Predictions for 2015

It's that time of the year for predictions so we will post some of our own.  Often wrong, but never in doubt. 

1. The stock market will be up around 6% to 7% this year and it will again be lead by the mega cap stocks meaning those over $200 billion in market value.  Some of the $150 billion plus stocks will join that group this year as well so if doing your own picking check those out as well if you are into individual stocks.  Look for single digit or lower than teens PE's.  We again like Vanguard's large cap funds for most people.  One can not go wrong with VFIAX by just buying and forgetting. 

2. Best stock value of the year.  Triangle Capital,  symbol TCAP.  This stock has been beaten down mercilessly for reporting some small bad credit issues last quarter.  The 10% plus dividend will not be cut and the stock rebounds 25% making for a nice 35% annual gain. 

3.  New Media Investments, symbol NEWM,  proves us right as the best current long term hold.  This company that is the holder of a large number of medium and small daily newspapers will prove to be a solid buy advancing from the current price of around $23 to past $30 by year end.  Good dividend payout remains as well. 

4. The market will have at least two corrections this year and those who hold mega cap funds and stocks will ride right through them untouched. Stocks, not mega caps,  in industries being sold off will take the pain and stay down. 

5. Interest rates will remain flat.  The Federal Reserve wants to move rates up, but stays on the sidelines as they watch the housing market go nowhere another year and Obamacare pinches full time employment in small businesses and the economy remains too weak to raise rates.  This continues to make our selection NNC a safe choice for yield and capital gains potential into 2015. 

6.  Housing, which is absolutely essential to a growing economy, remains on the sidelines with no growth and with mortgage rates remaining near 4% for a 30 year loan.  Go buy a home to live in, not for an investment (unless at the beach),  if you have not already and lock in these generational low rates. 

7. By the end of the year it will become clear to everyone that Jeb Bush is going to be the next US President. He will win over most independent voters and even some democrats to take a solid lead in the polls versus Hillary Clinton, who will be burdened by Elizabeth Warren and Bill Deblasio.  Bush is the safe choice for the well off, both democrat and republican, so he will gain steam throughout the year. 

8. The NC Legislature will continue to play chicken with real financial reform and do nothing to change tax schemes or any other reforms either.  Hey guys cut income taxes to zero both individual and corporate and end the energy subsidies !!

9. Dan Blue will decide to run against Sen. Richard Burr and be immediately deemed the one as all other democrats drop out of the race. 

10.  Gas prices will remain low as Saudia Arabia will continue to use their clout to bludgeon Russia and Iran. US companies will do as they always do and find ways to cut costs and keep right on drilling.  Obama will veto Keystone Pipeline after having passed both houses of Congress. 

11.  Apple, symbol AAPL, will remain the bluest of blue chips this year and when investors get worried they will pile into the stock as a safe haven for it's super safe dividend and addicted group of users.  Buy some very early in the year and hold. Better than owning US Treasuries. 

12.  For those who like to take real risks in picking stocks, but some Media General, symbol MEG.  This company has consolidated lots of television stations in media markets where politicians will need to spend millions in 2016 election and the company will see profits soar.  It has debt and it has risk, but it also has as it's largest shareholder Warren Buffet, which is not widely known. 

13. Super safe 5 stocks diversified.  APPL, XOM, GS, VZ, and PM. 

14. Super risky stocks for best chance at big return.  TCAP, NEWM, MEG, GILD, and BP. 

15. Sears will be gone by the end of 2015.  Ditto Radio Shack.  Add in one metro newspaper or newspaper chain yet to be named. 

Our Mistakes..

We make mistakes.  We suggest stocks that at some point after our suggestion to buy have issues.  So let's review some of our recommendations and our current opinion on those selections. 

ARCP...We really really thought this REIT had their act together.  But we were not the only ones as several big bank lenders kept piling in the cash so the management could buy retail properties.  The dividend rate was stable and secure per their quarterly reports and the spin offs of shopping centers made lots of sense too.  Then they bought big into the Red Lobster real estate.  Too big in our opinion and we backed off a bit thinking they had too many of their eggs in one basket.  Of course they finally jumped the shark with the killer statement about "accounting issues".  Accounting issues anywhere means run.  We never lost money here as we exited our positions early on with that having more to do with luck than smarts.  If you are holding the preferred stock you likely are ok, but if we were holding the common stock we might consider it time to take a tax loss and move on as these shares are not going anywhere real soon. 

TPL...Texas Land Trust peaked out at over $200 per share and have of late settled in around $!25 or so.  As we mentioned early on if you bought in this would be a wild ride and it has been and will continue to do so.  The deal here is to hold on and be one of the last holders when the trust liquidates.  It is a game of chicken and Russian Roulette rolled into one and only for the serious gamblers and big boys. 

TCAP...Triangle Capital has sold off a good bit since we suggested their purchase.  Now settled into around $20 we still like TCAP.  In fact we will go as far to say it is an outright steal here.  Dividend over 10% and one of the best CEO's around who will move on from their hiccup of a quarterly report.  We personally are looking for a place to move in, but will wait until after the New Year to avoid the tax loss selling. 

DOLN...We did not outright suggest the purchase of Dolan Company, but we did say the risk might be worth a few dollars.  We hope you only had a few dollars in this dumper since it declared bankruptcy last year.  The money you had is completely lost as a shareholder.  Bad, really bad management can not be overcome even with decent opportunities for profits is a lesson well learned again. 

CVE, ERF, COSWF...Who knew?  Almost nobody thought oil prices would crash and if you owned any of these stocks noted here the pain has been intense as all of them act as owning a oil well yourself.  We only like one of them right now and that is CVE.  CVE has said their now 5% yield is sustainable and they might be right, but we urge caution and only risk capital if you buy in. 

SBY.. We honestly thought the housing market would take off in 2012 since rates were below 4% for 30 years loans.  The feds were in the game helping people buy and lastly there was a huge market in young people needing first homes.  This made for ideal conditions for renting homes and buying homes reconditioned from the housing crash in 2009.  Not so as what we failed to see was the fact most people were getting only part time jobs and most young people were having issues with even these low payments.  Thus nothing housing related improved or has improved since the so called recovery has begun.

Get in the market and enjoy this ride !

Now twice in the last three months we have had sell offs in the stock market and both times we have not only rallied, but we had ferocious rallies.  What to make of it?  As we have been opining for months this market can not go down as the monetary and fiscal support is just too strong.  We did NOT say the economy is strong, just that economic engineering and political spending is such a support that it is hard to push down this huge asset supporting apparatus built by both the Federal Reserve and Obama.  Begs to question is there anything that could cut the legs out of this market?  

Before we answer that last question, let's pursue something else. For those of you who have been hiding in treasury bonds for years and missed the last 5000 points of the Dow move let me suggest a story I often heard from my father. He told me over and over not to buy a house on the beach as sooner or later a hurricane would take it out. He was right, but during the years one does not have a beach home one is deprived of the joys of owning one. Likewise while many of you hide in bonds and cash you are depriving yourself of the huge money making taking place in the stock ownership.

While waiting for the assumed stock market crash you are losing out on tons of money making.  Yes eventually the downturn will come and yes if you are in the market there will be pain. But honestly no one can predict precisely the date and in our opinion it is years in the future.  When the downturn does come the economic and political moves will predict it so one will have time to then move into safer assets such as the bonds some are invested in now. Add to that bonds are more risky than stocks now due to interest rate risk.

What can bring down this market? The only thing we think that could do so is a geopolitical event of some sort.  Think Iran drops a nuke on Israel, or North Korea attacks the south, or Isis explodes a nuke in some major US city.   Yes they can happen and just like a hurricane can take out your beach house, but if you wait for those as well you lose out on this stock market monetary move.

So make your move into stocks today.  Your ship has come to dock and believe it or not this time you are at the dock.  Like the lady in the Blue Bunny Ice Cream commercial you see on TV, it is good to be rich or working to get rich when you have Obama and Democratic elites who got your back.       

               

Our 2014 results and looking into 2015

We had our second best year in history during 2014.  But the reason was more about amount of invested capital than about gain in percentage terms.  We will finish 2014 at about a 11 percent gain, which is our annual goal number.  Profits under that percentage means we made bad choices and profits above that number tends to say well we got lucky with capital allocation. However we gained in 2015 because we increased our invested capital by almost 40 percent this year mainly due to our belief we had picked the lock of the Obama risk scheme and decided to get aggressive.   We were proved right and it paid off handsomely.  We look into 2015 and will likely up our risk capital by another 20 percent. 

As we have discussed in several postings some 18 months ago we decided that securities that had regulatory protection from Obama and Congressional Democrats were the way to go.  That came after we gained the knowledge of just which securities met that criteria.  Those securities are mega capitalization technology and financial stocks such as MET. PRU, JPM, AAPL, CSCO, ORCL, MSFT, and GS.  Add in the mega sized telecommunication issues such as T and VZ and anything that prospered with low interest rates forever.  We stuck with those for these many months and up sized our positions in these securities a good bit.  Rarely did we take a less than six figure position and during 2014 we had only one losing trade.  That translates into large gains due to larger positions and with frankly little risk.  Given a choice of owning a small business or dining at the Obama profit table we find the choice easy. 

The financial engineering of the Federal Reserve and the Political Economy being run by Obama means interest rates near zero for as far as the eye can see and that is being backed up with no growth political policies.  So mega cap stocks prosper by taking in all that lovely Fed capital and high deficit spending while small business gets killed with regulations they do not have the political muscle to avoid.  The big cap stocks use the profits to buy back stock and increase dividends since they have no competition and little reason to invest for growth.  It also limits to near zero any risk in downside to their stock prices. Utilities like telecommunications are on Obama's protected list due to the near universal love of mobile devices by his young believers and voters.  Lastly municipal bonds, which are a favorite of the state level Democrats enjoy low interest rates and almost zero risk of default make for smart investing for those needing to avoid taxes, which again tend to be the wealthy who support Obama almost universally too. 

Looking into 2015 we see no change in this investment approach.  Republicans might be in charge of Congress, but Obama has made clear he will not allow his supported classes to get hurt with any legislation.  Our selected securities will likely change little or none at all.  We might look closer at some of the battered petroleum securities since they have been oversold and offer little downsize risk,  but again we will look at the mega sized picks such as XOM.  We will also keep in our portfolio picks like SF and NEWM, which we consider first rate picks for picking up market share even when growth is nowhere to be found.  Smart consolidation here is a great approach when bonds can be sold at less than 3 percent long term even for mid market companies. 

We will be posting our 2015 portfolio sometime near the end of 2014,  but note again it will change little from what we have been trading for many months now.  If you are a retirement investor or long term investor we highly suggest you continue to buy low cost mega cap mutual funds or ETF's.  Vanguard has several choices such as MGC, MGV, and VFIAX.    There seems to be little chance that this approach will change even after 2015 and into 2016 as well.  Add in that we assume Hillary Clinton will be elected in 2016 as President and her close connections to the same mega cap companies like Obama will mean pretty much the same investment environment has at least a decade to run.  It's good to be rich and protected by the ruling Democrat political class. 

Now what this simply means is the rich will continue to get richer and the poor poorer.  The employed will continue to be well served and the unemployed looking for jobs even a decade from now.  That made even more so with the huge influx of cheap labor via Obama's decreed immigration rules.  Those new green card holders will be the ones getting any vacant jobs and will be the very ones serving their new masters the politically rich made richer by lower cost services.  If you have resources or can assemble resources via regular investing you can participate in this wealth transfer and blessed years to be rich.  We find it sad for those who are stuck in this financially engineered political economy jobless and poor are voters, many of which clueless voted for these policies are the very ones suffering the most.  We continue to glee at the opportunity given us and will sit by with less effort and collect more profits.  Until something changes we will sit on the beach and frankly hope for voters to usher in a new Morning in America, which for our posterity we personally prefer to this staying rich easy. 

                

 

How we pick stocks.

One of the most important decisions in individual stock investing is to avoid making a mistake.  Make that a BIG mistake, one where the company you bought is actually going in the wrong direction and the stock goes into free fall. Risk happens fast, very fast, so fast almost all investors can not adjust quick enough to avoid losing lots of capital.  In trying to catch a falling stock you render a lot of blood capital in the effort before finally finding a way to rid yourself of the stock. You might not get rich quick, but you sure will not get poor fast.  Trust me getting rich slow is a whole lot more fun than getting poor fast. 

Now the key here again is to avoid completely the falling stock and loss of capital and there are some ways to reduce significantly your risk.  Here are some points to keep in mind. 

One, pick stocks with dividends, strong sustainable pay outs, that at some point buffer bad economics and bad economies. Seriously if the stock has a sustainable 4% dividend there comes a point where the stock becomes yield bait to those seeking yield and those buyers come into the market and buy shares shoring up the stock price. Most stocks like these do not have 20% price collapses. 

Two, pick stocks with large capitalization,  We much prefer $200 billion plus which is about 25 stocks, but will look for values down in the $50 billion plus category selectively.  A large capitalization stock will not fall as fast either since they most likely have the financial heft to sustain bad corporate decisions, bad economies, and frankly can use their government connections to help with regulatory pressures.  Take a look at the 52 week highs and lows and you will see little movement. 

Three, we consider this trait the most important and that is a low PE.  In fact we look for stocks with single digit PE's which tell us there is the possibility it is undervalued and ripe for upward movement.  We will buy stocks into the lower teen's PE but almost never above that point of value. Of course one needs to do their due diligence here to make sure there is not a compelling reason for the low valuation.  But when dealing with most large capitalization stocks with low PE's your chances of it going down is much less and your chances of higher price good. 

Four, keep a eye out for stocks that fit the first three criteria that are selling off or have sold off significantly into a value point. We just love seeing stocks fitting the first three criteria getting sold off or a whole category getting sold off.  Recently oil stocks got killed over a two days period and values popped up on our radar from the overselling.  Panic breeds opportunity.  Keep an eye open for chances like these and buy at either the sharp early sell off or wait for a day and see if the stock stabilizes if it sells down to a stable price in a slower manner.  Step in and buy and most times you will get your money in the green within the week or less. 

Follow these criteria and you will find yourself most times a successful investor in individual stocks.  Never ever fall in love with a stock, you date them you do not marry them.  Does not mean you can not hold them for long periods, it means if the value has passed you sell and move on.  There are better values somewhere else or the money is best in cash. Do not let tax issues decide you selling point as a profit taxed is a profit gained and that is much better than a profit lost.  Lastly do not try to make the last dollar, as in you will keep this stock past the point of fair value as the risk increases and smart investors let someone else risk making the last dollars in a stock.

                 

Old Fashioned Gas Wars.

The current downtrend in pump gas prices is nothing more than an old fashioned gas war. Those of you young enough remember gas wars where gas stations would compete for having the lower price and in the end all gas stations got hurt selling below cost.  We actually have bought gas in a gas war at 19 cents per gallon.  In this case however it involves large companies, even larger countries, and much much higher stakes.  Let's take a look at the winners and losers and where one might find some profits from this new oil order. 

Remember the "peak oil" theory tossed out there by everyone from those trying to make a buck on short sighted investors to those who actually created it and championed by the democrat party for the purpose of pushing so called renewables, solar, and wind energy sources.  Well we now know that peak oil was a hoax.  Best guess now we have tapped about 30% of the possible sources of current oil and gas energy.  Furthermore many oil people now think oil and gas come from deep in the earth where it is very hot and the blow off of that heap is seeping crude and gas up through the mantle and then the earth's crust.  Here is something you likely do not know there is more, tons more, crude oil seeping naturally out of the earth's crust into the ocean than could ever be spilled by any oil company well leakage on an annual basis. Simply put we have more oil than we need and we will never run out for all intents and purposes. 

Fact is we are living in a oil world that started with Ronald Reagan.  That old "supply side" idea of if the capitalists get incentive enough they will produce more oil that demand could ever demand and prices will come down.  Bingo!  Everyone in the oil industry knew there was barrels and barrels of oil underneath America to get if someone could find a way.  Someone found a way, with enough incentive being $80 plus barrels of oil.  Not to get into the details here, but fracking and lesser know horizontal drilling, has produced a bonanza of energy for the US at a cost of around $55 to $60 per barrel here.  Mostly in North Dakota and West Texas.  In the last couple of years all that new oil has come to the market and driven the price down due to the glut.  Oh, and remember those who said "drill baby drill" would not produce more oil, well they owe us an apology for their outright lies. So here we sit with a world oil glut and frankly it is going to be with us a good number of decades if the oil people are left alone to do their thing.  Goes to show a cartel, like OPEC, can only last so long world where at least one country has a free market.  Note one more thing only in the US do you see new oil being extracted, not Europe, not China, and certainly not Russia, no where else because of the incentives at play here and not in other non free market countries. 

Now who are the winners and losers?  Simply put Russia, Venezuela, Iran, and Mexico are right now the losers.  In the case of the first three countries the NEED for higher priced oil is to keep the country afloat financially.  Russia being a gas station masquerading as a real country gets hurts worse since they are in a real bind since they are the world's largest producer.  Venezuela and it's restless population can not survive as a country without higher priced oil.  Lastly Iran is a high cost producer and this current price hurts them badly cash flow wise.  Honestly Saudia Arabia which can produce oil in the $20 to $30 a barrel range knows all this and wants these three countries to suffer geo-politically.  Saudia Arabia also wants to drive the new US drillers into bankruptcy. We will get to Mexico in a moment. 

So the current scenario is hurting US fracking and horizontal drilling producers.  However they have one advantage none of the other producers have in that the United States government in not in essence running and owning the oil companies.  Most of these countries are de facto in ownership of the "oil company" doing the drilling and oil sales.  So unlike the US there is no incentive to find ways to drive costs down and squeeze vendors.  Trust me that is happening righ now in the US oil fields and in a year or two when it really matters they will be able to produce the same oil at a even cheaper price per barrel than the current $55.   Mexico has begun selling off their state owned oil company and one can expect once the free market people get a chance at their oil resources they will begin producing at a lower market based price.  Canada too has huge resources of oil and they will find ways to produce at a lower price given the incentive here.  In all North American will be energy independent if the capitalists are left alone to do their thing. Now how low Saudia Arabia wants to drive the price per barrel down is an unknown, but even they have their tipping point with a restless population hooked on lots of free stuff from oil revenues.  So as we said at the start we have a gas war, which will end eventually, and as in all wars the suppliers in the end win. 

Who are the suppliers we like best?  Let's start with one we like long term,  Haliburton symbol HAL, who is a primary oil field servicier in the world when it comes to specialized services.  HAL will be merging with Baker Hughes next year in a deal just announced and they will find cost savings there. HAL has sold off significantly and we think way too much here at $40. It carries a single digit PE too.   Oil majors will also win since they are multi-faceted businesses ranging from drilling to selling at the pump.  Chevron, symbol CVX,  is a darn good pick here having sold off a good bit.  Exxon is always a good pick if one thinks safety.  However we really really like BP, symbol BP, which carries a nice 6% dividend along with an already substantial upside already due to the Gulf oil incident. We recently bought BP, after they sold off last week,  and HAL and might add more. Since we know there is a point where the gas wars end and anyone who buys when there is blood in the streets value wise gets rewarded.  Might add CVX as well.   CVX and even Conoco Phillips, symbol COP, carry a very safe 4% dividend for those seeking yield. 

So pick your spots and add some oil stock selectionsknowing there is an end to the new fashioned gas wars.

              

Permanent QE and Zero interest rates.

Like it or not as we see the economy Quantitative Easing and zero interest rates are here for at least another two years and maybe another 8 years plus if Hillary Clinton wins the Presidency in 2016.   Low rates and QE are not positive for growth nor job creation, but they do offer continuing opportunity for those with assets, notably financial assets, to keep gaining wealth. 

As we have noted before we find the current financially engineered political economy a downer for future prospects of young folks seeking employment and for those employed the hope for annual raises of any quality or job promotion of the type know in the past being non existent.   Economic growth needs business conditions to be competitive and consumers with jobs to make growth happen and push interest rates up.  This is not happening now as evidenced by just this week's housing index where rates moved up just a few basis points and the refinancing mortgage business go bust.  There is little to no inflation or business growth so the Federal Reserve has no impetus to push up their zero rates.  Inflation of course is essential to business growth and the ability to cover expenses as they inch up annually even without payroll inflation. 

Ditto for job growth being dead since the ever recycling of money at zero interest rates and no inflation means all business is doing is making the same profits over and over.  Therefore no need for additional employees and no meaningful raises for those already employed.  Small business is not growing and actually slowly losing profits due to the no growth being non expansive.  Corporations, most notably mega cap corporations, are experiencing the same no growth business scenario. However they have the option of reducing share count with the resulting financially engineered increase in profits via the reduced number of people feeding at the trough.  Small business being closely held does not have that option. Large corporations also can spread the same profits over less shareholders and increase the profits paid to each shareholder. 

Now only fools do not see that if one owns shares in mega and large cap stocks the resulting growth in share value and increasing dividends that actually support those capital gains makes for opportunistic investing.  We were asked just last week if we were 35 years old again would we invest or reinvest profits in a standing small business and the answer was a resounding no, when it was so much easier to sit and collect growing financially engineered politically protected capital gain profits from owning stock in large corporations who can play the Washington DC game and small business can not. 

So unless something changes in Washington DC where we elect leaders that go with growth policies we will continue to invest and reinvest in large caps and sit in our chair on the beach and smile.  Sadly many of those who can not see the difference in a no growth financially engineered political economy and a growth economy when voting will likely be those awaiting our needs at the beach.  Yes, I will take a baked potato and large salad with that steak please. 

 

            

 

Looking into 2015

We remain convinced that the market will continue moving upward through the end of the year. In fact we are betting on a continued move upward, with hiccups downward along the way, for another two years.  Mega caps and large caps are being rewarded for being compliant with the Federal Reserve and Obama administration policies see nothing but blue sky ahead. The financial engineering and political economy marches on despite the change in Congress. We will suggest your reading our postings on this idea back a couple months ago when during the stock downturn we loaded up and have been richly rewarded.  We hope you did as well. 

This posting is for targeting some ideas going forward into 2015 so as to position your money and retirement funds for the best returns.   We are fans of lost cost customer driven funds by Vanguard and if you have a choice use their ETF's and funds for your investing of retirement assets.   MGV and MGC are excellent ETF's for placing your money now and for at least the next two years.  Throw in some VOO and sleep well at night.  VFIAX and VEIPX and excellent Vanguard funds for the same purpose.  If you are past 55 years old VWINX is much better than playing the target date funds with still putting money in VFIAX.   We are not fans of target date funds because we believe even at 80 years old all retirement portfolios need a healthy doze of stocks. 

Individual stocks picks default to value based mega and large caps for us if one is picking stocks for your portfolio.  BP here at under $42 is a screaming buy for long term portfolios.  The cost of the Gulf cleanup is priced in as well as the downturn in oil prices.  If there is a better buy in the market now we do not know where.   PRU and MET two large insurance companies are priced for a zero rate economy and sooner or later that will change and with even a hint of a rate increase these two companies with large portfolios to invest will increase profits going forward.   A dash of AAPL since the customers of this company are like tobacco users totally hooked on the products and will pay anything to get the upgrades.   We also like NEWM for long term capital gains.   SF has upside as well for long term gains.  Finally for those past 55 years old buy some NNC for capital gains and a nice tax free dividend. 

Do not listen to the doomsayers keep invested in America and do it smartly by following who is being rewarded by politicians and the federal reserve. 

               

 

Fall Trading Portfolio.

Our fall trading portfolio is nothing but slow and steady.  We are completing one of our best trading years and see no reason other than keep on trading financially engineered stocks. Below are our current picks with a short comment on each. Almost all of these picks we got in on when the market sold off in October and we are enjoying the fact we believed in our market analysis of the market being ruled by financial engineering and a political economy to keep rolling on. 

AAPL...We continue to hold Apple as our largest holding and have wanted to expand it a bit as well, but the price is starting to get frothy to us and we might just hold off until a sell off occurs.  We are in at $87.50 and $90.  Note that the company bought a truck load of stock back last quarter. 

AFL...Slow steady insurance carrier which we have traded for some time.  We hold it at $57.50.  

BP...We still believe this stock screams buy me at the current price.  Oil per barrel might be down but oil companies like BP will continue to do just fine for the long haul.   Our price $42 as we are a bit underwater here.  As a side note here if oil continues to sell off we will likely take a look at XOM as well.  Sell offs create value of course. 

CSCO...Continues to chug along, raising the dividend, buying back stock. and making us profits.   Our price $23.

FB...A new security to our trading portfolio and unlike most we hold this one was simply a sold off value buy.  Our price at $65 makes us most comfortable long term even in a sell off. 

GS..Did we ever catch this one right.  We got in at a single digit PE and a strike price of $160.   

JPM...JP Morgan has moved up a good bit since we got in at $50.  Even now it is selling at a single digit PE so we will stay in for awhile longer.  Nice dividend and lots of buy backs continue. 

MET...Another of our single digit PE insurance stocks.  They just reported some additional stock buy backs and decent earnings.  We believe the insurance stocks are great buys right now because they will prosper more than any other financial segment when rates are moved up a bit sometime soon.  We are in at $50.

NNC..It has sold off recently,but at $2 under net value and a 5% tax free payout we are happy just staying long and collecting the cash.  We are in at $12.92.

O..Realty Income has moved up nicely in the bounce back and might again be getting rich for our liking.  We are in at $40.

PM...Great well run tobacco company that is headquartered internationally.   We are most happy with the $80 price we are in at along with continue dividend increases and huge stock buy backs. 

PRU..Another solid large cap insurance stock at a single PE, nice dividend, and lots of stock buy backs.  Our price $82.50

SF...Continue to plug along making money, merging with smaller firms, and making us profits.  Price $40.

T.. Steady eddie telecom stock.  Buy and forget, collect the dividends and enjoy the stock buy backs.  Price in at $33

VZ..Same as above.  Price in at $45.

ORCL..We have not traded Oracle yet but it is on our list as a replacement going forward at $38. 

NEWM..We just pounded the table on this stock and continue to suggest long purchase.  6% dividend and long term capital gains potential.  Take a look at a recent posting for full explanation

NEWM is a BUY.

As a stock and option trader we come upon occasionally really nice opportunities for long term capital gains that say BUY ME and BUY ME now.   In some past postings we have mentioned this stock, but feel the need to do so again since their most recent earnings report was solidly what we expected and the stock began to make that move upward. 

New Media Investment Group is a spin off of another media company that did not want the slow growth newspaper business.  But slow growth does not mean no growth and certainly does not mean is not making money.  Newspapers have taken a bad rap in the last decade much of it due to the bad management practices of large chains that got into too much debt buying up large metro newspapers at a premium price.  Almost all the big newspaper chains are on a downward spiral and losing readers, losing revenue, and barely making enough money to pay for the debt load. 

That however is not so with the smaller newspaper business.  Small dailies in small towns and some larger non dailies are thriving.  Trust me on this one as we have almost 4 decades of experience in this field having retired from working with small dailies just like the ones we are posting about here.  If you do not trust us consider that Warren Buffet and several other billionaires are buying up smaller properties and seeking more as they see what we see and that is solid profits that can be reinvested and paid out to shareholders.  Solid profits such as 12% plus annually. 

Up to some time ago there were no publicly traded newspaper companies as far as we knew who specialized in this growing field of opportunity. New Media is the first we found and they are doing just fine.  They recently completed a share offering that boosted their cash pile as they seek additional newspaper buying opportunities.  We expect they will continue to buy newspapers and this time unlike the buyers in the 1990's buying spree they will be buying at bargain prices or at least at fair prices. NEWM  their stock symbol is a worthwhile long term investment here at just under $19.  Add in they pay just under a 6% well covered by cash flow dividend. 

What's not to like a good capital gains opportunity.  A stock that we believe could double in price over the next five years. A stock that pays a good dividend while you wait and add in solid management.  Now do not go out a load up all your portfolio on this stock, but do consider it as part of your overall diversified holdings. 

Political Predictions

Yes we really bombed with the May primary predictions.  But this is a new day and new predictions are needed so let's take a look at some local, state, and national races we consider competitive and size them up.  We may be often wrong, but we are never in doubt. 

Johnston County Register of Deeds... Michelle Ball we believe did every event on the county calendar, visited about every nook and cranny in the county, and even did a round the county tour.  Ms. Ball did what we would do as a candidate in a county where it is hard to reach people via the media and that is retail politicking via handshakes and getting face to face with voters. Michelle Denning has also got out , but as best we can tell not to the extent that Ms Ball has done. In our opinion this county has not seen someone as adept at winning votes and doing politics like Ms. Ball since current Sheriff Bizzell.  In the end unless Ms. Denning can find someway to change the dynamics of the race the advantage Ms. Ball has with an R by her name in Johnston County it is likely too much to overcome. 

Seventh Congressional District....David Rouzer has done more than his due diligence in this conservative voting leaning district by getting out and taking nothing for granted.  We expect this race might turn into a laugher in the end due to his hard work.  We frankly are impressed with Mr. Rouzer's not measuring for drapes early and that could bode him well if he wins. 

Second Congressional District...What could have been the toughest race for Rep. Renee Ellmers could also turn into a wider than expected win in this district.  Ms. Ellmers who seems to be the energizer bunny has got out among her voters and business contacts and let people know she wants their vote just like a first time candidate would do.  Her opponent Clay Aiken who we frankly believed could have won this district has been hurt by poor use of resources and not finding a way to make Ms. Ellmers make a mistake that the national media could pounce upon. 

NC US Senate....This race that could have been a fairly easy win by Thom Tillis has been made harder by what he allowed to be done to him in our opinion. He allowed Sen. Hagan to paint him as anti-education early on.  The most important rule in campaigning is to NEVER let your opponent paint you something before you do likewise to your opponent.  All of the education ads are frankly a outright lie, but this is politics and that means hardball is allowed.  Ms. Hagan is frankly a bad candidate and comes across so on in person and on television is a bit better. That is why she skipped the last debate.  Mr. Tillis would have been smart coming out hard and early on at Sen. Hagan painting her as nothing more than a stand in for the unpopular Obama.  The recent ruling on gay marriage is bad timing for Democrats since it will energize some social Democratic conservatives that might have sit home and small numbers will mean a lot here.  We also believe black turnout needs to reach towards 30% of the electorate for Sen. Hagan to win. Sen. Hagan must win Wake by 12% plus percentage piling up votes in their liberal leaning county to win so keep an eye on those numbers in Wake early on.  We have gone back and forth on this race for days and only now believe we see a winner.  The early vote in our opinion was won by a percent or two by Mr. Tillis by older voters coming out strong.  Rural Democrats seem to be breaking late for Mr. Tillis and if that continues as we think it will into the election day run of about 50% of the entire vote Mr. Tillis will pull this one out.  Add in we think that we will know the result by 10 PM or so as others like us will be checking the votes in Wake to check if Sen. Hagan has done well enough there. Yes we are going against many pundits here but we REALLY think this is the end result. 

NC Senate...The Republicans will remain in control of NC Senate, but lose 3 seats.  Loss of super majority. 

NC House...The Republicans will remain in control of the NC House and lose 4 seats.  Keeping their super majority. 

National US Senate picks.  Republicans pick up West Virginia, Montana, South Dakota, Alaska, Arkansas, Louisiana, Colorado, and Iowa.  New Hampshire, North Carolina are close toss ups but should swing if the Republicans are having a good night which we believe they will.  Watch the Kansas race as possible loser for Republicans.  If things are going really well for Republicans Virginia and New Mexico might flip as well. Lastly do not be surprised if Angus King in Maine decides to caucus with the Republicans if they win control. Sen. Mancain in West Virginia might switch parties as well. Finally I count 9 new Republican seats net. 

Important Race to watch...Florida Governor.  If Crist pulls this off beating Scott that says two things.  One Florida voters are out right stupid picking the sleazy Mr. Crist, much like Virginia did with Mr. McCauliff last year.  If Crist wins in Florida that might will bode well for the 2016 Presidential election for Hillary Clinton.  Virginia has turned from red to blue in the last few years and Crist winning Florida would mean that state is not far behind.

               

This time it is different.

If you have invested or traded securities you have heard that phrase.  Usually in an effort to tell you or explain to you how all the accumulated wisdom of the ages will be wrong THIS time.  Reminds me of the efforts of young people today to tell us this time is different with Obama in charge.  Well they are wrong and guess what the novice investors who try and tell you this time is different that a total collapse is coming or that the end of the world is near are wrong too. 

People and generations follow almost predictable courses. Time and again human nature being what it is has not and will not change.  Humans have emotions and needs and those traits pull them back to the same path each time.  As they way the market is driven by fear or greed.  The key is to be on the opposite side of those emotions when others are on one side.  Yes darn hard to do that.  Frankly however sometimes the best path is to do absolutely nothing and ride the wave. This just happens to be one of those times. 

Today is a perfect example we looked and researched and tried to find a trade to make this morning. Facebook being a prime example as it was getting the crap beat out of it for two days now.  Down a bunch of points and looking all the way a value buy.  But the PE is still ultra high and the price now down enough to really make a difference.  The other point to make is looking at the option chains there is just nothing enticing there either which tells us someone else see the same thing we do.  The market can be smart and when it is you just sit back and ride the gains and smile. 

We are fully invested and fully positioned in our trading portfolio and intend and stay that way.  We loaded up real good during the latest stock market sell off and are enjoying those gains right now.  This political economy and financial engineering is going right on for at least two more years.  Saddle up with extra contributions to your retirement plans in mega cap stocks.  If you are buying individual stocks buy mega cap stocks too.   The insurance companies look strong here and are reporting blow out earnings this week just as I suggested several times before and even after moving up are still undervalued. Refer back to our earlier postings for specific suggestions during the last two months. 

Be wise and do not believe it is different this time. 

We got it right.

We take our lumps when we make bad calls on the market, so we are taking our bows when we got it right.  After a scary sell off for some days last week the markets have settled down to a steady ebb and flow.  We have seen a couple of nicely up days retracting some of the losses of the previous week.  We are also seeing the normal reward and punishment of individual stocks when they report earnings.  Good example is Amazon this morning getting taken to the shed for a very poor quarter.  Frankly we are enjoying listening to people like Dennis Gartman do a mea culpa for their off bear market call.  Even Dougie Kass has been unusually quiet the last week after he said the Oct. 15 low was the start of the end of the world as we know it. Maybe after watching markets and studying this economy and business flow for now over three and a half decades we know something too. 

In the end mega cap stocks and blue chip companies with solid balance sheets and a slow steady crawl forward continue to hold ground and gain a bit too in stock price.  The no growth economy fits right in for these companies and they are increasing dividends and buying back stock to reward shareholders.  Pfizer this morning reported a huge buyback and this followed several others making similar announcements.  Apple last week noted they had bought back literally billions of dollars worth of shares in the last quarter.  These buy backs hold up shares in shaky markets, make earnings per share move up, and are frankly the right thing to do with profits when there is little reason to invest for growth in this economy where there is none. 

Again we state what we have been posting for some time now.  Continue to invest in retirement accounts in mega cap and large cap index funds.  Continue to buy the same stocks individually.   No we are not happy with a Obama led no growth economy, but smart investors play the market you are given and a slow steady 5% to 7% growth ain't bad if you are looking long term.  We find it not bad either for trading since we are back to 12% returns in our trading account.  

We continue to like low PE value stocks.  BP is a steal here at near $40.   AT&T looks good here at $33 and a well over 5% dividend.   NNC is undervalued by $2 per share, pays out a almost 5% dividend and has little downside risk.  Almost any large cap insurance company is priced to buy as well.   As little further out on the risk curve is SF and NEWM, both growth stocks we have been pushing for some months now.   We bought heavily into the sell off last week and have already been handsomely rewarded.   We own AAPL, AFL, BP, CSCO, GS, JPM, MET, NNC, O, PM. PRU, SF, T, and VZ in our trading account now. 

This market has at least two more years to go so stay invested, ignore the cat calls of bear market people, and enjoy the ride. 

Some trades this morning.

We continue to like the opportunities in the market at this lower valuation point.  Still possible to see an additional sell off, especially if something like ebola, Ukraine, or ISIS takes center stage by doing something big like ISIS taking over Baghdad. Bull markets do not end this way, low interest rates, valuations moderately high but not stretched to ridiculous, and of course a Fed that now is looking to boost rates no earlier than later 2015.  

There just is no real reason to crash or move down sharply like 15% or such off highs.  Smart investors, old time hands, who understand investor sentiment and resulting action are saying buy selectively. Leon Cooperman was on CNBC today at noon saying just that and he has made a ton investing in stocks and bonds.  So if you are in the market continue to be there and if you are regularly investing in retirement funds continue to do so and boost that percentage a bit as well. 

We were in the market this morning doing some trades.  AT&T, symbol T.  Verizon, symbol VZ.  JP Morgan Bank, symbol JPM.  Stifel Nicolaus, symbol SF, and Goldman Sachs, symbol GS.   GS was a new entrant to our trading portfolio replacing IBM which reported bad earnings this morning.  We made some money in IBM but prefer to move on here as we see no comfort in owning their shares at this juncture.  GS is simply a play on the financial engineering we have been posting about for some time now and we believe there is decent upside potential in GS with little downside risk. 

Today Apple, symbol AAPL, will be reporting earnings after the bell and we will take a look at that and will consider another 1200 shares of AAPL Tuesday if the stock sells off.  Apple should be good here for some several quarters so a sell off presents an opportunity to add some more profits.  We already hold 2400 shares our largest holding. 

We remain down a bit in our insurance holdings AFL, MET, and PRU, but still consider them good until our options expire in December.  Also BP, having sold off due to oil price drop, is a screaming buy right now at almost 6% dividend.  

          

Market Sell Off. Our thoughts.

As we have opined in the last few months we believe the underpinnings of this market will keep the recent sell off to a minimum. Yes, it could go to and maybe beyond a bit the widely accepted 10% move downward to make it an official correction or it may not.  In any case if it does go down more consider it a gift for long term investing.  Again we highly suggest mega and large cap stocks.  Just yesterday we made the move to invest our annual retirement contribution in the S&P 500 Vanguard Index fund, so we place our money where our mouths are going.  We are still fully invested in our trading portfolio and will step up Monday to buy some opportunities this sell off has offered up. 

The market is responding to a downturn in the economy right now. Europe is hurting and Japan is still lingering in nowhere land.  But the American retail buyer continues to spend and with the significant move down in the cost of gasoline much of that new found money will be spent just as we move into the holiday season.  That spending will also be a buoy on the market.  Add in that stock buy backs and dividends continue to move forward and expect that to pick up a bit now due to the sell off and the opportunity for large cap companies to buy back stock even cheaper. 

Maybe we are wrong as some pundits are saying now. The biggest bear we follow believes this is the start of a big sell off and he has been right before. But of course bears have called the last ten of two actual sell offs as they say. We believe this is a slow or no growth economy and we have it for awhile under Democratic leadership and it's high taxes and regulation.  Big companies thrive and small business dies.  So until something changes we continue to believe such and this sell off does nothing to change that opinion. 

As the Wall Street Journal noted yesterday we are seeing lots of financial risk taking and very little economic risk taking.  That again due to the issues the Obama economy has pushed on small business which is where most economic risk is taken.  We would expect tomorrow, Friday, could be a roller coaster ride since many traders might prefer to be on the sidelines for the weekend and it is the October options expiration day.  So keep your powder dry at least until Monday if you are buying individual stocks. 

Again if you are a retirement investor follow what we said earlier and buy some mega cap index funds.  If you are an individual stock buyer look around in the sell off for bargains.   We still like the big insurance stocks here for the long haul as they have taken a pounding the last week and screaming buys. PRU and MET are our favorites.  JPM just reported solid earnings this morning and has a low PE and looks good for the long term as well.  The oils have sold off too much and BP looks good here too. Note that low gas prices are here for at least two years as Saudi Arabia is pumping big time in an effort to hurt Russia and also push back on the current US energy boom.  

Other stocks we like right now are AAPL and SF.  APPL has a fixed base of buyers and they are into the latest new phone run so profits are headed up. SF has sold off way too much and now just above $40 is a solid short term and long term holding.    IBM has been taken to the woodshed this week as well and taking a position there could even make for short term profits.  BRK.B, Berkshire Hathaway has sold off here and offers up a good entry point for long term holders. 

Falling interest rates also make for investments in leveraged bond funds.  We still like NNC for North Carolina investors seeking tax free income.  NNC is now selling about $2 per share below net asset value. 

Keep the faith and understand this is a market event and NOT completely an economy event. At least not in the sense of being a big drop in business. Until the political equation changes to be pro-growth there is money to be made in markets like this one however if you buy correctly.  No jobs to be made and low interest rates hurt a lot of young and poor people, but as we continue to opine you play the hand, or market, you are given. 

           

 

Emerald Isle Area Restaurants No. 2

We opined on our choices for best restaurant options for the Emerald Isle area back about two years ago.  Having spent a good bit of time in the area during those two years let's make another run at the list.  This list is not all inclusive, nor is it listed in any order, just a list of where we believe are the best choices and what dishes we like. 

Lazzaras Pizza...We continue to find this little pizza and sub shop on the corner of Coast Guard Road and Emerald Drive a good pick.  The pizzas are always well topped with ingredients and the crusts good, if not quite crispy enough for our liking. The ease of getting one piece at a time is a plus if just wanting to get your pizza fix.  Small dining area that is comfortable, but they do offer outside seating that is nice in season.  The subs are ok, but we do not find ourselves wanting to dine of their subs unless it is a rainy night which makes for a quick trip for us.  Does close some in off season. 

Church Street Deli and Pub...This little place is in downtown Swansboro and we have liked it every time we have been there. Quaint and cozy little dining area and bar.  The food is excellent and we especially like the hot dog selection.  Anyone will feel comfortable here and find it a good place to sit, talk, and relax. 

T&W Oyster Bar...We really like this seafood restaurant about five miles out on Highway 58 from Emerald Isle.  The seafood is always quite good and the servings are plentiful.  They have good baked potatoes too. Try the hush puppies, but be careful not to fill yourself up with them prior to the meal as they are quite good and addictive.  The owner is most personable and comes by the table to check on your meal and chat.  We love the sorta seafood camp feeling you get in the place.  Fireplace in the winter makes it a good winter choice too.  Open nightly and on Sundays at noon. 

Village Market...Great little place that has excellent selections for higher end deli foods of all types.  Much of the food is made in house and the staff is friendly and helpful.  They have regular lunch specials that are good and do not forget to try their breakfast choices.  Small dining area that is a nice place to dine, talk, and just sit awhile. 

Mikes Restaurant...One of our favorites on the island.  A great place to eat breakfast and the price is right too.  Be sure to try their home potatoes which alone are worth the trip. The breakfast plates are plentiful and good for morning appetites.  We understand the coffee is good as well. The wait staff is friendly and the place just really good for eating well and enjoying the morning.  Frankly their lunch menu looks good too, but we can not tear ourselves away from the breakfast to try them so far.  Note the place closes at 2 PM. 

Rucker Johns...We come back to RJ's over and over.  Simply put the best place to dine on the island in our opinion.  The food is priced right, the quality excellent, and we have never been disappointed in any food choice.  Add in that the staff is well trained and attentive.  The manager generally drops by to check on your meal.  The place is very comfortable to dine and we honestly believe the food choices are so good we could almost dine here daily forever and never get bored.  Check the daily specials online.   Our favorites are the steaks, notably the prime rib.  We also heartily suggest the Tuscan Turkey sandwich as well.  The salads are well prepared and good choices, try the honey mustard and hot bacon dressing as it is first rate.  The baked potatoes are always cooked to perfection.  The Shrimp Bisque is a almost to die for soup choice if it is on the menu that day.  Having dined there a good bit and listened to comments from fellow diners we believe their might not be a bad item on the menu so take a chance.  Open year round. 

            

Interest Rates..Where are they headed.

This is a question we get asked at least once a day.  Frankly it is the easiest question to answer as well.  Rates are going nowhere.  They can not go down since they are at basically zero and they are not going up either.  Why? 

This goes back to the economy we have now.  The political economy that we opined on several times in the past couple of month is here to stay for some time.  The Obama economy, strangled by regulation and supported by trillions of Federal Reserve dollars, has not and can not achieve take off on it's own status.  What transpires is that mega cap stocks are making profits and with no growth economy to invest in are plowing those profits back into share buy backs and dividends.  Small business which took the brunt of the huge Obama tax increases, struggling with regulatory pressure, Obamacare rules, and not able to buy their freedom politically from such issues are hurting and hurting bad.  The fact that almost all new jobs come from businesses under 100 employees and they can not grow means they like their mega cap brethren have no reason to borrow money.  Not borrowing money means there is no pressure to push interest rates up there either. 

Note the struggle banks and mortgage companies have every time they try and build profits from higher home lending rates.   Last year they finally got over the 3% 30 year loan level and up above 4.5% to only find home buying dried up due to the higher rates.  Builders have seen huge drops in demand in the last 6 months due to those same rates.  Today rates are hovering just a few hundred basis points above 4%.  We frankly would not be shocked to see a 3% handle in the next few months.  There is just no demand in housing and without housing the economy just sinks further into no growth. 

Now if you hold stocks, mega and large cap stocks, you are doing very well.  Low interest rates have forced almost everyone into stocks.  Frankly if you own a CD or a Treasury Bond right now we wonder about your smarts.  Stocks being held up with buyback's, dividends, and low rates have a floor and we are currently fully invested in such thinking.  This market is a trader's dream, a little up and a little down with no worries of any real move either way. 

We see nothing that could change our minds on this scenario for at least another two years, even if the Republicans take over the US Senate.  We agree Hillary Clinton will win in 2016 and therefore will continue this crony capitalism with high regulations and high taxes.   The only thing that could make growth and most importantly job creation move upward would be a pro-growth new administration.  

So simply put we as mega stock investors are sitting fat and happy with Obama in office and a Clinton scenario.  Just more profits, more dividends, and more easy trading ahead in the windshield.  Yes we are screwing the young folks and the poor people but this economy is the one you got.  We suggest if you have investing assets place them in mega cap stocks and large cap index funds for retirement plans and get on board this ride.  

              

Market Downturn. What to do now?

The market has sold off a good bit the last week and some investors fear a crash or at least a serious correction.  We expect neither and we suggest you go back and read our two posts on the political economy back in July for starters.  The central point is the economy is not growing, but companies are making profits.  Companies have few reasons to invest for growth or future employees so they turn around use those profits and buy back stock, lots of stock.  Point is as stock prices move down expect the same companies who have bought back stock to keep up and maybe even quicken the pace. Stock buybacks reduce outstanding shares and increase stock values. 

Where to invest here?  Simply as we have suggested before if you are working and putting money in a retirement asset plan continue to do so and please pick a good index fund.  If you are looking to buy individual stocks pick those that are turning over big piles of cash regularly and have good valuations.  We like stocks such as CSCO, ORCL, AAPL, and IBM.  All these are good long term technology picks.  We also like PRU and MET, two insurance stocks with upside potential.   BP down here near $40 is a steal.   SF offers some significant growth potential in the financial area.   PM is cheap as well nearing $80.   JPM offers a solid bank value.  T, O, and VZ are great long term income and growth picks.  BRK.B is like having a stock as a mutual fund and would make a great retirement growth pick stock.  We really like NNC down below $13 for good upside capital gains and tax free income.  Lastly if one is looking for some opportunity at a big capital potential try NEWM. 

We have positions in all these securities or plan on doing so in the next month. 

               

 

Trading Portfolio Fall 2014

Our trading portfolio has changed some over the last month as we have dropped some stocks and added back some old ones as those old names have sold off a bit and reached value territory. 

AIG...new entry to our portfolio with a single digit PE.   Yes one will notice we have four insurance based stocks in our trading portfolio now. All like AIG are single digit PE and have upside potential when interest rates go up in the meanwhile they are at a point where downside risk is minimal. 

AAPL..Our largest trading position.  Apple at this point in the cycle has little downside risk and rich option premiums.  The only fear comes at some point in the cycle where traders start taking long term capital gains, which is a few months off. Still a fairly low PE of around 14 and we have a strike price of $87.50

AFL..This insurance stock continues to be a steady eddie for us producing regular income with little risk. Strike price of $57.50 might be lowered soon. 

BP...We are back in BP after the recent court decision finally put a high end figure on the fees that will get paid for the Gulf spill.  The best part is that payment is years out and the stock is trading again at a single digit PE.  Best value in the oil patch and we have it at $42.  Little downside risk even in a market selling off oil. 

IBM..We are not true fans of this tech company, but we love their stock buy backs and the huge footprint the company has worldwide.  Our price is $175. 

JPM..Still the best bank in the country.  Another single digit PE and our strike price is $52.50.  Bad news is priced in on this one. 

MET...Insurance giant which is trading in a single digit PE.  We like it because it is value priced with little downside risk and has upside potential if interest rates really do move up. Strike price of $50.

NNC..We continue to hold a very large position in this closed bond fund. With the recent sell off due to interest rate concerns we will be buying more soon once we believe it has set a bottom in price. 

O...Due to interest rate rising fears this stock has come back down into our price territory of $40.   We love Realty Income and its monthly dividend. 

PM..Another stock that has come back into our price zone at $80.  Phillip Morris has been hit by currency rate concerns as well as the new E cigs.  Both we believe it can overcome with its huge cash flow. 

PRU..Another insurance biggie. Does the insurance idea come through here? Insurance with large holdings of stocks, bonds, and other securities does much better with higher interest rates which helps them make more cash from these holdings.  Our strike price is $82.50

SF...We continue to trade Stifel Nicolaus because we like the company.  The management has proved to be wise in bolt on acquisitions and making money.  Our strike price is $40. 

SHLD...We are underwater in this stock.  We have made a good bit of money from this stock, but it looks like we will be burned this time and good with a strike price of $29.50.  Sears Holdings might really be going down. 

T.. Solid telecom stock at $34. 

VZ...Ditto solid telecom stock at $47. 

All these stocks would make good choices for your portfolio except SHLD.