Dear Diary,
Yesterday, the Federal Reserve Bank lowered the long bond yield to 3% from 3.5%. This drop further drives the relative value of my holdings and all stock prices upward.
Gene
Thursday, January 31, 2008
Thursday, January 24, 2008
Long Bond Yield Drops
Dear diary,
After a night of 5% to 8% drops in world markets a couple of nights ago, the Federal Reserve lowered its yield on the 30 year Treasury bond 75 basis points to 3.5%. This changes our calculations on owned stock relative values as follows:
Symbol/ Expected 2008 Earnings/ Long Bond Yield/ Relative Value
MDT $3.00 3.5% $85.71
AEO $2.20 3.5% $62.86
HOG $3.95 3.5% $112.86
I called Pfizer (PFE) for an investor kit a couple of days ago, as well. Expectations are that the revenues by 2011 will potentially be cut in as much as half, due to patents ending on major products. However, they have a giant business that can adjust prices to inflation or loss of patents in many products and other drugs. They also stand to buy up lots of smaller drug companies between now and 2011. With the current share price about $23 a share, the relative value even of the dividend alone presents excellent price appreciation in the coming years. PFE would have to go out of business to be a risky investment, based on my Buffett training.
Concerning the markets, they are reacting to an over-extension of credit, combined with inflation in the M1 Money Supply by Congress. The 5th plank of "The Communist Manifesto" is doing what it was designed to do: rattle the property out of the hands of individuals and place it into the hands of politicians and rich people. Will we ever learn that central credit in the hands of politicians and rich people only leads to poverty for the masses?
Gene Chapman
After a night of 5% to 8% drops in world markets a couple of nights ago, the Federal Reserve lowered its yield on the 30 year Treasury bond 75 basis points to 3.5%. This changes our calculations on owned stock relative values as follows:
Symbol/ Expected 2008 Earnings/ Long Bond Yield/ Relative Value
MDT $3.00 3.5% $85.71
AEO $2.20 3.5% $62.86
HOG $3.95 3.5% $112.86
I called Pfizer (PFE) for an investor kit a couple of days ago, as well. Expectations are that the revenues by 2011 will potentially be cut in as much as half, due to patents ending on major products. However, they have a giant business that can adjust prices to inflation or loss of patents in many products and other drugs. They also stand to buy up lots of smaller drug companies between now and 2011. With the current share price about $23 a share, the relative value even of the dividend alone presents excellent price appreciation in the coming years. PFE would have to go out of business to be a risky investment, based on my Buffett training.
Concerning the markets, they are reacting to an over-extension of credit, combined with inflation in the M1 Money Supply by Congress. The 5th plank of "The Communist Manifesto" is doing what it was designed to do: rattle the property out of the hands of individuals and place it into the hands of politicians and rich people. Will we ever learn that central credit in the hands of politicians and rich people only leads to poverty for the masses?
Gene Chapman
Tuesday, January 15, 2008
Things Are Looking Good
Dear Diary,
American Eagle Outfitters (AEO) and Wal-mart are the only two retail companies in the black for the Christmas holidays, it seems, as I saw on the "Nightly Business Report" a few nights ago. AEO is at 10 times earnings.
Harley Davidson (HOG) is waiting for Spring sales to see what upside is there for them, now selling at 10 time earnings.
Medtronic (MDT) continues to putt right along at 19 times earnings.
Gene
American Eagle Outfitters (AEO) and Wal-mart are the only two retail companies in the black for the Christmas holidays, it seems, as I saw on the "Nightly Business Report" a few nights ago. AEO is at 10 times earnings.
Harley Davidson (HOG) is waiting for Spring sales to see what upside is there for them, now selling at 10 time earnings.
Medtronic (MDT) continues to putt right along at 19 times earnings.
Gene
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