First trading morning of 2012.

Noteworthy this morning is the downgrade of Realty Income and Southern Company from top picks to holds. As expected none of the reports say either of these companies are doing anything wrong or even that they are not good buys, just that they have moved up enough to make their price no longer attractive. Following my post a couple of days ago and yesterday about dividend stocks taking on higher valuations this is no surprise. I expect we will see some more of these reports in coming days as investors continue to plow money from other low yielding assets into safe dividend payers yielding 4% or more. Tobacco stocks have already seen downgrades for valuation reasons and I would not be surprised to see DUK,  HCN,  and other blue chip dividend stocks to see such soon. Rich valuations make me nervous. 

I also find the movement upward in stock futures this morning to be maybe illustrative of the coming year. Again feelings instead of thinking is taking hold. European troubles seem to have abated and China is reporting good prospects so traders are signaling all ahead looks good since it feels good now.  Europe is not going away and is likely to get worse before it gets better and US and China depend on those countries for lots of export activity. Therefore unless we are going all hopey changey again the worries there of an impending recession, if not already in one, will revisit us again.  Keep a watch on SCCO for a sign if there is real economic improvement happening since nothing in this world now can be built without copper. 

2012 should be wild ride with lots of opportunities for profits. Let the ride begin !