Blue Chips

Blue Chips

Postby winston » Sat Jan 22, 2011 9:21 pm

The Only Stocks I'm Telling My Retired Friends to Buy Right Now By Dr. David Eifrig
Saturday, January 22, 2011


"I'm worried, Dave… There's so much talk everywhere about collapse and the end of the world. What should I do?"

Like many retirees, my mom is bombarded all day long on TV and radio with talk of financial collapse and how bad off America is. Many of these commentators expect a hyperinflation that will wipe out bonds and the value of the dollar. Their top recommendations are to stock up on bottled water, canned food, and gold bullion.

It's enough to make investors want to run and hide. Don't do it…

One of the keys to great investing is ignoring the hype and focusing on facts. It's tempting to listen to a great story and put your money to work based on the story. The messages sound compelling. But it can lead to making decisions based on fear and emotion… which is a disaster for retirement portfolios.

So let's take a look at a few facts…

One number I watch is the "money multiplier" (also known as the "M1"). The M1 measures the flow of money through the economy. A reading above 1.0 indicates the economy is expanding.

As you can see from the chart below, money is still not moving through the economy swiftly or broadly among sectors. But things have improved over the past year. And until the M1 passes 1.0, we're in little danger of hyperinflation.

Another of my favorite ways to monitor what's happening in the global economy is to watch the number of people flying. Flying is dependent on both business travelers and folks spending money on vacations.

It turns out, from month to month, air traffic is increasing slightly over the year before. For example, in October 2010, air traffic was up 5.6% from a year ago. That's not rip-roaring growth. But there's no "doom and gloom" developing here.

Like passenger volume, I also use an anecdotal indicator I call the "cabbie index."

When I first wrote about the cabbie index in August 2009, there was a line of cabs just waiting for passengers outside New York City's Penn Station longer than I've ever seen. The cab drivers I talked to were worried about being able to feed their families. Today, it's still easy to get a cab. But the lines are shorter. And the cab drivers I've spoken to are optimistic the economy is stabilizing.

These indicators are just a few of the signs I'm seeing that things aren't going down the tubes just yet. In other words, you don't need to dump all your investments and head for the bomb shelter. But I'm always interested in owning investments that will prosper in case I'm wrong.

Fortunately, there are companies you can own right now that will make you money in both good times and bad. They are so dominant, and their products are so ingrained in everyday life, they'll keep on chugging along no matter what happens. I like companies that provide food, fuel, and health care right now.

People will eat, drive, take their pills, brush their teeth, and go to the doctor no matter what's happening around them. That means companies that provide proven products won't just survive, they'll boom during the next decade. This is where the bulk of a retiree's stock portfolio should be right now.

In my monthly newsletter, Retirement Millionaire, we've focused on companies in these industries. One pick – beverage giant Coca-Cola – has made my readers almost 13% in just six months… And it's paying us a solid and growing dividend.

Stick with global, blue-chip companies, and your portfolio will protect you from whatever the future holds.

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Blue Chips

Postby winston » Sat Feb 19, 2011 9:12 pm

The Ultimate Portfolio to Protect Yourself from the "End of America" Scenario
By Dan Ferris

Now that my colleague Porter Stansberry has made national news with his dire "End of America" video, I'm hearing a major question over and over…

To paraphrase a hundred e-mails, the question goes:

If you guys are right about the "End of America" prediction and a currency crisis, why on Earth would you recommend investing in U.S.-based stocks?

Just in case you're not familiar with the "End of America" scenario, know that it isn't off in the future. It's right here, right now.

What you read and see every day is what the End of America looks like. It's not a Mel Gibson post-apocalypse movie…

It looks more like this: The Fed keeps interest rates at 0%, prints $1.5 trillion in one year, and then decides to become the biggest holder of Treasurys. A scam-oriented financial system penalizes savers and rewards the biggest risk-taking speculators.

Home prices plummet. The government takes over the car manufacturing, home mortgage, financial services, and health care industries. The dollar is worth 35% less than nine years before.

Unemployment is 17%, but the government reports it as 9%. Inflation is causing food prices to spike, but the Fed reports inflation is under control. Moving money around in any amount is risky. Leaving the country and reentering it is risky. Huge protests take place (like in Wisconsin) when politicians propose spending cuts. The protesters can't stand the thought of not riding on the taxpayers' gravy train.

The End of America isn't "out there." It's right here, right now. The question isn't what will you do if it gets here, it's what are you doing now that it's here.

For most folks, the thought of owning U.S. stocks in this sort of environment doesn't make sense. For me, it does… But you have to own the right stocks. And the right stocks are a group of companies I call "World Dominators."

World Dominators are big companies that are No. 1 in their industries. They dominate their markets, obliterate competition, gush cash, pay rising dividends year after year, and – since they probably aren't going to rise 300% in a week – are generally underappreciated by the average investor.

World Dominators ought to be the core of your stock portfolio, the anchor that performs for you over the long term, providing safe, steady returns (mostly via relentless dividend growth), and providing you with an income that will beat inflation better over a lifetime of investing than all the gold stocks in the world. They are the ultimate "armor plated" wealth-preserving vehicle for the "End of America."

World Dominators are so hard to compete with, they sometimes get sued for it, like when the Justice Department sued Microsoft and the European Union sued Intel.

Of course, it didn't matter to either company. Microsoft still has 90% of the PC operating system market. It's got $40 billion in cash and securities and less than $12 billion in debt. It still has 80% gross profit margins.

Intel lost its $1.25 billion lawsuit. The result: It is one of the financially strongest companies on the planet, stronger than most U.S. banks. It has $21 billion in cash and less than $3 billion in debt, and it makes 44 times its interest expense in pretax profits. It has 50%-plus gross profit margins.

World Dominators are so good at what they do, regulatory bodies often try to prevent them from putting other, higher-cost providers out of business, like when Wal-Mart was denied a license to start a bank. All the big Wall Street bankers knew it would put them out of business by not charging super-high fees.

When World Dominators get cheap enough to buy, they are the only "sure thing" in the stock market. We bought Intel in April 2009. Less than two years later, we're up 50%. Likewise, my 12% Letter readers are up 76% in just over two years with cigarette giant Altria, which they bought in November 2008 (26% of that gain is from dividends alone). Payroll dominator Automatic Data Processing is up 51% since we bought in October 2008.

World Dominators are not frauds. They're not financially weak. They're not losing money. Their businesses aren't shrinking. They might have laid a few people off and had lower sales in 2008 or 2009… But for the most part, the crisis left them untouched compared with almost every other business in the world.

You want to know what the greatest investor in history owns? His name is Warren Buffett and he owns World Dominators. His company, Berkshire Hathaway, is Coke's biggest shareholder. He also owns Procter & Gamble, Johnson & Johnson, Wal-Mart, UPS, and ExxonMobil. Warren Buffett buys World Dominators because he knows they'll continue to beat the competition for many years to come.

If you're concerned about defending your wealth from the End of America, absolutely own some gold, silver, energy, and agricultural assets. But keep a good chunk of your portfolio in World Dominators.

Bought at the right price, they are the greatest stock investment idea ever. They offer safety. They offer large and growing income streams. They offer huge profit potential. And right now, many of them are as cheap as you'll ever see. It is truly a once in a lifetime opportunity to get started.

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Blue Chips

Postby winston » Sat Apr 23, 2011 5:21 pm

Watch Your Step By JACK WILLOUGHBY

America's money managers are bullish in Barron's latest Big Money poll, but picking their spots with care.

The crowd is seeking safety in big, defensive stocks.

http://online.barrons.com/article/SB500 ... =djembwr_h
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Blue Chips

Postby winston » Mon Mar 26, 2012 12:24 pm

From personl experience, I can tell you that there's also BS going on in some of the world's most respected and admired companies.

And because they are big, they can survive several small and medium size BSs, unlike the smaller companies where one mistake may wipe them out...


World's 15 most admired companies

Recent FORTUNE magazine survey asked businesspeople to vote for the companies that they admired most, from any industry. According to survey partner Hay Group, the reputations were based on innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment, quality of products/services and global competitiveness.

http://sg.finance.yahoo.com/photos/worl ... slideshow/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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