Thursday, February 26, 2009
(Cont'd from above)...

Jim (cont'd):   


Reimbursements could be cut for everything, including the drugs... not just for big pharma places like Lilly... But biotechs like Genzyme... companies we had thought were near and dear to the hearts of the democrats everywhere... If I didn't know any better, I would think that President Pelosi... uh, President Obama wants the stock market lower. He's turned the White House into a bear's den... It's Jellystone National Park!

Obama has unleashed bunker-busting missiles on the cost-cutting healthcare players... the insurance companies, the drug companies!... He's making sure that these companies that were once winners are now losers... You know what they're doing?... They're failing the "Marathon Man test... Is it safe?"... All of which goes to show that, in this new democratic revolution... nothing is safe. There are no bomb shelters... no Norad caves...

You can try to hedge against the chaos by owning gold. You know we like that. But you've got to buy it on the way down, not on the way up...

We're in real trouble...

We're in real trouble between what's happening in the world economy and our President... who seems to be taking his cues... Guess who he's taking his cues from?... No, not Mao... No Pancho Villa, although I had lunch with him... No! He's taking cues from Lenin... And I don't mean the "all we need is love" Lennon... I'm talking about the "we'll take every dime Cramericans have" Lenin!... A man whom I revere as an ancestor (as Jim holds up Vladimir Lenin's portrait next to his similar likeness and face)... but not as a manager of a Capitalist country...

With this assault, no stocks can be considered truly free from danger!...

Defense stocks?...

Maybe Obama is going to stop war profiteering... He reminds me of the father in "East of Eden"... Heck, he reminds me of Tom Jones, if you want to stick with the Steinbeck theme...

Oil is up big but, for all we know, Obama is about to put in a windfall profits tax, like the "late" Jimmy Carter, may he rest in peace... I forgot... (he is not yet dead)...

What happens if our Treasury Secretary, "Tiny Tim" Geithner, calls another reporter tomorrow, and the reporter tells him the banks rallied Thursday... and you'd better shoot them like capitalists running dogs... "Timid Timmy" does whatever his "Presscabal" (?) wants, so tomorrow must be an awful day for the financials... if healthcare can get killed like this, pretty much any group could be next...

We've got to recognize... this is terrible market... one where any lift is a chance to lighten up, until Obama realizes that, well, many Americans actually own stocks... not just the Plutocrats. We have a new enemy... we voted for him... and, along with a dismal economy, he's making these pieces of paper more dangerous by the day...

A week ago... A week ago we were worried about whether the banks were making the right marks on their portfolio... Now we're just worried about Marx... and I don't mean Groucho!...

What's the trick to investing in a world where the risk just grows higher?...

First, another reminder... Any money you may need for big outlays in the next 4.5 years should not be in equities... This, by the way, at one time, was considered a radical call... Now it's like, yeah, of course...

Keep it in the CDs... which we know are well-protected, thanks to FDIC chief, and Cramer-fave, Sheila Bair...

With Obama, cash could be king... How about Queen? Maybe Rook? Bishop? It could be Knight... Your portfolios are the pawns...

Second, you must stay diversified...

Why?... Because you can't know what the world's economic "blunderbuss," or Obama's budgets, are going to blow away next...

I know. You'll still lose. But you'll lose less, especially you have some cash in CDs... Can you believer me with the CDs?... I mean, I'm a stock televangelist, for heaven's sake!.. But it is capital preservation time.

Third, you need to find companies that can raise their dividends like Coke did last week... or CL did today... They at least are not affected right now, so far...

Now, I've been thinking... Because it's kind of like my worst nightmare... I've been thinking... Can Obama come after toothpaste?... How about soda?... Will the man tax Crest?... Is Mountain Dew next?... Speed Stick deodorant?...

While nothing is safe... some assets are definitely safer than others...

You know we dig gold... bullion... or SPDR Gold ETF (GLD)...

We are not giving up on oil because, fortunately, the U.S. doesn't control it, so the price can go higher. And we've got a great oil name right after this that I think could be "Obama-proof"... That's a tease to keep you from switching to nightly news...

And we like stocks that have cash in the balance sheets to raise their dividends, like Colgate-Palmolive Co. (CL) or a Coca-Cola (KO)... I can get behind those...

The market's been losing faith in the soft-goods stocks. I think that's a mistake...

Despite the fact that most of them are either at their 52-week lows or crashing through them, the companies continue to deliver superior returns in a low-interest world...

Now, even these stocks, which are regarded as essential components of any defensive portfolio... They've got their weaknesses. They've been getting killed by currencies... strong dollar, weak Euro... European sales translates into fewer greenbacks... blah, blah, blah...

I think that situation could change...

I want you to think back a year ago. Go into the "wayback machine" with Mr. Peabody... Do you remember that that month - just this month last year - that the Euro would never go down?... Now I think the endless buying of dollars might subside, making currency less of an issue...

Commodity prices?... They had been a problem. Because, even though they've collapsed, many of the soft-goods companies hedged and, in many cases, hedged badly... But when those hedges end, they'll reap the profits... lower chemicals, lower plastics, lower shipping costs... not to mention dramatically lower advertising costs.

The second half will be better than the first, and the Doritos and Diet Coke tax... well, they might be a thing of the past...

The thing is... Many of these stocks are still being sold hand over fist... I think it's because you can raise money by selling them. It's difficult to sell the banks and the transports and industrials... They go down everyday... so Coke and Colgate are stocks that get cheaper as they go lower, and I feel more confident about them as the year goes on.

Here's the bottom line...

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The Bottom Line!:     In a world where no stock is safe, you can still take precautions... That means keeping any money you need for the next 4.5 years out of stocks, for big purchases and, with your longer-term capital, owning gold (i.e., SPDR Gold ETF (GLD), oil... Verizon (VZ) and AT&T (T)... big yields... and companies like Coca-Cola (KO) and Colgate-Palmolive Co. (CL)... that can afford to raise their dividends, with yields that are higher than possibly any other point in their existence... But spruce that portfolio up with some Sheila Bair-protected, FDIC insured CDs... They'll come in handy, now that the Capitalists have moved to Beijing, and the communists inhabit Washington...

[verbatim recap]

[end of segment]

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