I am retired and take educated guesses on all things financial.

November 22, 2006

November 22, 2006: JFK...where were you? Construction stocks amid carnage, and Verizon

Some moments remain frozen in time. The assassination of John F. Kennedy is one of those moments for me. I was sitting in a middle school science class when the principal, Mr. Hurst, quietly went in room to room and told us about the death of the President. In our community, John Kennedy was to a large degree hated at the time because of his failure in Cuba and his support for the civil rights movement. More the latter than the former. I remember many classmates making home made "white power" signs prior to an open housing march by Martin Luther King at the insistence of parents, who came to the march with rocks.Personally, I was stunned by the reality only when Lee Harvey Oswald was shot by Jack Ruby, who had strong ties to the Chicago mob (called The Outfit). Many strongly suspected the mob connection right away. And then the funeral, with "JJ" saluting his father's casket on the caisson.I remember tears, then. I also remember adults on our block of small homes who were glad he was dead, so hated he was in some quarters. Yet more than a few of those haters later had sons wounded, maimed and killed in Viet Nam, fighting for their country in a war JFK escalated. Patriotism trumped hate and politics, at least in the early and mid-1960s.

I have posted the very poor state of the housing industry. I received a few e-mails basically asking for a few ideas to consider as potential purchases if the carnage continues. Here are my choices for your consideration. Please research these carefully before you part with your loot.

Fortune Brands (FO) about 80
Lennar (LEN) about 49
M/I Homes (MHO) about 35
Standard Pacific (SPF) about 24

Late last week, I was doing a few stock screens and Verizon (VZ) came up looking very good in a richly priced market. Sporting a 4.25% yield, this company has spun off its phone directory business and now has the potential to grow organically to provide a cumulative 20% or more return over the next twelve months. Verizon Wireless is first rate and Verizon Business is growing very well. 2007 could well be the proverbial tipping point for this cash cow. I purchased VZ today for my portfolio after a hard search for a portfolio addition in communications.Just don't expect 5 gazillion Verizon employees to follow you around after your purchase(VZ should outsource, but I digress).

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