11 months ago this is what i said

Yesterday while discussing the market, someone said Billy its a stockpickers market now.

Guess what? Its always a stockpickers market. Are we at the bottom? Who knows. Here's what is obvious to me

Valuations on the stocks that are on my radar screen have not been this low in awhile

Anheuser Busch is BELOW where WEB bought in almost 3 years ago. With price increases and managements stockbuybacks and the possible Imbev merger there certainly is MORE upside than downside . the 40+% high ROE and almost 50% market share in the US are powerful.The 45 march put pays you 95 cents and is a great way to "get long" bud . Please respond in this thread if you need further explanation

Kraft is 10% below where billionaire takeover specialist Peltz bought in last year and his handpicked board members,the "breakaway" from Altria and the fact they are buying back stock heavily should combat the increase in commodity prices which have made these stocks a GREAT VALUE. Neither KFT or BUD are losing market share although the commodity prices have been a drag on earnings

Johnson and Johnson is another WEB pick and he owns over 3 billion dollars worth of the stock which he bought near this level LAST SUMMER

This company is a 3 headed monster with pharma,medical device sales and consumer goods and its over 20% ROE is very appealing at these levels


Altria alias "BIG MO" has a high div yield a ROE of over 40% and should be unlocking more value with its spinoff of the international cigarette market


Will all 4 of these stocks double in the next 2 years? Don't think so. How long is the recession going to last? I don't know and neither does anyone else

Many have said Billy these stocks look "dead. THATS RIGHT. BE GREEDY WHEN OTHERS ARE FEARFUL.

1)These 4 stocks are all recession proof .All 4 of these companies products are affordable and consumable.It is doubtful that ANY household in the US is NOT doing business and PROFITING off these 4 companies

2)Cash is yielding about 3.5% and is taxed as ordinary income.The Dividend yield on this portfolio is almost 4% and is taxed at LOWER rates than interest income

3) Even though these companies"seem" to be "no growth" industries they all have HUGE FREE CASH FLOW which can be used to

4) Buyback their stock at these LOW PRICES which benefit the long term shareholder

5)FORWARD PE is about 14 for ALL these companies which historically is LOW especially in todays low interest rate enviornment


Thse stocks make up about 75% of my portfolio. BNI makes up another 20% and has aforward PE of 12 and a 5 billion dollar investment by Warren Buffett ,but "new money should enter it about 5% lower than prseent levels . aperson who sold the March 80 puts and collected a 1.75 would at "worst" be entering at 78.25

Certainly there are stocks with higher long term "upside" and there are always those who want to"wait" until the markets get to "unrealistic" lows before they get in. ( someone told me that when JNJ gets to 50 they are buying) That is each individuals choice but at these current price levels DOUBLE DIGIT annual compounded returns should be realized.


JUst think about this if these 4 stocks are bought at the current levels and they end the year EXACTLY where they ended the year at 2007 . Lets analyze how your 11 month returns would be

BUD 47.03 today price 52.34 dec 31st price RESULT: 11.29 appreciation + almost 3% dividend=OVER14%in 11 months

KFT: 28.95 today price dec 31 32.63 RESULT:12.71 appreciation +almost 4% dividend =over 16.5% in 11 months

JNJ 62.87 today price dec 31st 66.70 RESULT: 6.09 appreciation +2.9dividend almost 9 % in 11 months

MO 73.13 today price dec 31 75.58 RESULT: 3.35 appreciation + 4.1% dividend almost 7.5% in 11 months.

So you see the odds are in your favor.Since 1957 18 of the top 20 performing S&P stocks were either pharmaceutical or consumer staples companies if reinvested dividends were factored in. This information and the low PE, High ROE and High Dividend yield (read past articles to “recap” how important these traits are)

Just for the record 10,000 invested in each would have given you about 6% return with dividends included

Check this out http://www.squidoo.com/Creating-Dividend-machine

Buying the right stocks at the right price WORKS.Be patient.peace