It's Been too Long

Well, it's been far too long since my last post. Unfortunately I've been extremely busy over the last five months and I just haven't had the time to sit down and write. The last five months have been very volatile in the market. In my last post, which was made in late July, I talked about the decision I had made to shift out of the stocks in the Cramer portfolio and move the money into the stocks in the Buffett portfolio. Thank goodness I made that decision when I did. As I have said many times in my investing career, the toughest thing an investor will ever learn is when to sell. Most of us are reluctant to sell a stock that we have a gain in because we're afraid it will go higher after we sell. For some strange reason we're also reluctant to sell a stock that we have a loss in because we're afraid it will go higher after we sell it. I also think it's harder to sell a loser because by closing out the position with a loss, we're, in a way, admitting defeat. That's the decision I was faced with in July. I had a lot of stocks in the Cramer portfolio that were down since I had bought them. I had the choice of selling them and locking in losses or hanging on and hoping that the stocks would rebound. I like to be very open about my trades and I often give the exact buy and sell points but I don't reveal the number of shares. Below is the list of stocks that I have sold since my last post along with the price I sold them at and their closing price as of Friday, December 12th. As you'll see, I made the right decision by selling these stocks.


Apple (AAPL) - Price I sold at: $166.03 - Current Price: $98.27
Burington Northern (BNI) - Price I sold at: $94.37 - Current Price: $71.38
Bucyrus International (BUCY) - Price I sold at: $58 - Current Price: $18.72
Chesapeake (CHK) - Price I sold at: $32.75 - Current Price: $16.64
Freeport McMoran Copper & Gold - Price I sold at: $64.75 - Current Price: $22.28
Google (GOOG) - Price I sold at: $411.69 - Current Price: $315.76
Goldman Sachs (GS) - Price I sold at: $99 - Current Price: $67.74
Raytheon (RTN) - Price I sold at: $56.09 - Current Price: $50.80
US Oil Fund (USO) - Price I sold at: $77.81 - Current Price: $38.10
US Steel (X) - Price I sold at: $141 - Current Price: $39.03

I also sold Eaton Vance Tax Advantaged Dividend Income Fund (EVT) at $18.37. It's closing price on the 14th was $10.72. This closed end fund was listed in the Buffett portfolio. I kept two stocks in the Cramer portfolio, Teva Pharmaceuticals (TEVA) and Wal Mart (WMT) because I felt these stocks were much safer than the other Cramer stocks, most of which were tied to commodities. That turned out to be a good move as these two stocks have held up well recently. Another fortunate move I made was to significantly increase my exposure to the Ultrashort DOW ETF (DXD) which seeks to perform at twice the rate of the DOW Jones Industrial average, just in the opposite direction. This is a holding that I've owned since late 2007. However, I never reported on it before because I always thought of it as an insurance policy rather than a holding in the portfolio. It certainly saved me from even greater losses when the mrket turned really nasty in September. Hopefully, I'll be back sonner rather than later to post some more.

Sunday, July 27th, 2008 Update

I haven't been able to post anything in over two weeks. I was on vacation for awhile and then I was really busy after getting back home. The last two weeks in the market have been really volatile. Unfortunately, my portfolio has not fared as well as I would like. I have always said that I don't mind for my portfolio to be up less than the overall market on the up days, as long as it's not down more than the overall market on the down days. Lately, that's exactly what I've seen all too often. It has pointed out to me that I've got too much risk in my portfolio and it's time to step back and not only look at the individual stocks that I own, but my overall investing philosophy. Fortunately, I've had a lot of time to think since my last post. I've come to the conclusion, that I need to do three things 1) reduce the number of stocks in the portfolio 2) make the Warren Buffet stocks a greater percentage of the portfolio 3) be more aggressive in writing covered calls and naked puts to generate current income. Right now, I own sixteen stocks with six of them in the Buffet portfolio and ten in the Cramer portfolio. I will start to liquidate most of the stocks in the Cramer portfolio as I feel the timing is right and use this money to invest in the Buffet stocks. New purchases of Buffet stocks will be done in combination with the sale of covered calls. Since these stocks are not nearly as volatile as the overall market, the idea is that I'll be able to bring in some cash by using the new shares as collateral. This upside is that I lower my cost basis on shares of stocks that I like and the downside is that I get called out and don't realize all of the gains that I could have. Since I will not sell covered calls against my entire position of any one stock, I will always have some shares available to participate in any rally. I will also use naked puts as a way to either generate income (put finishes out of the money) or allow myself to buy into a stock at a good price. I think this new strategy will help cut down on the volatility in the portfolio as well as help me achieve the goal of my investing philosophy: To build a portfolio that 1) generates long-term capital appreciation and current income 2) outperforms in a down market even though it may lag in an up market.

Friday, July 11th, 2008 Update

I've been getting ready for vacation this week, so I haven't had a lot of time to post messages. The short update on my portfolio is that I lost ground to both the DOW and the S&P on Tuesday, then beat both of them on Wednesday and Thursday. Lately, I've been looking at the stocks I have sold this year to see where they traded after I sold them. Let's just say I'm very happy I sold most of them. One of the things I have said for a long time is that the toughest thing you'll ever learn related to investing is when to sell. Sometimes, this means taking a loss before it turns into a bigger loss. I'll talk about this more when I have time. I'll be on vacation the next week and will probably not be able to post much if at all.

Monday, July 7th, 2008 Recap

It was another down day for the major averages as the DOW dropped .5% and the S&P 500 dropped .9%. My portfolio managed to outperform both indexes with a .49% loss. Frankly, I'm getting tired of beating the averages in this manner. Unfortunately, I don't see an end to the poor market action just yet. The only real news of the day was the drop in oil prices and how the market failed to rally on that. Crude finished down about $4 per barrel on the day. Tomorrow Alcoa (AA) will kick off the earnings season with their second quarter earnings report. The company is sure to disappoint as they always do.

New Specific to my portfolio:
Altria (MO) was the biggest winner today trading up 2%. Since I can find no news to attribute the move to, I'm assuming this was probably just a bounce from last week's selloff which was puzzling. The biggest loser in the portfolio was Teva Pharmaceuticals which lost 8.5% on the back of a report that revealed a 40 mg dose of Copaxone, one of the few drugs the company has developed on its own, is no more effective against Multiple Sclerosis than the already approved 20 mg dose. I still like this stock, but in this environment, I will wait to see if the stock goes lower before adding to my position. I made two moves today. First, I sold some July 125 calls against my position in Freeport McMoran when the stock was trading around $109 per share this morning. The calls have only nine more trading days to rise about 14% or they will finish out of the money. Since my cost basis is well below $125 per share, I like the risk/reward here. My second move was to unload the shares of US Steel (X) that I bought last Wednesday when the stock dropped over $22 in one day. I decided to take the quick gain and lighten up on my position since the market is trading so poorly lately. I know the company will report great second quarter earnings in just a few weeks, but I am being very cautious at the moment and wanted to raise some cash in case buying opportunities present themselves in the meantime.

Sunday, July 6th, 2008 Weekly Roundup

It was another down week in the market and for my portfolio. The week finished a day earlier than usual as there was no trading on Friday, July 4th. Thursday was a slightly positive day for the market with the DOW and S&P ending the day both in positive territory. My portfolio was also slightly positive, but slightly less positive than the DOW and S&P. That makes my record against the DOW 6-3 and my record against the S&P 2-2. The big news of the week was the European Central Bank's move to raise short term interest rates by .25% and the seemingly never ending string of record-breaking oil prices. I began to raise more cash in my portfolio as it now appears we're headed for certain recession and I just can't see any improvement in the economic outlook or for consumers until we get lower prices at the pump. Hopefully, we will see lower gas prices this Fall. I've read reports of China building up their oil supply because they don't want there to be any shortages while their country is on display during the Olympics. The Olympics don't end until about August, 25th so I don't expect any relief until at least then. Meanwhile, fuel prices have risen so far so fast this year that it has really put a strain on businesses. Many companies have put fuel surcharges in place to offset the higher costs, but this has resulted in slower business. So, I want to sell the stocks in my Jim Cramer portfolio that I think will be hurt by this scenario and look for new stocks that are either unaffected or actually benefit from the current environment.

Warren Buffet Portfolio

Eaton Vance Tax Advantaged Dividend Income Fund (EVT) $23.01 - This closed end fund tends to track the market and it did so this week going lower. The two biggest sectors owned by the fund, energy and financials, are somewhat offsetting each other at the moment, but the remainder of the portfolio has been hurt by the downward direction of the market. The fund yields almost 8% so if it continues much lower, I will have to step in and add to my position.

General Electric (GE) $26.91 - The company will announce second quarter earnings on Friday. I'm expecting a decent report, but nothing that will cause investors to come flooding back into the stock. Lately, the company has been focusing on cutting costs and selling off their slower growth businesses such as their appliances division. I wish the company would change their name from General Electric to "Green Energy" as they are making a real push into green technologies. They are also using their NBC affiliates to push the idea to the general public and it's now somewhat "hip" to be green. GE also announced today that it would byuy "The eather Channel" and the weather.com website. "The Weather Channel" has also started made a push towards green programming. so I can see where this is going. For now, I'm happy to be getting a chance to buy at historically low prices. I'm not sure how long the sale will last, but as the stock goes lower I will add to my position. I will add to my position if the stock trades down to $25.

Coca Cola (KO) $51.48 - Hopefully, the stock is finding a bottom here in the low 50's. It's been drifting lower for several weeks and has been hurt recently by announcements of slowing growth from international bottlers. I believe the weaker dollar will offset the slowing growth and the company will be able to make earnings projections for this quarter. KO has long been seen as a safe haven among stocks when the economy slowed so I think the stock will start to hold up better even if the market continues to weaken.

McDonald's (MCD) $57.19 - The company is benefiting from consumers trading down and the weaker dollar is also helping. They have announced good same store sales growth for each of the first two months in the second quarter, so I expect a good report when second quarter earnings are announced soon.

Altria (MO) $20.12 - The stock suffered this week after a report came out that the government may outlaw sales of menthol cigarettes. I've read that MO doesn't have any exposure in this area, but the stock got hit anyway. Whether the company sells menthol cigarettes or not, I don't think this will hurt earnings because I can't see people switching from menthols to nothing. I want to buy more shares if the stock drops to $19.75.

US Bancorp (USB) $27.67 - The stock has been hurt lately by other banks' woes. To me, this looks bullish for USB. I'm not sure why this best-of-breed regional bank has gotten sold off as much as it has, but it's giving me a chance to add to my position while the stock is yielding over 6%. If the stock falls to $27, I will add to my position.

I will be back later to finish the rest of my report.

Wednesday, July 2nd, 2008 Recap

It was an ugly day in the market with the DOW being down 1.46% to 11,215.51 and the S&P 500 trading down 1.82% to 1261.52. Several of the commodity related stocks were hurt today although the commodities themselves did well. Oil & copper were both up today but the stocks related to those commodities didn't fare as well. This is very confusing to me because commodity stocks should rally when the commodities they sell go higher. Also, the near term news is expected to be bullish for commodities as the ECB is expected to raise interest rates tomorrow. This should weaken the dollar further and provide more support to already strong commodity prices. I don't understand how this could be bearish for these stocks, but it definitely was today. Tomorrow was already setting up to be a bad day in the market, but now I really have to wonder how bad it will be if the stocks that should be rallying can't rally.

News specific to my portfolio:
My portfolio was down 1.8% today so it outperformed the S&P, but not the DOW. That brings my record against the S&P to 2-1 and against the DOW I'm now 6-2. I had two big losers in the portfolio today. US Steel (X) and Bucyrus International (BUCY). The news that I have been getting about the steel sector says that the steel companies have been raising prices like mad and they are still doing good business. The coal companies have been doing well because of short supplies and rising prices as well. I know both of these companies will announce great earnings for the second quarter, but since the stock market is more of a forward looking vehicle, the perception of what the company will do going forward is always more important than what the company has done in the past. A couple of days ago I was talking about X nearing $200. Today it closed just above $153 per share and is down over $43 in the last week. That seems very excessive to me, but the stock may go down more tomorrow. BUCY has not sold off quite as much as X, but it is still way off of its highs. I still believe in the story for both of these stocks, but I've learned over the years not to get in the way when the market tells you that you're wrong. Swift action may be required to avoid losing even more. Hopefully, the market will turn in our favor.

Tuesday, July 1st, 2008 Recap

I've been away for a few days. I was unable to do my usual weekly roundup and I was not able to make a post yesterday. On Friday, my portfolio outperformed the DOW as it was down only .5% compared to a 1% drop for the DOW. On Monday, my portfolio again outperformed the DOW with a .35% gain versus a fractional gain in the DOW. This ran my record against the DOW to 6-0. On Monday, I began tracking my portfolio against the S&P 500 index. I started with a win for a 1-0 record. Today was a different story as my portfolio was down about .1% against gains in both the DOW and the S&P. This makes my record against these indexes 6-1 and 1-1 respectively. There wasn't a lot of news on the day, but the DOW went for a wild ride. By late morning, the DOW had dropped more than 100 points below yesterday's close twice with a trip into positive territory sandwiched in between. At the closing bell, the DOW was up 32 points.

News specific to my portfolio:
Since I haven't made an entry since last Thursday, I wanted to mention that I sold out of Apple (AAPL) and Raytheon (RTN) on Friday. I like both stocks and I will probably regret selling them, but I just felt it was time to get rid of both given the near-term outlook. First, with AAPL I fear that they will not be able to sell as many new iphones as originally predicted. Gas and food prices have continued to rise and I think we will see more food inflation in the coming months as companies start to pass on price increases to the consumer. There are many factors that have been driving the oil market higher and it's uncertain whether this will continue or not. Either way, gas prices are elevated and iot appears they will stay that way even if prices drop. To me, this all says less spending by consumers on things like the iphone. In RTN's case I'm afraid the upside will be limited until after the Presidential election. The current polls are showing Obama leading McCain and this is perceived to be bad for defense spending in general. I continue to believe that RTN can increase earnings by selling to foreign countries, but the U.S. defense budget is by far the largest in the world and this is what is driving the stock price at the moment. Today, Teva Pharmaceuticals (TEVA) was my biggest gainer tacking on 2.6%. However, we'll have to keep an eye on this one tomorrow as after the bell the company announced they had lost a patent dispute against Astrazenica (AZN). Both Bucyrus International (BUCY) and Chesapeake Energy (CHK) were big winners today advancing more than 2%. Tomorrow will be an interesting day for CHK. After the market closed, they announced a joint venture with Plains Exploration. The deal seems pretty sweet for CHK as they sold 20% of the land they have in the Haynesville Shale to Plains for $1.65 billion and also agreed that Plains would pay money to drill wells for CHK. Apparently, other investors agreed with me as the stock traded up to $70.75 in after hours trading. This represented a $3.39 move beyond the closing price. US Steel (X) was the biggest loser on the day dropping over 5%. Apparently, investors were in the mood to sell steel stocks as the whole group suffered. I want to buy more of this stock if it drops below $170 per share. The steel companies have pricing power right now and I think this will be shown in the next quarter's earnings reports. One concern about the steel sector has been increasing input costs. This is where X has a bit of an advantage as they own most if not all of their supply chain. I look for this stock to go above $200 soon and still higher as we move toward the end of the year.

Thursday, June 26th, 2008 Recap

Today was a crummy day in the market. The DOW was down 358 points closing at 11,453. There was just a lot of bad news for traders to sell on. We had the RIMM and Oracle news from yesterday and then Oil was way up as well. It also didn't help that Goldman Sachs downgraded both Citigroup and General Motors to a sell rating. June has now officially become the worst month for the stock market since the great depression. My portfolio again outperformed the DOW as it was down just short of 2% and the DOW was down a little more than 3%. However, this is little consolation. I never like to lose money, but 2% of your portfolio in one day is especially tough to swallow. The two biggest losers in my portfolio were GE and Apple which were both down more than 5%. I had only two winners, Teva Pharmaceuticals and the US Oil Fund (USO).

Wednesday, June 25th, 2008 Recap

The market was plagued by another late day selloff which erased earlier gains. When the dust settled, the DOW was up only 4 points closing at 11,812. The decline started shortly after the Fed announced no change in the Fed Funds Rate. Early in the day oil, natural gas and all the energy names sold off while the financials rallied. After the Fed announcement, everything turned around as oil, natural gas and all the energy names rallied into the close while the financials sold off. Before the bell Monsanto (MON) announced earnings that exceeded expectations, but the stock was down on the day. Apparently, the guidance going forward was not enough to spark a further rally. This stock has been on fire for the last several months and I have wanted to add the name to my portfolio for some time, but there just hasn't been enough of a pullback yet for me to get in. If the stock were to drop to $125, I would pull the trigger. After the bell, Research in Motion (RIMM) and Oracle (ORCL) both announced earnings. RIMM's results were a little short of the market expectations, and the stock sold off about 10% in after-hours trading. Oracle, on the other hand, announced very good earnings, but the stock sold off after hours as the company was cautious on their outlook for the next quarter.

News specific to my portfolio:
My portfolio was up .4% today which again outperformed the DOW. I think I'll start keeping score on a day-to-day basis. This week I'm 3-0, so that's where we'll start the record keeping. The biggest gainer in the portfolio today was Apple (AAPL) which was up more than 4%. There was no particular news on the company today. However, the stock did sell off some in after-hours trading most likely due to the RIMM news. I think you can buy this stock if it falls into the low 170's tomorrow. One other stock of note in the portfolio was US Steel (X). I have been talking a lot about the $185 level because this served as resistance for the stock for the last month or so. On Monday, the stock broke through that level and closed over $190. I think the $185 level now serves as support. Today we got good evidence of that as the stock sold off sharply early in the day, hitting an intraday low of $184.88. The stock bounced off this level hard and finished up 1.29% at $191.96. I still think this stock will see $200 by July, 4th. There was one stock in the portfolio that was a bad underperformer, The Chemical & Mining Company of Chile (SQM). I added the stock to my portfolio yesterday. In Tuesday's report, I mentioned that the stock had been on fire and I wanted to get in, even though I don't normally do that. This proved to be a bad decision and I quickly sold out of my position this morning when the stock dropped under $49. I decided there was a better way to play this than just taking the long side. After selling my shares, I bought one July 50 call and one July 45 put. Basically, I'm betting that the stock will continue to be volatile for the next few weeks. Hopefully, I will be able to sell one of these contracts for enough of a profit to cover the cost of both and still have some money left over. This is a risky strategy, but one I'm willing to try at this time given the volatility of the stock and what I perceive to be cheap premiums on the options. I made one other move today, selling some December 24 calls in Altria (MO). The stock had a nice pop at the open on an upgrade. When I sold the calls, the stock was trading around $21.75. By the end of the day, the stock had dropped closer to $21.25. It's a long time until December, but I feel like I know this stock pretty well and it usually doesn't move that quickly. In the past I have thought about selling calls when I felt the stock moved up too far too fast, but I always decided against it hoping the stock would continue upward. Today, I decided to sell the calls because I felt it would probably go back down in the near term. Only time will tell if I'm right.

Tuesday, June 24th, 2008 Recap

Today was pretty quiet as the DOW was down 35 points to finish at 11,807. The Fed started a two day meeting today and we will get the all-important "statement" along with the announcement on interest rates. Most traders are not expecting a rate change from the Fed, but they are expecting tougher language on inflation in the statement. I agree that the Fed will leave rates unchanged, but I'm not sure what that will mean for the market. Obviously, we're in a tough environment for stocks right now. Inflation is running high and the economy is getting weaker. Hopefully, at some point we'll get some relief on energy prices which is a must if we're going to see things get going again.

News specific to my portfolio:
I was lucky again today as my portfolio was up a little while the DOW was down a little. Yesterday's two biggest winners, Chesapeake Energy (CHK) & Bucyrus International (BUCY), were today's two biggest losers. CHK lost about 3.5% to finish at $65.45 and BUCY was down 2.2% finishing at $75.99. The two biggest winners were US Bancorp (USB), which was up more than 3.5% to finish at $29.93, and Raytheon (RTN) which was up 3.28% to finish at $59.25. I suspect that Nat Gas being down a little gave folks a reason to take some profits in CHK. BUCY has been on a tear, so I suspect a little profit taking on it as well. Both RTN & USB have been down for several consecutive days, so maybe the stocks finally got cheap enough for investors to step in. I can't find any news that would account for the rise in those shares. Today was a fairly active trading day as I made three trades. I was able to buy more Wal Mart (WMT) at $56.50. I feel good about being able to add these shares because I had been waiting for them to come own to my price. In my second trade, I added a new name to the portfolio, Chemical & Mining Company of Chile (SQM). I'l have more about what they do in the weekly roundup. This stock has been moving higher lately and trading volumes have been increasing. This is a big momentum name, which I don't usually like to trade, but I decided to take a chance on this one. The last trade I made was to sell some Big Lots (BIG) short. This is purely on the recommendation of Fast Money's Karen Finerman. She has been right on with her short calls and I feel like she is right on this one as well. I also don't do much shorting, so this will be a little different for me as well.

Monday, June 23rd, 2008 Recap

The DOW spent most of the day in positive territory before a late day selloff pushed it downward to close virtually unchanged. The DOW was at 11,842 when the closing bell rang. The big news of the day was the announcement that Saudi Arabia will raise oil production by 500,000 barrels per day. However, this had no effect on crude prices as oil rose to close near an all-time high. To be honest, 500,000 barrels per day sounds like a lot but it's not very much considering the total daily worldwide consumption is about 85,000,000 barrels per day. After the bell UPS announced that second quarter earnings would not meet previous expectations as higher fuel prices and lower shipping volumes are to blame. This is not a big shock, but the market will probably sell off tomorrow morning because of this.

News specific to my portfolio:
My portfolio gained just less than 1/2 of 1% on the day which was ahead of the DOW. Three stocks stood out on the upside. Chesapeake Energy (CHK), Bucyrus International (BUCY) and US Steel (X). There was no news to account for the pop in either CHK or BUCY which were up 6% and 5.25% respectively. X was added to the Conviction Buy List at Goldman Sachs (GS) and traded through the all-important $185 level to close at $191.02. I have mentioned on more than one occasion how important it was for the stock to close above $185. I think the stock can trade through $200 within the next week or two. I took the opportunity early in the day to sell a small portion of my shares at $188.50 on the hope that the stock would fall back closer to $185. However, the stock just kept on chugging all day. Goldman Sachs (GS) and US Bancorp (USB) were the two worst performers in the portfolio today as both were down more than 2.5%. I took the opportunity to buy some USB at $29. I was also hoping to get a chance to add to my Wal-Mart (WMT) position at or below $56. Unfortunately, the stock opened higher and I never got a chance to do that.

Sunday, June 22nd, Weekly Roundup

It was a bad week for the stock market. Luckily, my portfolio was down less than 1% while the DOW was down about 4%. I give the credit to the fact that I am currently investing in "safer" stocks, which usually don't go down as much in a poor market, and a host of stocks that are related to energy which is about the only sector outperforming at the moment. As always though, things can change in a hurry, so I have to make sure I have a plan for each stock in the portfolio, should the story change, and that I'm always looking for stocks that will do well in the current environment.

Warren Buffet Portfolio

Eaton Vance Tax Advantaged Dividend Income Fund (EVT) $23.79 - It was a tough week for this holding which usually tracks the overall market. I last bought shares at @ $22.75 and unloaded those shares at $25.25. If the stock dropped below $24 I would be interested in adding to my position.

General Electric (GE) $27.38 - The stock finished down almost two dollars on the week. GE is a huge conglomerate which is in many businesses, but they have a great track record of growing earnings. The company missed expectations in the first quarter of this year, but I expect them to bounce back. I have been using the weakness of late to add to my position. I would like to buy more at $27.

Coca Cola (KO) $53.66 - The stock suffered more this week as a couple of its international bottlers announced that case volume growth would be lower than previously expected. I like this stock for the long term. The company is constantly looking for ways to grow and I think international growth will see the company through the current environment. I would like to add to my position closer to $50.

McDonald's (MCD) $57.40 - The stock was down on the week as it follows its usual pattern of selling off after announcing good same store sales early in the month. If the stock slips much more, it could be a good time to add to my position.

Altria (MO) $20.78 - The stock lost twelve cents off of its closing price from the previous week. This is one of the reasons you want to own Altria. In a week where the DOW was down almost 4%, Altria was down less than 1%. The great dividend and shareholder friendly management are other good reasons to own it. If the stock drops to $20, I would definitely buy more shares.

US Bancorp (USB) $29.67 - The stock held up better than most regional banks this week. I continue to own this stock, which is in the worst performing sector for 2008, because they avoided many of the pitfalls that hurt their competitors and I expect them to come out stronger than ever. I will add to my position if the stock drops to $29.

Jim Cramer Portfolio

Apple (AAPL) $175.27 - I started a position in the stock again this week as it started to look attractive after the recent selloff. The 3g iphone should drive good earnings growth this year and I have confidence in management to keep coming up with gadgets that will sell. If the stock drops to the low 170's, I will add to my position.

Burlington Northern Santa Fe (BNI) $103.02 - Tough week for the company as they announced second quarter earnings would fall short of previous expectations because of flooding in the Midwest and higher fuel costs. At first, I was uncertain on what to do with the stock but I have decided to keep it for now. The flood waters will eventually recede and the company is the best positioned of all the railroads to take advantage of higher coal and corn prices. If the stock drops below $100, I would consider adding to my position.

Bucyrus International (BUCY) $73.83 - I sold some covered calls against my position on Monday. On Friday, I was able to buy those calls back for a profit. This stock has been a great performer this year and I expect it to go higher. I would like to add to my position if the stock gets closer to $70.

Chesapeake Energy (CHK) $63.96 - It was a great week for the stock as it made a new 52 week high. As long as Natural Gas prices stay high, the company will continue to perform well as they continue to increase production each year. I'm hoping to get a rally to $70 this week where I would seel some shares.

Freeport McMoran Copper & Gold (FCX) $117.03 - I sold some calls against my position on Monday and they expired worthless on Friday, so I got to keep all the money I brought in. The company is well positioned to benefit from all of the building going on in places like China. If the stock drops closer to $110, I would have to add to my position.

Google (GOOG) $546.43 - It was a tough week for the stock. There wasn't much news, so it appears it was just a victim of the broader market selloff. I continue to like the stock but I'm not looking to add to my position at the current level.

Goldman Sachs (GS) $183.77 - The stock was actually up this week even though most other financial stocks were down big. On Tuesday the company announced great earnings which easily exceeded expectations. I took the opportunity to sell some shares which I had boughht a few months ago at a lower price. Since the stock usually sells off with other financials, I may get a chance to add to my position. I would like to do so if the stock drops to $165.

Quanta Services (PWR) $33.86 - The stock was up slightly this week. I like the company as they are the leading maker of windmills. Wind is the cheapest of all alternative energies and I expect it will have the best chance of catching on. I like this stock for the long term but I'm not looking to add to my position at these levels.

Raytheon (RTN) $57.89 - The stock held up relatively well this week. Raytheon is very cheap with a current P/E ratio below 10. Defense stocks should hold up better in a down market, but this one has been down in previous weeks as it looks like Barack Obama will be the next President. Most investors think he will not want to spend as much on defense. The elections are a long way away and a lot can change between now and then. I like having this stock in the portfolio because it offers some diversity to my energy holdings. However, I could see cutting my losses if a better opportunity comes along.

Teva Pharmaceuticals (TEVA) $44.18 - The stock was up about 4% this week as the company got some good news about one of the drugs they're developing. I added this stock just over a week ago and had been looking to buy it for several months. I like the stock for the long term because our population is getting older and TEVA is one of the largest generic drug makers. If this stock were to drop below my cost basis of $42.60 I would add to my position.

US Oil Fund (USO) $109.14 - The stock was virtually unchanged on the week. I had sold some JUN 102 calls against my shares so on Friday I decided to buy those calls back at a loss. I also added more shares to my position. I will probably sell more calls against some of my position tomorrow and let the rest run because it seems like oil always finds a reason to go higher.

Wal Mart (WMT) $56.26 - The stock lost about $3 on the week and is starting to look attractive. This is about the only retail stock that has performed well this year as consumers have been trading down to the discounter. I see no reason to believe that trend won't continue and I'm actually hoping for a lower open tomorrow so I can add to my position. I will be extremely happy to add to my position below $56.

US Steel (X) $182.79 - The stock gained about $10 on the week but failed to close above the $185 level after trading above $186 on Friday. I think this is an important level technically for the stock and if it can manage a close above $185 it could go significantly higher.

Wednesday, June 18th, 2008 Recap

It was another tough day in the market as oil was up again and worries about the regional banks spooked investors. The DOW finished down 131 point to close at 12,029. We're getting closer to the market lows set earlier this year when the DOW twice dropped to around 11,700. I don't know if we'll get there again or if we'll go even lower, but days like today are not very encouraging. In yesterday's recap I talked about the after hours announcement by YRC that second quarter earnings would be higher than previously expected. I was skeptical of this announcement as it looked like the upside would come from consolidating benefits plans rather than stronger business. The stock managed to tack on 5% today, but one analyst was not impressed by the announcement. I guess it remains to be seen if the earnings picture really does improve from here. I have to believe the rise in oil prices is causing the consumer to cut back.

News specific to my portfolio:
My portfolio again outperformed the DOW as I was only down slightly. The biggest winner was Chesapeake Energy (CHK) which made a new 52 week high at $66.08 before settling at $65.94. There was no specific news on the stock that I can find, but natural gas was up, so I'm sure that had something to do with the rise. This stock has been on a tear, but it has to pull back at some point. If this stock continues to $70 in the short term, I will have to sell some of my position. US Steel (X) was also up today as it charged forward almost 3%. Again, I could find no specific news that would account for this. General Electric was the biggest loser in the portfolio today dropping 2.25% closing at $28.21. I'm not too concerned as I am in this one for the long term. In fact, I'm glad to be getting such a good buying opportunity and have a limit order in to buy more if the stock drops to $27.50. US Bank was also a loser today dropping 2.15% to close at $30.01. My limit order to buy at $30 was filled today, so I'm happy with this development. This is another great company that has been hurt by the bad news surrounding its peers. USB steered clear of the sub-prime mortgage mess, but they are still being sold off with other financial stocks. I have a limit order in to buy more of this stock if the shares drop to $29. I made one other move in the portfolio today selling some shares of Goldman Sachs (GS) at $185.25. I made just a small amount on these shares that I bought a couple of months ago, but I am happy to take profits in the name right now. After the spectacular earnings announcement yesterday, I expected better performance from the stock. However, we're seeing the same sort of stuff we've seen with GS stock over the last several months. They announce good things, their competitors announce bad things and everyone focuses on the bad stuff coming out of the other companies. In the past this has created several buying opportunities. I'm hoping the stock will drop to about $165, where I will be more than happy to buy these shares back. One last note... after the market closed today, Burllington Northern (BNI) announced that their second quarter earnings would not meet estimates because of higher fuel prices and because they have lost some business due to flooding in the Midwest. I'm a little torn by this announcement because I really like the stock. I believe they will continue to benefit from higher fuel prices because they will take business away from the truckers. However, we know they won't meet their estimates for this quarter and the stock is sure to take a hit. I might be better off selling my shares and waiting for a better entry point once we get through this rough spot. At this point, I'm not sure what to do with the stock.

Tuesday, June 17th, 2008 Recap

The market started off pretty well, but by late morning all the gains were gone and we continued to drift lower until the close. The DOW finished off 108 points at 12,160. There were two big new items that drove the action and oddly enough both were centered around one of my holdings, Goldman Sachs (GS). Before the bell, GS announced second quarter earnings of $4.58 vs the consensus estimate of $3.42. It was another huge quarter for GS which seems to always blow away estimates. The GS earnings announcement provided strength for the market early in the day. However, it was a report by GS released later in the day that drove the market down. The report stated that because of continued losses, banks may have to write down an additional $65 billion. This took the market down and GS's stock price with it. After the bell there was one more news item of note as Yellow-Roadway (YRC) "raised" their earnings forecast for the current quarter. The stock was pushed 9% higher in after-hours trading. However, I have to challenge that somewhat because the raised guidance is not coming from stronger business, but rather because the company has recently consolidated several benefits plans. It will be interesting to see how the stock and the rest of the transportation sector trades tomorrow. I can see why people got excited about the headline on this story, but when investors dig into it a little, I think they'll find a reason to be disappointed.

News specific to my portfolio:
There wasn't much news on specific stocks in the portfolio other than GS. Overall, my portfolio advanced today despite the lower overall market. CHK was the biggest winner as it was up almost 5% to close at $64. This stock just continues to move higher as Natural Gas is enjoying a great rally without much publicity. I sold some of my position at $59 a few weeks ago and I wish I had held onto it a little longer. However, I probably need to think about selling a little more if the stock moves toward $70. BNI & USB were the biggest losers in the portfolio today. I'm not sure what caused BNI to drop almost 3% to $102.21, but it's starting to reach a level where I want to add more. If it moves closer to $100, I will have to pull the trigger because the stock looks great on a fundamental and technical basis. USB was hurt by the GS report, but I don't mind too much as I want to add to my position at $30. The stock closed at $30.67 and if we get a downward open tomorrow morning, my limit order may get filled. Lastly, I added a position in AAPL today at $180. The stock pulled back hard last week to the mid 160's and I wish I had bought some of it a few days earlier. I still think I got a good price, it just could have been a little better.

Monday, June 16th, 2008 Recap

The DOW finished down 38 points at 12,269. Oil was the big story of the day as it hit a new all-time high above $139 per barrel before finishing down on the day below $134 per barrel.

News on Specific holdings:
Three holding stood out today on the upside. BUCY was up almost 3% today as the coal sector continued higher. I actually sold some covered calls against my position in this stock because it has has such an incredible run. I wouldn't be surprised to see the stock pull back in the near term even though I still believe in the long term story. CHK was also a winner today, up 3% on the back of natural gas which was up almost the same. We also got some good news on this holding as we found out the CEO, Aubrey McClendon, bought another 200,000 shares on Friday. This guy has been a consistent buyer this year and even though it was one of his smaller purchases, it shows he remains very bullish on the company. TEVA was the biggest mover of the day up over 5% on an upgrade after positive trial results for a drug the company is developing.

On the downside, it was another tough day for KO. One of the company's bottlers in Greece announced earnings that didn't meet expectations. I still love this stock for the long term, but as I mentioned in my weekly roundup, I think it may be headed for $50 so I want to wait before adding to my position.

Tomorrow GS will announce earnings and I'm expecting the company to beat estimates of $3.42 per share and the whisper number of $3.34 per share. If the stock opens up tomorrow morning, I will probably sell some of my position into the rally.

Sunday June 15th, 2008 Weekly Roundup

This was a pretty volatile week in the market, but we managed to end at about the same place we started on the major averages. On Monday, Tuesday and Wednesday it seemed like the market would never have another up day, but the sun came out on Thursday and Friday to give us a little relief. The DOW finished Friday at 12,307.35. It was a pretty active week in my portfolio as I eliminated four names and added two. I sold out of Philip Morris International (PM), BE Aerospace (BEAV), Microsoft (MSFT) and Foster Wheeler (FWLT). On PM, I decided to sell out of the position and buy more Altriawhen it drifted below $21. These two companies used to be one until they split earlier this year, so their business is the same. However, PM is a totally international company now unlike MO which is only in the US. With all the talk of a stronger dollar early in the week, I decided it was time to trade out of PM. I'm not sure how much stronger the dollar will get, but as it strengthens, it will be bad news for PM. With BEAV, I was lucky enough to get a pop on Monday to get out of some of my position at $30. I sold the rest on Thursday. I just came to the realization that this stock is probably going lower in the short term and whether the street is right or not, the sentiment is that all of their customer are going out of business. I don't believe that's the case, but I will sit on the sidelines for now. We finally got a resolution in the MSFT/YHOO deal and MSFT popped nicely on Friday because of it. I decided to get out of the stock when the stock went up. I was holding a very small position in FWLT and was hoping to seel it at $80, but the stock weakened on a downgrade early in the week and I decided to take my gains while I still had them. The first of my two new positions is Wal Mart (WMT). I believe the company will continue to benefit from the weakening economic situation as consumers trade down from other retailers. This is one of the safest stocks you could ever invest in and it's not bad as far as a dividend growth play either. On Friday I added a name that I been looking at for a long time in Teva Pharmaceuticals (TEVA). The company is one of the leading generic drug makers and has had consistent earnings growth for several years. Thestock price has been drifting lower so far this year until I decided it was time to buy at $42.60.

Weekly Roundup

The Dividend Growth Stocks will now be named "The Warren Buffet Stocks" because I view these as long term holdings. These are great companies with which I build the foundation of my portfolio.

Eaton Vance Tax Advantaged Dividend Income Fund (EVT) $24.45 - The fund was little changed for the week. It usually tracks pretty closely with the overall market. It would have to drop below $23 before I considered adding to my position.

General Electric (GE) $29.15 - Last week I said I wanted to add to my position at $29.75. That's exactly wat I di as the stock dropped to my price on Thursday. I tried to add even more on Friday as the stock was down early in the day. I put in a limit order to buy at $28.50, but the stock never made it that low. GE is really cheap at these levels and there has been heavy insider buying lately. Hopefull, the stock will drop to $28.50 in the next day or two. I want to add more shares of this tock, but I may have to pay more that the $28.50 to get them now.

Coca Cola (KO) $55.42 - The stock was up big on Tuesday on an upgrade from an analyst who said earnings would be great this quarter on the back of a weak dollar. On Friday the stock sold off as the largest bottler of Coke products in Europe said that unit case volume growth would come in at 6% this year instead of the previously forecast 7%. The upgrade was a surprise to me, even though I agree with the analyst. I think investors started to focus on how things look going forward as we moved on in the week and that's why it sold off from the $58+ close on Tuesday. If the dollar makes a large move upward against other currencies, KO will get hit. However, I love this stock for the long term and would love to add to my position in the low 50's.

McDonald's (MCD) $59.95 - The stock rallied this week on string same store sales for the month of May year over year. The company is expanding overseas while keeping a strong foothold here in the US. They are probably also benefiting from consumers trading down from the casual dining space as well. I'm not looking to add to my position at these levels.

Altria (MO) $20.90 - I added to my position this week at $21.05 one day before it went ex-dividend, so in effect I was buying the shares at $20.75. The stock has been under pressure lately, but I view this as a great buying opportunity as the stock now yields 5.5%. The company is buying back stock and will raise the dividend within the year. I expect I'll look back on this purchase in about five years and be really pleased.

US Bancorp (USB) $30.83 - Early in the week the financials sold off and took down USB with it. I think this is a case of throwing out the baby with the bathwater. The stock is looking really attractive at these levels and I want to add to my position at $30. I may go ahead and pull the trigger as buying at the current price would be a great deal too.

From now on the "Growth Stocks" portfolio will be known as the "Jim Cramer" portfolio. These are stocks I believe are benefiting from current trends and will go higher over the next twelve to eighteen months.

Burlington Northern Santa Fe (BNI) $104.68 - Shipping goods by rail is both less expensive and more environmentally friendly. Higher commodities prices are also helping the company push through price increases. I added to my position twice this week and I'm happy to own the stock at these levels. I would probably add more shares if the stock dropped below $100.

Bucyrus International (BUCY) $75.14 - The coal stocks have been on fire and I believe this name will go higher over time. In the short term it may pull back because it's had a great run.

Chesapeake Energy (CHK) $59.26 - Natural gas is another area that's been doing well and this company's CEO has been adding millions of shares this year. You have to love that situation. I would add to my position if the stock dropped into the low 50's.

Freeport McMoran Copper & Gold (FCX) $123.30 - It was a good week for the stock as it approached its 52 week high. Recent earthquakes in China shold lend support to the price of copper which is this company's main line of business.

Google (GOOG) %571.51 - Stock was little changed this week. The only news is that the company may have an agreement with YHOO since the Microsoft deal is now off the table. I look forward to the next quarterly earnings report. Hopefull the company can blow away the numbers as they did last quarter.

Goldman Sachs (GS) $178.29 - It was a pretty wild week as the stock reversed course and finished about nine points higher than last week. The company is set to announce earnings this week and I expect them to beat the number as they usually do. Hopefully, we'll get a good enough pop on the stock to unload some shares closer to $200.

Quanta Services (PWR) $33.34 - It was fairly quiet week for the stock, but it managed to move higher. I think the earnings estimates for this company are too low as our electricity grid is in bad need of repair and some state governments have begun to initiate quotas on renewable energy. The company stands to benefit from both of these situations. I'm up on this stock, but would add to my position on a pullback.

Raytheon (RTN) $58.04 - This stock has been getting hammered lately. I think the culprit has been speculation that Barrack Obama will be the next President. While that would probably mean a smaller defense budget, I don't think it nearly means the end of the company. A couple of the reasons I bought the stock were its cheap valuation and the fact that governments around the world are spending money on defense. This stock may be headed lower in the short term, but I want to wait until the stock drops to $55 before adding to my position.

Teva Pharmaceuticals (TEVA) $42.50 - This is a new addition to the portfolio. I have liked this stock for a long time, but just never got the right opportunity to add it to the portfolio. Teva is one of the world's leading makers of generic drugs. The company stands to benefit from our aging population, which will drive demand for drugs in general, and the need to lower medical costs which leads to more generic drug buying. I bought the stock this week at $42.60 and I would love to add to my position if it went lower.

US Oil Fund (USO) $109.20 - I have sold calls against my position which expire this Friday. We'll see where the stock finishes on Friday and whether I have to close out my position or get to sell more calls for July.

Wal Mart (WMT) $59.18 - This company is benefitting from consumers trading down. I like it as a play on our weakening economy. I would like to add to my position below $58.

US Steel (X) $174.61 - I love the fundamental story in this stock. However, it hasn't been acting very well on a technical basis. It will be interesting to see what it does this week after a large move upward on Friday. Hopefully, it will move above $185 in the near term which is a level I have identified as resistance .

Wednesday June11th, 2008 Recap

It was another tough day in the market as oil climbed back above $135 per barrel. The culprit today was news of a drop in oil inventories. I would really like to know who all these people are that are buying more gas at these prices. Anyway, the DOW finished down 205 points and we are now only about 300 points above the March lows of around 11,700. The market is very worried that $4 per gallon gas is going to sink our economy. I am pleased to say that my own portfolio performed better than the major averages today, but I am still unhappy whenever I lose money. On days like today, I like to review every stock in the portfolio and make sure I know why I own the stock and whether or not the story has changed. So, in today's review, I have found a couple of names that I'm thinking I may need to sell. The first is BE Aerospace (BEAV). Let me say that I have totally messed up when it comes to this stock. The short story is that I made money with this stock last year, but this year has been a different story. A couple of weeks ago when the stock started dropping, I wondered if I should buy some puts or buy more stock. Technically the stock did not act well and I ignored the fact that the airlines still don't have pricing power even though some have already gone out of business. This stock may rebound, but I think it's not going to go too much higher until the airlines gt pricing power again. The second stock is Microsoft (MSFT). This is another one that I just misplayed. It started out as a trade on the potential buyout of Yahoo, when I actually bought Yahoo stock. I later traded out of that to buy MSFT because I felt the risk/reward scenario was much better for MSFT. I don't typically make such trades and I should have stayed away from this one.

Specific portfolio news:
Several of my stocks were down significantly today. Burlington Northern was the most notable as it was down about 7%. A UBS Analyst downgraded the entire railroad sector which hit all of the rail stocks. I have to disagree with this analyst on the call. About 50% of what BNI hauls is corn and coal and the prices for those two commodities have been strong and only look to get stronger. Also, I believe the high fuel costs will force more companies to look at the railroads as a way to ship their products because it's much cheaper than shipping by truck.

I made one move today as I sold out of my small Foster Wheeler (FWLT) position to buy more BNI.

June 10th, 2008 Recap

Today was a wild day in the market even though the major indexes didn't move much. The big news of the day was Fed Chairman Ben Bernanke's speech to the Boston Fed. Bernanke claimed that even though the unemployment rate rose to 5.5% in May from 5% the previous month, "the risk of a substantial downturn (in the economy) has lessened". He noted that "rising energy prices have added to the upside risk for inflation" but maintained that "the seepage of rising raw material costs to other prices has been limited to this point." I have to wonder what this man is smoking if he really believes this. Our economy is definitely getting weaker and inflation is already a problem. The dollar is near all-time lows against many currencies and oil is not far off of its all-time high. I believe Bernanke's speech was an attempt to stop both of those trends. For today, it worked as the dollar strengthened and oil weakened. The question I have to ask of myself is whether I think these trends will continue. The answer is, only in the short-term. We've seen sharp corrections in commodities stocks before, only to see them come roaring back a few days later. I believe that's what we'll see again this time. However, I have to always be mindful of the fact that I could be wrong and I must have a strategy in mind for each of the stocks in my portfolio. As I have said before, I would rather take a gain in a stock when the outlook becomes uncertain as opposed to watching all of my gains melt away.

News on Specific holdings:
Coca-Cola (KO) $58.01 was the biggest gainer in the portfolio today as it was upgraded because, of all things, the weak dollar.

BE Aerospace (BEAV) $27.96 was easily the worst performer in the group today as it was down over 6%. I don't see any news to cause this decline so I'll just chalk it up to a little profit taking after an 11% rise yesterday.

US Steel (X) $176.41 was also down a lot on the day with a 4% decline. I don't see any news on it either, so I am guessing Bernanke's speech gave people an excuse to sell since this stock has been on a tear over the last six months. The only thing that concerns me is that the stock has tried to break through the $185 level twice now and it has failed to do so. It looks like it has good support in the lower 170's. If it trades down into the 160's, it may fall a little more before it finds more support.

I added to my Altria (MO) $21.13 position today at $21.05 as the stock sold off again. Luckily, the purchase was just in time to qualify for the 29 cent dividend to be paid early next month.

June 9th, 2008 Recap

The DOW was up about seventy points today. The big news was the disappointing earnings projection from Lehman Brothers (LEH). This took down all of the financial stocks and got a lot of analysts talking about further writedowns in the sector. This affected two of my holdings, US Bancorp (USB) $30.95 and Goldman Sachs (GS) $165.76. Both are very well run companies that have, for the most part, steered clear of the sub-prime mortgage mess. I have a limit order in to buy more USB at $30. The stock is one of my dividend growth stories and is currently yielding more than 5%. If I'm able to pick up shares at $30, those shares will be yielding %5.67. For GS, I would like to see the stock get closer to $150 before pulling the trigger on more shares. The company is slated to report earnings on Tuesday, June 17th. Last quarter the stock sold off before the earnings announcement only to bounce back over $20 in one day after the announcement. I'm hoping we get another selloff going into earnings this time.

In other portfolio news, BE Aerospace bounced back over 11% today after finishing at a new 52 week low on Friday. I was lucky enough to pick up some shares at $27.03 on Friday and I sold those shares today at $30. It seems the only news I could find on the stock is that they are buying a division of Honeywell (HON) for over $1 billion. BE management commented that the acquisition will boost earnings "significantly" after 2009. To me that just didn't seem like the type of news that should move the stock that much. I suspect there is a good chance that we'll see BEAV sell off again unless oil turns a drops like a rock which I think is unlikely. For today, I was very happy to take an 11% gain in one trading day. I still own several shares of this stock.

McDonald's (MCD) $59.31 announced good same store sales growth for the month of May. This helped shares to climb over 4%.

Commodities and rails did well today. I had several winners in these areas as BNI, CHK, FCX & X all were up more than 2%.

Lastly, I initiated a position in Wal Mart (WMT) today picking up a small amount of shares at $59.30. I had been holding Nordstrom's (JWN) for several months, but it's become apparent that consumers are trading down right now and Wal Mart stands to do better in that environment much more than JWN. I would like to add to my WMT position below $58.

A New Approach

OK, I'm going to try something a little different. So far, my posts have been fewer and farther between than I would like. I also have struggled with how to make recommendations. From now on I'm going to play with a totally open hand so you can see all of my positions. Also, I will try to post something on the blog every day and then have a weekly roundup where I give my thoughts on each stock that I'm holding. Time for the first weekly roundup...

Dividend Growth Stocks - These stocks are the foundation of my portfolio. To qualify as a dividend growth stock, the company must have increased it's dividend at least once every year for the last fifteen years and the average of those increases must be 10% or greater. I also like for the stock to have a current yield of at least 2.5% when it's added to my portfolio.

Eaton Vance Tax Advantaged Dividend Income Fund (EVT) $24.91 - This is a closed end fund which I have been holding for over a year. It pays a great dividend as it now yields over 7%. The fund holds high yielding preferred and common stocks which tend to increase the dividend every year. The fund is a little bit of an exception to the rule because it hasn't been in existence for fifteen years. However, most of the stocks in the fund have been increasing their dividend every year for much longer than that. The fund tends to own a lot of financial and energy names and those two groups are headed in opposite directions at the moment. I don't know if the fund will be able to increase the dividend this year or not because of the financial exposure, but I expect that to resume in the years ahead. I'm not looking to add to my position at the current level.

General Electric (GE) $30.02 - This stock was taken to a new 52 week low this week. It's currently yielding 4% which is historically high. I think investors are punishing the stock a little too much for their financial exposure. I want to add to my position if the stock drops to $29.75

Coca-Cola (KO) $55.80 - Coca-Cola is the largest beverage company in the world and I really like what they are doing to become more of a beverage company than just a soft drink company. They have great international exposure and I expect the stock to hold up better if the market continues to decline. I would like to add to my position below $55.


McDonald's (MCD) $56.95 - In January, when the stock dropped below $50, I sold some January 2009 65 calls and then used that money to buy a few January 09 55 calls. When the stock moved up toward $60 a few weeks ago, I sold the 55's for a nice profit. I'm not looking to add any more shares at the current price.

Altria (MO) $21.53 - This stock is as defensive as you can get. The recent spinoff of the international business will allow the company to buy back stock and continue to raise the dividend. At current levels it's yielding just under 5.4%. I would like to add to my position at or below $21.

Philip Morris International (PM) $50.50 - This is the internatiopnal business that used to be under the Altria umbrella. It sports a lower dividend than MO, but it has better growth prospects. For now I'm holding the stock and awaiting the next quarter's earnings report which will be the first for this company.

U.S. Bancorp (USB) $32.07 - It's been a really tough year for financials in general, but this bank has done much better as they avoided the sub-prime mortgage crisis. The stock is currently trading right around my cost basis. I would like to add to the position at or below $30.

Growth Stocks - These are stocks which I want to own because I believe there is some underlying factor that will make the stock go higher over the next six to twelve months. However, I don't have as much patience with these stocks as I do the dividend growth stocks. I typically hold them for at least a few months and I usually add to my position if the stock goes lower after my initial purchase, but I will sell when I think the fundamentals have changed.

BE Aerospace (BEAV) $26.98 - This stock has been really tough to own lately. Investors have focused on the sad state of the domestic airlines and driven this stock much lower. I added to my position twice this week, but maybe I should have cut my losses. For now, I will continue to wait for some official word from the company to substantiate the speculation that has ruled the stock lately.

Burlington Northern Santa Fe (BNI) $110.40 - I absolutely love the rail stocks right now and this is the best positioned of the bunch to take advantage of higher commodity prices. I also like the cost savings element of the railroads. Most of us remember, when we were kids, we used to count the rail cars on a train when we got stopped on the way to Grandma's house. Seems like there was always about 100 cars on a good sized train. Anyway, in my first job we used to load 60 tons of chicken onto one rail car and we could load about twenty tons onto a truck. If you do the math it shows that a train, which takes two guys to drive across the country, can carry about 6,000 tons of stuff and a truck which takes one guy to drive across the country can carry about twenty tons. It's not hard to figure out that rail is a much cheaper means of shipping your product and with fuel prices climbing almost every day, people who need to move freight will continue to move toward the rails. This stock hardly ever pulls back, so maybe I should just pull the trigger and buy more. For now, I'm hoping to add to my position at my current cost basis of $108.50

Bucyrus International (BUCY) $75.36 - The coal stocks are another group I love, but as I have mentioned before on the blog, it's hard to figure out which ones stand to benefit the most. That's why I chose to go with the mining equipment stocks instead. I believe they will continue to benefit no matter which coal stocks do well. This stock is another that doesn't ever seem to pull back much. It recently split 2 for 1 and it's above my cost basis. I would like to add a little more to my position if it dropped closer to $70

Chesapeake Energy (CHK) $58.05 - This is a natural gas stock which has done really well so far this year. The company has a consistent record of growing reserves and production which is what you want to see with oil and gas companies. The insider buying here has been incredible. Two weeks ago I was lucky to add to my position below $52 and I sold those shares on Friday just above $59. I still own a pretty sizable position in this stock, but if it drops below $55, I would like to buy back the shares that I sold on Friday.

Freeport McMoran Copper & Gold (FCX) - This stock is very volatile, but it's also very cheap. Freeport is either the number 1 or number two producer of gold, copper and molybdenum in the world. Many analysts believe the stock will go much higher this year. I think if it can break above $125, then we will probably see an extended move higher. In the meantime, I would add to my position at or below $110, but I'm hoping we see the stock make that move above $125.

Foster Wheeler (FWLT) $75.76 - I have been lucky enough to sell most of my positio in this stock for a good profit over the last month. I have a limit order in now to sell the last portion at $80. The stock would probably have to move closer to $65 before I would consider adding to my position.

Google (GOOG) $567 - I really like Google because it's such a leader in it's industry. The share price tends to scare people, so I tell them to use the divide by ten rule. I'm not interested in adding to my position at current levels. The next earnings report should be coming up soon, so we'll need to be on the lookout for that.

Goldman Sachs (GS) $169.44 - This company is the absolute best-of-breed when it comes to the brokers. They have continually posted great earnings numbers compared to their peers and they managed to hedge themselves effectively against the sub-prime mortgage crisis. Unfortunately, it tends to trade in line with a lot of its peers on most days instead of trading on its own merits. I expect they will announce another good quarter, but the path of least resistence right now is lower. I'm very interested in adding to my position if the stock drops into the 150's

Microsoft (MSFT) $27.49 - Everyone knows about Microsoft so I definitely don't need to explain what they do. Recently, the stock has been brought down by the potential Yahoo merger. I expect the stock to trade in a tigh range until we get some resolution on the Yahoo deal. I believe, at current levels, the stock is undervalued. I would like to wait to see what happens with Yahoo before making any more moves in this name.

Quanta Services (PWR) $31.27 - This company is the leading maker of windmills, but is also involved in a lot of other businesses. Most of the businesses are related to energy. My position here consists of some Jan 2010 calls. I see this a long term play as earnings are forecast to grow by over 50% in 2009 after only fractional growth in 2008. If the stock moves below $30, I would likely add to my position.

Raytheon (RTN) $59.99 - Raytheon is one of the larger defense contractors. I like them because they have a really cheap valuation in an industry I expect to grow no matter who is the next President. That's because they are beginning to get a lot of contracts from foreign governments. Unfortunately, whenever the news of the day indicates that Senator Obama is likely to be our next President, all of the defense contractors tend to trade down. The stock is below my cost basis and I added to it at $60 on Friday. If it continues to move lower, I will continue to add shares.

US Oil Fund ETF (USO) $112.17 - I have owned this ETF a few times since last Fall. Since the oil market has been so volatile, it has been a good trading vehicle. I have been selling covered calls against my position every time I've bought. Twice I have been called out of the stock at a nice profit while I kept the money every other month and improved my cost basis. This month it looks like I will get called out of the shares again for a nice profit. I'm not looking to buy any more shares at this point and will wait until the third Friday in June to settle my position one way or the other.

United States Steel (X) $180.27 - Steel stocks are enjoying great pricing power at the moment and I'm really excited about this stock. I was luck enough to get a chance to add to my position this week at $175. I would still like to add more shares if the stock pulls back. Luckily, it's a little more volatile than BNI and BUCY, so I will probably get that chance. I don't want to look at selling until the stock is at least at $200 as I believe this company has several good quarters of earnings reports ahead of it.

Short term trades - These stock represent a small portion of my portfolio. These are names in which I believe I can take advantage of a short term overreaction to make money.

Currently, I have no trades in my account.

Strange but Wonderful Day in the Market

Today was a most unusual day in the stock market. After several days in a row of oil going lower, it rallied over $5 per barrel. This would seem to be bad news for a stock market that has been sinking lower even as oil had been selling off. Instead, the DOW rallied 214 point to finish at 12,604. Just about every sector showed strength and it was hard not to be a winner today. One stock that was down and continues to puzzle me is BE Aerospace. The stock has sold off sharply over the last week on virtually no news. Either somebody knows something or this is a tremendous buying opportunity. I continue to like the stock until I see a reason not to like it. As I've mentioned several times before, the company makes equipment which is used in airplanes. They have an advantage over competitors because the equipment they make tends to weigh less and this helps the fuel efficiency of the aircraft. Earlier this year, I read the transcript of the fourth quarter 2007 earnings report conference call. Management was very bullish and raised their guidance for 2008. They talked a lot about the Boeing 787 and how it was going to be a big driver of earnings growth going forward. However, they said it was more of a 2009 story. They also mentioned that less than 5% of their record backlog was for the 787. The only negative that I can find about the company is the theory that Jeff Mack of "Smart Money" has been reciting lately. He makes more of a general call on the airline industry and mentions Boeing rather than BEAV. He believes that the airlines are all in bad financial shape and will not be able to afford new planes. I agree that the domestic airlines are doing poorly, but the foreign airlines are doing better and they can offset some of the lost sales to the domestics. Also, I'm not sure if the domestic airlines have much choice when it comes to upgrading their fleets and I believe when they start to buy new planes they will definitely be looking to buy those that are cheaper to operate. If they are able to get by without buying a lot of new planes, they will probably have to refurbish some of their existing planes. This is also a positive for BEAV because they have a division that does just this. I know I've said it many times, but I have to repeat it again. I think this company has many ways to win and I am betting they will deliver on future earnings growth forecasts. I'm still bullish on the stock until I see something that makes me change my mind.

Is oil going to continue lower?

Over the last week or so we've seen the first sustained move lower for oil in quite awhile. For the last several months, oil has rallied on just about any news item. However, in the last week, we've seen oil sell off on just about any news item, including reports of draw-downs in supply which should be bullish for oil. I'm not sure how much lower oil will go in the short-term, but I do believe we're headed lower. Once we find the bottom, I think we can expect another rally later this year. In the meantime, I want to talk about how this affects my portfolio... I sold National Oilwell Varco (NOV) and the gold ETF (GLD) today. I wanted to reduce my exposure to oil in the short term and both of these positions would get hurt if oil continues lower. The GLD was more of a hedge against inflation, but since most people have been buying it as a hedge against higher oil prices I wanted to use it to build up some cash for other stocks I like. NOV is a terrific company and I expect it to be trading higher as we move through the year, but that doesn't change the fact that it tends to trade in line with oil. I had a profit in the stock, so I took it. If it moves down toward $75, I will probably buy it back. This stock really shouldn't get hit with the day-to-day moves in oil prices. The company builds drilling rigs and those will continue to be in high demand. The world needs more energy and it's need for energy will continue to grow in the coming years. I love this company for the long term, but sometimes I just want to lock in the gains for the short term and buy the stock back at a lower price.

What's up with BE Aerospace?

I've been surprised by the drop in BE Aerospace (BEAV) over the last week. Today it closed at $32.72 which is not much above its 52 week low. I'm sure the reason it's getting bid down is because most of the domestic airlines are getting hurt by high oil prices. To me, that view is pretty shortsighted. When I first started looking into this stock, I was interested because the components they make for planes are lighter and in higher demand since companies are looking for any way to cut costs. However, as I started to study the company more, I found that they have a lot more going for them than just making light weight seats. It turns out that they have several divisions and I believe all of them stand to benefit in the current environment. I have recommended this stock twice before with an average price of $36.08. The stock traded into the low 40's after my last recommendation before the recent pullback. Today I'm recommending buying BEAV again which gives us an average price of $34.96. I look forward to selling this stock for a profit in the future.

Take the gift in BUCY & JOYG

I have been touting both Bucyrus (BUCY) & Joy Global (JOYG) for the last few months. At one point I suggested taking profits after a quick run up, but now I'm back in the buying mood. It appears commodity prices will remain strong for the next three to five years and this will in turn drive demand for products made by both of these companies. Today JOYG announced second quarter earnings and a strong outlook for the future. However, the stock was only up a little more than 3%. BUCY was actually down on the day. I'm putting both of these stocks back on the buy list with a recommended price equal to today's close. For BUCY that's $67.55 and for JOYG that's $80.44.

Let's Stick with the Global Growth Story

There are several stocks that I want to detail as part of this post. Unfortunately, I don't have time right now to go in-depth on all of them, so I will just give the names for now. Burlington Northern (BNI), Bucyrus (BUCY), Joy Global (JOYG), Transocean (RIG), National Oilwell Varco (NOV), Foster Wheeler (FWLT), Fluor (FLR), Chesapeake Energy (CHK), Freeport McMoran (FCX), Monsanto (MON), US Steel (X), Arcelor Mittal (MT), Potash (POT) & Mosaic (MOS). I'll be back later with some more details.

I'm Flattered! Jim Cramer reads my blog!

A few weeks ago I recommended buying Joy Global (JOYG) and Bucyrus (BUCY). Both stocks performed well, being up 11.5% and 15.75% respectively, through Tuesday, April 29th when I recommended taking profits. Then, on Thursday Jim Cramer recommended both stocks on his "Mad Money" show. I still like both stocks, and I would buy them again on any weakness going forward. Actually, I would buy them at the prices they were trading at on Wednesday, but Cramer took care of that by recommending them on his show and now they're both higher. The reason I recommended taking profits was because I was worried about what the Fed might say or do on Wednesday. Their meeting came and went, with the FOMC lowering their "overnight lending rate" by 25 basis points. However, as is usually the case, the statement released by the Fed was more important than what they did with interest rates. The Fed was expected to signal an end to interest rate cuts, but instead they left the door open for more cuts in the future. If they had made a statement that said the interest rate cuts are over, then I think both stocks would have suffered in the short term. This is because the dollar would have strengthened, which would have put pressure on commodity prices and then rightly or wrongly, all stocks related to commodity prices would have suffered for awhile. I felt it was better to lock in the gains than to take a chance on losing them to the Fed. Now, eventually I expect the interest rate cuts will come to an end and the strengthening dollar scenario will play out. Until then, I think you can buy the commodity plays that have done so well especially the ones that pulled back last week such as Mosaic (MOS), Potash (POT), Monsanto (MON), Apache (APA), Chesapeak Energy (CHK) and Transocean (RIG).

Has the dollar finally made a turn?

The FED is set to make an announcement on short term rates tomorrow. Most expect a 25 basis point cut with a statement that points to the end of rate cuts. If that happens, we could see the dollar strengthen and an end to all of the inflation driven trades. This has forced me to think about all of the stocks in my portfolio. The following is a list of the stocks that I own, listed with the closing price on 4/28/2008, and what I think a strengthening dollar would mean to each of them.

AAPL (172.74) – I haven’t heard about the weak dollar being a great benefit to AAPL, so I don’t think it would have a negative effect.

BEAV (39.84) - This company does business with a lot of international carriers, so the weak dollar probably has helped. The main reasons to buy this stock right now are 1. Worldwide air travel is growing. 2. The Boeing 787 is going to be a huge deal for BEAV, although so far it’s been a detriment b/c it’s been delayed so many times. 3. With high fuel costs being such a concern to airlines, they are looking for ways to cut costs. This ties back to reason 2 b/c the 787 is lighter an much more fuel efficient. 4. The domestic airlines are raising prices and I look for them to be on more solid footing in the next few years. However, they still need to upgrade their aging fleets and this again plays into BEAV’s hands. So, overall we have some mention of the weak dollar, but it’s not the only reason to buy the stock. I would say that a strengthening dollar would hurt BEAV, but it would also help in other areas, so hopefully it would work out about even.

CHK (53.80) - We have been hearing a lot about how nat gas is cheap relative to oil and a lot of people think it will continue to go higher. If commodities prices got hit across the board, CHK would also get hit. We’d have to hope that nat gas prices held on better than other commodities.

EVT (25.46) - This is a closed end fund which invests in a lot of multinational companies that are based all over the world. About 20% of the holdings are in the oil & gas sector and about 20% of the holdings are in the financial sector. Since I have owned this fund, it has tended to trade in line with the market, so I have to think a strengthening dollar would be a positive for some stocks in the fund and a negative for others. I like owning this fund because it has a lot of high yielding preferred stocks and also a lot of dividend growth stocks. I would want to continue to own this fund as the reason I bought it is still in tact whether the dollar strengthens or not.

EWT (16.92) - This is a Taiwan ETF. A strengthening dollar would most likely be positive as Taiwan exports a lot of goods to the U.S. and China, which also exports a lot of goods to the U.S.

FWLT (68.08) - This company builds a lot of plants that are used for energy production. The majority of their revenues come from overseas. The main question would be whether or not they could get enough business to overcome the strengthening dollar. On one hand you can say a strong dollar hurts them, but because their services are in such demand, maybe they would have pricing power. I would say that a strong dollar would be slightly negative for this company.

GE (33.17) - GE has so many businesses that it’s hard to tell what effect a stronger dollar would have on them. No doubt it would hurt their international operations, but it would probably help somewhere else. Overall, the effect would probably be neutral.

GS (190.24) - I can’t see a strong dollar having any effect on this stock

JOYG (76.90) - This one is hard to figure out. JOYG would get hurt if coal and gold prices went down, but they would be much more at risk if coal prices retreated. However, I think gold prices would be much more at risk if the dollar strengthens. I can also see a scenario where coal prices at worst stay stable if the dollar strengthens. Coal is the cheapest energy source we have and we’re just now getting to the point where a lot of countries that used to be exporters of coal are now importers of coal. I think a strengthening dollar would be a negative for this stock, but I’m not sure how negative.

JWN (37) - A strengthening dollar would most likely be a positive for this stock as it has no international exposure and lower inflation would be seen as a good sign for the economy.

Had to pause here as it was late in the evening. The prices on the following reports are as of 4-29-2008

KO – (58.72) - This is a high quality stock that I plan on owning for a long time. It has the strongest brand name in the world; it pays a great dividend and it has a history of increasing the dividend every year. However, this section is for comments on what effect a strengthening dollar would have on these stocks. So, this one is a hard one to figure out. The majority of KO’s earnings growth has come from overseas in recent years so that part is disturbing. It’s been unclear just how much of an effect rising commodity prices have had on KO’s earnings, so there’s no way to tell if deflating commodity prices would be an advantage for KO. I would say this one is slightly negative.

MCD – (60.20) - MCD is another company whose earnings growth has been largely driven by overseas markets. However, the stock has been hit lately b/c of slowing domestic sales. I actually think a strengthening dollar would be slightly beneficial to this stock b/c it would help domestic sales, which has been the biggest concern, and even though overseas growth would slow, they would still be relatively strong.

MO (20.24) - This stock is now a totally domestic play since they split off the international business.

MSFT (28.64) - I’m sorry to say that I don’t have enough information on this stock to make a determination. It’s a new holding in the portfolio and I just haven’t studied it enough to know it that well.

MT (87.32) - MT is a really tough call. This is a steel company which sounds bad when considering a possible strengthening dollar. However, since the company is headquartered in Luxembourg, the dollar is not their home currency. Add that to the fact that there is a real shortage of steel in the world right now and you have to wonder if steel prices can go a lot lower. This one is hard to call, but I will be cautious and say it’s negative.

NYX (67.85) - NYX is another stock that has benefited from growth in Europe and has benefited from the weak dollar. However, it’s a little bit different b/c this is a stock exchange which really doesn’t have a lot to do with selling a product. If the dollar were to appreciate greatly, then that could be a drag, but I think there are enough negative factors such as our trade deficit and huge budget deficits which will keep the dollar from making a move more than 10% – 15% against other major currencies.

PM (52.01) - This is the international part of the old Altria. A strengthening dollar would hurt this company which would have to be overcome by stronger sales. I believe sales will continue to grow, but future earnings forecasts may have to be trimmed if the dollar strengthens.

PTY (14.73) - This is a closed end fund which owns high yield corporate bonds. I don’t think the dollar has much of an effect on this holding unless it were to cause the companies to default on these bonds.

RTN (64.42) - This is a defense contractor. Although they are starting to get more business from overseas, it has not been a huge benefit so far. I think a strengthening dollar would have a little to no effect on RTN.

USB (34.27) - This is a bank with no overseas exposure. I see no effect based on dollar strength or weakness.

Now that I've detailed all of the stocks I own, I wanted to point out a few stocks that I would buy right now as I do expect the dollar to strengthen in the coming months. Obviously, I want to stay away from companies that get a lot of their business from overseas. I think you can now buy Mastercard MA (273.96) and Visa V (80.88) as they are benefitting from the increased use of credit cards, but they have no credit risk. I also like high quality financial stocks, with an emphasis on the high quality part, such as US Bancorp USB (34.27) and Goldman Sachs (192.68). I also like retailers such as Nordstrom's JWN (38.08) and Polo Ralph Lauren RL (62.39) and tech stocks such as Apple AAPL (175.05) and Google GOOG (558.47). Consider these official recommendations as of today at these closing prices. I would also say it's time to take profits on JOYG at today's closing price of $73.82 and BUCY at $124.06. This locks in a nice profit on my recommendations in just over a month's time. I believe these stocks can go higher, but they will probably go lower first.

Update on recommended trades

I thought it would be good to give an update on the trades I've recommended since starting the blog.

On 1/16/2008 I recommended Annaly Capital Management (NLY) at $18.72. The stock has had a wild ride since my recommendation trading as high as $21.20 and as low as $11.50. I originally liked the stock because I felt it actually benefitted from the subprime mortgage crises. Annaly Capital is actually a REIT that invests in only prime mortgages issued by Freddie Mac and Fannie Mae. Unfortunately, a similar REIT took a hit when they started having liquidity issues of their own. This started speculation that NLY would have to raise capital by issuing more shares. The stock has stabilized recently and I continue to like it although the upside is probably now limited. If you had bought at my recommended price of $18.72, you would now be down 6% with today's closing price of $17.10 and after collecting the 48 cent dividend paid in March.

In early February, I recommended Yahoo (YHOO) for a rare trade. This was shortly after Microsoft offered to buy Yahoo in a package worth approximately $33 per share. So far, there has been no agreement between the two companies. This story has drug out much longer than I originally anticipated and after buying some Yahoo shares myself, I recently sold them and bought Microsoft instead. My reasoning is that I see MSFT being a much better company and I believe their price would go up and Yahoo's price would go down if the deal doesn't happen. If the deal does happen, I believe MSFT's stock will go higher, but it will take longer. Either way, I believe MSFT is the safer play, but I'm stuck with this trade as a recommendation, so let's see how it plays out.

Also in early February, I recommended US Bancorp (USB) at $32.09. I like the stock because they have steered clear of the subprime mortgage crises and I believe they will emerge from this mess a lot stronger than other banks. I also believe thet the aggressive rate cutting by the Fed will help USB's earnings. Since the recommendation, the stock is up 5% with today's closing price of $33.27 when you factor in the 42.5 cent dividend that was paid in March.

I have recommended BE Aerospace (BEAV) twice over the last few months. The average price of my recommendations is $36.08. Today's closing price is $36.03 so it's virtually unchanged. I still really like BEAV. The company is benefiting from increased air travel all across the globe. The main factor that has held the stock back is the continued delay of the Boeing 787. Each time Boeing announces another delay in bringing the new 787 to market, all of the suppliers get hit. Eventually, Boeing will get their act together and the 787 will start being delivered. This should allow BEAV to have fantastic earnings growth over the next several years. If the stock moves down toward $30, I would add to my position.

I recommended General Electric (GE) at $33.11 in early March. The stock initially spiked over $38 per share. Then they disappointed with their earnings announcement and the stock got crushed. I continue to like the stock at current leves, finishing today at $32.46. GE is one of the S&P Dividend Aristocrats which I really like and the stock is currently yielding just under 4%. I think we're getting a great opportunity to buy GE while the yield is at a historically high level. The company is a global leader in several industries and I feel they will get the problems worked out in their financial division which caused the earnings shortfall. I would recommend buying the stock as long as it's in the low 30's.

My last recommendation was on March 26th for Joy Global (JOGY) at $66.21 and Bucyrus International (BUCY) at $117.07. Since the recommendation, both stocks have gone higher with JOYG finishing today at $75.90 and BUCY finishing today at $124.15. I've been lucky with these two stocks continuing to go higher immediately after my recommendation. I still believe that coal will remain in high demand because it's the cheapest energy source in a world that is in big need of energy. This bodes well for the mining equipment stocks and I continue to like both of these stocks. They both announce earnings in the next week, so be on the lookout for the reports.

Alcoa starts off earnings season with a dud...

Alcoa kicked off earnings season after the bell this afternoon and as usual, the company delivered subpar results. Estimates were for the company to make 48 cents per share. However, Alcoa could only manage 44 cents per share blaming higher energy costs and the weak dollar of all things for the shortfall. I have followed Alcoa for quite some time and I continue to be amazed that the company never meets expectations. The CEO had some nice things to say about their outlook going forward, but as always you have to wonder if Alcoa will be able to deliver.

In other news today, Arch Coal (ACI), which was one of the companies in the coal sector that I considered recommending before settling on JOYG and BUCY, said their earnings for 2008 would be between $2 and $2.50 per share. The consensus estimate before the announcement was $2.42. This disappointed the market and caused a broad selloff in the commodities sector. If you read some of the comments I made in response to Michael's comments on the JOYG/BUCY recommendation you will see that I felt these two companies were safer picks because there were so many other factors that came into play with the coal mining companies. I suspect that ACI hedged a bit too much of their 2008 output before coal prices started to rise during the Winter months and was not able to take full advantage. Even though ACI forecasted earnings that may fall well below the concensus estimate, I believe the outlook for the coal industry in general remains strong for the foreseeable future. I would recommend adding to our positions in JOYG and BUCY if the selloff produces a better entry point in those stocks. ACI finished today at $48.22 after hitting an intraday high of $52.64. JOYG traded as high as $71.28 before pulling back to close at $69.14. BUCY traded up to $114.93 before falling to $110.41 at the close.