50 for 2008

Happy New Year! 2007 was a banner year for my portfolio with Apple (aapl) being my largest winner and still my largest position. I also had a lot of success with TXN, GS, GRMN, LUV, ADBE, and CHK. I am reevaluating my portfolio today by asking myself the following question: Would I buy this stock today? If I answer no to that question, than I am dumping it and taking the loss in 2007. I am going to start the year with stocks that I am confident will go north. On that note, here is my finalized list of 50 stocks that should outperform the market in 2008. I will keep it on a watch list and periodically post the performance. Hope everyone has a great 2008 and thanks for reading!

Adobe Systems, Inc. (ADBE)
Amazon (AMZN)
American Express (AXP)
Apple (AAPL)
Baidu, Inc. (BIDU)
Best Buy (BBY)
Blackboard (BBBB)
BP plc (BP)
Cannon (CAJ)
Chesapeake Energy (CHK)
Chipotle Mexican Grill (CMG)
Countrywide Financial Group (CFC)
Cypress Semiconductor (CY)
Dell (DELL)
Dick's Sporting Goods (DKS)
Electronic Arts (EA)
Exxon Mobile (XOM)
First Solar (FSLR)
Focus Media (FMCN)
Gamestop (GME)
Garmin Ltd. (GRMN)
Genentech (DNA)
Goldman Sachs (GS)
Google (GOOG)
JetBlue (JBLU)
JP Morgan Chase (JPM)
Lifetime Fitness (LTM)
Logitech (LOGI)
Meritage Homes Corp (MTH)
Merrill Lynch & Co (MER)
Nike (NKE)
Nordstrom (JWN)
Novartis AG (NVS)
Pepsi (PEP)
Pfizer (PFE)
Research in Motion (RIMM)
Shutterfly (SFLY)
Starbucks (SBUX)
Sunpower Corp. (SPWR)
Target (TGT)
TASER International (TASR)
Texas Instruments (TXN)
Total (TOT)
Toyota Motor Crop.(TM)
Transocean (RIG)
Under Armour (UA)
Unilever (UN)
Verizon (VZ)
Whole Foods Market (WFMI)
Wynn Resorts (WYNN)

Life is a gamble!

I was going to blog about Wynn Resorts (WYNN) today but they lost almost 3% so I will wait till next week.

Today news hit that Apple will announce (hopefully next month) an agreement with movie companies to rent films through iTunes. It looks like Apple is really trying to make Apple TV a success. With more applications available this could work. One thing I have learned in the past year is never underestimate Jobs.

Get Ready for Another Blowout Quarter!

Amazon announced today the top best selling items of this holiday season. Apple has taken 5 of the top 10 positions, including #1 with the iPod Nano! Apple is going to be sitting pretty when earnings come around.

Disclosure: Long Apple

Merry Christmas!

Exxon Mobil (XOM)

With $39.1 billion in net income for 2006, Exxon Mobil (XOM) is the most profitable company in the world. Currently trading around $94 a share, Exxon has been a good performer in 2007 and with consistently rising oil prices looks poised to have a great 2008. Lets take a look at the bull/bear perspective and you decide;

Bull:
Gas prices will have to drop below $50 a barrel for Exxon to loose money. With uncertainty in the middle east and an increase in demand gas prices will likely continue to rise. Technology will allow Exxon to find natural resources more efficiently creating higher profit margins.

Bear:
OPEC, pricing policies, political risks, government taxes, economic sanctions, and anti-trust laws all could effect Exxon's profit margin in the coming years. President Bush recently singed the 2007 Energy Bill calling for higher fuel efficiency. The growing concern of global warming and air pollution will increase the demand for alternative fuel vehicles and electric powered vehicles.

Starbucks (SBUX)

If caffeine is the best selling drug in the world then Starbucks is the biggest drug dealer. With over 15,000 "lounges" does Starbucks have room to continue its impressive growth or have they over expanded.

Bears:
Last weekend I was out shopping with my wife at a busy intersection and noticed there were three Starbucks within one block. Starbucks are everywhere and they have not come out with anything new or innovative in a long time. McDonald's has had a lot of success with there new line of premium coffees and posses a real threat to the Starbucks experience. Why would someone wait in line for 10 minutes to pay twice as much for the same product? With the new competition and over expansion Starbucks may have an uphill battle in front of them.

Bulls:
First, Starbucks is selling 14 times as much coffee per store as McDonald's. Starbucks also offers an atmosphere that McDonald's can not match. Second, Starbucks has room to expand internationally especially in Asian markets where coffee is popular. Finally, caffeine is addicting and in this fast paced world in which we live people are going to need there coffee and Starbucks will be happy to supply.

Going Green

President Bush signed into law today The Energy Independence and Security Act raising the minimum fuel efficiency requirements on automobiles. Hearing this news, I decided to check out some of the most fuel efficient cars on the market and some concept cars soon to be on the market. Here is a list of the most fuel efficient cars currently on the market.

The concept cars have a lot more flash and style, but are unavailable. The electric Chevy Volt is getting a lot of attention. I think the idea of being completely off gas is exciting not only environmentally, but monetarily. Another concept that could catch on is Toyota's Alessandro Volta. It seats three on a row with a "drive-by-wire" control. This allows anyone in the car to drive. It also can produce a 0-60 in four seconds. Not bad for a hybrid or a Ferrari!

Trends

If you have ever read this blog before then you know that I like to follow trends, momentum, and volatility. The current market as a whole has been trending lower, and there is only two trends that i can see going higher in the near future. The fist one that comes to mind is anything green. The environment is going to be a major topic in the coming presidential election and if the Democrats take over the office green stocks will benefit greatly. Some of my favorites are FSLR, SPWR, & STP.

With the mortgage industry in the dumps and the economy heading towards a recession look for booze and gambling to do well in 2008. Historically, when life gets tough people get drunk and gamble. So, if that is the direction we are headed keep your eye on these stocks MGM, HET, WYNN, BUD, & TAP.

50 Best Stocks of 2008

I have compiled a preliminary list of the 50 stocks that I believe will out perform the market in 2008. As you can see technology is the most concentrated sector followed by oil & gas and retail. A few companies that made the list have had a very bad 2007 and should recover nicely in 2008. I included a couple risky Internet based companies that look promising coming into 2008 like BBBB & SFLY. I have not finalized the list yet and a few may shift, but I will finalize the group and track it throughout the coming year. Please let me know if I missed any obvious players.

American Express (AXP)
Apple (AAPL)
Baidu, Inc. (BIDU)
Best Buy (BBY)
Blackboard (BBBB)
BP plc (BP)
Cannon (CAJ)
Chesapeake Energy (CHK)
Chipotle Mexican Grill (CMG)
Countrywide Financial Group (CFC)
Cypress Semiconductor (CY)
Dell (DELL)
Dick's Sporting Goods (DKS)
Electronic Arts (EA)
Exxon Mobile (XOM)
First Solar (FSLR)
Focus Media (FMCN)
Garmin Ltd. (GRMN)
Genentech (DNA)
Goldman Sachs (GS)
Google (GOOG)
JetBlue (JBLU)
JP Morgan Chase (JPM)
Lifetime Fitness (LTM)
Logitech (LOGI)
Merck & Co (MRK)
Meritage Homes Corp (MTH)
Merrill Lynch & Co (MER)
Nike (NKE)
Nordstrom (JWN)
Novartis AG (NVS)
Pepsi (PEP)
Pfizer (PFE)
Research in Motion (RIMM)
Shutterfly (SFLY)
Starbucks (SBUX)
Sunpower Corp. (SPWR)
Target (TGT)
TASER International (TASR)
Texas Instruments (TXN)
Total (TOT)
Toyota Motor Crop.(TM)
Transocean (RIG)
Under Armour (UA)
Unilever (UN)
Verizon (VZ)
Whole Foods Market (WFMI)
Wynn Resorts (WYNN)

4.25%

The Fed dropped interest rates today another .25% to 4.25%. Big Ben did not calm investors that were expecting a 50 point drop. The DOW dropped 294 points closing at 13,432. It appears that the subprime mess is not going to go away anytime soon. There are a lot of stocks selling at bargain prices if you want to try and find the bottom. I am going to continue to keep my distance, but if Countrywide drops back down in the single digits I may pick up a few hundred shares. The rest of the week should be very volatile as speculators sort through the Feds minutes and try and make sense of the interest rate cut.

Check out this list of companies that pay virtually no income tax. I have traded Chesapeake and think it is the best of this bunch. Interesting list.

Ben Stein Vs Goldman Sachs

This past weekend Ben Stein, a modern day economic genius, wrote a piece in the New York Times questioning the independence of economist Jan Hatzius, a Goldman Sachs economist. Jan wrote a detailed paper describing how the mortgage meltdown could aversely effect other industries in the market. He hypothesized that the mortgage crisis could continue, creating enormous problems for investors, especially companies holding mortgage backed securities.

From an outsiders perspective there is nothing wrong with Jan forecasting the economic future of our markets, actually that is what we expect of our economists. The problem with Jan's prediction, as Ben lays out, is that the company that is signing his paycheck every week is shorting the mortgage industry. Goldman Sachs benefits every time a well respected (and highly paid) economist bad mouths the mortgage industry. Goldman Sachs is basicly a huge hedge fund answering to nobody and manipulating the markets by controlling the media. Goldman has billions of dollars invested in the markets and somehow managed to make money while every other bank were writing down billions in assets.

The most interesting part of this article is that Ben Stein is a shareholder of Goldman Sachs! I guess if you can't beat em, join em.