The new website is up and running! We are very excited about the "Dynamic Growth" investment service. Dynamic Growth is a one of a kind investment system that picks only the top no-load sector funds and ETF’s, while focusing on sector rotation, and the sector rotation model.
Every week, we publish the results of our research by picking a portfolio of the Top 15 Exchange Traded Funds (ETF's), and every month, we publish our research on the Top 15 Fidelity Select Sector Funds.
For a limited time only, we are allowing investors to subscribe to our service for free. On June 1, 2007, all free trial subscriptions will expire. No money or credit cards are required during the free trial period. All you have to do is go to the sign-up page and register. You will be able to establish your own "username" and "password" to access the "Newsletter and "Portfolio". The sooner you sign up for our free trial subscription, the more time you will have to evaluate our performance.
Now, let’s get to the markets.
Are Wal-Mart, Best Buy, and Texas Instruments trying to tell us something? It looks like our call for a slowing economy is beginning to happen.
This morning, Best Buy (BBY), one of the most popular stores for the retail consumer, announced earnings that were below Wall Street’s estimates. The company reported earnings of 31 cents per share while most analysts had expected 35 cents. The company had to discount highly profitable items like flat-panel TVs to lure customers, and compete with rivals such as Wal-Mart and Circuit City.
Also today, Texas Instruments (TXN) cut its fourth quarter profits and revenue forecasts on weak semiconductor sales. Texas Instruments makes telecommunication chips for cell phones, and this profit warning prompted Oppenheimer to downgrade shares of Nokia to "neutral" from "buy".
On November 27, the world's largest retailer, Wal-Mart (WMT), reported a fall in same store sales of 0.1%. The most startling piece of information in Wal-Mart's announcement was that the company had not reported a decline in sales in almost ten years.
So, the bottom-line here is a simple one. If profits are down on products consumers love to buy (electronics, flat-panel TVs, and cell phones), retail sales will probably be down across the board. Deep discounting going into Christmas may help stimulate sales, but profit margins will decline along the way.
If a deep discounter like Wal-Mart is having problems, then you know that the consumer is having problems too.
Unless I am way off base, high consumer debt and a zero savings rate are beginning to affect the economy in ways we have not seen for quite some time.
Huh, maybe the 19% Black Friday retail sales numbers were a hoax after all.
