Wednesday, March 11, 2009

BUY OF KXI/CXW, FRE, COMCSA, EBAY /FRUM on Limbaugh/Barton Biggs Back and Forth

It is going to be a tough slog to make significant headway in the market averages in 2009, possibly it may become easier during the second half when some light at the end of this dark tunnel may become visible.   

Jamie Dimon is seeing modest signs of an economic recovery.  He also stated that JP Morgan was profitable in January and February. JPMorgan CEO Dimon Sees 'Modest Signs' of Recovery - Financials * US * News * Story - CNBC.com

The next paper to close will probably be the Seattle Post. Seattle paper says workers told jobs will end | Markets | Markets News | Reuters

I am going to invest my 2009 retirement contribution placed into the Roth IRA, and then call it quits for at least a few weeks on buying common stocks.  I have been on what lawyers might describe as a frolic and detour for the past few days ignoring my own instructions about avoiding all common stock purchases. Frolic (law) - Wikipedia, the free encyclopedia
It is not even theoretically possible for me to fire myself for my flagrant insubordination of my own rules, or at least I hope that is true.   

The budget deficits for the current fiscal year will just be staggering, beyond my comprehension. Next year will be worse.  For the first five months, the deficit has already reached  765 billion.  Budget deficit reaches $765B in 5 months: Financial News - Yahoo! Finance

 I added today 30 shares of KXI  at 39.09 in the Roth IRA, an ETF for global consumer stable stocks.  I have owned it previously and sold it at a much higher level.  This is a link to more information:iShares S&P Global Consumers Staples Sector Index Fund (KXI): Overview
I was either going to buy KXI or PG and decided to go with KXI.  The largest holding in this ETF is PG at 9%, followed by Nestle at 8%, then Wal Mart, KO, PEP, etc.  I did write an earlier post that consumer stables were not a refuge in a bear market.  This was in February 2009.  Consumer Staples: Not a Refuge in a Bear Market/Spend more Money on SEC Enforcement/Accuray/Job Losses/Obama Pay Plan 
I believe that is true.  This downturn is already an old man by historical standards.  And since I wrote that post, KXI has fallen another 6 points.  The 39 price is down from a November 2007 high of around 64 or so.  That decline is a really large one for consumer stable stocks. This made the current entry point more enticing for a long term hold in a retirement account.  In that account, I am more inclined to hold something long term, provided I can buy it at what I view as an advantageous price, and I am less willing to accept the current money market yield as a viable alternative.  So that takes care of about 1/6th of my recent contribution. 


Corrections Corporation, a small position, announced a new contract with Arizona to manage house 752 inmates in a CXW facility in Colorado. Corrections Corporation of America Announces Contract Award From the State of Arizona: Financial News - Yahoo! Finance

Freddie Mac (FRE) reported a 23.9 billion dollar loss and says it needs another 30.8 billion in capital from the government.  Freddie Mac Reports Fourth Quarter and Full-Year 2008 Financial Results: Financial News - Yahoo! FinanceFreddie Reports $23.9 Billion Loss - WSJ.com This defies belief.  The loss for 2008 was 50.1 billion, which is just incredible-words can not describe my disgust.   

The WSJ gave four reasons why the recession may be easing.  Is Warren Buffett Wrong? Four Reasons the Recession May Be Easing - Deal Journal - WSJ

Comcast (CMCSA) said it is now the third largest residential phone service provider in the U.S. 
I will take a look at the stock again.  I have only owned a bond within the past two years. 

David Frum takes issue with Limbaugh being the titular head of the Republican party. Why Rush is Wrong | Newsweek National News | Newsweek.com
I read his article today.  His problem with Rush is more style than substance.  Frum does not so much challenge Rush's ideology, which is today's mainstream republican, as he does Rush's bombastic style of articulating core GOP beliefs.  It is interesting that Frum tries to prove his bona fide conservatism by stating that he supported the Iraq invasion.  I previously articulated my reasons why I refused to classify support for the Iraq invasion as a conservative belief (discussed in more detail in at least five prior posts:
 Accurate Information is Not a Side to an Issue/ W & the Housing Crisis/Lying Works In Politics  I do believe that Frum's support for the invasion is proof of his lack of good judgment and adherence to group think, and has nothing whatsoever to do with conservatism.    

Also, in this week's Newsweek, Barton Biggs makes the case for why the markets can rally. 
He does view a fall to S & P 500 and DJIA 5000 to be "farfetched".  Is this the same Barton Biggs who just told the NYT for investors to buy a shotgun for the upcoming social unrest caused by a deepening downturn. Even for Stock Market Veterans, It’s Uncharted Territory - NYTimes.com


I would hope that a massive effort is undertaken by the Obama administration to find and prosecute perpetrators of financial fraud.  Prosecutors Plan an Attack on Financial Fraud - NYTimes.com

DISCLAIMER:

  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will.  In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. 

 

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