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Blog Archives

Readers’ Views on Debt

September 24, 2008
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A few weeks ago, I wrote about the massive buildup of both government and individual debt in last 70 years. I noted that this bubble of debt appeared to have popped in the past year.  And I speculated that a very long (decades-long) period of debt shrinkage and balance sheet improvement might be in the cards.  Then I asked for your opinions. Since then, the chickens have come home to roost.  We’ve seen more than a few institutions laid low by imploding debt.  We’ve seen a massive transfer of debt (and assets) from the private sector to the public...

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Sequenom: A Great Biotech Stock

September 23, 2008
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We saw a huge relief rally on Thursday and Friday of last week, followed by a proportional counter-move yesterday. That the bottom has been seen in many stocks is a very high probability.   So what do I like?   I like medical stocks, especially those involved in biotech and genetic technology. There are some impressive charts today, and the long-term fundamentals are bright thanks to growing demand from aging baby-boomers. Who’s going to pay for all this care is yet to be determined, though recent events provide a clue.  Also, I have some “radical” ideas about the potential...

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Fannie, Freddie and America’s Debt

September 12, 2008
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Today we start with a discussion of the U.S. government rescue of Fannie Mae and Freddie Mac, constructing a vision of the big trends that brought us to this place, and where they might lead next. In my vision, it all revolves around debt. Fannie Mae (officially Federal National Mortgage Association) was founded in 1938, as part of then-President Franklin Delano Roosevelt’s New Deal in which government money and reputation helped pull the American economy out of the Great Depression by supporting the mortgage industry. In 1968, to help balance the federal budget, Fannie Mae was converted to a...

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A Solid Healthcare Investment

September 12, 2008
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Today’s investment idea ties into that possible new world, specifically the part where health care costs are brought under control.  It’s CVS Caremark (CVS), which will be the country’s largest drug store chain once it completes the acquisition of Longs Drug Stores. The stock was recently recommend by J. Royden Ward, editor of Cabot Benjamin Graham Value Letter, who wrote the following: “CVS shares are undervalued and sell for only 13.5 times forward EPS.  The 10-year average P/E for CVS is over 20.  We expect CVS shares to advance to our Minimum Sell Price of 56.19 within one to...

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A Leading Biotech Stock

September 4, 2008
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If you want to be a big winner in the market, you simply can’t hang back with the crowd.  You’ve got to think for yourself, imagine alternative scenarios, notice what’s happening outside the world of groupthink.  When you do, you’ll find opportunities like Isis Pharmaceuticals (ISIS). Isis earned a spot in Cabot Top Ten Report back on August 18, thanks to its strong performance.  Here’s what Editor Michael Cintolo wrote. “Pharmaceuticals are showing up in these pages with increasing frequency as investors, hungry for a little alpha, look to the big moves these companies can make when good news...

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