Tim Connolly: Winning Strategies

Today’s Commentary is a really good read—Provided Courtesy of my Friend Lester.
Take a moment to read Robert Hall’s “I’m 63 and I’m Tired”

Robert A. Hall is the actor who plays the coroner on CSI if you watch that show. He is much more than an actor. Read to the end.

This should be required reading for every man, woman and child in the United States of America.

"I'm 63 and I’m Tired"
by Robert A. Hall

I'm 63. Except for one semester in college when jobs were scarce and a six-month period when I was between jobs, but job-hunting every day, I've worked, hard, since I was 18. Despite some health challenges, I still put in 50-hour weeks, and haven't called in sick in seven or eight years. I make a good salary, but I didn't inherit my job or my income, and I worked to get where I am. Given the economy, there's no retirement in sight, and I'm tired. Very tired.

I'm tired of being told that I have to "spread the wealth" to people who don't have my work ethic. I'm tired of being told the government will take the money I earned, by force if necessary, and give it to people too lazy to earn it.

I'm tired of being told that I have to pay more taxes to "keep people in their homes." Sure, if they lost their jobs or got sick, I'm willing to help. But if they bought Scansions at three times the price of our paid-off, $250,000 condo, on one-third of my salary, then let the left-wing Congress-critters who passed Fannie and Freddie and the Community Reinvestment Act that created the bubble help them with their own money.

I'm tired of being told how bad America is by left-wing millionaires like Michael Moore, George Soros and Hollywood Entertainers who live in luxury because of the opportunities America offers. In thirty years, if they get their way, the United States will have the economy of Zimbabwe, the freedom of the press of China, the crime and violence of Mexico, the tolerance for Christian people of Iran, and the freedom of speech of Venezuela.

I'm tired of being told that Islam is a "Religion of Peace," when every day I can read dozens of stories of Muslim men killing their sisters, wives and daughters for their family "honor"; of Muslims rioting over some slight offense; of Muslims murdering Christian and Jews because they aren't "believers"; of Muslims burning schools for girls; of Muslims stoning teenage rape victims to death for "adultery"; of Muslims mutilating the genitals of little girls; all in the name of Allah, because the Qur'an and Shari'a law tells them to.

I'm tired of being told that "race doesn't matter" in the post-racial world of Obama, when it's all that matters in affirmative action jobs, lower college admission and graduation standards for minorities (harming them the most), government contract set-asides, tolerance for the ghetto culture of violence and fatherless children that hurts minorities more than anyone, and in the appointment of U.S. Senators from Illinois.

I think it's very cool that we have a black president and that a black child is doing her homework at the desk where Lincoln wrote the Emancipation Proclamation. I just wish the black president was Condi Rice, or someone who believes more in freedom and the individual and less arrogantly of an all-knowing government.

I'm tired of being told that out of "tolerance for other cultures" we must let Saudi Arabia use our oil money to fund mosques and mandrassa Islamic schools to preach hate in America, while no American group is allowed to fund a church, synagogue or religious school in Saudi Arabia to teach love and tolerance.

I'm tired of being told I must lower my living standard to fight global warming, which no one is allowed to debate. My wife and I live in a two-bedroom apartment and carpool together five miles to our jobs. We also own a three-bedroom condo where our daughter and granddaughter live. Our carbon footprint is about 5% of Al Gore's, and if you're greener than Gore, you're green enough.

I'm tired of being told that drug addicts have a disease, and I must help support and treat them, and pay for the damage they do. Did a giant germ rush out of a dark alley, grab them, and stuff white powder up their noses while they tried to fight it off? I damn sure think druggies chose to take drugs. And I'm tired of harassment from cool people treating me like a freak when I tell them I never tried marijuana.

I'm tired of illegal aliens being called "undocumented workers," especially the ones who aren't working, but are living on welfare or crime. What's next? Calling drug dealers, "Undocumented Pharmacists"? And, no, I'm not against Hispanics. Most of them are Catholic, and it's been a few hundred years since Catholics wanted to kill me for my religion. I'm willing to fast track for citizenship any Hispanic person, who can speak English, doesn't have a criminal record and who is self-supporting without family on welfare, or who serves honorably for three years in our military.... Those are the citizens we need.

I'm tired of latte liberals and journalists, who would never wear the uniform of the Republic themselves, or let their entitlement-handicapped kids near a recruiting station, trashing our military. They and their kids can sit at home, never having to make split-second decisions under life and death circumstances, and bad mouth better people than themselves. Do bad things happen in war? You bet. Do our troops sometimes misbehave? Sure. Does this compare with the atrocities that were the policy of our enemies for the last fifty years and still are? Not even close. So here's the deal. I'll let myself be subjected to all the humiliation and abuse that was heaped on terrorists at Abu Ghraib or Gitmo, and the critics can let themselves be subject to captivity by the Muslims, who tortured and beheaded Daniel Pearl in Pakistan, or the Muslims who tortured and murdered Marine Lt. Col. William Higgins in Lebanon, or the Muslims who ran the blood-spattered Al Qaeda torture rooms our troops found in Iraq, or the Muslims who cut off the heads of schoolgirls in Indonesia, because the girls were Christian. Then we'll compare notes. British and American soldiers are the only troops in history that civilians came to for help and handouts, instead of hiding from in fear.

I'm tired of people telling me that their party has a corner on virtue and the other party has a corner on corruption. Read the papers; bums are bipartisan. And I'm tired of people telling me we need bipartisanship. I live in Illinois, where the "Illinois Combine" of Democrats has worked to loot the public for years. Not to mention the tax cheats in Obama's cabinet.

I'm tired of hearing wealthy athletes, entertainers and politicians of both parties talking about innocent mistakes, stupid mistakes or youthful mistakes, when we all know they think their only mistake was getting caught. I'm tired of people with a sense of entitlement, rich or poor.

Speaking of poor, I'm tired of hearing people with air-conditioned homes, color TVs and two cars called poor. The majority of Americans didn't have that in 1970, but we didn't know we were "poor." The poverty pimps have to keep changing the definition of poor to keep the dollars flowing.

I'm real tired of people who don't take responsibility for their lives and actions. I'm tired of hearing them blame the government, or discrimination or big-whatever for their problems.

Yes, I'm damn tired. But I'm also glad to be 63. Because, mostly, I'm not going to have to see the world these people are making. I'm just sorry for my granddaughter.

Robert A. Hall is a Marine Vietnam veteran who served five terms in the Massachusetts State Senate.

www.winningstrategies.net

Wayne Allyn Root: W.A.R. Strategies

Why the 9/11 Mosque Controversy Is NOT About Religious Freedom...and Should Be Stopped!

As one of America's leading Libertarian thinkers, perhaps I'm always expected to give the "Libertarian answer" to every issue. But sometimes one has to speak not as a Libertarian, Republican or Democrat, but rather as an American- preferably a common sense American. The issue of allowing a mosque to be built in the shadow of the 9/11 terrorist tragedy is one of those times.

The answer is simple for a common sense American- I support religious freedom, as all Americans should. But this is not a case of religious freedom. Yes, Muslims can build their mosque virtually anywhere in America- despite 9/11...despite the Times Square bomber...despite plots by Islamic extremists to blow up the New York subway system...despite everything happening in Iran, Iraq, and Afghanistan. That's what makes our country great. We do in fact support religious freedom. You can build a mosque virtually anywhere in America.

However, there are also the rights and sensibilities of others to consider in a free society.

Does "religious freedom" mean hate groups should build statues to Hitler in front of Jewish temples in America? Should Americans raise money to build Jewish temples and Christian churches at Mecca? Should Japan build a statue to the bravery of their pilots at Pearl Harbor? Should the U.S. build a statue to the bravery of our pilots at the site of Hiroshima? Aren't those examples all about "freedom of expression," "religious freedom" and property rights? Perhaps, but is it too much to ask for a little consideration and respect toward others?

This proposed building of a mosque on hallowed ground is an ATROSITY towards America. To build a celebration of Islam within steps of 9/11 does nothing to increase religious freedom...it inspires hatred, divides our cultures, and increases the odds of violence and hate crimes. Common sense suggests this mosque, being built in this specific location, is NOT being built as a sign of friendship between Muslims and Americans...but rather as a sign of the lack of respect...a belief in our weakness...and an attempt to embarrass and belittle us. The financial district of Manhattan is not a residential area with a large number of Muslim residents for the mosque to serve. Therefore common sense suggests that the only possible reason to build it there (rather than in Brooklyn or Queens where there are large Muslim populations) is to show Muslim contempt for Americans by building a monument to Islam in the shadow of the site of their greatest triumph over America.

It is an offense to build a mosque in that location- an offense to all Americans (including Muslim Americans), all Christians and Jews, all relatives of 3000 dead heroes at the World Trade Center.

Yes, private individuals and organizations have the right to build houses of worship with their own funds. But one has to wonder where the money is coming from to build a 15-story building on some of the most expensive real estate in the country. We Americans believe in the separation of Church and State. If it turns out that this project is sponsored by a foreign government -- either directly or through a state-sponsored organization that engages in terrorism -- than the idea of this being an issue of religious freedom is a sham and an argument can be made that our Constitution would actually prohibit this mosque from being built.

However, if this is privately funded by parties with no ties to a foreign government, I have to believe that we have enough people in this country who are offended by the prospect of a mosque at Ground Zero, that the money can be raised to buy this land at a fair price from the owners. I know I'd be the first to contribute to a foundation to keep this sacred land from ever being desecrated by a symbol of the very groups that attacked America on 9/11.

We can also put public pressure on the property owners to sell to this new patriotic foundation funded by Americans. We can organize massive protests, filling the streets surrounding this property with patriotic Americans concerned that the hallowed ground of 9/11 never be used as a political tool to taunt or embarrass the United States, or as a place to preach intolerance towards Americans. I, for one, am ready to fly 3000 miles to New York to join the protest.

These are the only rational answers for common sense patriotic Americans who still believe in a free society. In situations like this, none of us can afford to be Libertarians, Republicans, Democrats, or politicians of any stripe. We are all proud Americans.

Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. He now serves on the Libertarian National Committee (LNC) and as Chairman of the Libertarian National Congressional Committee (LNCC). He writes for the Las Vegas Review Journal and is a regular guest on FOX News. His new book is entitled, "The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts." For more of Wayne's views, commentaries, or to watch his many national media appearances, please visit at: www.ROOTforAmerica.com.

John Merrill: ETF/Fund Strategies

SUMMARY.  The U.S. economy continues to show strong cyclical strength that should last well into this year.  The economy may decelerate to more moderate growth later this year or in 2011.

The cyclical bull market continued after an 8% correction in January and early February.  Corporate America is in very good shape with strong balance sheets and improving earnings and revenues.

ECONOMY.  Economic statistics released in February give added support to the strength of this cyclical recovery.  The government’s upwardly revised its estimate of economic growth in the fourth quarter to a very strong 5.9% (annualized) gain in real GDP.  Leading indicators suggest that this strength will continue well into the first half of this year.

The widely followed Institute of Supply Management (ISM) survey of manufacturing provided a strong reading of 56.5 for February, down slightly from a reading of 58.4 in January.  Numbers above 50 indicate that the manufacturing sector is growing. 

The nonmanufacturing (services) ISM index also produced a solid growth number of 53.0 in February.  This was its fastest pace in over two years.  This is a sign that the recovery is beginning to broaden out. 

All of the good news for the economy as a whole – and business in particular – has not yet shown up in increased payrolls.  The “Payroll Report” (a survey of businesses) released Friday continued to indicate that the U.S. economy is still treading water – neither adding new jobs nor letting more jobs go.  The report added 35,000 jobs to the December and January reports while showing a similar number of lost jobs in February.  The “Household Survey,” the report that determines the unemployment rate, was unchanged at 9.7%.  With each passing month, it appears that the peak in unemployment was reached this past October.

The combination of a rebound in manufacturing and negligible job growth is behind the sharp increase in the nonfarm business productivity numbers.  Fourth quarter productivity was revised to a 6.9% annual rate from 6.2%.  This is a huge number that is far higher than any other developed country.  This means that our companies are getting financially stronger, and are more competitive.  Eventually such numbers must lead to job growth.  For now, they are spurring corporate investment.  Capital equipment (“capex”) spending was up 18% in the first two months of 2010.  This can continue for some time as the level of corporate cash flow relative to capex is at 50 year high.

A continuing surprise behind the better economic numbers is how well the consumer has held up.  Retailers reported that store sales rose in February by the largest amount since November 2007 – despite the terrible weather and snow storms around the country.

Housing is a part of the economy where the statistics are still uneven.  The housing affordability index is at its best level in over a decade and the government’s $8,000 tax credit is still available yet pending homes sales fell 7.6% to 90.4 in January (the latest monthly statistic).  This may have been partially caused by the bad weather, yet this is an area that has yet to demonstrate a sustainable rebound.

Despite the current economic recovery, we still have questions about the ongoing strength and longevity of this economic rebound.  The “Long Leading Indicators Index” from ECRI, which measures economic growth six to twelve months out, has flattened out in recent readings.  This indicates that the strong rate of growth we are currently experiencing may fall back into a milder rate later this year.

The economic headwinds which we have pointed out before include:
•       Commercial real estate financing.
•       Below average wage and benefit growth.
•       Contraction of state and local government spending as they adjust to smaller tax collections.
•       Two new waves of mortgage problems coming from Alt-A loan and Option-Arm loan resets.
•       Uncertainties as to future government policies, taxes, and debt.

International economic growth has its own uncertainties.  Europe’s economy stalled at the end of 2009 – expanding at just a 0.4% annual pace in the fourth quarter.  In addition, sovereign debt issues in the peripheral countries of Europe, (Portugal, Spain, Greece, and Ireland) continue to be a concern; although Greece was easily able to sell government debt last week.  The Euro has weakened against other currencies over the past three months which should help their industry competitively.  Hopefully, their growth will pick up this spring.

As we have said for the past six months, we are now in the sweet spot of this economic expansion.  The solid and improving economic news is likely to continue well into this year.  However, we are watching closely those areas that may slow this recovery down.

MARKETS.  The S&P 500 fell over 8% from early January to mid-February in the most severe correction so far in the current bull market.  This pullback took it within 2% of its 200 day moving average.

As we noted in last month’s Commentary, most bull markets tend to stay above their 200 day moving averages although they will periodically fall back to it before beginning another upward leg.  In other words, this looked like a “textbook” correction.

The market got major support from this corporate earning season.  Approximately 72% of companies exceeded their earnings expectations.  Perhaps more importantly, about 2/3 also beat their revenue estimates.  Corporations have migrated from beating earnings from primarily cost cutting to improvements in top line growth, too.

The fundamental underpinnings of this bull market remain intact.
•       World economic growth has come back everywhere but Europe.
•       Inflation is still well in check (and will likely continue with the high unemployment and low factory utilization).
•       There is ample cash on the sidelines for investment.
•       Monetary policy is very accommodative (0% Fed funds rate)

We are ever more confident that the earnings per share of the S&P 500 index will reach $75 in 2010.  The historic average range of earnings multiples is between 16 and 17.  This puts the “normal” value of that index in the range of 1200 to 1275.  It is 1138 today.  This suggests that valuations are supportive of further gains in the markets.  More positive earnings surprises in the next couple of quarters could push this valuation level up further.

TANGLEWOOD STRATEGIES.  Our equity weightings remain:
•       Overweight U.S. large companies
•       Underweight U.S. small companies
•       Underweight REITs
•       Underweight International Developed Country stocks
•       Overweight Emerging Market stocks

We continue to believe that large, U.S. high quality multi-national companies are among the cheapest stocks in the market in terms of their own historical valuations.  They are also among the safest (overall) in terms of downside volatility.  We also believe they are well positioned to take advantage of growth opportunities wherever they present themselves around the world.  Several of our selected mutual funds focus on these companies – Amana Growth, Jensen and Parnasus Equity.

We believe emerging markets are likely to continue to outperform developed markets over the balance of this bull market.  The trailing return on equity (ROE) for the MSCI emerging market index is 12% versus 7% for developed markets.  This is likely to be the 10th year in a row of emerging market outperformance in this area.  Yet emerging markets are selling at a forward P/E multiple estimate of only 14 based upon consensus earnings estimates.

We have substantial positions in what we call “Defensive Winners,” funds that have substantially outperformed their relevant indexes over the past two complete market cycles – with less risk (volatility) than that of the indexes.  These funds include T. Rowe Price Capital Appreciation and Mathews Asia Growth and Income.

We made one change to our portfolios in February.  We added a small 2% position in the U.S. large-cap index (Russell 1000) when the market declined by 7%.

Underground Options Strategies

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Jan Vandersandee: Income Strategies

Technical, Sentiment and Cycles:

The highs made on April 26 (predicted by us based on our long term cycles) now look like it was the end of the cyclical bull market and the resumption of the secular bear market. Only closes above the April 26 highs would negate the bear market scenario. The next important cycle we have is an intermediate cycle in late-July (plus or minus a week) and we expect that cycle to be a low (it is possible that the low came in on July 20). The market is currently (July 27) very overbought so there should be a pullback after which we should rally into our next cycle in mid-late August. The cycle following the August cycle is a longer term cycle in October and we expect it to be a low. Be very careful.

Recommendations for Income:

This week I have a buy and write recommendation that I have given before and we did well with.

1. Buy InterDigital- IDCC - at around 27.15 and sell the August 27 call for around 1.05 (so the net cost of around 26.10) which would generate just over a 3 % income (less commissions) in just over three weeks if called away. If the stock closes below 27 on expiration in August then we will write the September call. The stock is selling at around 8 times earnings so is cheap and does not have much downside risk.

Gary Cella: Under the Hood

AIG, The Pay Czar And Other Silly Things...Well, well the Wall Street Journal reported recently citing "unnamed people" (Why are they always afraid to be named?) that AIG head Robert Benmoshe is going to quit, take all his marbles and go home. Seems that old Bob is upset with his company having to pay only up to 500,000 dollars salaries to the top 25 highest-paid executives...Say it isn't so..That's just about going to cover the cost of the country club dues, summer home tax's, trip to Europe and private school for three kids.Gee, that hardship? Wow no wonder main street hates wall street. With real unemployment over 17 percent, the average salary of 28,000 dollars per person, and taxes and unemployment  going higher, you would think someone would thank their lucky star's to be making $500,000 per year.I guess not. Maybe Bob can just return all the money AIG got from us the taxpayers. Remember us? Were the people that that you got the money from so you can have a company that CAN pay you and your 25 Best Friends 500k. Maybe write a book called How to get by on $9600 per week. (Robert Benmosche has since announced he is staying with AIG).