Kirk Lindstrom's Blog

Posted by Kirk Lindstrom

The Bradley siderograph (more information) was developed in the 1940's by Donald Bradley to forecast the stock markets. Bradley assigned numerical values to certain planetary constellations for every day, and the sum is the siderograph. It was originally intended to predict the stock markets. William Eng, a noted technical analyst, singled out the Bradley as the only 'excellent' Timing Indicator in his book, "Technical Analysis of Stocks, Options, and Futures" (source: Astrikos)

In our discussion forum in "2007 Bradley Turn Dates" posted by stocktiger:

stocktiger wrote

Hmmmm, even though this isn't exactly scientific the turn dates have been pretty darn close this year. Looking at the chart itself shows a potential down leg from 6/14 to 8/26.

Let's see how it worked out so far.

= > > Chart of Markets between 6/14 and 8/26/2007 < < =

After 8/26, the next Bradley turn date is 10/17.

= > > Chart of Markets between 8/26/2007 and 10/17/2007 < < =

And after 8/26, the next Bradley turn date is 12/22.

= > > Chart of Markets between 10/17/2007 and 12/22/2007 < < =

Kirk Lindstrom:

DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice. In addition, past performance does not guarantee future results.

Subprime & Market Meltdown Advice

Posted by Kirk Lindstrom

I want to take my hat off to Liz Ann Sonders of Charles Schwab for a most excellent article titled "Inside the Subprime Storm" What’s driving it. What it may mean to you."

In the article, Liz explains the trouble well starting out with:

"The trouble began with “collateralized debt obligations,” or CDOs for short. Once called CMOs (collateralized mortgage obligations), CDOs are derivative securities backed by pools of bonds, loans (including many subprime) and other assets. They’re unique in that they represent different types of debt and credit risk, packaged into tranches with different maturities and risk profiles. The higher the risk, the higher the yield.
For years, CDOs were a money machine that helped line the pockets of hedge funds, private equity shops and investment banking firms. But now the money machine is busted."

I especially like her concluding advice:

"What to do: In periods of extreme volatility, we believe the best strategy for long-term investors is to do nothing. Don’t panic, but don’t try to bottom-fish a highly volatile market. "

At times like this, I prefer to use some of the assets in my "explore portfolio" to buy stocks that have corrected. You can read in our CACS Forum where some of us have been buying a very volatile stock in the hopes for some quick gains on any market recovery. Also, when the market has had a major 10% correction, it is a great time to rebalance your portfolio to hopefully take advantage of buying some cheap shares.

Disclaimer. I own CACS in my newsletter and personal portfolios with significantly lower "break-even price" than the current price (as of 8/16/07.) That is I could liquidate now with nice gains and I probably won't post about it before hand. My most recent buy was at $3.85 and I hope to make a nice gain on this when the subprime dust settles.

Link to Lis Ann Sonders article: Inside the Subprime Storm

Verigy (VRGY) Confirms Guidance

Posted by Kirk Lindstrom

On August 7, 2007 at 10:12AM PST Verigy was down nearly 33% from its recent high of $30

Verigy Charts

Yesterday I posted here that I thought clueless people were selling Verigy (Ticker VRGY) to lock in gains they were fearful of losing on the market correction after the 1 year lock-up expired.

Kirk Lindstrom - VRGY Sell-off Reason @ Aug 7, 2007 10:12 AM
Note how the chart started to go down at the 1 year after IPO mark. Lock-up ended and insiders can sell after a double....
Maybe it will fill the gap but $30 to $21 on no news.... very odd. From what I can tell, it is being sold off with the R2000. Even with the sell off, it is still one of my best gainers for the year.
It might be people selling to lock in gains after going public a year ago. It had a similar sell-off after they distributed shares to Agilent shareholders who didn't know what value the company had. Maybe panic selling by the insiders and former HP/Agilent employees I used to work with that rode their HP and Agilent up and down in 1990's to 2002...and don't want that to happen again..
PE under 10 and sold off baby with bathwater as far as I can tell..
Disclaimer: I own it with big profits already and (am) buying more.

On Aug 7, 2007 at 12:31 PM PST Steve T. posted here he bought VRGY yesterday at $20.40.

Today, Verigy announced all is well. They expect their third quarter results to be within issued guidance range. Press Release.

As I type, Verigy is trading at $23.45, up 15% since SteveT's buy yesterday!

Note 1: Verigy will release its complete results on Aug. 22.

Note 2: I purchased Verigy for my newsletter and personal portfolios with big gains already. My newsletter has an average price per share under $20. I've added on this sell-off and expect the stock to rally to new highs but I may sell some or all of my personal and newsletter shares before this happens. I will not necessarily post future trades in public but I will tell newsletter subscribers of any changes to the newsletter portfolio before or when it happens. (I say before because I have an "auto sell" level already in place for some of the recently purchased Verigy shares.)

Best CD Rates for July 2007

Posted by Kirk Lindstrom

See the full list of top rates by term below.

For short term money close to home, I like World Savings at 5.46%. Ascencia has CDs paying 5.50% with one and two year terms. For longer term CDs between 3 and 7 years, E-Loan is tops this month at 5.60%

We discuss the best rates for CD in our Get The Best CD Rate discussion forum. Check there for updates on the best CD rates or to ask questions. If you hear of a better rate, please post about it there.

Term - Date - Best Rate (APY) - Where?

Daily Savings get 5.25% at Vanguard Prime MMF & E-Loan
Daily Savings through 9/28/07 get 6.00% at FNBO Direct
3 Months get 5.30% at Countrywide
5 Months get 5.41% at World Savings
6 Months get 5.40% at Ascencia & Countrywide
8 Months get 5.46% at World Savings
1 Year get 5.50% Ascencia
18 Months get 5.46% at E-Loan
2 Years get 5.50% at Ascencia
3 Years get 5.33% at E-Loan
4 Years get 5.46% at E-Loan
5 Years get 5.60% at E-Loan
7 Years get 5.00% at Pentagon Federal CU

APY = Annual Percentage Yield

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

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Kirk Lindstrom:

DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.

EGLS: Electroglas Inc.

Posted by Kirk Lindstrom

INSIDER BUY ALERT! 10:11 AM July 24th, 2007

Electroglas Inc. was founded in 1960 and is headquartered in San Jose, California. Electroglas makes semiconductor equipment including wafer probers, test handlers and test floor management solutions.

I Have no position, but I always take note when insiders buy stocks in one of my favorite and most profitable market sectors where a return to old highs would be a 20 bagger from the current price. This one is now on my watch list. Discuss this blog here.

EGLS *** ELECTROGLAS INC *** SPECIAL INDUSTRY MACHINERY -- 3559

NOTE: LOW LIQUIDITY

--------------------------

Dir/ = Classification of Insider

$26k = Value of I-Buy trade(s)

10k = Number of Shares

$2.58 = Average Price Paid

$2.57 = Recent Stock Price (delayed)

59k = Average Daily Volume (composite timeframe)

$68M = Company Market Capitalization

2007-07-24 = Purchase Date

2007-07-24 = Filing Date

13:11:22 = SEC Arrival TimeStamp (Filing appears on SEC site 30-60 secs later)

--------------------------

5.01 = Beta

0.50% = Short Interest

4.6 = Short Ratio (days)

12-Jun-07 = Date of Above Short Information

--------------------------

Yahoo Intraday Chart (delayed): http://finance.yahoo.com/q/ta?s=EGLS&t=5d&l=off&z=l&q=b&p=&a=v&c=
Form Four Document (top link on page -- ".html"): http://www.sec.gov/Archives/edgar/data/902281/000090228107000032/0000902281-07-000032-index.htm
SEC Main Page for Form 4 Filings: http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=&type=4&owner=only&action=getcurrent

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Kirk Lindstrom: Disclaimers: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk.

Core PPI up 0.3% in June 2007

Posted by Kirk Lindstrom

If you wanted the FOMC to lower the Fed Funds Rate, then 0.3% core PPI inflation for June 2007 is not good news. The US Federal Reserve Open Market Committee (FOMC) continues to be right keeping rates at 5.25% to contain inflation

PPI stands for Producer Price Index, a measure of inflation.

The good news is energy prices have fallen. Gasoline prices in California fell about 8% recently despite higher crude oil prices. (Crude Oil Price Charts here)

U.S. June PPI capital equipment prices up 0.3%
U.S. June PPI intermediate goods prices up 0.5%
U.S. June PPI crude goods prices rise 0.3%
U.S. June PPI energy prices fall 1.1%
U.S. June PPI foods prices fall 0.8%
U.S. June core intermediate PPI slowest rise in 3 years
U.S. PPI up 3.3% in past year
U.S. June core PPI rises 0.3% vs. 0.2% gain expected
U.S. June PPI falls 0.2% vs. 0.2% gain expected

June PPI annualized: 0.3% per month x 12 months = 3.6%

June 2007 CPI data are scheduled to be released on July 18, 2007, at 8:30 am Eastern Time.

Discuss these results in our US Economy Discussion Forum.

Kirk Lindstrom: DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice. In addition, past performance does not guarantee future results.

Larry Elder on Warren Buffett

Posted by Kirk Lindstrom

In his article "Billionaire Warren Buffett -- a Case of the Guilts?" Larry Elder wrote,

" Whatever happened to Warren Buffett, the world's third-richest man? Guilt, a feeling of being blessed by luck, forgotten lessons — who knows? In any case, Buffett now believes that government should redistribute the wealth earned by others to those who did not earn it."and
"First, Buffett, on his $46 million a year, paid — at his 17.7 percent rate — over $8 million in taxes."

and

"Now let's deal with his secretary, whom he claims pays his or her taxes at a 30 percent rate. Buffett, in his speech, provided no details about the secretary. But even with minimal deductions, the highest possible federal tax bracket for a single person earning $60,000 a year is 25 percent. We don't know whether Buffett's secretary is married, a homeowner or renter, or has children.Let's suppose Buffett's secretary is a single person, a renter, no kids, and makes no IRA contribution (or any other gross income adjustments) and claims the standard deductions. This scenario places the secretary in the highest possible income tax bracket. But after the standard deduction ($5,150) and one personal exemption ($3,300), the secretary's taxable income becomes $51,550 — the 25 percent tax bracket. This means the secretary pays $9,439 in taxes — or 15.7 percent of the $60,000 annual income. Assuming the secretary lives in Nebraska (where Buffett is headquartered), with its highest income tax bracket at 6.84 percent, the secretary pays $2,663 to the state, or another 4.4 percent of the $60,000. Altogether, this gives the secretary a total tax rate of 20.1 percent."

then

"Now suppose we're talking about a married secretary, with a stay-at-home spouse. They file jointly, pay a home mortgage and have two kids under the age of 17. They place $4,000 in an IRA and itemize $15,000 in deductions. Here the tax picture changes dramatically. Taxable income drops to $27,800 — the 15 percent tax bracket. With child tax credits, secretary now pays $1,419 in federal taxes, or 2.4 percent of $60,000. Add in another 2 percent for $1,218 in state taxes, and secretary pays a grand total, state and federal, of 4.4 percent on the $60,000-a-year salary."

Larry missed or ignored what I heard Buffett say so I wrote him. My emailed letter was:

Hello fellow Libertarian!
I agree with you except for your calculations in the article "Billionaire Warren Buffett -- a Case of the Guilts?"http://news.yahoo.com/s/uc/20070705/cm_uc_crlelx/op_243207
Buffett considers Social Security and Medicare payments as taxes. Those are a tiny percentage of his salary while they are about 15% for his secretary. Add that 15% to the small "real tax" she pays and the rate is higher than Buffett's 17.7% rate.
At least he is being honest that the idiots who run our government are not investing these SS payments but simply spending it so they treat it as if it is a tax while promising us benefits that can only be delivered if it was invested in the stock market and Treasuries, not just Treasury equivalents.
best regards
Kirk Lindstrom
http://investment.suite101.com/
http://www.theretirementadvisor.net
FREE issue of Kirk's Investment Newsletter @ http://home.netcom.com/~kirklindstrom/Newsletter/WhatLetter2Buy.html

I will let you know if Larry Elder writes me back.

Getting the Best CD Rate

Posted by Kirk Lindstrom

In our "Get The Best CD Rate" discussion forum, regular contributor pbradford6 warned:

In the past I bought high yielding CDs all over the country and have experienced some problems at maturity time. Years ago I had naively instructed them to mail me a check. Don't do that! I have had checks damaged/torn and lost which increases the time you have no access to your money. I then had them deposited directly into my brokerage account only to be hit with transfer fees of $20 - $30 dollars.
There is also one other problem that was my fault. You have to know when each CD matures; without instruction the institution will roll over the CD to a like maturity without your knowledge /permission. Then when you realize that the money has been reinvested you are subject to a "premature distribution penalty" when you ask for its return.

This was my reply:

That is REALLY good advice. I only put money in internet banks that allow me to transfer it for no fee to my brokerage accounts or my World Savings Checking account that I use as a central account since I can go to the office less than a mile away and make a stink if there is any hanky-panky (problems with the other bank doing the transfer of funds on time.)

For the really hot rates, you have look at the "dead time" getting your money to and from the bank and calculate how it lowers your "effective" yield. I find I can pick one of the top places on the Best CD Rates forum with a branch near me, such as Countrywide or World Savings, that pay top rates, and simply roll over the CD into a new one with no lost time. You do have to remind yourself to call or go in and get the best short term rate or they will often roll the CD into a lower paying "non special" CD that pays much less when it matures. They give you 7 days after it matures with no penalty. This works well for me and I don't lose any interest to "dead time."

Bob Brinker's Secular Bear is Over

Posted by Kirk Lindstrom

Between May 2003 and June 2007, I had Brinker as:

ST: Bob does not do short term market timing after he failed with the QQQQ disaster in October 2000.
IT (Intermediate Term; 1 to 5 years): Bullish - Fully Invested. EXCEPTIONAL advice.
LT (Long Term: 5 to 20 years): Bearish - He wrote he believed the markets were "in a secular Bear market Mega trend."

Reference:

In his July 4, 2003 Marketimer, Bob Brinker wrote: "We believe that the U.S. stock market entered into a new secular bear market megatrend based on the March 24, 2000 Standard and Poor's 500 Index close of 1527.46. If past history is any guide investors will have to wait a very long time befoe they see that level materially exceeded. However a series of cyclical bear markets and cyclical bull markets appears inevitable within the secular bear market megatrend."

Now I have Bob Brinker as bullish for the short, intermediate and long term:

ST: Bullish: Mark Hulbert reported Brinker says "No Bear Market in 2007."
IT (Intermediate Term; 1 to 3 years): Bullish - Fully Invested. EXCEPTIONAL advice... so far.
LT (Long Term: 3 to 20 years): Bullish - "the valuation based secular bear market... reached its conclusion on June 13, 2006."

Reference:

In his June 2007 Marketimer, Bob Brinker wrote "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P500 Index (1527.46) and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006 at the bottom of the mid-term off-presidential election year correction."

I've read that many consider themselves underinvested in equities because of their respect for Brinker's former bearish long term market outlook. I'm interested in what they plan to do now. Please tell us here.

Kirk's Note: I believe we have been in a long term secular bull market with the lastest record high in 2007 a "higher high" after the March 2000 high with only a single cyclical bull market bottom in October 2002. See the definition of a secular bear

6.0% APY Savings Account

Posted by Kirk Lindstrom

FNBO Direct has a 6.00% APY savings account with rates good through September 28,2007.

A policy change starting June 18 will limit customers' deposits to $1 million. However, for those who already have $1 million or more on deposit prior to June 18th, the new limit will not apply.

FNBO does not accept POD (Payable on Death) accounts which is a way to get more FDIC insurance. I would not put more there than you can get FDIC insurance for.

Note: The daily rate is 5.84% which works out to 6.00% APY.

If you want to lock in rates for a longer period, check out my rates survey titled "Best CD Rates for May 2007"

where you can get

A 17 Month CD paying 5.55% @ Security Savings Bank
9 or 10 Month CDs paying 5.41% @ World Savings

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

2.3% Core Inflation Still Too High

Posted by Kirk Lindstrom

Since inflation is falling, the pressure by the "inflation hawks" should not be strong enough to cause the Fed to raise rates at their next FOMC meeting. The Federal Reserve is doing a masterful job at containing inflation induced from higher energy and commodity prices while not sending the economy into a recession or causing high unemployment. Likewise, core CPI is still too high vs. the Fed's comfort level of one to two percent core inflation so I don't expect them to lower rates at the next FOMC meeting either.

U.S. core CPI up 2.3% in past year, lowest in a year

= > > Kirk Comment: higher rates are working to Bring this down but it is still out of the Federal Reserve's "comfort zone" of 1.0 to 2.0% a year.

U.S. CPI up 2.6% in past year

= > > Kirk Comment: I consider this about average inflation. It is not low inflation by any stretch of the imagination despite the federal reserve slowing money supply growth with higher interest rates and other monetary actions.

U.S. April CPI food prices up 0.4%
U.S. April CPI energy prices up 2.4%

= > > Kirk Comment: It sure looks like energy is going up more than food so higher energy prices are dominating the inflation numbers, Brinker's protestations don't seem to help.

U.S. April core CPI up 0.2% as expected
U.S. April CPI up 0.4% vs. 0.5% expected

= > > Kirk Comment: I paid $3.55 per gallon of Regular yesterday. $68 for 19 gallons of gasoline. It was not long ago we were griping about $40 for 19 gallons of gasoline. The extra $28 won't change my lifestyle, but it sure is inflationary because people will demand higher salaries and prices for their goods and services so they can maintain their standard of living. In a healthy economy with low unemployment as we have today, this means you have to give your workers raises or they'll leave for better pay.

Numbers don't lie or spin.

Table A of the CONSUMER PRICE INDEX: APRIL 2007 Press Release from the BLS shows the compound annual rate contributions for the various components. Number one contributor is 43% for Energy followed by Transportation at 17.4% (you have to buy gasoline to transport something.) Nothing else on the list is in double digits. Food prices are up considerably also which makes sense it takes energy to pump water to grow produce and feed for livestock.

It sure looks like the Federal Reserve continues to be right keeping rates at 5.25% compared to following the advice of many on TV and radio who think otherwise. My hat is off to the Fed for engineering what seems to be a soft landing of the economy while bringing down the inflation caused by higher energy prices.

Kirk Lindstrom: DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice. In addition, past performance does not guarantee future results.

Best CD Rates for May 2007

Posted by Kirk Lindstrom

See the full list of top rates by term below. For short term money close to home, I like World Savings at 5.41%. Security Savings Bank has a 5.55% 17 Month CD. For longer term CDs between 3 and 7 years, NetBank.com is tops this month.

Rate Survey as of 5/5/07:

(Click here for the information in table format and rate sheets for each institution listed)

3 Month CD is paying 5.30% @ Countrywide
6 Month CD is paying 5.41% @ World Savings & Countrywide
9 or 10 Month CD is paying 5.41% @ World Savings
1 Year CD is paying 5.31% @ AmTrust Direct
17 Month CD is paying 5.55% @ Security Savings Bank
18 Month CD is paying 5.25% @ NetBank
2 Year CD is paying 5.20% @ NetBank
3 Year CD is paying 5.20% @ NetBank
5 Year CD is paying 5.20% @ NetBank
5 Year CD is paying 5.14% @ World Savings
7 Year CD is paying 5.20% @ NetBank

More rate tables, yields, terms and contact info at:

APY = Annual Percentage Yield

Best Rate Money Market Fund

Daily Saving rate is 5.22% APR @ Vanguard Prime MMF (This is a 5.10% 7 day yield)

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

Kirk Lindstrom:

Why Listen to Bob Brinker

Posted by Kirk Lindstrom

In our Bob Brinker Discussion Forum, Oreo6363 asked:

Hi Kirk - Why do you listen to BB - Why waste your time??

I replied:

Welcome to Suite101. I hope you stick around.

I don't know why some of Brinker's "Bob can do no wrong" supporters get so upset that Brinker's critics listen to his show. Bob is great for talking about events and ideas related to investing. It is best I don't agree with everything because that exercises my mind. Also, I like to hear the good ideas offered by his guests. It is great when the best of the best guests reinforce what I've been trying to teach here at Suite101 and in "My Newsletter "

For example, this weekend Burton G. Malkiel said quite clearly to a caller:

"I have been following markets for about 50 years, and I've never met anybody who could time the market correctly."

This is a guy Bob Brinker said was a "legend in his own time." What I loved is the legend said he invests his own money the exact same way I've been recommending since I started my newsletter back in 1998!

Burton Malkiel said on that same Moneytalk appearance that it is OK if you want to have a little fun buying a few individual stocks. However, if you are going to do it, you can do it with a lot less risk if the core of your investments are in good low cost index funds. (The "core and explore" approach I recommend!) Burton Malkiel said that is exactly what he does. If you think you know something about a certain biotech stock, for example, that will find the cure to cancer, go for it, provided the core of your portfolio is indexed.

I've heard Jack Bogle in interviews say he does the same thing as Dr. Malkiel and I except he uses some of Vanguard's managed mutual funds that are tax efficient and have low turnover.

The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.

[John C. Bogle in Common Sense on Mutual Funds: , pg 20]

I feel great knowing that two "legends in their own time" recommend what I teach here and they share the same opinion of market timing. Where I differ is I think some small traders can make money trading on a daily basis, but it is not "investing" and you can't follow their calls with a newsletter because the markets move too fast to take advantage of the inefficiencies they exploit. When pressed, I bet Bogle and Malkiel would agree, but that is only my speculation.

You wrote

Folllow your own advice. Yes, he made a mistake in 2000, but who hasn't??? You have made mistakes - I'm sure of that.

I do follow my own advice. My complaint with Brinker is he doesn't account for his bad advice in his record. How do you feel about losing so much money in QQQQ following him but when he talks about his "major buys and sells" he doesn't mention telling subscribers like you to put 30 to 50% of cash reserves into the QQQQ?

See THE NEW QQQQ update to view the actual QQQQ mailings. (yes, there were two!)

Look for Oreo6363's reply in our "

Bob Brinker FREE Forum 63,586"

DOW 13,000!

Posted by Kirk Lindstrom

Congratulations to all us longs!

The Dow Jones Industrial Average (DJIA) was 13,003.51 at 9:31am EST
The NASDAQ Composite was 2,534.05 at 9:31am EST
The S&P500 was 1,484.93 at 9:31am EST

On Feb. 28th, 2007 I posted the BLOG titled Feb 27th In Perspective where I wrote:

"Yesterday the DJIA closed at 12,216.24, down 416 points from the Feb. 26th close.Corrections are regular parts of the market. I see them as great opportunities to accelerate your dollar cost average plans if you are below your target asset allocation and are on a DCA program to get to your target asset allocation. If you are like me and take profits as the market goes up to keep a fairly constant asset allocation, then corrections are great opportunities to get some shares back at cheaper levels to regain your target asset allocation."

I am happy to report I eat my own cooking (take my own advice) and bought shares on that correction that are up significantly today. Congratulations to everyone who did the same.

For current charts of the major markets, see:

Kirk Lindstrom:

Jobs Report for March 2007

Posted by Kirk Lindstrom

Today's jobs report, released by the Bureau of Labor Statistics, showed that labor market remains tight as 180,000 new jobs were created and the jobless rate fell to 4.4%.

Discuss this jobs report and how it effects the stock market in Kirk's Market Thoughts

I like to think of it as 95.6% of eligible workers in the US have a job.

Details from report include:

U.S. nonfarm payrolls rose by 180,000 in March, well above most everyone's forecast
The US Unemployment rate fell from 4.5% to 4.4% which matched the October 2006 number which was the lowest in nearly six years!
economists on average had expected to see 168,000 new jobs for a 4.5% unemployment rate

The "household survey" showed unemployment fell by 141,000 to 6.72 million and employment rose by 335,000 to 146.3 million workers.

Construction led the job gains with 56,000 new jobs
Nearly 36,000 jobs were added at general merchandise stores last month
29,500 health care jobs were created
19,000 additional workers were hired at restaurants and bars
Manufacturers shed workers for the ninth consecutive month falling by 16,000 but but the average workweek in manufacturing rose to 41.1 hours from 40.9 hours and factory overtime rose six minutes to 4.3 hours.

Discuss & Ask Questions

Discuss and ask questions about the jobs report and other economic events in our ECRI Data & Forecast discussion forum where Lakshman kindly answers questions about their excellent indexes and how they relate to the economy.

Kirk Lindstrom:

Best CD Rates for April 2007

Posted by Kirk Lindstrom

The highest CD rate as of April 4th, 2007 is 5.50% APY (5.36% certificate rate) for 3, 4, 5 and 7 year CDs. For short term money, you can get a 5 month CD at 5.46% APY.

We discuss the best rates for CD in our Get The Best CD Rate discussion forum. Check there for updates on the best CD rates or to ask questions.

For short term money close to home, I like World Savings. For longer term CDs between 3 and 7 years, Pentagon Federal Credit Union is tops this month.

Rate Survey as of 4/4/07

5 Mo CD - World Savings - 5.26%, 5.40% APR
10 Mo CD - World Savings - 5.32%, 5.46% APR
1 Yr CD - Netbank.com - 5.07%, 5.20% APR
18 Mo CD - Netbank.com - 5.12%, 5.25% APR
2 Yr CD - Netbank.com - 5.07%, 5.20% APR
3 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR
4 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR
5 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR
7 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR

More rate tables, yields, terms and contact info at:

APY = Annual Percentage Yield

6.0% Money Market Rate

Through April 30th, 2007, HSBC is offering 6.0% on its money market funds. After they get your money, if they lower the rates, which they probably will, then you could roll the money into one of their CDs such as their six month Certificate of deposit that is paying 5.25%.

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

If you hear of a better rate, please post in our Get The Best CD Rate discussion forum

Kirk Lindstrom:

Blackstone Group to go Public

Posted by Kirk Lindstrom

The Blackstone Group started in 1985 with a staff of four that included its two founders, Peter G. Peterson and Stephen A Schwarzman who put up $200,000 each to start the company.

They have been very secretive about their returns but reports say since its inception in 1987:

The flagship corporate private equity portfolio returned 30.8% annually
Their real estate portfolio returned 38.2% since 1991.
Investments in funds of hedge funds have returned 13%
Investments in funds of mezzanine debt have returned 16%

Web site http://www.blackstone.com

From the web site,

Since 1985, without deviating from Blackstone's core beliefs, the firm has raised more than $64 billion for alternative asset investing across its Private Equity, Real Estate, Corporate Debt, Distressed Debt, and Marketable Alternative Investments groups. The Corporate Advisory Services and Restructuring & Reorganization Advisory Services businesses have handled assignments valued at over $550 billion.
Through June 30, 2006, Blackstone had invested total capital of $24.1 billion in 318 transactions with a total enterprise value of over $198 billion through its Private Equity, Real Estate, and Mezzanine funds and over $5.1 billion across 439 different senior loan and other debt instruments through its Corporate Debt funds.

More about the deal

Morgan Stanley and Citigroup will be the lead underwriters
Blackstone says it will list its shares on the New York Stock Exchange

Kirk Lindstrom: Disclaimers: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk.

The World's 10 Richest Men

Posted by Kirk Lindstrom

This is the list, compiled by Forbes Magazine, of the World's ten richest men.

The list of The World's 50 Richest for 2006 ranks the World's Billionaires by net worth. It is amazing that ten billion dollars is not enough to make the top 50 these days!

Shown are their names, where they live, age, how many billions they have and where they got their money.

1. Bill Gates, Washington, 51, $56, Microsoft

2. Warren Buffett, Nebraska, 76, $52, Berkshire Hathaway

3. Carlos Slim Helu, Mexico, 67, $49, telecom

4. Ingvar Kamprad and family, Sweden, 80, $33, Ikea

5. Lakshmi Mittal, India, 56, $32, steel

6. Sheldon Adelson, Nevada, 73, $26.5, casinos, hotels

7. Bernard Arnault, France, 58, $26, LVMH

8. Amancio Ortega, Spain, 71, $24, Zara

9. Li Ka-shing, Hong Kong, 78, $23, diversified

10. David Thomson and family, Canada, 49, $22, inheritance

List of The World's 50 Richest for 2006 ranks the World's Billionaires by net worth. It is amazing that ten billion dollars is not enough to make the top 50 these days!

This is Bill Gate's 13th year he's been number one. If his company, Microsoft, continues to flounder as a stock and Warren Buffett's Berkshire Hathaway has another great year, Buffett could easily take the lead next year. Last year, Gates gained $6B while Buffett gained $10B as BRKA gained about 23.3% in 2006 while MSFT only went up about 14.6%

The San Jose Mercury news said of the 946 billionaires on Forbes magazine's list, 92 or 9.7% live in California and 24 of them live in California's "Silicon Valley," where I live. Check out our Real Estate discussion forum where we talk about how expensive it is to live here.

I wonder how long it will be before a woman makes the top ten list?

Best CD Rates for March 2007

Posted by Kirk Lindstrom

The highest rate as of 3/2/07 is 6.00% APY (5.83% certificate rate) for a 7 year CD and you can get a 10 month CD at 5.45% APY.

We discuss the best rates for CD in our Get The Best CD Rate discussion forum. Check there for updates on the best CD rates or to ask questions.

For short term money close to home, I like World Savings. For longer term CDs between 3 and 7 years, Pentagon Federal Credit Union is tops this month.

Rate Survey as of 3/2/07

10 Mo CD - World Savings - 5.31%, 5.45% APR
1 Yr CD - Netbank.com - 5.31%, 5.45% APR
18 Mo CD - Netbank.com - 5.31%, 5.45% APR
2 Yr CD - Netbank.com - 5.26%, 5.40% APR
3 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR
4 Yr CD - Pentagon Federal Credit Union - 5.36%, 5.50% APR
5 Yr CD - Pentagon Federal Credit Union - 5.59%, 5.74% APR
7 Yr CD - Pentagon Federal Credit Union - 5.83%, 6.00% APR

More rate tables and contact info at:

APY = Annual Percentage Yield

5.75% CD in California

In the 2/27/03 LA Times, Wachovia advertised a 5.75% 8-month CD. This is only for California but call the phone number listed and ask if you can get the rate even if you are out of state. It can't hurt to ask!

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

Kirk Lindstrom:

Feb 27th In Perspective

Posted by Kirk Lindstrom

February 28, 2007

Yesterday the DJIA closed at 12,216.24, down 416 points from the Feb. 26th close.

Corrections are regular parts of the market. I see them as great opportunities to accelerate your dollar cost average plans if you are below your target asset allocation and are on a DCA program to get to your target asset allocation. If you are like me and take profits as the market goes up to keep a fairly constant asset allocation, then corrections are great opportunities to get some shares back at cheaper levels to regain your target asset allocation.

Market Charts showing

February 27, 2007 Decline in Selected U.S. Indices

Index & Percentage Decline

Dow Industrials (3.3%)

Dow Transports (3.4%)

Dow Utilities (2.9%)

NASAQ Composite (3.9%)

S&P 500 (3.5%)

S&P 400 (3.1%)

Russell 2000 (3.8%)

Philadelphia Bank Index (3.2%)

AMEX Broker/Dealer Index (4.4%)

Real Estate iShares (3.2%)

Philadelphia Semiconductor Index (3.1%)

AMEX Biotechnology Index (3.7%)

AMEX Pharmaceutical Index (2.5%)

AMEX Oil Index (3.5%)

Reuters/Jefferies CRB Index (7.0%)

Philadelphia Gold/Silver Index (0.6%)

= > > Data courtesy of Henry To

Correction Watch

The intraday high for the S&P500 was on Feb. 22 at 1461.57.

The S&P500 low on Feb. 27th was 1389.42

Point difference is 72.15 or 4.94%

The intraday high for the DJIA was on Feb. 20 at 12,845.76

The DJIA low on Feb. 27th was 12,092.31

Point difference is 749.45 or 5.87%

Market Charts showing

Kirk Lindstrom:

Day at a Glance

ECRI's WLI for Feb 23, 2007

Posted by Kirk Lindstrom

February 23, 2007

ECRI is the Economic Cycle Research Institute, founded by Geoffrey H. Moore.

Graphs of WLI vs GDP Growth

In their press release, ECRI wrote:

The Economic Cycle Research Institute, an independent forecasting group, said its Weekly Leading Index climbed to 139.3 in the week ending Feb. 16 from 138.9 in the prior week.
The annualized growth rate inched down to 3.4 percent from 3.5 percent in the previous period.
"Even though WLI growth has now eased to a nine-week low it remains comfortably above last summer's readings, indicating that the U.S. growth outlook is positive," said Lakshman Achuthan, managing director at ECRI.
The rise in the index was partly offset by slower housing activity, Achuthan said.

Note: Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.

Graphs of WLI vs GDP Growth as of 2/23/07

Read their book

Beating the Business Cycle: How to Predict & Profit from Turning Points in the Economy by Lakshman Achuthan and Anirvan Banerji

Discuss & Ask Questions of Lakshman

Discuss and ask questions about ECRI's FIG, WLI and other economic terms in our ECRI Data & Forecast discussion forum where Lakshman kindly answers questions about their excellent indexes and how they relate to the economy.

Definitions:

WLI is Weekly Leading Index
FIG is Future Inflation Gauge
ECRI is Economic Cycle Research Institute
ECRI website: http://www.businesscycle.com

Kirk Lindstrom:

Kirk on Chicago Radio WJJG 1530AM

Posted by Kirk Lindstrom

I will be on the radio Wednesday 2/21/07 in Chicago to discuss investing as a guest on the "Perspectives On Our Heritage - with Rick Biesada" show.

Radio Station WJJG 1530 AM

Chicago's Hometown Station

Wednesday Evenings, from 4 to 5 PM

I am scheduled to talk for about 15 minutes between 2:30 to 3:00PM PST

They requested I speak to the following agenda:

Briefly discuss the folly of market timing
Cover what is asset allocation
Explain "Core and explore" in simple terms
Go over your recommended retirement portfolio using no load vanguard funds

Here are some URLs for the radio station and the show:

Needless to say, I will not be there to discuss politics! :)

They don't stream the show on the internet yet but they told me they hope to give me an MP3 of my appearance if all goes well. I hope to share it with everyone later on after the show. Check "Kirk's Market Thoughts" for a link to the MP3 when it becomes available.

If you are in the Chicago area and can record the show on your PC for me, it would be much appreciated in case they have some problems.

How Good Are Zillow's Estimates?

Posted by Kirk Lindstrom

The study by JAMES R. HAGERTY on the February 14, 2007 "Wall Street Journal"; Page D1, took a detailed look at how accurate the popular Zillow.com web site is at estimating real estate prices for 1,000 homes studied. Their conclusion was "Zillow's "Zestimates" often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible -- off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million."

Article URL & our Real Estate Discussion Forum

KEY Excerpts:

The Journal looked at transaction prices recorded for 1,000 recent home sales in seven states, using data from First American Real Estate Solutions, a data provider in Santa Ana, Calif., and compared those prices with Zillow estimates, which didn't yet reflect the sales. The median difference between the Zillow estimate and the actual price was 7.8%. (That was close to the 7.2% median "margin of error" reported by Zillow itself on all transactions involving homes whose value it has estimated.)
The estimates were about equally split between ones that were too high and those below the mark.
Zillow came within 5% of the price in a third of the transactions studied by The Journal. It was more than 25% off target on 11% of them. In 34 of the 1,000 transactions, Zillow was off by more than 50%.
Zillow had estimated that a four-bedroom, 7,600-square-foot home in Fall City, Wash., was valued at $661,756. The home, built last year, sold in early January for $2.7 million. "If you don't visit the property, you're never going to know that it's in an exclusive, gated part of the neighborhood," says Maria Danieli, who represented the sellers. Ms. Danieli says Zillow may be fine for "cookie-cutter" neighborhoods but "they can't compute" the values of the luxury homes she sells.

The above findings pretty much matches my experience with Zillow. It is a useful tool for homes you already have a good idea what they are worth... but it is useless if you don't know the neighborhood very, very well. I'd advise using Zillow with caution.

Discuss this in our Real Estate Discussion Forum

ECRI's January 2007 FIG or

Posted by Kirk Lindstrom

ECRI announced the latest inflation numbers today. Their January 2007 US FIG fell to 119.5 and its growth rate fell to minus 2.1%.

ECRI is the Economic Cycle Research Institute, founded by Geoffrey H. Moore.

ECRI's U.S. FIG, short for Future Inflation Gauge, is designed to anticipate cyclical swings in the rate of inflation in the United States.

In their press release, ECRI wrote:

U.S. inflation pressures fell in January due mainly to disinflationary moves in measures of jobs, home loans, interest rates and vendor performance.
ECRI's proprietary US FIG index fell to 119.5 in January from 120.1 in December, revised up from 119.6.
The index's annualized growth rate, which smoothes out monthly fluctuations, dropped to minus 2.8 percent from an upwardly revised minus 2.1 percent in December.

Quote: "The USFIG remains in a cyclical downswing that began in the fall of 2005. Thus, U.S. inflation pressures continue to ebb, even as economic growth prospects improve further," said Lakshman Achuthan, managing director at ECRI.

Discuss & Ask Questions of Lakshman

Read their book

"Beating the Business Cycle: How to Predict & Profit from Turning Points in the Economy" by Lakshman Achuthan and Anirvan Banerji

Definitions:

WLI is Weekly Leading Index
FIG is Future Inflation Gauge
ECRI is Economic Cycle Research Institute
ECRI website: http://www.businesscycle.com

Kirk Lindstrom:

Major Intel (INTC) Insider Buy

Posted by Kirk Lindstrom

I get these insider reports from a private source that has a computer program monitor the SEC for announcements of insider buying and selling. Now and then I get a real gem like this announcement that an Intel insider is buying.

Yesterday the rumor mill was Intel won back the server business at Google from AMD. One blog I've read today says Google accounts for about 2% of world wide server sales so this is a huge win for Intel.

= > > Intel Discussion Forum < < =

INTC *** INTEL CORP *** SEMICONDUCTORS & RELATED DEV -- 3674

Details:

OFCR/ V. PRES. GM TECH & MFG G = Classification of Insider
$680k = Value of I-Buy trade(s)
33k = Number of Shares
20.60 = Average Price Paid
20.63 = Recent Stock Price (delayed)
999k = Average Daily Volume (composite timeframe)
119B = Company Market Capitalization
2007-01-25 = Purchase Date
2007-01-26 = Filing Date
14:29:52 = SEC Arrival TimeStamp

The Insider Roster at Yahoo shows Holt William M owned 27,934 shares before yesterday's filing.

Check the SEC Document showing this purchase of 33,000 shares for $680,000 to bring his total to 60,851 shares. (worth about $1.25M at $20.54)

This note is odd: "The transaction involved a nonmarket distribution from an investment fund in which the reporting person was not required to pay a purchase price." Somehow he got direct control of shares but didn't have to pay directly for them.... I wonder how that works.

Remarks:

Mr. Holt holds 885,626 options with the right to buy Intel Common Stock and also holds 17,250 restricted stock units.

Disclaimers:

I own Intel in my personal portfolio at a tiny fraction of its current price.
I recommend and trade the the ups and downs of Intel in my newsletter explore portfolio.
Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk.

Q1-2007 Allocation to Equities

Posted by Kirk Lindstrom

Take the Poll is on our Main Page about half way down.

"Equities" include all stocks, ETFs (Exchange Traded Funds) and stock mutual funds.

Do not include bonds, CDs, money market accounts, REITs, GOLD, etc.

Complete the sentence: I have

0 to 20% in equities
21 to 40% in equities
41 to 60% in equities
61 to 80% in equities
81 to 100% in equities

The Poll is on our Main Page about half way down... so you have to scroll down the page.

After you make your entry, discuss this poll and asset allocation in general HERE.

Kirk Lindstrom:

Best CD Rate for January 2007

Posted by Kirk Lindstrom

We discuss the best rates for CD in our Get The Best CD Rate discussion forum. Check there for updates on the best CD rates.

The Pentagon Federal Credit Union is now offering 3, 4, 5 and 7-year money market certificates which have a 6.25% APY with a dividend rate of 6.07%.

There is a $1,000 minimum deposit

More rate info Pentagon Federal Credit Union Rates.

You must be a member of the Pentagon Federal Credit Union to join. They have a long list of questions asking if you belong to any organizations that allow you to join with no fees. If you don't belong to any of those, then it asks if you want to join the "National Military Family Association" (NMFA) for $20 which allows you to purchase the CDs.

You can also call to help determining your eligibility to join at: 1-800-247-5626

Your savings insured to $100,000 by the National Credit Union Administration, an agency of the U.S. Government. Effective April 1, 2006, Traditional and Roth IRAs (Individual Retirement Accounts) are insured to $250,000 by the National Credit Union Administration, an agency of the U.S. Government. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

Ask questions about CDs and Annuities in our discussion forum: Get The Best CD Rate

Kirk Lindstrom:

Apple iPhone

Posted by Kirk Lindstrom

1/10/07:

At the MacWorld conference in San Francisco, Apple Computer CEO Steve Jobs announced it was dropping the word "Computer" from its name as it announced two new products that are not computers.

Apple TV: $299: Apple announced the "iTV" product everyone was speculating about in the press and on blog sites. Jobs said their $299 "Apple TV" will allow Mac users to stream media content from their MAC computers to this TV monitor wirelessly. The Apple TV has a 40 GB hard disk, 720p HD video and supports component/RCA, HDMI, Wi-Fi (b/g/n), USB 2.0 and Ethernet connections.

iPhone $499 (4GB) & $599 (8GB): Apple then announced the rebirth of the "Apple Newton" with a new name of "iPhone." The iPhone combines three products. It has a mobile phone, a widescreen iPod with touch controls and an internet communications device with desktop like applications for email, web browsing, maps and searching. You can see pictures of it and a demo of how it works here.

Picks and Shovels: Both the Apple TV and the iPhone will use chips from Intel according to this report while this report says Samsung has the processor

Kirk Lindstrom:

Jim Cramer's Growth Stocks 2007

Posted by Kirk Lindstrom

I watched some of Cramer's show while on the stairmaster yesterday at my health club while reading the paper. His antics are a bit much... but he gave some insight about whey he likes these three growth stocks.

Visit our Jim Cramer Discussion Forum

Cramer's number 3 growth stock for 2007 is Cisco Systems (CSCO). "The Cisco of today is not the Cisco of yesterday," he said..

Cramer's number 2 growth stock for 2007 is Apple Computer (AAPL). Apple is up 175% in the last 2 years but that doesn't bother Cramer who said "winners keep winning and "losers keep losing." I was struck by how Cramer is extrapolating the success Apple has had with one product line (iPod and iTunes) to other products as if it is so easy to keep the growth up. Cramer's made this mistake before.....

Cramer's number one growth stock for 2007 is the NYSE Group or NYX. "If you're comfortable taking a few risks to make more and more mad money, NYX is for you." Cramer said the main objective of NYX is to "make money" as if that is something new that nobody else has figured out. He also thinks the analysts have their future earnings estimates too low and they will raise their estimates in the future. Cramer said the NYSE is ready "to conquer the world" and should go to $240.

Quotes for NYX, AAPL and CSCO

NYX currently $98.78
AAPL currently $85.65
CSCI currently $28.42

Make sure you read "Cramer's top 10 picks in Feb. 2000" to see how his past picks have done. I think those ten picks in 2000 show why Cramer plays a clown on TV rather than works on Wall Street.

blog archive

Bradley Turn Dates for 2007

Subprime & Market Meltdown Advice

Verigy (VRGY) Confirms Guidance

Best CD Rates for July 2007

EGLS: Electroglas Inc.

Core PPI up 0.3% in June 2007

Larry Elder on Warren Buffett

Getting the Best CD Rate

Bob Brinker's Secular Bear is Over

6.0% APY Savings Account

2.3% Core Inflation Still Too High

Best CD Rates for May 2007

Why Listen to Bob Brinker

DOW 13,000!

Jobs Report for March 2007

Best CD Rates for April 2007

Blackstone Group to go Public

The World's 10 Richest Men

Best CD Rates for March 2007

Feb 27th In Perspective

ECRI's WLI for Feb 23, 2007

Kirk on Chicago Radio WJJG 1530AM

How Good Are Zillow's Estimates?

ECRI's January 2007 FIG or

Major Intel (INTC) Insider Buy

Q1-2007 Allocation to Equities

Best CD Rate for January 2007

Apple iPhone

Jim Cramer's Growth Stocks 2007