Clearly, Bank of America CEO, Ken Lewis is getting ready to go through what can only be described as a Ivy League lynching. If you haven't noticed by now, or just haven't paid attention, the Ivy League crowd looks down on the rest of us. In fact, we are looked upon as "sources of revenue" rather than human beings. This is why we have been labeled "consumers" and not "Americans."
See, Ken Lewis is not an Ivy League guy. In fact, he is a lot like us, graduating from Georgia State University. Now that Lewis has spilled the beans on one of the gang ( Hank Paulsen- Goldman Sachs- Dartmouth Grad), the Ivy League lynching is sure to begin.
Here's the scorecard;
Hank Paulsen- Dartmouth
John Thain- MBA from Harvard
Ken Lewis- Georgia State University
It doesn't seem like a fair fight, does it.
In the world of stocks and investing, investors are trying to decide if the current rally phase is the beginning of a new bull market, or just another bear market rally. For those who don't have adequate cash positions, we suggest you build those positions now.
Even if the current rally is the start of something new, we cannot ignore the historical patterns that occur within the "Sell in May, and Go Away" mantra. The evidence within this phenomenon is pretty compelling.
In fact, the "Sell in May" strategy suggests that if you invest in the market during the best six months (November through April) and then switch into safer investments (cd's, money-markets,or bonds) you'll have better results. I must tell you though, I wouldn't buy a bond with a maturity past 3-6 months given the current environment.
The "Gang" is at it again today trying to convince you to buy into the latest scare- the swine flu. Whether the threat is real or not is anybody's guess. All I know is this latest piece of news came suddenly out of nowhere.
My wife asked me this morning if I had taken the swine flu vaccine the last time the epidemic broke out. I said no, and she said she did. She asked me why I didn't. I said, "you should know me by now, I'm a contrarian".
When it comes to the current tactics being used to promote the pandemic scare, I think you'll find that there are more swines on Wall Street, than there are cases of the flu.
In the months ahead, it is in the big boys best interest to get the "little people" (consumers) spending again. After all, it is us, the "little people" that make the big boys rich. If we don't spend, their bank accounts get smaller. This means they will do everything in their power to fix the economy. For us this means more gains and bigger profits ahead.
Here are our Top 10 ETF's for the week of April 27th:
1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) VIS: Vanguard Industrials
6) DDM: Ultra Dow 30 Proshares ETF
7) IXP: iShares S&P Global Telecom
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust
Here are our Top 10 Fidelity Sector Funds for April 2009
1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking
For the Week:
On Friday, the stock market rallied early, churned around, and faded into the close.
DJIA: 8,076.29, up 119.23
S&P 500: 866.23, up 14.31
Nasdaq Composite: 1,694.30, up 42.10
American Express and Microsoft were the best performers after better than expected earnings reports. American Express was up 4.33 to 25.30. Microsoft gained 2.00 to 20.92.
Last week, the market regained it's footing as the "stress test" results turned out to be a nonevent. In addition, Treasury Secretary Timothy "Babyface" Geithner expressed some confidence in the capital positions of many key banks.
Crude Oil price dropped -$0.92/bbl for a second straight down week, to close at 51.55.
Materials stocks were the strongest group for the week, followed by Industrials. Consumer Discretionary stocks were the forth best performers while the groups that Wall Street told you to buy (Consumer Staples & Healthcare) brought up the rear.
If the market corrects in the May-October time frame, the Staples sector will perform much better.
Today, Wall Street is promoting drug stocks as worries over recent swine flu outbreak is bringing attention to the group.
General Motors said it will get rid of Pontiac to focus on 4 core brands to cut costs.
Profits at Whirlpool and Humana were better than anticipated. Humana gained 2.12 to 29.48. Whirlpool was up 6.47 to 47.20.
Now that the rally is about 7 weeks old, a "sell in May" break is overdue.
Bonds are a big risk here with interest rates scraping along the bottom.
Economic News
-Jobless claims rose 27,000 in the week to a slightly higher-than-expected level of 640,000.
-Existing home sales for March were down 3.0 percent.
-New home sales fell 0.6 percent in March, but the numbers for February and January were revised higher by 30,000.
-Durable goods orders fell 0.8 percent in March after a 2.1 percent increase in February.
-Gold
-The U.S. Dollar
Our current asset allocation is as follows;
95% Equities: (Normally 95%) Aggressive
80% Equities: (Normally 80%) Moderately Aggressive
60% Equities: (Normally 60%) Moderate
40% Equities: (Normally 40%) Moderately Conservative
20% Equities: (Normally 20%) Conservative
