I see reason to believe that the market bottom was this morning. We won't know for sure until this is confirmed by declining volatility levels (^VIX and ^VXO). The market has fallen over 40% in the past year and over 30% in the past 30 days making this the worst crash since the depression.
Some pundits are saying "you still have time to sell now" - I don't believe this. Market crashes happen near the top - that's why this big decline has come as a day after day grinding rather than a single (or double) day event.
I'm a big believer that "the pendulum swings both ways, and it swings too far". There is good reason to believe it has now swung too far:
1) Historic speed of decline
2) Extreme fear levels (^VIX)
3) Favorable valuation levels (trailing 10 year P/E is now down to 13.6, price to book, dividend yield etc are all at long term lows)
4) Forced selling brings price too low
5) No one wants to own stocks
6) Front page of newspapers and magazines (not financial magazines) is the stock market
I read somewhere today an interesting statement - when markets are going up we all forget what can surprisingly go wrong - now we're all forgetting what can surprisingly go right. I believe there's a lot that may go right that will shock investors (or former investors who have bailed) -- most notably the shocking amounts of liquidity being pumped into markets which could create a major boom.
Will I be right? Not based on my recent predictions.
While I'm not going to update the recommendations (lack of time) I will add MER - Merrill Lynch to the list as of today's close.
Friday, October 10, 2008
Monday, October 06, 2008
The Market is Cheap
Well, in case it wasn’t terribly obvious, I was very wrong in my last posting. I called it “time to buy” – it wasn’t (at least in the short term). I said I thought WaMu would be fine – they weren’t [I will say that looking back on 2008, we will know that Jamie Dimon got the best deal of the year in purchasing WaMu for only $1.9 billion, without assuming any debt].
So I was wrong. However, I believe that the market is a “screaming buy”. We have fallen too fast (fallen faster than in 1987, looking at it month by month, based on percentage below 100 and 200 day moving average). We have cheap valuations. There is an insane amount of stimulus being applied – which lags by 6 to 12 months, but will eventually cause an improvement in the markets. If housing bottoms in the first half of 2009 [as I’ve long predicted], then this will look like a tremendous buying opportunity – and I think it is.
So how did my last recommendations fare? [MMM (-9.92%), UNH (-25.70%), PETS (-9.33%), APA (-20.69%), DPS (-3.00%), ADSK (-17.07%), AIB (-22.70%), PBR (-18.92%), TEX (-37.04%), WM-PK (-100%)] averaging a loss of 26.44%, underperforming the S&P 500 [-15.78%] by a whopping 10.66%. Since inception on 7/31/2007 the recommendations have lost 11.82%, outperforming the S&P 500 [-25.97%] by 14.15%.
I recommend buying stocks at this juncture. Ones I prefer: SSO, QLD, DDM, DIG, UNH, COP, ADSK, AIB, PBR, TEX, ASF, MT, BBY, L, MDR, PCZ, BID, SVU, TXT.
Here are some stocks that hit 52 week lows today that I think are cheap:
TKR – Name P/E P/Book Enterprise Value/Revenue
ASF – Administaff 11.6 3.1 0.3
AET – Aetna 9.3 1.8 0.7
AA – Alcoa 7.5 0.9 0.8
MO – Altria 10.3 10.1 1.2
AXP – American Express 10.4 2.9 2.7
APA – Apache 7.0 1.8 2.7
MT – Arcelor Mittal 4.3 1.0 0.8
ADM – Archer-Daniels-Midland 6.9 0.9 0.3
BJS – BJ Services 7.3 1.5 1.0
BP – BP 5.7 1.4 0.5
BHI – Baker Hughes 9.1 2.3 1.4
BBY – Best Buy 10.3 2.9 0.4
BA – Boeing 9.2 4.7 0.6
BYD – Boyd Gaming 12.2 0.5 1.6
CBS – CBS Corp 7.0 0.4 1.1
CI – Cigna 8.9 1.9 0.6
CVS – CVS 15.0 1.4 0.7
DVR – Cal Dive 10.6 1.7 2.1
CAJ – Canon 10.3 1.6 0.9
KMX – CarMax 25.4 1.7 0.4
CAT – Caterpillar 8.1 3.3 1.3
CX – Cemex 5.1 0.7 1.2
CRL – Charles River Labs 21.1 1.9 3.0
CVX – Chevron 8.2 2.0 0.7
CHS – Chico’s 34.5 0.9 0.4
CBK – Christopher & Banks 18.0 1.1 0.3
XEC – Cimarex Energy 6.0 1.0 2.0
COH – Coach 9.4 4.8 2.1
COP – ConocoPhillips 5.9 1.1 0.6
GLW – Corning 7.8 1.7 3.3
DE – Deere & Co 7.7 2.2 1.4
DVN – Devon Energy 8.5 1.6 2.8
DFS – Discover Financial Services 11.8 0.9 NM
EMC – EMC Corp 13.9 1.9 1.5
FIS – Fidelity Info Services 9.3 0.9 1.4
FRX – Forest Labs 8.0 2.1 1.6
FDP – Fresh Del Monte Produce 7.0 0.9 0.5
FTO – Frontier Oil 4.9 1.4 0.3
GD – General Dynamics 11.4 2.2 0.9
GE – General Electric 10.9 1.8 4.2
GNA – Gerdau AmeriSteel 4.4 0.9 0.8
GSK – Glaxosmithkline 12.7 8.3 3.1
HAL – Halliburton 9.0 3.1 1.5
HES – Hess Corp 9.1 2.1 0.7
HPQ – Hewlett-Packard 12.7 2.7 0.9
IR – Ingersoll-Rand 6.3 0.8 1.4
IBM – IBM 12.4 5.0 1.6
IFF – International Flavor & Frag 14.1 4.6 1.7
KG – King Pharmaceuticals 15.4 0.8 0.7
L – Loews Corp 6.6 0.9 0.6
MAN – Manpower 7.5 1.0 0.2
MRO – Marathon Oil 7.4 1.3 0.5
MDR – McDermott International 7.3 3.1 0.6
MCK – McKesson 13.1 2.2 0.1
MRK – Merck 13.2 3.4 2.6
MCO – Moody’s 14.0 NM 4.2
MOT – Motorola 16.2 1.0 0.4
MUR – Murphy Oil 7.2 1.7 0.4
NYX – NYSE Euronext 10.0 0.9 2.1
NBR – Nabors Industries 6.5 1.2 1.8
NOV – National Oilwell Varco 8.7 1.5 1.5
NWS.A – News Corp 7.4 1.0 1.1
NE – Noble Corp 6.3 2.1 3.2
NUE – Nucor 5.7 1.4 0.6
OXY – Occidental Petroleum 7.1 2.0 2.2
PBY – Pep Boys 19.8 0.7 0.3
PCZ – Petro-Canada 3.8 1.0 0.7
PBR – Petrobras 14.7 2.6 1.9
PLA – Playboy NM 0.6 0.6
PKX – POSCO NM NM 1.0
PCP – Precision Castparts 9.0 2.3 1.4
PRU – Prudential Financial 10.0 1.1 0.9
RTN – Raytheon 13.0 1.8 1.0
RSC – REX Stores 5.1 0.4 0.4
COL – Rockwell Collins 10.6 4.4 1.6
RDC – Rowan Companies 5.2 1.1 1.4
SWY – Safeway 10.5 1.4 0.4
BID – Sothebys 5.9 1.6 1.6
SUN – Sunoco 14.2 1.5 0.1
SVU – SUPERVALU 7.3 0.7 0.3
TGT – Target 12.6 2.5 0.8
TTM – Tata Motors 6.0 1.5 0.6
TEX – Terex Corp 3.7 0.9 0.3
TXT – Textron 6.1 1.7 1.1
MMM – 3M 12.1 3.6 1.9
TWX – Time Warner 11.1 0.7 1.7
TSN – Tyson Foods 60.0 0.9 0.3
USG – USG Corp NM 1.0 0.7
UL – Unilever 14.5 1.2 0.6
VIA.B – Viacom 8.1 2.1 1.6
WAG – Walgreen 12.7 2.2 0.5
WLP – WellPoint 7.7 1.1 0.4
WSM – Williams-Sonoma 13.5 1.3 0.4
WYE – Wyeth 11.1 2.6 2.1
YUM – Yum! Brands 15.0 25.1 1.6
ZMH – Zimmer Holdings 17.1 2.4 3.3
ACMR – AC Moore 14.8 0.6 0.2
AAPL – Apple 19.2 4.4 2.1
BAMM – Books-A-Million 5.4 0.8 0.2
CAKE – Cheesecake Factory 12.9 1.6 0.7
CTXS – Citrix Systems 20.1 2.1 2.3
DELL – Dell 11.1 10.6 0.4
EBAY – eBay 47.0 2.2 2.4
ERTS – Electronic Arts 13.6 2.4 1.9
EXPE – Expedia 13.2 0.8 1.3
FWLT – Foster Wheeler 8.3 5.1 0.6
LOJN – LoJack 8.4 0.8 0.3
MNST – Monster Worldwide 14.1 1.5 0.9
FLWS – 1-800-Flowers.com 15.2 1.4 0.4
OXPS – optionsXpress 10.2 4.3 1.5
RICK – Rick’s Cabaret 7.5 1.2 1.9
RMCF – Rocky Mountain Chocolate 10.3 4.3 1.6
SIGM – Sigma Designs 6.4 1.1 0.8
SPLS – Staples 14.3 2.4 0.9
SBUX – Starbucks 20.7 4.0 1.0
WFMI – Whole Foods 17.1 1.7 0.4
Obviously this is not an exhaustive list of all cheap stocks – these are just the ones that hit new 52 week lows today that I noticed.
So I was wrong. However, I believe that the market is a “screaming buy”. We have fallen too fast (fallen faster than in 1987, looking at it month by month, based on percentage below 100 and 200 day moving average). We have cheap valuations. There is an insane amount of stimulus being applied – which lags by 6 to 12 months, but will eventually cause an improvement in the markets. If housing bottoms in the first half of 2009 [as I’ve long predicted], then this will look like a tremendous buying opportunity – and I think it is.
So how did my last recommendations fare? [MMM (-9.92%), UNH (-25.70%), PETS (-9.33%), APA (-20.69%), DPS (-3.00%), ADSK (-17.07%), AIB (-22.70%), PBR (-18.92%), TEX (-37.04%), WM-PK (-100%
I recommend buying stocks at this juncture. Ones I prefer: SSO, QLD, DDM, DIG, UNH, COP, ADSK, AIB, PBR, TEX, ASF, MT, BBY, L, MDR, PCZ, BID, SVU, TXT.
Here are some stocks that hit 52 week lows today that I think are cheap:
TKR – Name P/E P/Book Enterprise Value/Revenue
ASF – Administaff 11.6 3.1 0.3
AET – Aetna 9.3 1.8 0.7
AA – Alcoa 7.5 0.9 0.8
MO – Altria 10.3 10.1 1.2
AXP – American Express 10.4 2.9 2.7
APA – Apache 7.0 1.8 2.7
MT – Arcelor Mittal 4.3 1.0 0.8
ADM – Archer-Daniels-Midland 6.9 0.9 0.3
BJS – BJ Services 7.3 1.5 1.0
BP – BP 5.7 1.4 0.5
BHI – Baker Hughes 9.1 2.3 1.4
BBY – Best Buy 10.3 2.9 0.4
BA – Boeing 9.2 4.7 0.6
BYD – Boyd Gaming 12.2 0.5 1.6
CBS – CBS Corp 7.0 0.4 1.1
CI – Cigna 8.9 1.9 0.6
CVS – CVS 15.0 1.4 0.7
DVR – Cal Dive 10.6 1.7 2.1
CAJ – Canon 10.3 1.6 0.9
KMX – CarMax 25.4 1.7 0.4
CAT – Caterpillar 8.1 3.3 1.3
CX – Cemex 5.1 0.7 1.2
CRL – Charles River Labs 21.1 1.9 3.0
CVX – Chevron 8.2 2.0 0.7
CHS – Chico’s 34.5 0.9 0.4
CBK – Christopher & Banks 18.0 1.1 0.3
XEC – Cimarex Energy 6.0 1.0 2.0
COH – Coach 9.4 4.8 2.1
COP – ConocoPhillips 5.9 1.1 0.6
GLW – Corning 7.8 1.7 3.3
DE – Deere & Co 7.7 2.2 1.4
DVN – Devon Energy 8.5 1.6 2.8
DFS – Discover Financial Services 11.8 0.9 NM
EMC – EMC Corp 13.9 1.9 1.5
FIS – Fidelity Info Services 9.3 0.9 1.4
FRX – Forest Labs 8.0 2.1 1.6
FDP – Fresh Del Monte Produce 7.0 0.9 0.5
FTO – Frontier Oil 4.9 1.4 0.3
GD – General Dynamics 11.4 2.2 0.9
GE – General Electric 10.9 1.8 4.2
GNA – Gerdau AmeriSteel 4.4 0.9 0.8
GSK – Glaxosmithkline 12.7 8.3 3.1
HAL – Halliburton 9.0 3.1 1.5
HES – Hess Corp 9.1 2.1 0.7
HPQ – Hewlett-Packard 12.7 2.7 0.9
IR – Ingersoll-Rand 6.3 0.8 1.4
IBM – IBM 12.4 5.0 1.6
IFF – International Flavor & Frag 14.1 4.6 1.7
KG – King Pharmaceuticals 15.4 0.8 0.7
L – Loews Corp 6.6 0.9 0.6
MAN – Manpower 7.5 1.0 0.2
MRO – Marathon Oil 7.4 1.3 0.5
MDR – McDermott International 7.3 3.1 0.6
MCK – McKesson 13.1 2.2 0.1
MRK – Merck 13.2 3.4 2.6
MCO – Moody’s 14.0 NM 4.2
MOT – Motorola 16.2 1.0 0.4
MUR – Murphy Oil 7.2 1.7 0.4
NYX – NYSE Euronext 10.0 0.9 2.1
NBR – Nabors Industries 6.5 1.2 1.8
NOV – National Oilwell Varco 8.7 1.5 1.5
NWS.A – News Corp 7.4 1.0 1.1
NE – Noble Corp 6.3 2.1 3.2
NUE – Nucor 5.7 1.4 0.6
OXY – Occidental Petroleum 7.1 2.0 2.2
PBY – Pep Boys 19.8 0.7 0.3
PCZ – Petro-Canada 3.8 1.0 0.7
PBR – Petrobras 14.7 2.6 1.9
PLA – Playboy NM 0.6 0.6
PKX – POSCO NM NM 1.0
PCP – Precision Castparts 9.0 2.3 1.4
PRU – Prudential Financial 10.0 1.1 0.9
RTN – Raytheon 13.0 1.8 1.0
RSC – REX Stores 5.1 0.4 0.4
COL – Rockwell Collins 10.6 4.4 1.6
RDC – Rowan Companies 5.2 1.1 1.4
SWY – Safeway 10.5 1.4 0.4
BID – Sothebys 5.9 1.6 1.6
SUN – Sunoco 14.2 1.5 0.1
SVU – SUPERVALU 7.3 0.7 0.3
TGT – Target 12.6 2.5 0.8
TTM – Tata Motors 6.0 1.5 0.6
TEX – Terex Corp 3.7 0.9 0.3
TXT – Textron 6.1 1.7 1.1
MMM – 3M 12.1 3.6 1.9
TWX – Time Warner 11.1 0.7 1.7
TSN – Tyson Foods 60.0 0.9 0.3
USG – USG Corp NM 1.0 0.7
UL – Unilever 14.5 1.2 0.6
VIA.B – Viacom 8.1 2.1 1.6
WAG – Walgreen 12.7 2.2 0.5
WLP – WellPoint 7.7 1.1 0.4
WSM – Williams-Sonoma 13.5 1.3 0.4
WYE – Wyeth 11.1 2.6 2.1
YUM – Yum! Brands 15.0 25.1 1.6
ZMH – Zimmer Holdings 17.1 2.4 3.3
ACMR – AC Moore 14.8 0.6 0.2
AAPL – Apple 19.2 4.4 2.1
BAMM – Books-A-Million 5.4 0.8 0.2
CAKE – Cheesecake Factory 12.9 1.6 0.7
CTXS – Citrix Systems 20.1 2.1 2.3
DELL – Dell 11.1 10.6 0.4
EBAY – eBay 47.0 2.2 2.4
ERTS – Electronic Arts 13.6 2.4 1.9
EXPE – Expedia 13.2 0.8 1.3
FWLT – Foster Wheeler 8.3 5.1 0.6
LOJN – LoJack 8.4 0.8 0.3
MNST – Monster Worldwide 14.1 1.5 0.9
FLWS – 1-800-Flowers.com 15.2 1.4 0.4
OXPS – optionsXpress 10.2 4.3 1.5
RICK – Rick’s Cabaret 7.5 1.2 1.9
RMCF – Rocky Mountain Chocolate 10.3 4.3 1.6
SIGM – Sigma Designs 6.4 1.1 0.8
SPLS – Staples 14.3 2.4 0.9
SBUX – Starbucks 20.7 4.0 1.0
WFMI – Whole Foods 17.1 1.7 0.4
Obviously this is not an exhaustive list of all cheap stocks – these are just the ones that hit new 52 week lows today that I noticed.
Thursday, September 11, 2008
It Was Time for a Miss
In case you miss the rest of what I say below, I want to point out that I am calling this "time to buy".
No one is always right. I was very wrong on the Fannie preferred. I thought it was “money good” and it looks like it may well not be. As you are certainly aware the government socialized Fannie and Freddie over the past weekend and eliminated future dividends on the preferred stock. There may be some value in the securities at these prices [assuming 1) housing recovers 2) the government doesn’t run these into the ground and 3) congress doesn’t eliminate the outstanding equity in the future], however the risk is great enough that I would not recommend the preferred stock (and if you own Fannie or Freddie common and want to hold on for the potential gain if the above 3 points are true you should sell, take the tax loss and buy the preferred in the same sized investment rather than holding the common – there’s a far higher chance of the preferred being worth something than the common). At least the government gave us the Q3 dividend on the preferred.
Also I recommended two oil companies which did poorly as oil fell and hedge funds that owned the oil producers have been forced to sell.
My outlook is this: I think this is time to buy. I expect that the July lows will in fact hold for the market and with Fannie/Freddie resolved (and I expect Lehman will be resolved similarly by Monday) there should be a lot less uncertainty. Furthermore I believe that the government took over Fannie and Freddie for the purpose of lowering mortgage rates, which has in fact happened significantly this week. If financing rates are cheaper home prices don’t seem as high and I think this will aid the housing recovery which I see occurring sometime in late Q1 or Q2 of next year (as mentioned here previously). If housing can stabilize this is very good for the stock market. Generally I do not see a global recession in the offing, which most market participants are betting on. If I’m right performance should be good relative to the market for a while, while if I’m wrong it will be poor. Generally I like financials, industrials, and energy companies currently.
Since I now have so much credibility in recommending beaten down financial preferred shares, I am going to recommend WM-PK. This is a preferred stock issued by Washington Mutual. I believe that the rumors of WaMu’s demise have been greatly exaggerated. The stock is somewhat cheap, but I don’t think after the massively diluted capital raise earlier this year that there will be a terrific return for common shareholders anytime soon. However with capital levels that are some of the highest in the industry and fairly solid reserves against losses their current condition is not bad. The concern is that their holdings of option adjustable rate mortgages will sour in the future when those negative amortization minimum payments turn into fully amortizing regular payments (i.e. when people stop being allowed to make a token payment and have to pay their full mortgage principal and interest installments). However, as mentioned above the government is lowering interest rates for mortgages – this has the distinct possibility of causing a turning point in the housing market. And those option ARMs don’t convert to amortizing payments soon for the most part – so there’s plenty of time for recovery in housing. Finally WaMu could always renegotiate the loans and allow for smaller payments from the borrowers which could reduce defaults if markets remain bad.
Energy: OPEC seems to be saying that they will defend $100/barrel oil prices which should be good for oil companies as their shares seem to have priced in much lower levels. Also global demand for commodities has dried up in the recent past as China had loaded up prior to the Olympics and then stopped buying, but I see this reversing as the Chinese pollution controls are returned to normal and the Olympics inventory is burned through. Probably positive for coal, copper, and oil, but I’m not very good at predicting commodity price moves.
Since the last update the recommended stocks [MMM (-1.37%), UNH (-1.12%), PETS (13.62%), APA (-5.94%), OXY (-16.28%), SNY (0.60%), DPS (5.87%), AEO (19.64%), ADSK (-6.28%), AIB (-5.55%), and FNM-PS (-71.02%)] averaged a loss of 6.17%, underperforming the S&P 500 [-2.09%] by 4.07%. Since inception on 7/31/2007 the recommendations have gained 19.87%, outperforming the S&P 500 [-12.10%] by 31.97%.
I recommend at this time: MMM, UNH, PETS, APA, DPS, ADSK, AIB, PBR, TEX, and WM-PK.
Many happy returns.
No one is always right. I was very wrong on the Fannie preferred. I thought it was “money good” and it looks like it may well not be. As you are certainly aware the government socialized Fannie and Freddie over the past weekend and eliminated future dividends on the preferred stock. There may be some value in the securities at these prices [assuming 1) housing recovers 2) the government doesn’t run these into the ground and 3) congress doesn’t eliminate the outstanding equity in the future], however the risk is great enough that I would not recommend the preferred stock (and if you own Fannie or Freddie common and want to hold on for the potential gain if the above 3 points are true you should sell, take the tax loss and buy the preferred in the same sized investment rather than holding the common – there’s a far higher chance of the preferred being worth something than the common). At least the government gave us the Q3 dividend on the preferred.
Also I recommended two oil companies which did poorly as oil fell and hedge funds that owned the oil producers have been forced to sell.
My outlook is this: I think this is time to buy. I expect that the July lows will in fact hold for the market and with Fannie/Freddie resolved (and I expect Lehman will be resolved similarly by Monday) there should be a lot less uncertainty. Furthermore I believe that the government took over Fannie and Freddie for the purpose of lowering mortgage rates, which has in fact happened significantly this week. If financing rates are cheaper home prices don’t seem as high and I think this will aid the housing recovery which I see occurring sometime in late Q1 or Q2 of next year (as mentioned here previously). If housing can stabilize this is very good for the stock market. Generally I do not see a global recession in the offing, which most market participants are betting on. If I’m right performance should be good relative to the market for a while, while if I’m wrong it will be poor. Generally I like financials, industrials, and energy companies currently.
Since I now have so much credibility in recommending beaten down financial preferred shares, I am going to recommend WM-PK. This is a preferred stock issued by Washington Mutual. I believe that the rumors of WaMu’s demise have been greatly exaggerated. The stock is somewhat cheap, but I don’t think after the massively diluted capital raise earlier this year that there will be a terrific return for common shareholders anytime soon. However with capital levels that are some of the highest in the industry and fairly solid reserves against losses their current condition is not bad. The concern is that their holdings of option adjustable rate mortgages will sour in the future when those negative amortization minimum payments turn into fully amortizing regular payments (i.e. when people stop being allowed to make a token payment and have to pay their full mortgage principal and interest installments). However, as mentioned above the government is lowering interest rates for mortgages – this has the distinct possibility of causing a turning point in the housing market. And those option ARMs don’t convert to amortizing payments soon for the most part – so there’s plenty of time for recovery in housing. Finally WaMu could always renegotiate the loans and allow for smaller payments from the borrowers which could reduce defaults if markets remain bad.
Energy: OPEC seems to be saying that they will defend $100/barrel oil prices which should be good for oil companies as their shares seem to have priced in much lower levels. Also global demand for commodities has dried up in the recent past as China had loaded up prior to the Olympics and then stopped buying, but I see this reversing as the Chinese pollution controls are returned to normal and the Olympics inventory is burned through. Probably positive for coal, copper, and oil, but I’m not very good at predicting commodity price moves.
Since the last update the recommended stocks [MMM (-1.37%), UNH (-1.12%), PETS (13.62%), APA (-5.94%), OXY (-16.28%), SNY (0.60%), DPS (5.87%), AEO (19.64%), ADSK (-6.28%), AIB (-5.55%), and FNM-PS (-71.02%)] averaged a loss of 6.17%, underperforming the S&P 500 [-2.09%] by 4.07%. Since inception on 7/31/2007 the recommendations have gained 19.87%, outperforming the S&P 500 [-12.10%] by 31.97%.
I recommend at this time: MMM, UNH, PETS, APA, DPS, ADSK, AIB, PBR, TEX, and WM-PK.
Many happy returns.
Thursday, August 21, 2008
Where's the Bear?
The market continued down until it bottomed on 7/15/2008 at 1,200.44. In my prior estimations, this could be the top of the range for the “bottom”. In other words, there’s a risk we may see a new low sometime over the next several months. However, I expect that the market is in a rally, and will continue for some time (how long or how high I do not know).
Specifically I want to comment on Fannie Mae and Freddie Mac. I’ve posted about this before so I won’t rehash, but suffice it to say I expect that the preferred securities are “money good”, and so I will recommend them here. In order to not skew my recommendations I will only recommend one, and I choose Fannie over Freddie. Why? Because Fannie is in a better capital position than Freddie and if things get really bad for one and not the other, Freddie will be the worse. The ticker on Yahoo for the liquid issue of preferreds from Fannie is FNM-PS, but it is known on some sites as FNMpS and others still as FNMPRS. Most of the other preferred issues from the agencies have essentially no liquidity and offer huge bid/ask spreads, so I would avoid them.
I expect that FNM-PS will be volatile, and it will not surprise me to see continued double digit percentage increases and drops on single days. It would also not phase me at this price if Fannie did not declare the dividend on their preferred – the only concern I have is nationalization wherein the preferred is wiped out, which I don’t expect, and have posted reasons why here prior.
Since the last update the recommended stocks [MMM (-0.66%), UNH (-0.49%), JNJ (+1.18%), PEP (+1.27%), BBY (+7.65%), BDK (-1.34%), PETS (-6.85%), JOSB (+13.11%), and WNR (+20.15%)] averaged a gain of 3.78%, outperforming the S&P 500 [+0.34%] by 3.44%.
I recommend at this time MMM, UNH, PETS, APA, OXY, SNY, DPS, AEO, ADSK, AIB, and FNM-PS.
Specifically I want to comment on Fannie Mae and Freddie Mac. I’ve posted about this before so I won’t rehash, but suffice it to say I expect that the preferred securities are “money good”, and so I will recommend them here. In order to not skew my recommendations I will only recommend one, and I choose Fannie over Freddie. Why? Because Fannie is in a better capital position than Freddie and if things get really bad for one and not the other, Freddie will be the worse. The ticker on Yahoo for the liquid issue of preferreds from Fannie is FNM-PS, but it is known on some sites as FNMpS and others still as FNMPRS. Most of the other preferred issues from the agencies have essentially no liquidity and offer huge bid/ask spreads, so I would avoid them.
I expect that FNM-PS will be volatile, and it will not surprise me to see continued double digit percentage increases and drops on single days. It would also not phase me at this price if Fannie did not declare the dividend on their preferred – the only concern I have is nationalization wherein the preferred is wiped out, which I don’t expect, and have posted reasons why here prior.
Since the last update the recommended stocks [MMM (-0.66%), UNH (-0.49%), JNJ (+1.18%), PEP (+1.27%), BBY (+7.65%), BDK (-1.34%), PETS (-6.85%), JOSB (+13.11%), and WNR (+20.15%)] averaged a gain of 3.78%, outperforming the S&P 500 [+0.34%] by 3.44%.
I recommend at this time MMM, UNH, PETS, APA, OXY, SNY, DPS, AEO, ADSK, AIB, and FNM-PS.
Tuesday, August 05, 2008
Changes
So only a few days into year 2 and I am already making changes. Most notably I am dropping EWBC from my recommendations as it has reached 80% of what I believe it is worth and has risen too fast. Since June 27th when I first recommended EWBC here it has risen 104% - which given that this increase has occurred in a little over a month makes me comfortable with selling – for now.
I’m also going to again recommend WNR – an oil refiner. This was disastrous last year and probably will be again, however with oil having already fallen precipitously (however I do not believe oil will continue to fall forever) and gasoline remaining relatively stable the refiners should at least have a shot at earning a profit. WNR is risky in that they may decide to dilute shareholders by raising additional capital, which is how this investment may not work.
Also I’m adding JOSB – Jos A Banks which is an extremely well managed and cheap retailer of men’s dress clothes.
Since the last update the recommended stocks [EWBC (+23.62%), MMM (+2.12%), UNH (+8.44%), JNJ (+2.89%), PEP (+2.94%), BBY (+3.70%), BDK (+3.40%), PETS (+2.76%)] averaged a gain of 6.23%, outperforming the S&P 500 [+1.39%] by 4.84%.
I recommend at this time MMM, UNH, JNJ, PEP, BBY, BDK, PETS, JOSB, and WNR.
I’m also going to again recommend WNR – an oil refiner. This was disastrous last year and probably will be again, however with oil having already fallen precipitously (however I do not believe oil will continue to fall forever) and gasoline remaining relatively stable the refiners should at least have a shot at earning a profit. WNR is risky in that they may decide to dilute shareholders by raising additional capital, which is how this investment may not work.
Also I’m adding JOSB – Jos A Banks which is an extremely well managed and cheap retailer of men’s dress clothes.
Since the last update the recommended stocks [EWBC (+23.62%), MMM (+2.12%), UNH (+8.44%), JNJ (+2.89%), PEP (+2.94%), BBY (+3.70%), BDK (+3.40%), PETS (+2.76%)] averaged a gain of 6.23%, outperforming the S&P 500 [+1.39%] by 4.84%.
I recommend at this time MMM, UNH, JNJ, PEP, BBY, BDK, PETS, JOSB, and WNR.
Thursday, July 31, 2008
First Year
I can promise one thing – there will never be another year that I will achieve as much positive relative performance to the S&P 500 as this first year. So the best is now safely behind us.
I am not changing the current recommendations, but did want to provide an update so that there will be a record of the annual return. Over the period since the last update the recommended stocks [EWBC (+11.94%), MMM (+2.42%), UNH (+17.83%), JNJ (+2.03%), PEP (+3.27%), BBY (+3.55%), BDK (+5.91%), PETS (+4.17%)] averaged a gain of 6.39%, outperforming the S&P 500 [+0.59%] by 5.80%.
Over the first year my recommendations returned +15.88%, compared to the S&P 500’s -11.11% for total outperformance of 26.99%. My goal continues to be outperforming the market by 1.5% per quarter, and these extreme results likely will never be repeated.
I also would like to point out that these recommendations are only for your thoughtful consideration and that it would be imprudent for any person to blindly copy my recommendations – read at your own risk.
Send me an email if you’d like at Mark.Hanna79@gmail.com. Many happy returns.
I am not changing the current recommendations, but did want to provide an update so that there will be a record of the annual return. Over the period since the last update the recommended stocks [EWBC (+11.94%), MMM (+2.42%), UNH (+17.83%), JNJ (+2.03%), PEP (+3.27%), BBY (+3.55%), BDK (+5.91%), PETS (+4.17%)] averaged a gain of 6.39%, outperforming the S&P 500 [+0.59%] by 5.80%.
Over the first year my recommendations returned +15.88%, compared to the S&P 500’s -11.11% for total outperformance of 26.99%. My goal continues to be outperforming the market by 1.5% per quarter, and these extreme results likely will never be repeated.
I also would like to point out that these recommendations are only for your thoughtful consideration and that it would be imprudent for any person to blindly copy my recommendations – read at your own risk.
Send me an email if you’d like at Mark.Hanna79@gmail.com. Many happy returns.
Monday, July 21, 2008
How's the Water?
Well I’ve been on a roll. I guess that means it’s time for a miss. I’m going to predict that the market heads lower until we bottom in September/October/November (sound familiar?).
“This sure feels like a recession” – even though the numbers haven’t borne witness to it. Economists in one recent poll (http://online.wsj.com/article/SB121660918668269545.html) seemed to see positive GDP growth in the second half of 2008 – with only 10% forecasting a contraction (recession). Stock prices have gotten interesting and eventually it pays to bite the bullet and buy in spite of bad news and a gloomy outlook. It’s time to dip your toes in the water, but not yet dive in. Generally when a recession is confirmed (headlines etc) then it is time to buy. This will likely not happen until October/November at the soonest.
In case it’s gone unnoticed, I prefer to buy what no one else likes – the stocks that are cheap and don’t have to produce huge growth and beat estimates in order to be a profitable investment. Chasing ever higher estimates is difficult – not going out of business is easy. While tech stocks have not gotten to the “no brainer” price yet, they’re heading that way fast.
This market is perfect for loading up on your favorites. To beat a dead horse again, think of this as a sale – 20% off – but there’s a lot of rubbish in this rummage sale. If you buy great businesses then you can get a terrific bargain; if you purchase something that wears out or has problems with its design – then the bargain you thought you were getting wasn’t one at all.
I am a believer that quality is the way to go when it comes to buying companies – and this is a good time to reiterate this – if the business isn’t the highest quality then this is probably not the right time, or price, to buy.
My prior recommendations [EWBC (+47.57%), MMM (-1.12%), UNH (-8.38%), JNJ (+5.57%), UYG (-1.21%), XHB (-1.97%), DNA (+29.10%)] averaged a gain of 9.94%, which outperformed the S&P 500 (-1.44%) by a whopping 11.38%. I recommend at this time EWBC, MMM, UNH, JNJ, PEP, BBY, BDK, PETS.
Overall record since I began posting recommendations on this blog on 7/31/07 has been +8.92%, compared to the S&P 500's -13.44%. My goal continues to be outperforming the market by 1.5% per quarter, so don’t expect that the next year will look as good.
Some other businesses that you might consider putting on your shopping list:
PG – Proctor & Gamble
CSCO – Cisco
KO – Coca Cola
AMGN – Amgen
LLY – Eli Lilly
BAC – Bank of America
JPM – JP Morgan
TGT – Target
FDX – FedEx
ODP – Office Depot
SPLS – Staples
SBUX – Starbucks
ADSK – Autodesk
CVH – Coventry
FIS – Fidelity Information Systems
JOSB – Jos A. Bank
LOJN – LoJack
RMCF – Rocky Mountain Chocolate Factory
“This sure feels like a recession” – even though the numbers haven’t borne witness to it. Economists in one recent poll (http://online.wsj.com/article/SB121660918668269545.html) seemed to see positive GDP growth in the second half of 2008 – with only 10% forecasting a contraction (recession). Stock prices have gotten interesting and eventually it pays to bite the bullet and buy in spite of bad news and a gloomy outlook. It’s time to dip your toes in the water, but not yet dive in. Generally when a recession is confirmed (headlines etc) then it is time to buy. This will likely not happen until October/November at the soonest.
In case it’s gone unnoticed, I prefer to buy what no one else likes – the stocks that are cheap and don’t have to produce huge growth and beat estimates in order to be a profitable investment. Chasing ever higher estimates is difficult – not going out of business is easy. While tech stocks have not gotten to the “no brainer” price yet, they’re heading that way fast.
This market is perfect for loading up on your favorites. To beat a dead horse again, think of this as a sale – 20% off – but there’s a lot of rubbish in this rummage sale. If you buy great businesses then you can get a terrific bargain; if you purchase something that wears out or has problems with its design – then the bargain you thought you were getting wasn’t one at all.
I am a believer that quality is the way to go when it comes to buying companies – and this is a good time to reiterate this – if the business isn’t the highest quality then this is probably not the right time, or price, to buy.
My prior recommendations [EWBC (+47.57%), MMM (-1.12%), UNH (-8.38%), JNJ (+5.57%), UYG (-1.21%), XHB (-1.97%), DNA (+29.10%)] averaged a gain of 9.94%, which outperformed the S&P 500 (-1.44%) by a whopping 11.38%. I recommend at this time EWBC, MMM, UNH, JNJ, PEP, BBY, BDK, PETS.
Overall record since I began posting recommendations on this blog on 7/31/07 has been +8.92%, compared to the S&P 500's -13.44%. My goal continues to be outperforming the market by 1.5% per quarter, so don’t expect that the next year will look as good.
Some other businesses that you might consider putting on your shopping list:
PG – Proctor & Gamble
CSCO – Cisco
KO – Coca Cola
AMGN – Amgen
LLY – Eli Lilly
BAC – Bank of America
JPM – JP Morgan
TGT – Target
FDX – FedEx
ODP – Office Depot
SPLS – Staples
SBUX – Starbucks
ADSK – Autodesk
CVH – Coventry
FIS – Fidelity Information Systems
JOSB – Jos A. Bank
LOJN – LoJack
RMCF – Rocky Mountain Chocolate Factory
Saturday, July 12, 2008
Crunch Time
Thus far into the credit crunch, we have generally been able to cope with each crisis through a combination of two methods: existing plans [IndyMac and Subprime Lenders] and negotiated solutions [Bear Stearns and Countrywide]. We have now come to the climax of the story – Fannie and Freddie.
The world is scared of Fannie Mae and Freddie Mac – and for good reason. These Government Sponsored Enterprises (GSEs) have significant problems. They are financial guarantee companies, and like the other financial guarantee companies [the monolines ABK, MBI and the mortgage insurers MTG, PMI, RDN, TGIC], they are being thought of as likely to default. The GSEs have negative book value if their portfolios were marked to market – in other words in a timely liquidation scenario there would currently be a loss for debtholders. This is significant in that FNM and FRE have been considered “backed” by the federal government, which is why they have been assigned AAA credit ratings, even though they would not be worthy of such ratings on their own.
It is common thought that Fannie and Freddie really are “too big to fail” – and not just for the United States. Many foreign central banks hold much of their dollar denominated reserves in Fannie and Freddie paper. Unfortunately neither existing plans [bankruptcy] nor a negotiated solution [sale of the companies] would be a viable solution, as the GSEs are too large for a sale and too important for bankruptcy.
There are really only two options if we recognize them as being too big to fail (and therefore rule out bankruptcy) and also assume that they will need assistance:
1) The US government explicitly backs the GSEs debt
2) The US government injects additional capital into FNM and FRE
The first option cannot happen because this would likely cause the national debt to double, and the country would probably lose its AAA credit rating [per Moody’s early 2008]. Therefore the second option is the only logical outcome [also Secretary Paulson has in the past indicated that the government will not back Fannie or Freddie debt].
The capital injection could be completed in a number of different manners – junior (subordinated) debt, preferred stock, or common stock. The public feeling amongst our financial system big wigs is that, to avoid moral hazard, the common shareholders of Fannie and Freddie should pay the consequences of having invested in a GSE and lose the majority of their investment. A common stock capital injection would put the government’s claim at the same level as existing shareholders – moral hazard. Subordinated debt probably would have the effect of propping up the stock price. On the other hand a convertible preferred issue with highly dilutive terms would punish the common shareholders and provide the capital that FNM and FRE are thought to so desperately need.
There are models in past governmental bailouts of what works, and what doesn’t:
Penn Central Railroad 1970 – Penn Central was a failing conglomerate making ill-advised purchases of money losing non-railroad companies in a scheme to borrow ever more money for real estate investments. Eventually the corporation approached the government for $300 million in aid. Nixon approved the package ($750 million for railroads, of which $300 was for Penn Central) but congress did not approve the aid. Penn Central declared bankruptcy in June of 1970 leading to the creation of Conrail and Amtrak.
Lockheed 1971 - $250 million in federal loan guarantees.
New York City 1975 – Billions lent by federal government to the city at a rate of the one year treasury plus 1% on a term of 1 year with annual renewals.
Chrysler 1979 – 1.5 billion in federal loan guarantees, and creditors forced to renegotiate debt at 30 cents on the dollar. Deal allowed Treasury to participate in upside in the stock, and eventually the government made money. Recommended reading: http://www.time.com/time/magazine/article/0,9171,947356,00.html
http://www.heritage.org/research/EnergyandEnvironment/bg276.cfm
http://www.cato.org/pubs/pas/PA00Aes.html
Savings and Loan Intuitions 1980 to 1989 – The rules were changed for Savings and Loans such that insolvent institutions were not identified and shut down quickly by regulators, but rather hidden and allowed to remain open. Capital requirements were lowered, and fake capital (called “capital certificates”) were issued to troubled savings and loans.
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
http://www.fdic.gov/bank/historical/s&l/
Airline bailout 2001 – Playing the “terrorism killed our industry” card, the airlines received $10 billion in loan guarantees and $5 billion in cash from Congress.
I expect that the final solution to the bailout of Fannie and Freddie will have multiple prongs: 1) The US Government will inject over half of the needed capital through the use of convertible preferreds 2) The US Government will lean on other central banks to inject most of the remaining needed capital, probably through the use of subordinated debt 3) The Fed will ensure liquidity for the GSEs in the event they cannot roll their debt by providing access to the discount window [already known to be the case] 4) Fannie and Freddie will raise additional capital through the issuance of debt and preferred stock in the public markets. Through the provision of additional capital and liquidity Fannie and Freddie will be allowed to remain open for quite some time, and if the housing market turns in 2009, as I expect, the government will again ultimately make money on their bailout.
The world is scared of Fannie Mae and Freddie Mac – and for good reason. These Government Sponsored Enterprises (GSEs) have significant problems. They are financial guarantee companies, and like the other financial guarantee companies [the monolines ABK, MBI and the mortgage insurers MTG, PMI, RDN, TGIC], they are being thought of as likely to default. The GSEs have negative book value if their portfolios were marked to market – in other words in a timely liquidation scenario there would currently be a loss for debtholders. This is significant in that FNM and FRE have been considered “backed” by the federal government, which is why they have been assigned AAA credit ratings, even though they would not be worthy of such ratings on their own.
It is common thought that Fannie and Freddie really are “too big to fail” – and not just for the United States. Many foreign central banks hold much of their dollar denominated reserves in Fannie and Freddie paper. Unfortunately neither existing plans [bankruptcy] nor a negotiated solution [sale of the companies] would be a viable solution, as the GSEs are too large for a sale and too important for bankruptcy.
There are really only two options if we recognize them as being too big to fail (and therefore rule out bankruptcy) and also assume that they will need assistance:
1) The US government explicitly backs the GSEs debt
2) The US government injects additional capital into FNM and FRE
The first option cannot happen because this would likely cause the national debt to double, and the country would probably lose its AAA credit rating [per Moody’s early 2008]. Therefore the second option is the only logical outcome [also Secretary Paulson has in the past indicated that the government will not back Fannie or Freddie debt].
The capital injection could be completed in a number of different manners – junior (subordinated) debt, preferred stock, or common stock. The public feeling amongst our financial system big wigs is that, to avoid moral hazard, the common shareholders of Fannie and Freddie should pay the consequences of having invested in a GSE and lose the majority of their investment. A common stock capital injection would put the government’s claim at the same level as existing shareholders – moral hazard. Subordinated debt probably would have the effect of propping up the stock price. On the other hand a convertible preferred issue with highly dilutive terms would punish the common shareholders and provide the capital that FNM and FRE are thought to so desperately need.
There are models in past governmental bailouts of what works, and what doesn’t:
Penn Central Railroad 1970 – Penn Central was a failing conglomerate making ill-advised purchases of money losing non-railroad companies in a scheme to borrow ever more money for real estate investments. Eventually the corporation approached the government for $300 million in aid. Nixon approved the package ($750 million for railroads, of which $300 was for Penn Central) but congress did not approve the aid. Penn Central declared bankruptcy in June of 1970 leading to the creation of Conrail and Amtrak.
Lockheed 1971 - $250 million in federal loan guarantees.
New York City 1975 – Billions lent by federal government to the city at a rate of the one year treasury plus 1% on a term of 1 year with annual renewals.
Chrysler 1979 – 1.5 billion in federal loan guarantees, and creditors forced to renegotiate debt at 30 cents on the dollar. Deal allowed Treasury to participate in upside in the stock, and eventually the government made money. Recommended reading: http://www.time.com/time/magazine/article/0,9171,947356,00.html
http://www.heritage.org/research/EnergyandEnvironment/bg276.cfm
http://www.cato.org/pubs/pas/PA00Aes.html
Savings and Loan Intuitions 1980 to 1989 – The rules were changed for Savings and Loans such that insolvent institutions were not identified and shut down quickly by regulators, but rather hidden and allowed to remain open. Capital requirements were lowered, and fake capital (called “capital certificates”) were issued to troubled savings and loans.
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
http://www.fdic.gov/bank/historical/s&l/
Airline bailout 2001 – Playing the “terrorism killed our industry” card, the airlines received $10 billion in loan guarantees and $5 billion in cash from Congress.
I expect that the final solution to the bailout of Fannie and Freddie will have multiple prongs: 1) The US Government will inject over half of the needed capital through the use of convertible preferreds 2) The US Government will lean on other central banks to inject most of the remaining needed capital, probably through the use of subordinated debt 3) The Fed will ensure liquidity for the GSEs in the event they cannot roll their debt by providing access to the discount window [already known to be the case] 4) Fannie and Freddie will raise additional capital through the issuance of debt and preferred stock in the public markets. Through the provision of additional capital and liquidity Fannie and Freddie will be allowed to remain open for quite some time, and if the housing market turns in 2009, as I expect, the government will again ultimately make money on their bailout.
Friday, June 27, 2008
The Bear Takes Hold
Sometimes it's not fun to be right. The market has been terrible. Unfortunately two of my picks in my last update has also done terrible [PG should do well in the long run, but WNR was a mistake - only buy it if you think oil has peaked which is difficult to predict]. The good news is that financials are near the bottom [SKF, the double short Financial ETF did terrific since my last post, and should do terrible as Financials recover some of the ground they lost]. My view is that house prices probably will bottom around the end of Q1 2009. Traditionally this would mean that the bottom for banks and builders would be around the end of Q3 2008, or September/October/November. However banks have fallen so far (as have homebuilders, just not as recently) that it's likely that the bad news is priced in at this point.
Overall the market [S&P 500] has fallen 6.64% since my prior post, but had rallied in the period in between. I still believe that the S&P will probably fall about 15% from the level of my prior post which would be 1,164 [8.9% from here]. Overall the odds are that the S&P 500 should fall somewhere in the 5% to 15% range from here.
What has happened since Q3 of 2007 is that corporate earnings have been dropping, and financials have been pulling down the market. If history rhymes then what should happen next is that financials will bottom out, yet the S&P will continue to fall, accelerating and eventually dragging financials back towards their lows again.
There are a good number of regional banks today that are very cheap on a price to book basis. If their problems don't multiply and accelerate, long term investors will do very well to buy them here.
Overall the economy is either in a recession or on the brink of one. I'm a believer that looking back we'll say that Q2 2008 was the start of the recession and that it ended in Q1 2009 [plus or minus a quarter]. Typically the market bottoms 6 months before the recession ends which should put the bottom sometime in August to November, probably around September.
When we do have a bottom in the S&P it should be a terrific buying opportunity as the problems that are here are not going to be here forever.
My prior recommendations [SKF (+49.27%), JNJ (-1.91%), PG (-13.67%), BUD (+29.41%), FMX (+3.94%), WNR (-14.44%), DNA (-8.44%)] averaged a gain of 6.31%, which outperformed the S&P 500 by a whopping 12.95%. I recommend at this time EWBC, MMM, UNH, JNJ, UYG, XHB, DNA.
Overall record since I began posting recommendations on this blog on 7/31/07 has been -0.93%, compared to the S&P 500's -12.18%.
Overall the market [S&P 500] has fallen 6.64% since my prior post, but had rallied in the period in between. I still believe that the S&P will probably fall about 15% from the level of my prior post which would be 1,164 [8.9% from here]. Overall the odds are that the S&P 500 should fall somewhere in the 5% to 15% range from here.
What has happened since Q3 of 2007 is that corporate earnings have been dropping, and financials have been pulling down the market. If history rhymes then what should happen next is that financials will bottom out, yet the S&P will continue to fall, accelerating and eventually dragging financials back towards their lows again.
There are a good number of regional banks today that are very cheap on a price to book basis. If their problems don't multiply and accelerate, long term investors will do very well to buy them here.
Overall the economy is either in a recession or on the brink of one. I'm a believer that looking back we'll say that Q2 2008 was the start of the recession and that it ended in Q1 2009 [plus or minus a quarter]. Typically the market bottoms 6 months before the recession ends which should put the bottom sometime in August to November, probably around September.
When we do have a bottom in the S&P it should be a terrific buying opportunity as the problems that are here are not going to be here forever.
My prior recommendations [SKF (+49.27%), JNJ (-1.91%), PG (-13.67%), BUD (+29.41%), FMX (+3.94%), WNR (-14.44%), DNA (-8.44%)] averaged a gain of 6.31%, which outperformed the S&P 500 by a whopping 12.95%. I recommend at this time EWBC, MMM, UNH, JNJ, UYG, XHB, DNA.
Overall record since I began posting recommendations on this blog on 7/31/07 has been -0.93%, compared to the S&P 500's -12.18%.
Thursday, April 03, 2008
Recession On
While stocks are currently cheap, the unfortunate fact is that housing is going to get much worse, and the effects are going to be felt over a long period of time. I believe the stock market will fall for the next 4 to 12 months (let’s call it 6 months) and that we are in a bear market. If that’s all true the market should fall about 15% more from here. Stay away from financials/mortgages/real estate.
My prior recommendations [BAC (+1.18%), C (-6.52%), WB (-18.12%), BBY (-9.22%), JOSB (-6.95%), BWLD (+15.47%)] averaged a loss of 4.03%, which underperformed the S&P 500 by a whopping 6.32%. I recommend at this time SKF, JNJ, PG, BUD, FMX, WNR, DNA.
Overall record since I began posting recommendations on this blog on 7/31/07 has been -6.81%, compared to the S&P 500's -5.93%.
My prior recommendations [BAC (+1.18%), C (-6.52%), WB (-18.12%), BBY (-9.22%), JOSB (-6.95%), BWLD (+15.47%)] averaged a loss of 4.03%, which underperformed the S&P 500 by a whopping 6.32%. I recommend at this time SKF, JNJ, PG, BUD, FMX, WNR, DNA.
Overall record since I began posting recommendations on this blog on 7/31/07 has been -6.81%, compared to the S&P 500's -5.93%.
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