Update on Stock Pick 2 and Stock Pick 7
In
review you now have 7 stocks and 1 ETF. Consolidated
Edison Inc. (ED) or another utility, Kraft Foods Inc. (KRFT) or another food
stock, Eaton Corp (ETN) or another industrial stock, Potash Corporation of Saskatchewan, Inc. (POT) fertilizer, and U.S.
Bancorp (USB) or some other financial (Bank) stock of choice, an oil or gas stock
my recommendation was Chevron Corp (CVX).
Copper ore Freeport-McMoRan Copper &
Gold Inc. (FCX) but any metal mining sector stock would do. Last picked was a tech stock Microsoft Corp. (MSFT). Remember you can own any stock in the sector
not the one I recommend. I like the SPDR Gold Shares Trust GLD ETF.
Pick 2
Kraft Foods Inc. (KFT) has split into two companies. If you had purchased this you when I posted
it you would have made some fast money and kept your dividend. With what the Federal Resurve Bank has
announced dividend stocks are the only way you will make any return on your
savings. As those who have T-Bills or
CD’s should be painfully aware of .
Kraft (new symbol KRFT) and Mondelez International Inc. (MDLZ). I don’t know which one is the better of the
two, but I kept them both. Jim Cramer likes MDLZ.
Technology stocks update.
The whisper on the markets is the desktop and possibly the laptop IBM
combabitable computer market is dying.
This is a huge problem for Microsoft Corp. (MSFT) and Intel Corp. (INTC)
both of which are married to the desktop devices. Handheld devices smart phones devices made by
Apple Inc. (AAPL) are cannibalizing the desktop market. I am not going to give up my desktop for a
handheld. My phone bill is currently
$100 a month; with 3 smartphones it would go up to $400 a month. Will Apple take over the world? Again I am not sure. Apple makes gadgets. The history of gadget companies is they go
out of favor, examples are Motorola and Palm (the dying and dead). How long will Verizon Communications Inc. (VZ)
and AT&T Inc. (T) subsidize sales of the IPhone?
Google
Inc. (GOOG) stock is a substitute if you trust the management. With 2 classes of stock I don’t trust them
far. International Business Machines
Corp. (IBM) is even more interesting. I
know I recommended Microsoft Corp. (MSFT) and I think it is safe for now. Oracle Corp. (ORCL) would be an interesting
substitute for Microsoft except for the dividend and I do plan to give more
consideration on replacing Microsoft with IBM in a future post.
With
all the above stay away from Dell Inc. (DELL) and Hewlett-Packard Co. (HPQ)
both give every appearance of going the way of Motorola and Palm. The first is well managed but will not sell
itself or merge with Hewlett-Packard Co. and the latter is poorly managed and
the entire board of directors should pay the company to sit on the board and
not the other way around.
I like boring
Industrials and Consumer Staple stocks, tech companies are run like fiefdoms by
less than ethical über-rich with huge egos.
So you are investing in one man’s brain and one product, plus the
management and marketing abilities of one company. Jerry Yang lost billions for the shareholders
in Yahoo because he hated Bill Gates and Microsoft, and Bill and Microsoft are nothing
but a vicious monopolist and a malicious monopoly. As a contrast in an Industrial you are
investing in electronic engineers and electric motors or the production of
steel. In Consumer Staples you are
investing in chemists and Oreo cookies or Camel cigarettes. I find cookies and cigarettes easier to
understand than source code and computer chips.
