Jan 26, 2009 - Issue #147

Total Return

Total return. Never invest for income alone. See my page on the subject.

CNBC guest analysts, because of the current low interest rate environment, have been recommending stocks that yield high dividends.

Dividends are a distribution of earnings. As such, they are, by definition, dependent on earnings. In times of declining earnings, dividends are reduced or eliminated.

The earnings outlook, going forward, is suspect. Therefore, dividends are suspect.

The number of investors trapped by holding declining stocks that previously paid higher dividends is legion.

These are extraordinarily abnormally dire times, economically speaking. We've never seen anything like this.

Instead of protecting shareholders interests, the absolute greed and corruption displayed by some (not all) corporate executives and politicians is simply mind boggling.

Walk through any mall and see how many stores are out of business. Indeed, the malls themselves are closing or on the verge of doing so.

With 25% of the S&P 500 earnings reports in thus far, the results are negative. The expectations had been positive.

All eyes are fixated on the 11/21 low. If it doesn't hold...

Go Steelers!

Heads Up

W. D. Gann, a keen market observer, although not an astronomer, nevertheless, was fascinated by the apparent coincidence of important market 'pivot points' and astronomical dates. Theories exist for estimating time and price of important market turning points but astronomical occurrences are computed with mathematical certainty.

There is no logical reason why these occurrences should coincide yet, empirically, they have. The 'Full Moon' and 'New Moon', among others, have been cited. Therefore, one might be well advised to be aware of their occurrence. Note: The first 5 business days of 2008 concluded on a 'New Moon' and we all know how that worked out. Coincidence?

1/26 Monday - New Moon.

During the next two weeks, the following Dow components report earnings. Keep a sharp eye out for possible price swings leading up to 'earnings day' (Subject to revision):

1/26 AXP, CAT, MCD, (Transportations) CNW.

1/27 DD, VZ, (Transportations) NSC, CHRW, JBHT.

1/28 BA, PFE, T, (Transportations) LSTR.

1/29 MMM, (Transportations) CAL, JBLU, YRCW.

1/30 CVX, PG, XOM.

2/3 DIS, MRK, (Transportations) UPS.

2/4 KFT, (Transportations) AXB, R.

Dow score card for the week ending 1/23/09.

DJ-30: 8077.56 -203.66 -2.46%. The Real World (arithmetical) DJ-30: 33.81 -0.85 -2.46%.

UP: 7, Down: 23.

Trends (weekly charts): This is the subjective part.

Rising (Generally Higher Highs/Higher Lows) 1 (N/C) 3%:


Consolidating (Generally Lower Highs/Higher Lows) 8 (-1) 27%:

+*BA, HPQ, +*JPM, -*KFT, MRK, +*T, +*VZ, XOM.

Declining (Generally Lower Highs/Lower Lows) 21 (+1) 70%:


+/- denotes change of direction.

* denotes change of category.

Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!

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