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July 2008 Stock & ETF Picks
I'm overdue for that time of the month. No, not that time of the month... the time where I make another batch of 12-month stock picks. Last month, June, was officially the worst June month since the great depression, or so I hear on the radio, and looking at my selections from that month they are already down an astonishing 10% or so with 11 more months to go before the trades close. Geez, I hope the next 11 months are better.
Regarding this month though I still feel most of my picks from last month are good buys and now I think they are even better because they are trading lower than they were a month ago. The market stinks right now and we officially closed yesterday in bear market territory, which basically means that stocks have dropped at least 20% firm their highs which in this case were hit in the Fall of 2007. Hmm, I wonder how my picks from the fall are holding up? Anyway, there are a couple changes to my monthly picks which I will detail below.
First of all, last month I made a big bet (read gamble) that Ford (F) would make a nice upward correction in price over the next 12 months. That still might be but it is still a bet/gamble/guess and has no basis for truth at all and this doesn't fit with my stock picking principals so I'm pulling from the list even though it's even lower on essentially no new news at all. In its stead I am replacing it with GLD, an ETF which tracks the price of Gold. Gold is a classic, and by that I mean epic, hedge against inflation. We are obviously experiencing more inflation than anytime in recent decades and even if other metals and commodities halt their upward trends I don't see Gold doing the same. I believe they will continue marching higher at least until the fed slows inflation which I don't see happening for a long time.
Second I decided to cut some of my Financials risk by exchanging Washington Mutual (WM) for Union Bank (UB). It's true I work for Union and I believe that the market has been dropping Union's stock price along with the rest of the Financials for no good reason other than that Union is a Financial. Union has next to no delinquencies or foreclosures on their books and they have been inflating their reserves for losses just because it's good PR not because they anticipate ballooning losses. UB is down about 38% fron two years ago compared to WAMU's decline of nearly 90%. WAMU, will likely rebound but I'm tired of calling a bottom in financials and not getting it. I'm switching over to a safer financial to lessen a downward trend but still experience a good upswing if the bottom is established. Union also issues a dividend which is currently yielding 5.2% annually as of July 9, 2008 close. This dividend is lower than some other financials but I believe it is safe unlike Union's competitors.
As a side note, I got some feedback from a significant woman in my life (my mother) that my stock selection tables made no sense as they were always saying zero. In months past I made the template and updated the prices every now and then throughout the year and many recent months hadn't ever been updated and still said zero. In an effort to make things a little more relevant to the casual reader I have updated my template to make future selections dynamic and constantly accurate to within 20 minutes. At this point I haven't built in dividend reinvestment into the template but hope to in months coming up.
See below for the complete list as selected after the close of trading yesterday, July 9, 2008. The performance on these picks will always be accurate until I remove their dynamic updating capabilities one year from now, July 9, 2009.
One final note I'd like to point readers to my hub for past stock performance and past selections. I have updated the completed performance from my selections last July and compared them to the overall stock market and found to have beaten the market for the 6th month in a row! Of course I was still in negative territory by more than 10% but the S&P 500 was down 18% so I beat it soundly. I'd encourage you to take a look at my past performance in these selections. I'd also like to say that my short-term trading page can also be reviewed at your leisure. My short-term trading puts me in single stock positions at all times as I shoot for large gains quickly. I haven't made a trade in it however since the 20th of June where I bought RIG.
Regarding this month though I still feel most of my picks from last month are good buys and now I think they are even better because they are trading lower than they were a month ago. The market stinks right now and we officially closed yesterday in bear market territory, which basically means that stocks have dropped at least 20% firm their highs which in this case were hit in the Fall of 2007. Hmm, I wonder how my picks from the fall are holding up? Anyway, there are a couple changes to my monthly picks which I will detail below.
First of all, last month I made a big bet (read gamble) that Ford (F) would make a nice upward correction in price over the next 12 months. That still might be but it is still a bet/gamble/guess and has no basis for truth at all and this doesn't fit with my stock picking principals so I'm pulling from the list even though it's even lower on essentially no new news at all. In its stead I am replacing it with GLD, an ETF which tracks the price of Gold. Gold is a classic, and by that I mean epic, hedge against inflation. We are obviously experiencing more inflation than anytime in recent decades and even if other metals and commodities halt their upward trends I don't see Gold doing the same. I believe they will continue marching higher at least until the fed slows inflation which I don't see happening for a long time.
Second I decided to cut some of my Financials risk by exchanging Washington Mutual (WM) for Union Bank (UB). It's true I work for Union and I believe that the market has been dropping Union's stock price along with the rest of the Financials for no good reason other than that Union is a Financial. Union has next to no delinquencies or foreclosures on their books and they have been inflating their reserves for losses just because it's good PR not because they anticipate ballooning losses. UB is down about 38% fron two years ago compared to WAMU's decline of nearly 90%. WAMU, will likely rebound but I'm tired of calling a bottom in financials and not getting it. I'm switching over to a safer financial to lessen a downward trend but still experience a good upswing if the bottom is established. Union also issues a dividend which is currently yielding 5.2% annually as of July 9, 2008 close. This dividend is lower than some other financials but I believe it is safe unlike Union's competitors.
As a side note, I got some feedback from a significant woman in my life (my mother) that my stock selection tables made no sense as they were always saying zero. In months past I made the template and updated the prices every now and then throughout the year and many recent months hadn't ever been updated and still said zero. In an effort to make things a little more relevant to the casual reader I have updated my template to make future selections dynamic and constantly accurate to within 20 minutes. At this point I haven't built in dividend reinvestment into the template but hope to in months coming up.
See below for the complete list as selected after the close of trading yesterday, July 9, 2008. The performance on these picks will always be accurate until I remove their dynamic updating capabilities one year from now, July 9, 2009.
One final note I'd like to point readers to my hub for past stock performance and past selections. I have updated the completed performance from my selections last July and compared them to the overall stock market and found to have beaten the market for the 6th month in a row! Of course I was still in negative territory by more than 10% but the S&P 500 was down 18% so I beat it soundly. I'd encourage you to take a look at my past performance in these selections. I'd also like to say that my short-term trading page can also be reviewed at your leisure. My short-term trading puts me in single stock positions at all times as I shoot for large gains quickly. I haven't made a trade in it however since the 20th of June where I bought RIG.
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