February 2007 Market Timing Update

"Money can't buy friends, but you get a better class of enemy. "
Spike Milligan"

Good News! No  Bear Market is on the horizon at this time.

My Guru would like to see a health restoring 5-10% correction in the months ahead to assist in furthering the
bullish trend.  Absent that, dollar cost averaging is the best way to invest new money. That, and patience.

Recession Risk:

    - The price decline of oil has reduced the likelihood of a recession to near zero.
    - Retail sales were a little low for the norm but were ok.   The consumer is still spending.
    - Sales in the electronics sector were very strong.

    - Housing remains weak and borrowing rates are low.  No evidence this will cause recession.
    - 4th quarter real gdp was firm at 3.5% but it will probably slow in 2007.
    - Inflation risk - there isn't any at this time.  
    - Unemployment is likely to remain low.
    - Merger and acquisition activity remains robust.  Lots of cash, lots of activity.

Still would like to see a health restoring 5 - 10% correction though....

Nothing else to really report.  Bob emphasizes that absent something unexpected, this year should be a good one.

Market Timing Portfolio Changes:

        None at this time.

Personal Portfolio:

Wailing and Gnashing of Teeth - a Good Time to Buy (01-23-07)?

My personal radar goes up when I see stocks and sectors being trashed in the media.  Lately it has been the semiconductor
sector so it usually pays to have a look around and see if anything in particular looks appealing.  I guess you could say my
stock investment philosophy is more of a value or a contrarian approach.

I came up with two prospects:

INTC - Intel
TXN - Texas Instruments

I settled on TXN
.  Intel, I dunno.

Texas Instruments - A good company whose game plan is improving. It has a PE of 11.

And a Gamble - Not an investment, but a gamble:

Tweeter Home Entertainment.  

This is a company that sells home entertainment systems and failed to jump on the flat panel band wagon.
They stuck with rear projection units and paid dearly for it.  

The company has been thoroughly trashed and is doing what it can to survive.
It was founded in 1972 and has been around for a long time.

I think it is worth a bit of a gamble in the short term but that is all it is - a gamble.

This stuff never fails to amaze me:

Homebuilder stocks rallied Tuesday as investors
interpreted D.R. Horton's better-than-expected results
as a sign of stabilizing fundamentals within the sector.

Horton, the country's largest homebuilder, earned $109.7 million,
or 35 cents a share, in the quarter ended Dec. 31.

A year earlier, the company earned $310.1 million, or 98 cents a share.

While the earnings were down sharply, the results topped analysts'
expectation for a profit of 33 cents a share, according to Thomson First Call.

Horton's top line fell to $2.80 billion from $2.84 billion but exceeded
Wall Street's estimate of $2.76 billion.

The beat lifted the stock up 6.5% to $28.90 in recent trading,
and gave a boost to other builder stocks as well.

And on the other hand:

GE's 4th-Quarter Earnings More Than Double

NEW HAVEN, Conn. General Electric Co. said Friday its fourth-quarter profit
more than doubled as its NBC television network showed signs of a turnaround
and its global sales of gas turbines, health care equipment, financial services
and aircraft engines grew strongly.

GE also said it is restating financial results for 2001 through 2005 and the
first three quarters of 2006 to adjust accounting for interest rate swaps
in part of its financial services commercial paper program.

Its shares fell $1.05, or 2.76 percent, to close at $36.95 on the New York Stock Exchange.

DR Horton loses money, but not as much as the analysts thought. The stock  gains over $1.50 a
share and boosts the entire sector.

GE's forth quarter profits more than double and the stock price drops by over a dollar.  
The interest rate swaps the report later said would actually benefit the company's bottom line.

What am I do deduce from this?  You got me.