Too Big To Fail

Tonight at 9:00PM Andrew Ross Sorkin’s account of the 2008 financial meltdown comes to life in an HBO Movie.(Trailer) Rave reviews, All Star cast, and what looks to be a chilling account of the arrogance of Wall Street and how close we came to a meltdown.

An economics lesson from hell as entertainment.

It’s a shame that more will see the movie adaptation than read the book, but that’s our culture. You know where I’ll be at 9:00 PM.

Europe on The Brink

Each day Europe inches closer to the brink of a fiscal meltdown. There are those in Europe and the USA (Republicans) who insist on “claiming that defaulting on U.S. [or European] debt would be no big deal “ This is truly frightening.

Nobel Prize winner Paul Krugman When Austerity Fails (NYT today) goes over that and other myths that obviously haven’t worked to solve Europe’s current problems

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KISS & Stocks

(Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES

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Index Percentage Volume
Dow -0.74% Down
NASDQ -0.71% Up
S&P 500 -077% Up
Russell 2000 -0.73% -

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Technicals, Fundamentals & Analysis

Investors411 record - 6 years of beating benchmark S&P 500

  • Last Friday AM Investors downgraded US Equities from CAUTIOUSLY BULLISH to NEUTRAL. A major part of the reasoning in this, as explained on Friday is based on market fundamentals. – I hate when analysts downgrade a stock/sector/market after its got toasted.
  • Its a globalized world and very serious problems exist – like in Europe and Japan These problems are going to add to worldwide problems this summer.
  • Repeat – This is not an end of the world forecast, but I think investors will need to hear the Fed say “I’ve got your back” with some new form of liquidity after June 30th, before they feel comfortable again.
  • Market direction is the #1 criteria for investing and this downgrades impacts especially the high bets stocks (fast growers) in YOUR Stock List. So be careful.
  • From Seeking Aloha here’s Jeff Miler on stocks this week.
  • Both JS & The Critic commented on how to buy protection if you are long some stocks this summer. It well worth reading. (scroll down to comments section)

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Dividend Stocks

If stocks get toasted or flatten, stocks with a second stream of income – a dividend – usually suffer too. It’s the dividend that makes them outperform most other categories. Earlier we covered the ultra high dividend stocks (NYL & AGNC). Today two sectors of relatively high dividend plays.

Notes

  • DailyFinance.com has a history of payouts for dividend stocks for the past 5 years. (Click on Dividends near top of column on left)
  • DUK – A Utility I forgot to mention Friday, has a 5.16% dividend.
  • * Indicates or someone in my family owns this stock
  • Buy the dip

Tobacco

  • *MO – 5.48% dividend, Simply put – people across the world are addicted to tobacco. This stock is almost always on a top 10 list of dividend stocks. Marlboro etc.. For 5 years the dividend has been flat of higher.
  • RAI5.40% Winston etc.. Another stock that has raised dividends for 5 straight years. Lawsuits – The double standard – Tobacco companies fill government coffers with tax dollars so litigation is often curtailed.
  • PM - 3.65% Not as high a dividend, but the story is this international company was spun off from MO in anticipation of US litigation against tobacco companies. Again always flat or raising dividends over last 5 years

Telecom

  • *T – 5.50% This whole group benefits from all the new tech toys and apps that use their services. 5 years of steady dividend growth. AT&T
  • *VZ -5.23 Another stock with a 5 year dividend growth record. Verizon
  • *WIN 7.22% Smaller than the two above giants. 4 3/4 years of the same dividend. Windstream

Do your own homework on these stocks. The above is an outline. Consider protection(see above) and be conscious of overall market conditions when investing.

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Shorter Term Forecasting Indexes

There are hundreds of forecasting tools, – These two tools have worked

When they stop working Investors411 will use other Indexes

  • The Dollar (USD) [Any daily price move over +/- 0.50 is significant. Dollar usually moves inversely to stocks] Dollar rose SIGNIFICANTLY Friday  +0.74% yesterday. The Dollar bulls  are back, and momentum could carry the dollar higher and stocks lower = Bearish
  • McClellan Index - (MO) [The very rough guideline is over +60 = overbought market = sell positions or short stocks, & -60 = oversold market = buy stocks .] MO fell to -20.22. Just a tad move oversold, but lots of room to run on both sides. = Neutral

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Positions

  • In light of the Long Term Outlook call Friday, I sold 1/2 of REMX (Rare earth metals ETF) at basically what it was bought for.  Still have a lot of confidence in this area.  But it will take a hit if the summer is down.
  • Investors411 favorite long term  favorite IMAX probably had a good weekend.  The Pirates movie opened lower than others, but close to 1/2 the revenue was 3D and IMAX charges a premium. Still have faith in this stock because of its solid fundamental story – Lots more potential 3D hits on the way this summer. Shrek opens in 3D this weekend
  • As stated on Friday YOUR Stock List will be negatively impacted by the change in long term outlook.

Disclosure - I have positions in IMAX & REMX and manage a fund that has a 5+ year position in GLD

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Check out the advice, recommendations, analysis by bloggers on stocks,politics and trends in the comments section of the blog Many of the best concepts regarding YOUR Financial Future are discussed their. Watch for Paul’s Corner every Tuesday and Thursday

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Longer Term Outlook

NEUTRAL

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

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