quarter earnings and stock prices continued to move in a positive direction. 
Wall Street watchers can be excused for feeling a little whipsawed this week. After watching stocks lose ground early in the week, they roared back Thursday, riding high on a bevy of upbeat earnings reports. That enthusiasm remains partially on display this morning with two of the three major U.S. stock indexes showing a positive opening ahead of the morning bell.
TheStreet.com's Jim Cramer says that as long as we're trapped in a commoditized stock market, use the futures to go bargain-hunting.
We had a lot of big names trading up to new 52 week highs again today. The overall markets were pretty flat, with the DOW closing the day down 0.14%, the NASDAQ closing the day's trading up 0.04%, and the S&P ending the day a bit lower to finish today's trading down 0.28%.
Dollar Tree
One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."
The Australian move to raise interest rates sparked a
Why would the government want a weak dollar? To get some perspective on the dilemma facing the Fed, let's go back to the Clinton years. During the 1990s, we had a booming economy. That booming economy fostered a strong dollar policy (i.e., strong economy equals a strong dollar).
Late Thursday, Standard & Poor's announced a few changes to its U.S. indices. The reason for the changes are that 
The markets opened lower this morning and have continued to slide all day, mostly due to poor reports on manufacturing and unemployment. Still, for the third quarter both the DJIA and the S&P 500 indexes gained about 15%. Now, it appears that faith in an economic recovery is wobbling, primarily as a result of expected growth in unemployment and continuing low consumer spending. The federal stimulus program has pumped about $86 billion into the economy so far, but that hasn't been enough to shake loose tight-fisted lenders or cash-conserving consumers. 
Why are Americans 
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