NOVEMBER 20, 2008 (Dow 7552, down 445) - The Second Great Dpression is on the table. The government can't let the large financial institutioins fail; must make sure the annuities and life insurance are there for beneficiaries; stabilize housing prices through tax credits for buying new homes; use TARP money to buy toxic mortgage securities from the banks; must back Fannie and Freddie bonds with an explicit guarantee to lower mortgage interest rates; modify existing mortgages so they are affordable; set up tax credits for hiring people to stabilize unemployment; provide debtor in possession (DIP) financing for the auto companies and guarantee their warranties; start a trillion dollar infrastructure program to put people to work and push the European Central Bank (ECB) and the Bank of China (BOC) to lower rates to 2.00% to reignite growth in their economies. THese actions may remove systemic risk and cause some of the money on the sidelines to buy riskier assets. Still like the quality high yielders (see recent recommendations). The SEC chairman is in the pocket of the short sellers.
had magnificent qtr - has costs under control - a buy
54.79
+9.84%
08/20/08
KO gets 81% of its earnings from overseas vs 29% for Pepsi (PEP) - but PEP may have more growth prospects as it expands internationally - KO's move into non-carbonated beverages has been successful as corbonated sales have been dropping - PEP has an edge because it is primarily a snack food co while KO may be hampered by a slower long term beverage market where there are constant price wars - Warren Buffett owns 200M shares of KO - KO has a higher dividend yield than PEP (2.8% vs 2.4%) but PEP has a better record of increasing dividends - with commoditry prices coming down, PEP is the better play now - PEP is growing faster but sells at the same earnings multiple as KO - in this merket where you want to be defensive, PEP seems best
54.33
+8.92%
08/27/08
like it at this stage in the cycle
53.79
+7.84%
10/01/08
great defensive play here - is ramping
54.16
+8.58%
10/10/08
is the kind of stock to buy now after the big drop in the market - buy it if the market gaps down Monday - the stock is now at unbelievable levels
41.50
-16.80%
10/24/08
didn't deliver great growth last qtr - there may be more economic sensitivity in the beverage sector than previously thought
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