October 31, 2006: Classic Music FM

As per e-mail request, I am posting the best classical music station on the planet. From the UK, and available outside the EU through this website. The quality of sound is superior and the music selection superb in every respect. Best of all, NO PBS blah-blah-blah.


http://www.surfmusic.de/radio-station/classic-fm,1048.html


Enjoy.

October 30, 2006: Rules to Grow Rich?

As a follow up to yesterday's post, I will summarize the new MONEY magazine's 25 Rules to Grow Rich By. I cannot quarrel with most of them. Common sense prevails. You may wish to share this with your kids - or spouse.

Home:
1. For the best return on a home upgrade, renovate an old bathroom. The kitchen will come in second.
2. It's worth refinancing your mortgage if you can cut your interest rate by at least one point.
3. Spend no more than 21/2 times your income on a home. For a down payment,it's best to come up with at least 20%.
4. Your total household payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.
5. Never hire a roofer, driveway paver or chimney sweep who is going door to door.
Invest:
6. All else being equal, the best place to invest is a 401(k). Once you've earned the full company match, max out a Roth IRA. Afterwards put more into your 401(k) or traditional IRA.
7. To figure out what percentage of your money to put in stocks, subtract your age from 120.
8. Invest no more than 10% of your portfolio in your company stock - or any single stock.
9. The most you should pay in annual fees for a mutual fund is 1% for a large-company fund,1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.
10. Build a retirement nest egg that is 25 times the annual investment income you will need.
11. If you do not understand how an investment works, don't buy it.
Plan:
12. Save at least 10% of your gross salary.
13. Keep three months' expenses in a bank savings account or money market fund. If you have children or rely on one income, make it six months'.
14. Aim to accumulate enough money to pay for 1/3 of your children's college costs.
15. Buy enough term life insurance to cover at least five years of your salary, or as much as 10 years if you have young children or significant debts.
16. Choose the highest deductible insurance you can afford to live with to lower premiums.
17. The best credit card is a no-fee rewards card that you pay in full every month.
18. Raise your credit score by paying your bills on time and borrow no more than 30% of your available credit.
19. Anyone who calls or e-mails you asking for your social security number or any financial data is a scam artist.
Spend:
20. Buy a late-model used car and drive it until it is junk.
21. Lease a new vehicle only if you plan to replace it within two or three years.
22. Wait at least three months before buying the "latest" electronic gadget or computer.
23. Don't redeem frequent-flier miles unless you can get more than a dollar's worth of air fare or other stuff for every 100 miles you spend.
24. Buy airline tickets early. Most seats go on sale 11 months in advance.
25. Do not buy an extended warranty on electronics, except if it is a laptop and the warranty is from the manufacturer.

October 28,2006: Stocks and Defense

Two stocks, one I own and one I am going to purchase early next week, are recommended for your consideration.

Chesapeake Energy (CHK) has had a modest rally the past few weeks. Winter cometh.
I do not advocate playing this stock as a trade on a cold winter. That horse is out of the barn - if there was a horse there to begin with. This exceptionally well-managed and well respected by peers company is stockpiling assets for future profit. This stock could be a core energy holding for you, so long as management stays intact.CHK reported earnings well above street estimates recently, in spite of 2% lower production as Chesapeake capped some producing wells. CHK raised its production growth target for 2007 from 10-12% to 14-18% and 2008 to 10-14% from 5-7%.
123 operational rigs will be increased to 151 during 2007, which includes 83 CHK-owned rigs. CHK posts 157% organic reserve replacement figures from Jan-Sept. 06, CHK has a 42 YEAR PROVED RESERVE AT 06 PRODUCTION LEVELS. Still, CHK is adding to expand its shale holdings by the hundreds of acres in prime West Texas Barnett-Woodford area. Their production costs due to effective buying and hedging at held in high esteem by those in the industry. The best compliment I can make about Chesapeake Energy is this. I received a cold call from a wildcat driller (I have speculated a bit in oil/natural gas since getting a great tip from a Texan whose son attended the same service academy as mine, thus the cold call list was made). He wanted me to invest in a few ventures as a small partner. I told him I was already into gas with Chesapeake, His response was, in a Texas drawl, if you have them you don't need me.Trading about 32.75, CHK will not a home run make. It will provide you with singles, doubles and a batting championship long term.

Baker Hughes, Inc. (BHI) has been whooped, bad. Now up from its lows, I think that this stock is ready to resume ascending, gradually. Higher margins in Completions/Baker Oil Tools, higher growth rates in completions for wireline and directional drilling, plus a ramp in international growth, including a significant increase in deepwater activity are a good sign. Further share repurchase also will help raise share price. BHI has exited Iran and the Sudan but this should not impact the bottom line whatsoever. Something about bribes/extortion is in that decision, I believe. I really think that BHI could reach the 100.00 a share price by this time next year, maybe even a bit higher. I do not see any measurable downside at this time.

Aero-Defense.A stockpickers dream. L-3 Communications (LLL) reported higher than expected earnings and should continue to do superbly. Goodrich (GR),ditto.
My recommendations based upon contracts to be issued are LLL,GR,British Aerospace (BEAV), Precision Castparts (PCP) and Dyncorp (DCP). As mentioned in a previous post, I like Boeing (BA), but the sizzle has gone out of the stock at present.Hold that one.

October 23,2006: Strategic enemies and stocks

This post is going to ramble. Please indulge in patience.

It is my view that no matter who comes out ahead in the upcoming general elections, the United States will still have the same strategic enemies. China #1, the so-called Muslim cluster #2 (wherever Islam reigns supreme)which is now being grouped together by our military, Russia and the adjacent vassal states #3 and the Axis of Incompetence - my term- #4 encompassing Venezuela,Cuba and Nicarauga/Bolivia/Mexico.

Outside of China,presently in an undeclared technology and arms race to surpass the United States by 2015 and lately blinding our intelligence satellites over her terrority with lasar bursts and launching unprecedented cyber attacks on defense and economic targets in the United States and Japan, the other strategic enemies have a common purpose - to weaken the power and influence of the United States to make the world safe again for despots and the crushing agony of pseudo-communist state control. Another reason to lessen the United States is to promote anti-competitive economic policies. Simply, these strategic enemies acknowledge that they cannot compete economically with the United States on equal terms. THEY HAVE TO CHEAT. For example, intellectual property rights are nonexistent in much of the strategic enemy world. The United States is loosing hundreds of billions of dollars having intellectual property stolen. Oil is carteled, Central and South America, especially Mexico, encourage human cargo to enter the United states, exporting their economic malaise and hoping to reap the benefits of "money from the states" to their impoverished families living under corruption or worse. Russia is swiftly going down the road to what is called "communist light". If you are against Putin and have a voice, it will be silenced.Capitalism, Russian style, is fine - if you pay off the right government ministers and serve the interests of the State.

You will notice I did not include North Korea in the above paragragh. They are but a puppet and proxy for China. Make no mistake. Once the United States closed most of the immense, high quality United States currency counterfeiting operation of North Korea and assisted by China in 2003, North Korea became irrelevant. The nuclear issue is more a product of China and Iran than North Korea. The United States military does recognize that the present leader of North Korea is mentally rancid, and thus had to prepare a basic anti-missile shield which is now 100% operational in Alaska and California and in the air on special 747 laser-equipped aircraft, just in case.

What does this do for stocks?

I think that it does present opportunities for the astute investor. I believe that Aero-defense will play a dominant role over the next several years as our ground forces pull back significantly from the Middle East (see previous posts on this opinion). Please look at my past blogs on Aero-defense stocks for names and scenarios. As the United States begins to appease rather than confront those wanting to weaken our democracy and economic powerhouse, I think that the Claymore BRIC (Brazil, Russian, China and India) ETF will do very well and also mitigate the risk of individual stocks and, perhaps, an economic failure or two in the aforementioned countries.I have previous posts on this fund and bless it. If India seems a bit under-represented in the BRIC fund, I recommend purchasing shares in Icici Bank (IBN), which has performed under expectations but should do very, very well long term. The natural resources of the Middle East and South America will be compensated for by additional drilling in previously "untouchable" areas off our coasts and through shale and oil sands, and, perhaps, coal and synfuels. The public will demand fuel, and caribou be damned at that stage. See my previous posts for some ideas in oil, including Suncorp (SU), PEO, etc.

That said, I look for the bull market to continue through 2007. Just be selective on your stock/ETF picking and be well versed on world events, which means reading, listening and blogging unbiased news (that pretty much excludes all mainstream media)in lieu of pure stock research reports. Political events will be driving the next leg of the market and gridlock in Congress will be a good thing.

October 20, 2006: NO to steel

There has been a lot of hype in regards to the steel industry of late. Even an ETF is available for tracking the makers of this oft imitated but never duplicated metals sector. In my opinion, the stock of steel producers is as anything but strong and resistent to corrosion.

According to the Media Service Center Institute (MSCI), steel service inventories totaled 3.8 months of supply as of the end of September vrs. 3.1 months as of the end of August and 2.8 months in September of 05. And according to Credit Suisse analysts, total inventories are continuiung to increase. INVENTORIES ARE NOW AT THE HIGHEST ABSOLUTE LEVEL SINCE CREDIT SUISSE STARTED TRACKING THIS DATA IN 1987.

This, and shipment growth has stalled. Average daily shipments of steel declined 0.5% in September. Even with some improvement anticipated in October, it will not be enough to bring pricing power to this industry group.

The only bright spot is that bar inventories buck the trend and remain slightly down year-over-year on an absolute basis.

Therefore: If you bought steel on the way up, congratulations. Inventory data now indicates that steel as an industry should be underweighted in your portfolio.
Adding to positions on weakness will not make sense until inventories drop, prices stabilize and the recession that is upcoming is determined to be a soft landing (likely, but not assured).

October 19, 2006: ALPHA,Stocks,Bonds ETF's,.

With the Dow bumping up to new highs, a mixed-party Congress likely (short of a Republican majority,I love gridlock in Congress), interest rates low and war fatigue increasingly numbing the country, here's how I view the investment climate:

If you are seeking tax advantaged yield, go after energy pipeline LP's such as ETP. You are getting a very nice dividend that is not going to rake you at tax time. Just be prepared to fill out a few additional tax forms come April. If taxes are not an issue, check out the GE Interest Plus account, currently at 5.43% (see my earlier blog posts on this vehicle). Ohio Savings and Capital One offer good money market rates online.For the arch-conservatives, six month Treasury Bills are yielding about 4.75% and can be purchased free online (see previous blog posts). The ETF's claiming yield are coming up short in my opinion and should not be purchased for that purpose. ONE exception might be the Claymore Dividend Hog fund (see previoous blog post).

I still like shorter term GMAC Smart Notes so long as you hold them to maturity and are SELECTIVE in your choice and purchase price. Some have a big spread and it seems to me that the prices fluctuate quite a bit daily. Usually, several are cheap on a day to day basis due to market excentrics. Do not buy any that mature after mid-2009 so long as GM is on the ropes. Avoid bond funds. Avoid buying junk for an extra yield boost (except those Smart Notes).

So many ETF's....so little to choose. There are scores of eclectic ETF's being offered or in the works. Be careful. A few may work out for you, but the majority are nothing more than marketing tools to pry more cash out of your pocket with little chance of beating the vanilla index fund over the long haul. And I do not endorse index funds! The hype over ETF's has been fierce. I still prefer well chosen individual stocks (see previous blog posts)with a FEW sector ETF's to spice up areas in your diversified portfolio that cover parts of the globe where company transparency is poor, or where industries are best selected (such as pharma) en masse.

Seeking ALPHA in the current high altitudes becomes somewhat daunting, but entirely possible if you stop, look and listen to the investment vehicles you are considering. If you are scratching your head, trying to figure out what investment is ripe,remember,there is never a bad time to lock in a few profits.

October 18, 2006: FOOD for thought

I am getting beyond post-partum from the weekend wedding. The bride and groom are celebrating their honeymoon in Belize, prior to reporting back to their USAF assignments.And the wedding costs are paid. All in all, life is good.

While eating some neat stuff at the rehearsal dinner and the reception meal, I thought a little about the costs and direction of food. Catering is a huge business. Fast food, organics, Wal-Mart, full service groceries, convenience stores, etc. Food. Food. Food.

Today I spent some time looking at food companies and the direction of the food business. Surprisingly, it was interesting and lots of fun.

The biggest surprise was that traditionally "low quality" companies such as Heinz, Sara Lee and ConAgra grew in the 3-5% range per year on average at retail while "high quality" companies like Kellogg and Hershey grew at only 1-2%. Campbell's categories grew 3% in dollar sales but only 0.4% in volume.

Categories positioned in health and convenience food have grown the fastest over the past three years, especially frozen foods (5-7%), refrigerated entrees (14%), chewing gum (9%) and yogurt (6%). A lot of the gains, I was told, are a bit reflexive because of the hits these areas took during the Aktins diet craze. Powdered desserts (Kraft) and packaged tuna (Del Monte) suffered the biggest declines. On a personal note, that packaged tuna smells like a poorly bathed bum, so no surprise to me (who can eat that rubbish!).

Therefore:

Robust demands for chewing gum indicates that Wrigley has the right platform for a turnaround if it can respond to competition creatively.

Kraft (K),Hershey (HSY) and Campbell (CPB) can continue to achieve their low single-digit growth targets even though data indicates that they might need to generate 25% or more of their growth from market share gains. Barring poor marketing decisions, there is no reason that their growth should "hit a wall" for any length of time. Safe bets, if you will.

The good news for Sara Lee (SLE) and ConAgra (CAG) is that consumers appear to continue to shop even for the most mundane of foodstuffs and actually will respond to marketing of same.

Tracking food portfolios by DOLLAR sales growth vrs. volume growth, note the current rankings:

Refrigerated entrees 14.4%
Coffee (ground) 12.0%
Chili 9.0%
Meat snacks (jerky,etc.) 8.7%
Chewing gum 8.6%
Desserts (single serve) 7.5%
Frozen potatoes 7.5%
Nuts 7.4%
Dog/Cat treats 6.9%
Powdered soft drinks 6.6%
Frozen hors d'eouvres 6.5%
Yogurt 6.3%
Canned tomatoes 5.9%
Cooking sprays 5.8%
Frozen dinners 5.3%
Side entrees/shelf stable 5.3%
Cheese 5.2%
Sliced lunchmeat 5.1%

Categories in fastest decline are gelatin mixes (-11.9%), cooking sauces (-3.6%), pudding mixes (-2.3%), popcorn, canned tuna and canned fruit (perhaps the nutritionally void food of the lot). Packaged tuna is about 15% of Del Monte's sales. Kraft has $300 million in gelatin and pudding mix sales. Consumers are also shifting away from powdered beverage and into more convenient ready-to-serve beverages. Kraft has about $610 million in ready-to-serve beverages and $525 million in powdered soft drink sales - almost a wash.

So, what to buy if you are picking food stocks for your portfolio? I will be looking at the following. Maybe one or two might be worthy of consideration in a balanced portfolio tilting a bit defensive.

Sara Lee (SLE) on a pullback to 14
Wrigley (WWY) on a pullback to 40
Kellogg (K) on a pullback to 44
Campbell (CPB) on a pullback to 32
Con Agra (CAG) on a pullback to 21
Heinz (HNZ) on a pullback to 36

As you can sense, I think all are a bit ahead of themselves right now, with the market bursting to new highs regularly.

MY FAVORITE FOOD/MEAT/PROCESSING/RETAIL FOOD DISTRIBUTION STOCK REMAINS SMITHFIELD FOODS (see previous posts on this blog) SFD is a winner and should be bought now.

October 16, 2006: DEFENSE and TECH

There are some very interesting developments in the aero-defense industry.

SAI Company came public at approximately $15.00 a share. I addressed this IPO last week to give my blog readers a heads up. I even beat Cramer on this one! Buy it. It is a great company primed to do substantial- MORE than substantial - DOD and NSC work in the foreseeable future with engineering and multiple-type research contracts. Trading at $18.18. www. saic.com

Boeing, a strong recommendation on this blog, announced/will announce 175 aircraft orders for September and 100 aircraft deliveries for the third quarter. Singapore airlines ordered 10 747-8F freighters with options for 10 more. AIRBUS SUCKS, BOEING WINS BIG.

Goodrich (GR), another strong recommendation was awarded the contract for E-3 AWACS aircraft seating configuations worth approximately 97 million dollars with much more to come.

L-3 Communications (LLL) looks to lock in two huge contracts, the Army Linguist contract and the C-27 JCA surveillance contract. The ultimate totals of these two projects alone rate several billions of dollars, at a miunimum, in my opinion.

WARNING: With the armed forces being requested to maintain groud deployment levels through 2010, personnel costs are said to be strongly increasing and may put a bid crimp in R&d programs throughout the entire military for fiscal years 2008-2013. I will keep an eye on this. The service most impacted at first will be the Air Force strategic wings and acquisition departments.Homeland Security will not be impacted primarily because of political considerations.

Anti-missile stocks to counter the little piglet in North Korea:

General Dynamics (GD)77.00 a share. Modest upside potential
Lockheed Martin (LMT) 88.00 a share. Good upside potential.
L-3 Communnications (LLL) 78.00 a share. Buy it!
Raytheon (RTN) 49.00 a share. Good upside potential.
Precision Castparts (PCP) 67.00 a share. Very good upside potential.
BE Aerospace (BEAV) 23.75 a share. Buy it!

These are larger companies that have downside protection with other solid operations, in my opinion.

If you want some smaller companies more highly concentrated in a pure anti-missile component, e-mail me and I will try to answer your inquiries.

TECH: This is earnings week for tech and I believe that the earnings will be very good for many companies. If you need exposure and do not want to risk it on individual stocks, two ETF's I like are PTF (A Powershares aggressive tech ETF centered in smaller US companies) and SGI (iShares Global Tech with holdings in larger companies worldwide).I do not own either, but may have one or both in my portfolio Monday as I lighten up on my position in MTF (Mitisubishi Financial). This stock has not been performing as well as expected and I will take a small long term profit here and wait for the Japanese financials to right themselves.

October 13/14,2006: Pictures of interest

Nothing serious on the post. I hope you enjoy a few pictures taken recently courtesy of the USAF and USCG.The picture most memorable to me was my recent visit into the bowels of a clasified satellite launch from our USAF base in the far west control area, the other is a picture of the rocket itself launching the satellite. All military satellites must now possess laser protection shields, due to space attacks on our satellites by China using a laser disabling system. The other pictures are of a high tech Coast Guard ship somewhere in port in South America this past week.

I have a wedding weekend and am hosting guests from 19 states for our daughter's wedding. I hope to have a worthwhile research post on Sunday.

October 11, 2006: Stocks, ETFs and why

Today seemed a good time to review a few stock and EFT picks made in prior posts, and give readers an informed view of generic drugs - especially those manufactured in the EU.

I have been a long term holder of the Bank of Nova Scotia (BNS).The present general flatlining of price is a good time to consider visiting the stock for possible purchase. I added a bit to my holdings today. BNS is a stock that is not widely traded and not as well-followed as many other banks.Not even MSN Stock Scouter has a rating on it. Why this is so has eluded me for years. It's excellently managed,profitable,transparent, shows steady dividend growth and is international in scope. Especially noteworthy are BNS positions into India, China and South America. BNS. of course, has a strong, diverse footprint in North America.Trading at $42.36. www.scotiabank.com. I believe it will easily go to $50.00 (US) over the next three quarters.

Purchasing newly minted ETF's is generally too daunting a research task for me. However, I have followed my thoughts posted earlier and purchased positions in two unique Claymore ETFS, EEB and CVY.

The Claymore BRIC Fund is a basket of stocks from four energing giants: Brazil, Russia, China and India =BRIC. EEB does not have a peer that I am aware of in the ETF field. Expenses are very low for a fund invested in these markets, and the benchmark Bank of New York index for tracking is logical and reasonable. I view this fund as a core holding,not for speculative trading. It provides zest for your international portfolio component. Trading at $25.99 with about 30,000 shares traded per day. www.claymore.com.

The Claymore Dividend Hog fund tracks Zack's international high dividend roster.
Having an ETF dividend fund not dominated by GE and another company or two is unusual. I like their portfolio for diversity and quality and recommend this as a core holding in a balanced portfolio of investments that needs some yield with international currency protection. Trading at $25.32 with approximately 29,000 shares per day. www.claymore.com

I have received some nice reader e-mail comments regarding one of my favorite ETF's, iShares Switzerland (EWL). I really like the stability and quality of the portfolio. What's not to like when your top holdings are Nestle, Roche, Novartis, UBS, Zurich Financial and Credit Suisse. Even if the Mullahs conquer Europe this fund should do well! Trading at $23.03, this ETF is a way to play the one strong link in Europe politically and financially. www.ishares.com

GENERIC DRUGS: Outlook

I have been reading research reports on generic drugs. I thought it was a good way to play "pharma", as "big pharma" is in the gunsite (oops, wrong term for the Democrats)....LITIGATION AND PRICE CONTROL realm once the mid-term elections turn over legislative power, perhaps, to Pelosi and....Soros. I believe I was wrong on this issue. It turns out that national healthcare policy worldwide is going to come down hard on generic pricing...no breaks for the old drugs. With lower levels of innovation at research and big pharma due in large part to litigation and national healthcare policy, there will be far fewer drugs for the generic pharma industry to replicate off patents. Sadly, the politicians are beginning to choke off new generations of pharmeceuticals through dis-incentive social policy, which hits big pharma, to prop up social welfare and other government deficit issues.Pondering this premise, I think that this may be a bit too much doom and gloom. I do want some pharma in my portfolio. Therefore, I own some ishares U.S.Pharmaceutical(IHE).I believe that individual generic stocks are a poor choice, and a basket of the great names in US pharma is a good bet. If any two countries can be innovative quickly, it is the U.S. and Switzerland. Pharma will have to be nimble and quick over the next decade and ishares Switzerland to a degree, and ishares US Pharmceuticals for sure, are the answer.

October 9, 2006: Defense/Aerospace musings

Jim Cramer on CNBC TV "Mad Money" said something interesting a few days ago. Paraphrasing, "Defense stocks will go up whether Democrats or Republicans are in control. Republicans will spend because they are fighting a war. Democrats will spend because they do not want to be perceived as weak on national defense." I agree, for the most part. War fatigue has set in, yet another attack - a mathematical certainty- will further evolve into more defense spending. One of the few duties explicitly spelled out for our government to actually do: DEFEND THE COUNTRY.

For investors, as I have pointed out on several previous posts, well selected defense stocks are the way to go (not ETF's or mutual funds, as there will be too many losers). Speaking of losers: AIRBUS announced another one year delay on the Airbus 380. Maybe those billions in politically-correct government subsidies are doing as poor a job as the EU science and rocket programs.Airbus sucks at this time in almost every way.

What to do?

I still am very bullish on Boeing (BA), in spite of its runup. The shares can easily top $100.00 over the next several months. A sale this week of 16 747 freighters to the United Arab Emirates is just another drop in the bucket for upcoming Boeing orders worldwide.

ITT will announce the 1.58 billion dollar sale of SINCGARS radios and RTIN Patriot missile support equipmet to South Korea.

As a sleeper,keep a look out for a rise in DCP. It will put in a strong bid for a 4.8 billion dollar Army linguist contract. LLL/NOC may loose this contract, which would have a small impact on their 2007 earnings. DCP is a buy,in my opinion, as this rumor would not have filtered out if there was not a reasonable chance of them getting the contract.

SAIC will put out an initial IPO this month expected to total 1.2 billion dollars in equity. Employees will still own 81% of the capital stock and will receive a special dividend. I may be interested in this company after further analysis and the final announced sale price.It is extrememly well regarded in defense circles.

Other shares I like today in this area are Raytheon (RTN), L-3 Communications (LLL)and
Goodrich (GR)- a lot.

October 6/7, 2006: Oil...whaddya do?

Thanks for the e-mails on yesterday's post. Expect the unexpected.


Oil.

Here is my take based upon two respected research reports out today.

OPEC is going to officially reduce oil output by roughly one million BD. This will not matter much, because OPEM members, behind the scenes, cheat.

Serious divisions remain in the cartel, with Iran and Venezuela in one corner and almost all sane members in another.

Non-OPEC oil supply growth is to be roughly 3% in 2007, a 1.5 million BD increase, thus wiping out initial OPEC cuts, and remaining at 3% through the decade.

Global demand growth for oil is to be approximately 1.1%, rising to 1.5-1.7% the remainder of the decade.This is less than dire warnings predicted earlier this year.

Thus, the price of oil is likely going to decrease to approximately $50.00 the barrel over the next year or two, with fluctuations expected in the $55-65.00 per barrel range prior to settling down.In short, there is PLENTY of oil with more on the way.And there is PLENTY of natural gas, too.

Note: The bulk of spare capacity (6%) will lie within OPEC countries, with attending political and policy risks.

INVESTMENT PREDICTION:

I would underweight energy, nor would I buy on any weakness at this point - especially oil and gas.As stated in late August, I would sell oils. Perhaps keep one or two majors for yield and "protection" against the unforeseen.Chevron is a good choice.

Projects like the Canadian oil sands in Alberta, etc. are still going to make some money, but not nearly enough to warrant investment. If you must, Suncorp is my choice. Ethanol....zip,zero,nada. Bunge is my only recommendation, because all of it's eggs are not in the North American ethanol basket. Smithfield Foods has a nifty pig manure biodiesal operation which is used to power many US Navy ships, but meat is their beat.

I guess driving an SUV will still be a pleasant experience. Driving an overpriced hybrid will bring....repair and recall problems, and nods of approval from the global warming crowd.


You are invited to read my August 31, 2006 post.

ACROSS THE POND
On a different subject, I recommend you visit the Diary section of one of most brilliant and throught-provoking journalists and author in the UK (and the EU), Melanie Phillps.I have had an e-mail correspondance with her and find her to be engaging and very well researched.
www.melaniephillips.com/diary/
She is Churchillian.

October 5, 2006: Kicked in the ALPHA......

The DJIA ia at an all-time high, inflation is tepid, deflation is non-existent, money markets pay a competitive yield, mortgage rates are down, earnings season looks very good indeed, unemployment is at record lows, investment variety and research disclosure have never been better!!! What could go wrong??

October 3, 2006: Drugs SEEKING ALPHA

There are a few companies that may prosper even if a Democratic congress tries to legislate/litigate our world class pharma into oblivion. Here they are, based upon a benign tip or two from those in the industry and some research.WARNING: I do NOT own these companies, and consider them as somewhat speculative, but worth tracking for possible investment in a balanced portfolio.I am tracking these myself.Once the political air clears, I will probably make a move.

CMX. Caremark Rx, Inc. provides cost effective pharmacuetical services to PBM programs. It has taken some large accounts away from other pharma service companies recently, giving it even more leverage negotiating drug purchases. It also administors programs using a good core base of business-oriented leaders supplemented liberally by low-cost workers on and off site. It maintains seven automated mail service pharmacies and 21 regional mail service pharmacies. It is growing well and managing growth well. I discovered this company by using it myself. It is customer friendly, accurate (not like my former PBS pharma service) and efficient. Analysts like it.I don't think Democrat policy can mess it up. Trades at 55.03. www.caremark.com

FSH. Fisher Scientific International, Inc. provides products and services for global scientific research and US clinical laboratory markets. Their customer base is broad, reaching from biotech companies to universities to hospitals. It sells its products and services to customers located in approximately 150 countries. It has three divisions: scientific products and services, healthcare products and services, and laboratory workstations.If Democrats try to mess it up,FSH goes to the other 149 countries. Good growth stock.Trades at 77.64. www.fischerscientific.com

LH. Laboratory America Holdings Corporation in an independent clinical laboratory company featuring 36 primary laboratories and over 1,300 service sites consisting of branches, patient services and STAT labs for routine testing. It also has a nice array of proprietary test systems for HIV, genotyping, genetics, oncology, etc. Could be impacted by litigation-friendly legislation. Trades at 65.21. www.labcorp.com

For those who want a phund of pharma, look at IHE. iShares Dow Jones US Pharma Index trading at 51.98. I do own this fund in my portfolio, purchased in July.