As it starts getting into its next product cycle, that may be an opportunity,
Medtronic I think is a great way to play sort of everyone getting older, as they say, the aging baby boom. They have a new product out that was approved last winter. It does two different things. An implantable device, and I'm not sure I'd explain it all well enough, but it's the next generation from the old pacemakers. And they have just over the past week implanted that for the first time in a patient and that's a whole great new product cycle about to start.
It had been the black sheep of the household products companies for several years now, ... But they've really worked hard to get their cost structure in shape and get inventory under control, and they'd be a great beneficiary of a weakening dollar, which is what we've slowly been seeing here.
I'm very concerned about the bond market. I think we have money supply at double-digit growth for a couple of years -- that ultimately has historically led to inflation. I see through the next few months a chance that the bond market (will attempt to) nudge the Fed (to raise rates) again.
I think they're starting to do things right and they understand what the challenges are in the U.S. restaurant market, ... So I think looking out 18-to-24 months there's a decent return here and some nice growth potential.
When there is some fear about accounting and growth and the economy, food stocks are a decent place to be, ... This company has been through a bit of a restructuring the last couple of years. Management is doing a great job. The company is improving and people are buying chocolate. So, what a great week to buy it.
We just don't have a good catalyst in these last few days to end us on an up note, ... The latest excuse is focused again on any military action in Iraq -- but certainly that's not new news and some portion of that should be discounted in this market. So, it's just these rival shots from different corporations -- today we get a little bit of better news.
I think the first word of caution is It's not the kind of market where you need to jump in immediately on these downs. We've trained investors so much over the past decade and a half Buy the dip, buy the dip.
Similarly, I think beverages have been a great place to be. Pepsi has been doing everything right lately and I think that's a good place to put some new money if people are unsure during these earnings seasons where to go, ... Stable business, great snack food and now the latest media is telling us they're going to really do great in water -- bottled water.
If we do see any slowdown in the market or any back-up from rates, the higher end purchaser is the one less likely to change their behavior and Tiffany benefits from that, ... Tiffany clearly has had an amazing run, so far, this year. We've held it for about year and a half now. I don't recommend this level at -- as entry point, but it's a great stock to watch and look for an entry point.
It's not good news. Both sides of it -- productivity not as strong as we hoped for and labor costs finally starting to show some of that pressure we all thought was out there. For so long, we would sort of breathe a sigh of relief, but this tells us there's a lot of wage pressure in that tight market.
It's about to be spun off by its parent Harcourt General, becoming another pure luxury play, ... And at that point, I think it will be a very interesting stock.
The unemployment data says things may not have turned around yet and the retail sales support this. The second-half recovery is clearly not here, so investors are looking ahead for something to compel them.
There's no question that the strength we continue to see in the economy is driven by the consumer, ... Consumers are spending. We like the luxury end because in many ways it is more insulated.
I think we're in the middle of this painful period and we're just going to churn around for a while.
We're going to be looking for further evidence that it is a tight (labor) market, ... Or there has been some release on that pressure, but I think today's numbers tell us we had better expect the worst.
Gillette has been off everyone's radar screen for a couple years. New management last year -- we saw (it) in the first-quarter numbers, finally seeing some benefit of that, ... Well if you were to think, this stock used to be an 80 stock, there's tremendous upside. Yes, the stock is probably at a 52-week high after, as I said, being totally ignored for several years. So I think what you're really seeing is the start of an uptrend.
getting up in the morning is for jerks.
It's the time to look at some of the blue chips that have languished a little bit. They have not been hit as bad as technology. But valuations look pretty attractive,
One thing we are seeing is decent review in spending. The defense sector is definitely benefiting from that. Their business is improving, their stocks are doing well. My favorite is General Dynamics.
It is much more difficult today to build a portfolio that pays enough cash to live on.
I think we've been getting a bit of a relief rally. It feels good but I don't think you put new money into that rally at this point.
It's really been surprising, ... that in the early part of the year, the stock market was able to shrug off some of the interest rate moves on the bond market. Clearly that's no longer the case. ... We've had some great winners for years and the tough thing is to tell investors it's time to step away from some of those. Those rich valuations are now at risk.
Merck, too, is down on recent news, down in this case from around 85, ... You keep hearing a little bit of concern about their patent expirations over the next two years. Those are very real. But most of analysts say their drug pipeline is pretty solid and their earnings are project to be some 15-to-18 percent for the next couple of years. This is a great investment with which to balance out your high-tech holdings.
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