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Wednesday,
April 22, 2009
(Cont'd from
above)...
Jim (cont'd):
Now you can invest
like a dreamer… that
is what I would have
done when I was in
college if I had two
nickels to rub
together… buying
stocks that make me
feel good, and
staying away from
companies that do
bad things… okay, a
pretty bad way to
try to make money…
as well as the two
Owens’ fit the green
theme… the fact is
that both companies
are doing poorly… I
do not think that
they will be able to
show any earnings
growth anytime soon…
and growth is why
you buy stocks… so
you can be a real
dreamer then… buy
them and hold them
for Earth Day after
Earth Day after
Earth Day and
perhaps make no
money… especially
since neither one
has a dividend… so
they are definitely
not paying you to
wait… the only way
that I see greens
doing well right now
is with some serious
Federal largess…
maybe subsidies for
insulation, because
who wants to spend
money on the Pink
Panther with natural
gas at $3.50, down
$10 from a couple of
years ago.
Maybe Owens Corning
can staunch its
decline if Congress
passes Obama’s
cap-n-trade plan… if
you are a dreamer
you can bet on that…
it would be a big
mistake though… you
naturally think
about Owens Corning
when the President
talks about building
off-shore windmills
like he did this
afternoon… as Owens
Corning makes the
best composite
materials for
blades… and they get
real hot as they
generate
electricity… but
again I say good
luck… those orders
could be years away
and by the time they
come in maybe there
will be another
material that will
be even better.
Now, I might like
these stocks as I
did one other time…
if oil was at $100 a
barrel and going
higher… or if the
budge deficit was a
surplus and the
government gave huge
subsidies to people
who insulated
buildings or reused
glass bottles… I
would be all over
the two Owens’… and
all of ? stocks too
if that were the
case… I would be all
over Clive Owens, if
I were a woman… or
maybe Owen Wilson…
does not matter,
that is not the
case… I say no to
all of the Owens’…
but I know that
there are a lot of
dreamers in this
audience… on this
show we are dream
weavers… we are
trying to weave
money into your
dreams… not dream
catchers, although
that was a pretty
scary Stephen King
movie...
You can buy an Owens
Corning or a Owens
Illinois if you want
to make a statement
to yourself… but
investing is not
about making a
statement… no one
will know that you
will own these nice
green stocks… it
does not matter to
anybody at all… what
we do believe
fervently on Mad
Money… is that you
should make as much
money as you
possibly can… then
if you are feeling
like a dreamer, go
give it to some of
our favorite causes…
something that will
help them a lot more
than if you own
dreamy stocks and
made no money… and
to that you have to
be a cold-blooded
realist… I would
rather have you own
the stock of a
polluter… I mean I
would even rather
have you own the
stock of companies
that make you sick…
like Altria, yeah,
the Marlboro man…
especially after
that great quarter
reported today… even
as I would have,
before I became a
pacifist, beat my
two children within
an inch of their
lives if I ever
caught them lighting
up… hey Altria pays
a huge dividend,
take it and open up
an anti-smoking
clinic… that is more
than you can do with
the absence of
dividends from the
OI and OC.
Now, it just so
happens, while I am
in Ohio… that I have
another real high
yielder… and Ohio
bank that as we
speak is returning
the $125m of TARP
money that it took
from the government…
And the company's
name is
FirstMerit Corp. (FMER)…
in Akron.. you can
invest with your
heart and buy a
company that needs
to take money from
the government to do
well… but we would
rather invest with
our heads… and buy a
company that is
giving money back to
the government…
Investing is not
charity… that comes
later… when you have
some profits to give
away… and I think
that you will if you
buy FirstMerit… this
is a great bank, in
a great position…
its competitors, the
larger banks in
Ohio, Huntington,
Key, Fifth Third…
those are all pretty
stressed out… as in
having trouble
passing the Federal
stress test, in my
opinion… if the
stress tests are as
hard as physics or
chemistry at Ohio
State… and some of
the banks in the
region flunk… I
think their best
branches could be
going to the one
Ohio bank that not
only does not need
TARP… but literally
just gave it back…
FirstMerit.
This little billion
and a half dollar
bank could indeed
become the largest
bank in Ohio by the
time this crisis is
finished… not only
is it the first to
return TARP money…
it is also one of
the only banks in
this country whose
debt has been
upgraded by the
Standard & Poor’s
500... and unlike
Owens Corning or
Owens Illinois,
FirstMerit is
totally paying you
to wait.. it has got
a beautiful 6.1%
yield…FirstMerit has
been a responsible
lender… it is not in
trouble… it can pay
the government back…
it can pay you a big
dividend… and it can
still be able to
grab the branches of
the banks in Ohio
when the FDIC starts
divvying them up.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The
Bottom Line!:
This is your choice…
you can dreams
dreams and buy the
two Owens’… but
remember that fairy
tales do not come
true… they will not
happen to you if you
invest with your
heart… or you can
save your dreams for
when you have some
profits to give
away… be realistic…
buy a
FirstMerit Corp. (FMER)
and actually make
some money… you can
sound like old blue
eyes… but you have
to invest like
Sinatra, the
chairman of the
board… if you really
want to help on
Earth Day… the right
choice is to invest
with your head… do
not make a
statement… make
money… so you pay
back your student
loans, put a down
payment on a house,
sock away something
for retirement… and
yes, pay for those
fabulous dreams that
no one should ever
give up on. If you
are looking to make
a difference on
Earth Day, invest
with your head -
consider FMER… On
this Buckeye Earth
Day… remember to
invest with your
head, not with your
heart.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
So, First Solar has
a large
manufacturing
facility in
northwestern Ohio,
and they have had a
monstrous run this
past few months. So
I was wondering if
this was a way to
make some green on
green?
Jim:
I have to tell you
when I was analyzing
what companies to
look at in Ohio, I
thought about First
Solar because of the
manufacturing… but I
came to the
conclusion that
again that company
could be very
overvalued if oil
goes down… now I
happen to not be a
bear on oil, I think
oil trades $45, $55,
$45, $55... but
First Solar did well
because of gigantic
government
subsidies… and we
saw that in Germany…
you cannot have
government subsidies
when you have the
government bleeding
from the eyeballs…
so I think First
Solar will mark
time… it is by far
the best solar stock
there is… bar none…
but I just don’t
think that group can
get any sort of
momentum with oil
stuck in that range.
```````````````````````````````````````````````````````````````````````````````````
Q:
I have got a
question about the
railroads. I have
been watching WAB,
reaffirmed guidance
for 09, what is your
thoughts about
getting on the
railroads to get on
a recovery?
Jim:
I am a huge believer
in the railroads… I
have got to tell you
something, last
night I was in the
airport because I
was getting ready to
fly out here… and
Norfolk Southern
reports, and it is
just hideous… I
mean, I got to tell
you, these things
did not really say
anything good at
all… and it is like,
wow, how much is
that stock going to
open down… and I
have been liking
rails, so I am
feeling real stupid,
and I am thinking oh
boy I am going to
have eat crow on the
rails… and sure
enough, Norfolk
Southern is up the
whole day, closes
okay… and what it
tells me is that
people believe in a
recovery… United
Parcel the same way…
I happen to be
buying Union Pacific
for
ActionAlertsPlus.com, my
charitable trust…
the answer is that
the rails remain a
terrific call on
worldwide growth,
including Chinese
growth… and we know
that China just
upped the GDP
estimates for this
year… I like the
rails, they make
sense… I like
Norfolk Southern…
and it is really
interesting that you
mention Waddack…
this crowd is smart…
that is another
great stock to look
at… and I was going
to use it, that is
another one… it is
interesting because
I am always trying
to figure out what
to talk about on the
show… and I said
maybe no one has
really heard of it…
so maybe they will
just pass over it…
but you have… you
are going to do
well.
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Q:
I want to talk to
you about Fifth
Third Bank, so what
do you think of the
future of this super
regional bank? and
what kind of effect
will TARP have on
it?
Jim:
You know it is
funny, when I was a
sales person at
Goldman Sachs in the
80’s… there were two
banks that you felt
were fabulous… one
was PNC, Pittsburgh
National and the
other was Fifth
Third (FITB)… these
were the best two
run banks in
America… and there
was no doubt about
it… and I am in
Ohio’s house so I am
not going to… it is
just not right for
me to trash a Fifth
Third, I know that
they are trying to
make a come back…
but they did a lot
of things wrong… as
did Huntington did a
lot of things wrong…
as did Key… as did
the late Nat City…
and I think that
Fifth Third could be
a muddler… in other
words, it could
muddle thru…
unfortunately it has
more of a…. I can’t
recommend it… there
are just two many
good banks that are
down so low… that I
am going to have to
say, nope I am going
to take a pass on
Fifth Third bank.
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[verbatim
recap]
[end of segment]
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