That Was The Week That Was-4th Week December

Shopping for Yield? According to November Barrons.com Greek sovereign debt yields 100% (or did back then) but risk is also 100%. There are other ways to boost yield. Daimler, the auto & manufacturing giant, has a yield of 6% plus the stock is trading at a significant discount from where it was last spring. Of course, like all other stocks what trades at a discount could trade lower. Still if you’re looking for yield there are stocks that provide significant dividends while you wait for a potential recovery. Depending on your risk comfort level there are a slew of products to satisfy an increase in return but all- I mean ALL- have a risk rating.

Bank of America closed under $5.00 a share Monday! It was an ugly day that got uglier as the day wore on. Markets closed off 100 points on the Dow. Countrywide losses still hold an anchor to Bank of America shares. Morningstar likes the stock but for the long term. This is the share price the ratings agency recommends to buy at and values the company at $10.00. It’ll take years, according to Morningstar for the firm to dig itself out of the hole.

AT&T busted by the Justice Department enforcement cops. AT&T gave up its bid for T-Mobile as the U.S forced the company to build its own network and not get it on the cheap by buying T-Mobile. Justice cops have been doing their job breaking up bids between Nasdaq OMX Group and NYSE EuroNext and H&R Block and TaxAct. AT&T closed under $29.00 a share.

Q: How do you prop up an ailing bank without more tax-payer funded bailout?

A: Use creative methods of moving already owned property on the balance sheet and selling it to investors.

European banks are using creating methods for raising cash without having to call it a bailout. Overseas the mere mention of the word bailout is toxic and so a substitute is in the works. Among those finding innovative ways to raise cash are the Italians. 

SAAB- (sob)- no more. The company filed for bankruptcy.

Markets exploded on Tuesday! Dow up 337 points, Nasdaq plus 81 and along with gold finally moving up $17.00 an ounce and oil nestling a tad under $100 everything looked quite cheery as the year winding down and traders closed their books for the year. Jimmy Cramer warned not to make too much of this latest rally and said he wouldn’t be a buyer right here.

“’ Who loves ya, baby?"  Telecoms still get love from Barrons ‘Getting Technical’ Michael Kahn. Both AT&T (a loser to the Justice ‘We Hate Business’ Police Department) still has plenty going for it along with Verizon. Both paying 5%.

How stinky-poo bad Euro Banks? The European Central Bank handed out over $600 billion to 523 banks! Loan interest 1% with 3-year payback. NPR said this should confirm that this is not a sovereign debt problem but- surprise- a bank problem. Who knew the Euro banks were in such bad shape? Certainly no one said anything about their liquidity issues before the loan window was opened.

Confused about oil? Remember- Dollar Down = Commodities Up. Dollar Up = Commodities Down. 

Ford –Started as a Buy by Sterne Agee.

Speaking of Autos…. according to Meena Krishnamsetty at MarketWatch.com the health of the economy is gauged by how many people will buy a car. And who owns the car stocks include hedge funds. At the end of the 3rd quarter  43 hedge funds owned Ford but their ownership was down from $2. 12 billion to $1.13 billion. GM was owned by 75 hedge funds with volume of shares slipping in the same time period some $800 million by hedge funds.

Doomed Exchange Traded Funds…Greedy organizers tried to slice and dice the industry a bit too thin thinking investors would buy just about anything.  Now the ETF industry says there are about 242 funds on a deathwatch. Not enough trading or assets to go on. 49 ETFs closed in 2010. Experts calling these Zombie Funds – they’re dead just don’t know it.

Gold closed $1609 an ounce as markets extended their winning streak to three days on Thursday. Whispers that the Fed may keep interest rates close to ZERO until mid-2014. The Fed minutes will be available for translation in January.

Capital One, the credit card & banking giant, continues to pursue customers even though they’ve had their debt discharged through bankruptcy. An audit found 15,500 such instances but the company disputes the finding. More than 800 of those erroneously hounded have filed lawsuits against the company.  About 1.4 million Americans filed for bankruptcy in 2011. Shenanigans aside Morningstar likes the stock to buy at $42.00 and value at $70.00. Shares closed at $42.64 Thursday.

Holiday Shopping List for 2012? Sterne, Agee & Leach have a few industrial ideas to share in Investor’s Soapbox published in Barrons.com. The analysts like the following stocks because of their pricing power, improving margins, successful transformations and restructurings, large deployable cash balances and sustained backlog expansion: ABB, Cummins, General Electric, Siemens, Tyco International and Wabco Holdings.

Have a wonderful Holiday & New Year!

Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.