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Steve Cook on Disciplined Investing

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Economics

   This Week’s Data

    June business inventories fell 1.1% versus expectations of a 1.0% decline; however, business sales rose 0.9% resulting in yet another decline in the inventory to sales ratio.

    The July consumer price index (CPI) came in unchanged and the core CPI rose a modest 0.1%; both numbers were in line with forecasts.
    http://www.calculatedriskblog.com/2009/08/cpi-flat-bls-rent-measures-decline.html

   Other

    The banks are not out of trouble:
    http://www.ritholtz.com/blog/2009/08/5-level-for-toxic-loans-doom-banks/
    http://paul.kedrosky.com/archives/2009/08/ten_minutes_wit.html

    Nor is the housing market:
    http://www.calculatedriskblog.com/2009/08/report-record-foreclosure-activity-in.html

Politics

  Domestic

Why ‘comprehensive’ healthcare coverage?:
http://mjperry.blogspot.com/2009/08/complete-health-insurance-coverage-is.html

Newt Gingrich argues for repeal of the capital gains tax:
    http://www.american.com/archive/2009/august/capital-gains-tax-an-argument-for-repeal

    I always love to get to Mickey Kaus’, my favorite liberal, take when the rhetoric starts to fly.  Here he is on ‘death panels’ (he’s actually quoting Obama):
    http://slate.com/blogs/blogs/kausfiles/archive/2009/08/12/will-you-won-t-you-be-on-my-death-panel.aspx

    The fallacy of ‘preventive care’:
    http://www.washingtonpost.com/wp-dyn/content/article/2009/08/13/AR2009081302898.html

    The American College of Surgeons fact checks Obama:
    http://www.powerlineblog.com/archives/2009/08/024266.php

    If you missed this WSJ article yesterday, it highlights the creator of the ‘cap and trade’ concept and his current view as to its effectiveness (guess what it is):
    http://online.wsj.com/article/SB125011380094927137.html

  International War Against Radical Islam

    Tony Blankley following a recent trip to Afghanistan:
    http://townhall.com/columnists/TonyBlankley/2009/08/12/empower_the_local_afghan_tribal_chiefs

The Market
    
    Technical

    The indices (DJIA 9398, S&P 1012) closed within their up trend off the March lows (8621-10316, 937-1153).  The S&P finished over the 1004 resistance level for the second day; this is the second time it has been over 1004 for two consecutive days.  Another up day and I will likely start to nibble (though our Portfolios are taking some action this morning in a foreign ETF--see below).

    On the other hand: the latest from Trader Feed:
    http://traderfeed.blogspot.com/2009/08/weakening-within-range.html

   Fundamental
   
    Thoughts from Barton Biggs:
    http://www.time.com/time/business/article/0,8599,1916047,00.html

    Some perspective on second quarter earnings:
    http://www.ft.com/cms/s/0/4faf7a8e-8754-11de-9280-00144feabdc0.html

    Headlines

    There was not much Investors pre-opening were upbeat as a result of the hedge fund manager Paulson’s purchase of Bank of America (which I covered in yesterday’s Morning Call).  But the retail sales numbers (also in covered in yesterday’s morning call) burst the balloon.  By mid morning, no one seemed to care and stocks moved to the upside and stayed there.

    Subscriber Alert

    Our Portfolios are raising their commitment to gold and non dollar denominated (foreign stock) ETF’s from 10% of the total assets of the Portfolio to 15%.  An introductory position (1%) of the Vanguard European Stock ETF (VGK) is being Bought.  By way of a review, our Portfolios now hold gold (USERX and GLD), the S&P Bric 40 ETF (BIK) and the Wisdom Tree Emerging Markets ETF (DEM).

    These investments are a defensive response to the continuing debasement of the dollar by the Fed.
    
 








Posted 08-14-2009 8:32 AM by Steve Cook