December 26, 2006: ETF's blessed by CSFB (today retail, tomorrow the world)

"WE BELIEVE THAT RETAIL ETFs ARE A USEFUL INVESTMENT TOOL FOR THOSE MANAGING A PORTFOLIO.

The two main ETFs available for retail investors are RTH and XRT, both of which are quick, simple and inexpensive ways to gain exposure to the retail sector without having to choose individual stocks."

SHAZAMMM!

A top-ranked brokerage house is now recommending ETFs.I believe this is the tip of the ETF iceberg regarding ETFs as hedges and also as a significant portion of one's permanent portfolio.What I and other bloggers have pontificated about for months is now being echoed by a gold plate investment research firm.

I have received many e-mails from here and abroad regarding ETFs and there place within a portfolio. I have championed ETFs that can fit specific needs. Importantly, the investor must look at the contents of each ETF carefully. As CSFB points out in the trial sector, RTH and XRT are both retail ETFs, but hold very different baskets of stocks. CSFB notes that RTH is an index fund and is comprised of eighteen retail stocks. WMT, HD, TGT and LOW account for almost 50% of the fund's value. XRT is composed of fifty three retail stocks with the goal of tracking the S&P Retail Select Industry Index (a retail sub-industry portion of the S&P).While both offer the benefits of diversification, trading flexibility, hedging, liquidity and low costs, the RTH offers ownership benefits of a short portfolio while the XRT offers a rebalancing advantage. Thus, given the exposure to broadlines/hardlines/food and drug stocks, the RTH may be less useful for softlines investors, while the XRT offers a more balanced softlines/broadlines mix.

Bottom line: THE INVESTOR MUST KNOW WHAT IS IN THE ETF TO APPROPRIATELY INCLUDE THE VEHICLE IN A PORTFOLIO. DON'T GUESS!!

December 27, 2006: Neat stuff for 2007

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An update on money saving sites is usually useful for many investors.
I hope these are as useful to you as they have been to me.


REVIEW YOUR CREDIT REPORT(S)FREE.
www.AnnualCreditReport.com. I recommend using one of the big three credit companies every four months so you get timely updates. This site is NOT a shill for a paid service.

TERM LIFE INSURANCE:
www.QuickQuote.com
You can browse without annoying requests for personal information.

529 COLLEGE SAVINGS PLANS:
Any plan is good in all fifty states.Congress has made this FEDERAL TAX FREE permanently.
If you have children and do not pick out a good program out of fifty states' offerings, you need a financial planner and a head slap.
I like two:
Utah has a dandy through Vanguard. Call 1.800.418.2551 or www.uesp.org
Alaska administered by T Rowe Price. Call 1.800.734.9609 or www.price529.com
Alaska will never have a state income tax in our lifetime and is my personal choice.
Several other states have recently upgraded their 529 College Savings Plan. Some offer a state tax break for contributing.
Up to $250,000.00 can be salted away for your children, grandchildren and even yourself.

REBATES ON PURCHASES:
These websites have coupons for lots of stuff.
www.PriceGrabber.com
www.eDealinfo.com
www.FatWallet.com

For non-coupon deals, check:
www.Overstock.com

SHOES:
www.Zappos.com
Outstanding personal and family shoe store in line. Great prices on first quality merchandise. Free shipping/return. I am a completely satisfied Zappo shopper.

AIRLINE TICKETS:
www.Kayak.com
Searches 120 travel and airline sites and does not charge booking fees.

FIRST CLASS AIRLINE TICKETS:
www.FareCompare.com
I don't know how they do it, but you can get a first class seat really cheap (Y-up and Q-up, or better). Some execs swear that they can get first class cheaper than full fare coach. I use it and it works. Especially nice on long haul or red eye flights.

STOP ALL FINANCIAL JUNK MAIL:
Dial 1.888.567.8688 and select Option #3
Stops all financial houses that use your credit line to market lists.
Especially a good idea after all the holiday shopping.

December 20, 2006: Lubricate your portfolio for 2007:Oil and Gas picks and a few random energy thoughts

A few days ago, I cautioned generally against natural resource stocks. Several e-mails arrived requesting more specificity, since energy stocks are used as a hedge in many portfolios. Coincidentally, a well respected research department released a lengthy and forward-looking synopsis utilizing their many analysts worldwide to reach basic conclusions and specific stock recommendations. I read the report thoroughly, and found myself nodding in agreement with many of their statements.
I will take action on a few of these myself upon further review.

Here is a summary of thought:

The energy cycle ending in 2010 will have oil fluctuating between 50-70/barrel. Higher oil prices are keeping demand under control, but the supply response has not been good - Russian production is beginning to surprisingly slip away.Access to conventional resources remains a problem. OPEC is back in the market management business, reluctantly, and will achieve or even over-achieve on its price objectives. Consuming governments are likely to formulate more radical policies in support of renewable energy - "but it is not easy being green". The world needs much more energy infrastructure in the coming decade, including a lot more in North America.

In 2007:

OPEC will tighten the market preemptively. They may error by cutting too much.
Non-OPEC supply growth will arrive after several years of delay. Good news.
Expect MERGERS AND ACQUISITIONS IN THE MID-SIZED PRODUCERS to combat rising costs and shrinking access to resources.
Other mid-sized producers will launch LEVERAGED BUYOUTS or GO PRIVATE.
North American natural gas prices will swing between 4-10.00. Companies keep on drilling, then stop. Thus, another wild ride for natural gas.
Global large projects will become even more expensive as they attempt to contain rampant inflation both upstream and downstream.
Consuming governments get serious and adopt more radical energy programs and renewable energy mandates. Billions of dollars will be diverted into Alternative Energy. Biofuels and wind power are favorites.
Russian oil output falls to near zero. Russia by their own stupidity has thrown out the experts they need to succeed.
Norwegian drillers will attempt to consolidate their offshore drilling industry by making both friendly and hostile takeover attempts to primarily US drillers.

Now, some stock picks based upon this scenario:

Baker Hughes (BHI)
BJ Services (BJS)
Global Santa Fe (GSF)
National Oilwell Varco (NOV)
Occidental Petroleum (OXY)
Petrobras (PBR)
Plains Exploration and Production (PXP)
Statoil (STL.OL)
Suncor Energy (SU)
Tesoro Corp. (TSO)
Total (TOT)
Valero Energy Corp. (VLO)
Williams Companies (WMB)

I would also recommend that you check out any ETFs that are heavy into non-Ethanol alternative energy companies. Also, ETF's that favor mid-size companies in this sector for consolidation, speculation and hedge purposes.

www.powershares.com
www.wisdom tree.com
www.iShares.com
www.Claymore.com

December 19, 2006: ETFs for consideration

As we do our portfolio reviews it is an overwhelming task to sort through thousands of investment options by name, let alone by quality and appropriate inclusion in one's portfolio.

The Hedge, or Speculative Portfolio provides necessary spice to hopefully boost your total investment return. With 2007 shaping up to be a challenging year for investors with pros opinions ranging from from goldilocks to gloom (or worse), here are a few ETFs you may want to take a closer look at.

www.powershares.com

Powershares Industry Rotation Fund (based on the Value Line Industry Rotation Index)

Value Line, an old chestnut advisory service that used to be the most current- coming out weekly delivered by your mailman, is still doing a good job with stock and industry rankings.

Top holdings recently include:
Midwest Air, Akamai, NBTY, BT Group, Garmin, Canon, Interwoven and Schering-Plough.

ticker symbol: PYH (introduced 12/01/06)


Powershares Listed Private Equity Portfolio Fund

An interesting play on the takeover frenzy. Unfortunately, the best takeover artists are likely private. The public takeover advisors and participants still may be a viable speculation.

Top holdings recently include:
American Cap. Strategies, Luecadia,SVB Financial,Capital Source, Allied Capital, KKR Financial and MacQuarie Infrastructure Trust.

ticker symbol: PSP (introduced 10/24/06)
---------

www.wisdomtree.com

Wisdom Tree International Dividend Achievers Fund

A good currency hedge using established international companies with the potential for steady growth, especially with utility consolidation in play.

Top holdings include:
Nam Tai Electric, Telstra Corp., Lloyds TSB Group,Endesa, Huaneng Power Ltd., ABN Amro

ticker symbol: PID (introduced 9/15/05)

Wisdom Tree Dividend Top 100

An interesting mix of dividend producing stocks with a more speculative flavor.

Top holdings include:
Southern Copper, Regions Financial, Lincoln National, GM, AT&T, Progress Energy, Excel Energy and Equity Office Property Trust.

Wisdom Tree International Utility Sector Fund

Less speculative than the International Dividend Achievers Fund. I like the holdings of this fund as a currency hedge and for a solid bet on worldwide utility company consolidation.

Top holdings include:
Enel,E.ON,Suez,National Grid,RWE, Fortum OYJ, Iberdrola and Scottish Power


www.ishares.com

I recently purchased these two iShares for my portfolio, as a play on Asia, currency and the gradual ascendancy of Pan-Asia as the center of commerce and to a degree, political power, in the world.ETFs are excellent hedging vehicles as their portfolios are updated daily, they can be traded cheaply and promptly, and their costs are lower than most mutual funds. I do not advocate day trading ETFs, as their contents do not activate that strongly on a minute by minute basis. When buying an ETF, use a market limit order one or two cents above (or below) the last real time trade.

Japan (ticker symbol: EWJ)


Singapore (ticker symbol: EWS)

I presently hold the following ETFs:

Claymore Zacks Dividend Hog (ticker symbol: CVY)
Claymore BRIC (ticker symbol:EEB)
iShares Switzerland (ticker symbol EWL)
Powershares Water Resources (ticker symbol:PHO)


FLASH: POWERSHARES ANNOUNCED TODAY A NEW ETF WHICH WILL INCLUDE A PORTFOLIO OF "BUYBACK ACHIEVERS". THESE ARE COMPANIES WHO HAVE BOUGHT BACK AT LEAST 5% OF THEIR STOCK IN A FISCAL YEAR, AND WHOSE STOCK PERFORMANCE IS POSITIVE.

December 18, 2006: Military trends and Stocks that may benefit

The following is derived from a recent conference and other sources that place emphasis on what military programs are going forward (or on hold) and the prognosis for our defense efforts. You may benefit by considering likely stock winners for vital national defense programs. Companies providing these systems are in parenthesis next to the items to be purchased.

The latest Emergency Supplement for the War on Terror is going to be almost 100b. That is on top of the 70b funded earlier this year.

The Army will fare best in obtaining funds to bolster their branch of the service, getting almost 50% of the Emergency Supplement. Heavy trucks (OSK),medium trucks (AH),light trucks (AH, TXT) and radios (ITT, HRS). Additionally there is 3.8 b for tracked combat vehicles (GD, BAE Systems).

The Air Force may be the weak sister for the upcoming year. The USAF average aircraft age is 24 years.."We are in uncharted territory". Congress refuses to retire legacy aircraft.USAF has five priorities which may be partially funded through two large rounds of personnel reductions in 2007 and 2008. Priorities are
the KC-X (BA), CSAR-X (BA), a spacecraft program of missile warning and SATCOM (no company on board yet), F-35 Conventional Take-Off and landing (LMT/NOC/BAE) and the next generation Long Range Strike Bomber (NOC,BA,LMT).There is strong USAF consensus that the Multi-Platform-Radar-Technology-Insertion-Program or MP-RTIP is purchased through (NOC/RTN) and integrated on the Global Hawk drone platform (NOC).

Note that in addition to a reduction of personnel, the USAF is deliberately looking to divest low-priority, poor performing types of acquisitions programs. However, Congressional districts maintaining these albatross programs will object. The result may be a weaker, not stronger Air Force to counter threats from China and rogue states.

USAF Space Weapons:

The Space weapons program has reinvented itself due to an over-optimistic performance and introduction schedule, atrophy of systems such as the ICBM and tactical space force during the Clinton-era "peace dividend", poor cost estimating and budgeting and delegation of Total Systems Performance Reliability Responsibility , or TSPR, to contractors without rigorous USAF program oversight.

Thus, a back to basics program of acquisition strategy has commenced to insure clearly defined improvements for each space vehicle, increasing cost estimate confidence to 80% probability from the current 50% and clear segregation of new subsystems in Technology Development Phase from the Production Phase.

Key priorities are the Global Positioning System III (BA or LMT),
Transformational Satellite Program , or TSAT (BA). ..this is a big order, Wideband Global Satcom (BA), Alternative Infrared Remote Surveillance System (RTN, GD and NOC are competing for this)....another big order. and space radar (LMT/NOC).

Other programs are classified and deal with global threats by upcoming Chinese technology in cyber and space warfare and global terror acquisition of WMDs.

Army:

The cost of outfitting one soldier will increase from 11g to 17g.Body armor (AH), protective padding (AH), thermal weapon sight, M4 carbine and night vision devices (ITT).

The Army has a 56b shortfall in equipment as of 10/2006. Companies getting an abundance of orders to quickly produce equipment include (GD, BA, BAE, UTX,ATK, AH/AM General and TXT).These companies will also be upgrading almost all Army equipment, including Black Hawk helicopters, light tactical vehicles, Bradley,Apache helicopters, tracked combat vehicles (W and CTV). Abrams tank (GD), CH-47F (BA).

A plethora of orders going will benefit the following stocks : BA, OSK, AH,TXT, ITT, GD TBD and LMT. I have additional information.E-mail me.

The Navy priorities are the F/A-18E/F Super Hornet and the EA-18G Growler (BA/NOC,
42 Super Hornets and 90 Growlers --minimum., the E-2D Advance Hawkeye (NOH or AHE). The F-35 is being built but orders are pushed back due to budget constraints.

Overall with contracts, the Navy winners in appear to be NOC, GD, BA and EFV.

Notes:

Boeing seems to be handling civilian and military orders extremely well. That bodes well for their subcontractors such as GR.

LLL announced a 500m share buyback.
NOC announced a 1b share buyback.
SAI beat the street's estimate of 0.23 by .05 (0.28).. I recommended this new issue several weeks ago. It is still a strong buy in my view.

In a selective and unusual market during 2007 in large part because of political and world terror instability, I am placing bets on several of the above companies. Please exercise diligence as you research stocks mentioned above for portfolio inclusion. I do not view these as speculative stocks at this juncture.I think that you may wish to hold a couple in your core holdings.

Previous aero defense stock picks in this blog are still valid.

December 17, 2006: Taking stock of the military

I am in the process of presenting a useful review of aero defense and other defense stocks for 2007. My research is not yet completed. I should have the post sometime on Sunday.

I believe this will be of help to investors looking for some ideas for their portfolios.

And, it will give you yet another view of our military thoughts going out through the decade.

December 14, 2006: Delta IV and an investment observation

This Delta IV rocket launched an important payload very recently from Vandenburg AFB in California.

Today, I had the opportunity to speak with a journalist about creating one's own hedge fund and some peripheral investment concepts.I am an amateur, not a professional, and approached the interview from that perspective.

With all of the information available at the fingertips of today's investor, I am sure that we have more data and sources than Sir John Templeton had when he began his marvelous international investing journey career decades ago.A pitfall, having so much information, is that we become over confident in our abilities to make correct investment decisions. Most of us cannot do that with money we have saved over the years and can ill afford to loose.

Over the past months this blog has been up and running, I have had the privilege of communicating with a variety of interesting individuals from several countries and across the U.S., almost always via e-mail. Exchanging insights and sharing a few humorous moments has been worth every second I have been churning out my thoughts in these posts. One communicant loves to point out my mediocre writing skills...and I learned a long time ago not to debate the truth. Another responder asks detailed followup questions on many stocks and funds which are often times beyond my tolerance level of time/research....but he/she takes time to write, so I try to head them off in the right direction.

Importantly, we bloggers and "lurkers" perform a service for each other. We encourage each other to think, and to respect (almost)all other points of view.

Reflecting after the interview, keeping each other informed with ideas and resources
is a good thing. Treating respectfully other viewpoints is therapeutic for all.

December 13, 2006: Buy a new car (next fall)

An interesting study published for clients by a well-respected research firm states that there continues to be negative news for pricing autos and homes into 2007.

New car prices are well into negative territory as lower inflation has caused the spread between overall CPI and new car CPI to narrow. And for the past two months, used car prices have also been in or near negative territory.

A consumer watch scorecard shows five factors for the auto industry deteriorating (income growth, unemployment, auto loan rates, new car prices and used car prices). Three factors are improving (auto purchasing sentiment,consumer sentiment and consumer debt).The negative trends are expected to continue into mid-2007, when a possible recession may even make them worse.

Investors are expected to shun domestic auto stocks. One issue I personally feel may be worthy of speculation is a new Ford convertible bond (unsecured) yielding 4% with a potential large upside in price appreciation.

GMAC is back in the market with SmartNotes. I have owned SmartNotes as stated in previous posts. I favor maturities of one year or less from existing notes,some of which on any given day are trading at a wholesale price.

Only consider these offerings with your "hedge" money to add spice to your diversified portfolio.

Looking ahead from a consumer standpoint, whereas now is a perfect time for a first time homebuyer to purchase a spec. home, I see next August and September as the perfect time to negotiate a superb deal on a new car. It is possible that all eight tracking devices above may favor the buyer at that time. And the way Ford is going, they may pay you to take a car off their lot.

December 12, 2006: High Tech Defense/Commercial Air

Aero Defense continues to be a profitable sector to explore. At a recent conference, many aero defense firms are expecting a minimum of high single digit up to mid double digit earnings in 2007. Commercial aerospace companies uniformly presented a bullish outlook in the market until AT LEAST 2010-2011. Metals companies reported a strong outlook given by commercial aerospace with most expecting solid double digit topline growth.

Boeing (BA) looks great heading out at least three years. Recently, Lufthansa ordered 20 747-81s with an option for 20 more (5.75b) scheduled for delivery beginning in late 2009. Aeroflot is leasing 15 737-500s.

Meanwhile, Airbus research and development costs for the A350XWB are rising to 15.4b to accommodate additional light weight carbon composites and other energy saving features.
Boeing management must be enjoying grossly subsidized Airbus again screwing things up. Perhaps Airbus had better stick with paper machet...at least the French will buy into it.

ERJ received a bit of a jolt when JBLU delayed delivery of 32 ERJ-190s by four years due to slower than expected growth. I now think that ERJ should not be on your buy list. Too many "if's" with orders.

The United States Army is proposing to cut several large programs. As predicted, Iraq is going to be winding down by summer. Note that several of the program cuts will be from companies located in districts with Democrat elected representatives.
Thus, the Army may very well get more than it needs to avoid layoffs and political fallout. Democrats need a beholden constituency.

Armor Holdings (AH) won a 650m order for roadside bomb-proof trucks.
Lockheed Martin (LMT) won a 11.25b 25 year contract from the UK for MFTS.
General Dynamics (GD) and Northrup Grumman (NOC) received an unspecified award for a new satellite system program .
MDA may award Boeing a contract for a missile defense complex in Europe. Surprise, surprise...are the Europeaceatanyprice legions becoming a bit more aware of the reality of Iran and their minions?

Several multi-billion dollar contracts are being awarded in January. L-3 Communications (LLL), Force Protection, Inc. (FRPT) look likely to get a lion's share.
Take note of Force Protection,Inc. This company may be a nice addition to your portfolio.

Other interesting companies now include:

BEAerospace (BEAV)
Esterline Technologies (ESL)
Goodrich (GR)...my favorite for quite some time
Rolls-Royce (RR.L)
Rti International Metals (RTI)

December 11, 2006: Stocks and bond notes

Just when you least expect it......

Safe to say most of us have done quite well with our portfolios this year. From time to time, we all feel invincible when the goldilocks scenario arrives. However, we also know that the perfect storm may impact when we least expect it.Then, those with truly diversified portfolios are glad they had the insurance that reasoned and varied bets provided.

Short of buying a sharia-certified mutual fund, I think reasonable prudence at this stage is called for. One area that I would not recommend a lighter position on is aero-defense stocks (posted regularly on this blog). Regardless of how Iraq is played out (my position has been for the past four months that we would be practically out by July, 2007 due to military contract orders that predict future armed forces events), the world situation for the United States will become more hostile, especially in the Middle East and South America. China remains our number one threat, and our vast military research and development team is working at top speed to stay ahead in the technological weapons race.Democrats will not touch this area.I like Canadian banks such as Toronto Dominion (TD) and Bank of Nova Scotia(BNS) because they are not exposed to anti-United States harassment,yet have excellent international exposure and a strong North American presence.I like iShares Switzerland (EWL).

Regarding energy, Claymore has launched two very interesting ETF's. Claymore MacroShare Oil Up Tradeable (UCR) which allows the investor to take a long range bet on rising energy prices, and Claymore MacroShare Oil Down Tradeable (DCR) which does the opposite. The mechanics are too complicated to discuss in this post. I recommend you go to www.Claymore.com and read about these yourself. Perhaps if an investment is too eclectic to comprehend after one reading, it should not be bought in the first place. I predict these two ETF's will be traded in large volume compared with other ETF's offered or projected.

Bonds can be a safe haven. Some pros like trust preferred and closed-end income funds rather than high rater corporate or government securities due to yield and potential capital gain upside when the economy goes south. Some like convertible securities, paying you interest while the market eventually recovers and you then gain on a resurgent stock price. A few are still touting Canadian income trusts, that I addressed a short time ago (my recommendation and probability scenarios still stand). Others are even recommending Ford and GM Bonds, reasoning that FOR SURE these companies will not roll over.

Precious metals bugs are almost always bullish. I am not a supporter of their cause. However, a little platinum, copper, coal and gas (natural, liquid and propane) might be nice in your portfolio.Chesapeake Energy took a hit last week after issuing another 30 million shares of stock that will fund future acquisitions. CHK is a strong BUY in my opinion. This superbly run company will use the funds wisely, creating value for the future.

Whatever your views on the above investments, please take a look at what you are invested in - and why. And beware world political events. This is the 1930s, not the 1950s-1990s.

December 10, 2006: Stock notes/Kyoto chuckles

Random thoughts after reading several research reports and thumbing through the latest Financial Times and Forbes publications.

Bank of Nova Scotia has had its earnings revised upward due primarily to excellent international operations. As regular readers know, I recommend BNS as a long term core holding. In my estimation, his international financial institution holds key ingredients for long term steady growth: North American base of operations,a dose of foreign currency exposure, international operations in swiftly developing countries, high quality loan portfolios, good research specialists and an excellent management team. Share volume remains low, keeping BNS a well-kept secret from non-Canadian investment institutions, hedge funds and speculators.

An interesting article in the current Forbes Investment Guide 2007 issue challenges the pollution credit exchanges set up under the Kyoto agreement. It seems as though it is cheaper for countries like India and China to produce pollutants such as HFC22 (refrigerant), sell the credits for "cleaning it" to Europe and the U.S. and then take the profits and make HFC23."Depending upon carbon prices, the plants would actually generate more money from carbon credits than production costs. (Thus)"the perverse would be complete". Another example of environmental outrage that will actually produce more pollutants than less...the law of unintended consequences. The article is written by Daniel Fisher and entitled "When Pigs Fly". Michael Dorsey, professor of environmental studies at Dartmouth and the coauthor of the book CARBON TRADING, says that while pollution trading programs work in the US to control pollutants like sulfur dioxide, it will be hard to track such schemes in developing nations. He states:"When you don't have the rule of law, when you don't have established agencies that can root out fraud, kickbacks and dirty dealing - which is basically two thirds of the planet- then the (pollution credit exchange) doesn't work."

Goodrich (GR) is mentioned favorably because it is in the thick of great air and aerodefense products, has a very good profit margin, sells at one time revenue and 12x earnings. It is reportedly has no defense against a takeover bid, either friendly or hostile. It may be a takeover candidate. I have long held GR and increased my position a short month or two ago.

December 7, 2006: Fannie Mae the stock and Fannie May the chocolate

Fannie Mae recently submitted their 10k.

Generally, Fannie Mae presents excellent intelligence on the home market in the U.S.

The current business environment is extremely competitive and challenging. Lots of other mortgage products and bundles of various quality mortgages are being purchased by the private sector. Fannie Mae still has not addressed their fiascos in the market since 2003. They must do this to improve profitability.

The decline in its retained mortgage portfolio in 2005/06, with the additional burden of net interest margin compression, should result in lower earnings and lower growth during these two years. Resumption of portfolio growth seems unlikely, in my opinion,until Fannie Mae becomes a more timely financial filer, which may not occur until 2008 or 2009.

Expense levels are high and not expected to decline through at least 2007.


Fannie Mae also is exposed to a modest decline in home prices in 2007,will probably be an active purchaser of lower quality loans resulting in potential losses in exchange for a higher interest rate of return,will sustain derivative losses from less than able management,be strapped with high administration expenses and high expenses to comply with more stringent reporting regulations, and will experience a likely reduction in the size of the overall loan portfolio.

I see FNM at the same share price (approximately 58.00) or lower at this same time next year.



A BETTER FANNIE MAY:

Instead of Fannie Mae the stock....buy Fannie May, the wonderful Chicago chocolates.
I received a few positive e-mails regarding www.fiveherds.com bison gourmet steaks.
Obviously, a gift of meat is not for everyone. But FANNIE MAY chocolates are the best.

Order yours from www.fanniemay.com

HIGHLY RECOMMENDED. I have found the romantic returns from their dark chocolates, especially, dwarf the price of the product.

December 6, 2006: It is all relative

I have found that those who live by a creed or some personality that grips them usually fail as investors. Everything is relative. Nothing is irrelevant.


Pictures can be enlarged with a click.

December 4, 2006: Coal...what's under YOUR tree?

Holiday giving? Consider a lump of coal.

Coal prices have increased sharply in recent years. Good value can still be found in western-U.S. sub-bituminous.

For true authenticity, nothing beats a lump of Northern Appalachia bituminous for its dustiness, dirty smudge and high sulfur content (adds a nice aroma). For availability, the winner is PRB sub-bituminous, which is in ample supply this holiday season. For those seeking a less authentic, but still effective approach, you may consider charcoal. While there is no coal in charcoal, the gift will have the desired effect.

When adjudicating your coal gift, you should consider the following:

Dirtiness -- why buy a lump of coal unless it's sure to get all over everything else in the gift area.

Crumbliness -- ditto #1.

Pungency -- coal does not actually smell. Or does it?

Price -- Five cents a lump is not a lot of cash, but if you have lots of friends who qualify,it can be expensive in quantity.

Availability -- Coal just is not as abundant as it once was (give your friends a coal extracting company stock gift).

Where does one buy coal? On line might be your best bet.

The following websites sell coal for the holiday season:

http://www.twolumpsofcoal.com/index.htm

http://www.nextag.com/lump-of-coal/search-html

http://www.minerungems.com/christmas_coal.htm

http://www.importer.alibaba.com/buyeroffers/coal.html

http://www.nextag.com/Cinnamon-Coal-Candy-528724462/prices-html

http://www.tradekey.com/index.html?criteria=2&search_in=1&keyword=coal&start_date=&auction=selloffer_search&country=


Credit goes primarily to CSFB for the above silliness.



ON A SERIOUS HOLIDAY GIVING NOTE:
If coal is not the correct gift, I am sending several good friends an assortment of prime bison steaks, which are truly delicious. I am ordering them through:

www.fiveherds.com

HIGHLY RECOMMENDED.

December 2/3, 2006: US Defense/aerospace

The weather outside is frightful. But the fire is so delightful.....

It is time again to check in with the military and see what is on tap. If some of the terms are not familiar, e-mail me and I will clarify them.

New aircraft orders for civilian planes are up, and will continue to modestly climb. Airlines want more fuel efficiency and passenger comforts. Boeing (BA) is first. Airbus is last. Precision Castparts and BE Aerospace are positioned nicely here.
Goodrich should excel, and is my top supplier pick. Other companies that supply parts to older planes may be vulnerable now.

Regarding defense, the Global War on Terror O&M and MILPER requirements have exploded, and may crowd out planned Procurement and RDT&E.

Army outlook: major focus on tactical trucks, communications and electronics and tracked armored vehicles.

Weapons Systems: Cost is TOTAL COST of the program to be spread over several years

USAF

Tanker 18b-28b BA vs. NOC (Boeing looks good)
TSAT 14B-18B LMT, BA or NOC
Long Range Strike 25.6b 2007 only (total cost unknown) NOC, BA,LMT
F-35 CTOL/Navy STOVL 245b LMT, NOC, BAE

at risk to budget cuts
Space radar LMT
B52 common core jammer not known
E-10A NOC

Navy

DGD-1000/DD 26.5b NOC, GD
MMA/P-8A 29.3b NOC
CVN-21/CVN-78 29.5b NOC
F/A18 E/F and EA-18G 13.6b BA NOC
V-22 26.1b BA TXT

at risk to budget cuts
BAMS 26.4b 2007 NOC LMT/General Atomics
EFV 10.1 GD

Army

FCS 152.0b BA SAIC
JTRS 31.6b GD/JTRS-HHR/ ITT/SINCGARS BA/JTRS-GMR
WIN-T 13.6b GD/LMT
JLTV no cost estimate no proposal

at risk
Joint Heavy Lift no cost estimate BA/TXT

General opinion is that with the winding down of operations in Iraq (see previous posts on this), the armed forces will still require much equipment for homeland security if the fight is to be taken to the enemy instead of suffering terror attacks with frequency here in the United States. Equipment will emphasize less risk of military casualties (drones, satellites, weapons systems operated at distance which will be more accurate, lethal and plentiful.

Token belligerents North Korea, Syria and to some extent Iran can be effectively defeated in a matter of hours using present weapon systems, if the United States has the will to not use the Viet Nam/Iraqi Freedom approach.

More sophisticated systems to eliminate terror cells and infrastructure are well on the way to common use.

China presents the largest threat. This country is continually testing, challenging and posturing new weapons, especially lasers and cyber warfare. China has a massive intelligence campaign to obtain western technology on the cheap and has shown active interest in ways to cripple economic systems, especially in the financial area.

Russia needs to stop poisoning every dissident that utters a nasty comment about Vlad. Putin. China is doing a much better job of challenging the West covertly, without the bad press.


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