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.