| |
|
Opening Segment 1
Title: |
'Fed On Target'
|
|
. . . .
. |
|
Featured Stock(s): |
MBIA (MBI)
Ambac
(ABK)
Radian (RDN)
PMI (PMI)
MGIC (MTG)
Altria (MO*)
AT&T (T)
Verizon
(VZ)
Costco (COST)
Urban Outfitters (URBN)
Sears (SHLD*)
Bear Stearns (BSC)
Goldman Sachs (GS*)
Wachovia (WB)
Washington Mutual (WM)
Countrywide
(CFC)
Citigroup (C*)
Ford (F)
General Motors
(GM)
See Opening Segment 2,
below...
|
|
We got a gift today...
The market anticipated a
big cut, so we got it, and
then it sold off...
As someone who's traded
for almost 30 years, I can
tell you that's just very
typical of the short-term
thinking that colors the
market these days...
Don't fall prey to it...
Thanks to these cuts, the
future is looking much
brighter than the past...
I am being so un-cynical
here, because there's no
reason to be cynical.
So don't think that a
decline in the averages,
after the cut, means you
have to be bearish...
Right now, I believe it is
incredibly imperative for
you to be more bullish!...
Post-rate-cut... because
this is where and when you
make the money...
. . . .
.
I am so confident that,
right now, I feel like
purchasing perhaps the
most loathed and toxic
investment around... I
feel like purchasing an
asset, now synonymous with
the destruction of
value...
With this rate cut, I
think I'm going to go buy
house... You heard me...
A house! One of
those poisonous financial
instruments with living
rooms and bedrooms and
bathrooms... kitchens!...
10 days ago, before the
cuts, the very idea of
buying a house... buying
domestic real estate was
simply unthinkable!...
This was the malignant
growth at the heart of our
financial system...
the heart of darkness that
was going to bring
everything down...
and now, I think, you
could probably find some
darn good buys among
houses... I mean it.
I'm not lying...
Why?...
Because, beginning next
week, Dr. Bernanke (Fed
Chairman) has become Dr.
Guioutine!... The
guioutine of interest
rates... and, with this
additional 50-point basis
cut, I think he has made a
turnaround in housing
inevitable!... Buy,
buy, buy!...
. . . .
.
Today, I believe the Fed
averted national systemic
bank failure... This
cut takes a situation
where major banks were
going to go under...
And maybe still, some
mortgage insurers do... I
believe that...
But this was a situation
that would have been truly
catastrophic and, you know
what?... We're
taking the catastrophe
right off the table...
Now, banks can make enough
money lending, because the
Fed has lowered the rate
at which banks have to pay
out interest to their
depositors, which
increases their profits...
. . . .
.
These companies that
insure the derivatives...
Again, MBIA (MBI),
Ambac
(ABK),
Radian (RDN)...
I fret about the personal
mortgage insurers,
PMI (PMI)
and
MGIC (MTG)...
Now... There will be a
step back if they fail,
but you must be ready to
buy, not run, from that
retreat, because they are
all that stands in the way
of a full-blown housing
recovery that no one in
this country is expecting
or predicting...
perhaps, with the
exception of Chad Dreier,
the unbelievable CEO from
Ryland (RYL),
who got it right the whole
way...
This is part of the Fed's
mandate to avert financial
Armageddon...
They did their jobs, even
though there are a lot of
people out there, still
urging them to go in the
other direction, and fight
inflation by destroying
the economy...
. . . .
.
It's not the Fed's job to
choose stocks, but make no
mistake here... I believe
this cut has given you an
opportunity to make a
great deal of money...
Let me tell you how...
First, stocks with high
dividends... Even better
today than yesterday...
Think
Altria (MO*),
which just announced a
major split, and a major
dividend boost today...
63% payout goes to 70%
payout on average...
How about
AT&T (T)
and
Verizon
(VZ)?...
Much heaped upon...
Frankly, I think their
yields are so
attractive... you've got
to swap out of cash and
into that... The
rate Bernanke cut... the
cash rate... it's just not
compelling enough...
Those stocks should go
higher...
. . . .
.
Second, you know the rate
cuts mean the retailers go
higher... I've been saying
that for a long time...
Costco (COST),
Urban Outfitters (URBN)...
You know something?... I
don't even care... Just
get one. I mean,
even my friend, Eddie
Lampert's stock at
Sears (SHLD*)
has been going up... of
course, only because they
don't have Eddie Lampert
to kick around anymore...
. . . .
.
You know the bankers and
the brokers from
Bear Stearns (BSC)
and
Goldman Sachs (GS*)...
They should all go
higher...
A few weeks ago, I would
have said that the
strength we had today,
before we sold off, and
the coming rally I'm
predicting, would be a
chance to sell the
banks... especially the
ones truly hobbled by
sub-prime... And
there you've got to think
Washington Mutual (WM),
Countrywide
(CFC),
Citigroup (C*),
Wachovia (WB),
Downey Financial
(DSL),
BankUnited (BKUNA),
FirstFed (FED)...
Now, you can buy
Wachovia (WB)
on weakness... That,
by the way, is the best of
the troubled lot...
and I'm thinking that
Washington Mutual (WM)
can hang on, until it gets
a bid... And
Bank of America (BAC),
with that big preferred
issuance, can now handle
the
Countrywide
(CFC)
acquisition...
And
Citigroup (C*)?...
Well, hey, listen...
It muddles around...
. . . .
.
Third, you can buy
industrials... You can buy
- get this, first time
ever - automakers... I've
been recommending
General Motors 7.5
Preferred (GMS)...
I now think you can buy
Ford (F)
and
General Motors
(GM)
common stock... Go
ahead. They work
now, because financial
catastrophe has been taken
off the table...
New recommendations, and
we know the economy should
be better in 10-12 months
than it is right now...
Anything that used to be
in a bear market is now in
a full bull-market mode...
Housing, banks, brokers,
retail, the industrials...
automakers. Buy them
on weakness...
. . . .
.
In 1990, when we got here,
the bears doubled down on
their shorts... kind of
like the market tanked
today, after the quick
Fed-induced rally...
They talked about shooting
fish in a barrel... the
banks... Well,
they were the ones that
got shot. You never
heard from them again...
A lot of them were tepid
bulls... panicked today,
and sold what they had.
But a few of us said, down
50% - two weeks ago - that
the worst was over for the
financials... and
the Fed would now see the
error of their ways,
because that's what
history dictated...
They followed history.
They did it. Be glad
the market came down...
It's an opportunity.
It was simply reacting to
day after day of
anticipation of the
cuts...
Don't run away from
stocks, now that we have
to run to them...
. . . .
.
Business is real good away
from housing and retail
and auto...
You'll hear a lot of
people talking and say,
why did they have to cut?
Business is real good away
from housing and retail
and auto...
Because housing was so
bad, they had to cut!
. . . .
.
The Bottom Line!:
I
believe the Fed has given
you a once-in-a-decade
opportunity to make big
money right now...
frankly, in stocks... and,
in six months, in homes.
Do not be scared away...
[See Jim's 2nd Opening
Segment stock picks
below... ]
|
|
 |
 |
|
|
|
|
|
|
|
|
|
 |
|
See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
|
|
 |
This holiday's
hottest tech
item... The
Flip!...
Completely
tape-free
amazing
60-minute
camcorder for
less than $200 -
great for young
and old!
(and still in
stock)
more details >> |
|
Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
We need your help!
If you find our service valuable, your
donation is critically helpful to support
our operating costs and is
MUCH appreciated!
(click below to donate) |
We are serving thousands
of
new visitors every day and our costs are
growing as well. Thank you for your
support & generosity!
|
|
|
|
|
