Octoer, 2009 Market Timing Update

money

October, 2009

'"We didn't actually overspend our budget. The allocation simply fell short of our expenditure."

~ Keith Davis

The Professional Opinion

S&P 500 Index: 1057.08

LEI - Leading Economic Index

The LEI has improved for five months in a row now, the longest streak since 2004.. Look for a range of GDP in the 2-3% range in 2010.

Five of the ten leading economic indicators have also increased. Capacity Utilization rose by .6% to 69.6%.
The difference between Capacity Utilization and full production is what is expected to keep inflation at bay in the near term.
As the economy improves deflation is expected to began to ease, with mild inflation taking its place.

The housing market continues to appear to be stabilizing. Existing homes were slightly lower in August. There was a slight increase in permits for new housing construction.

Other Key Factors

Consumer Price Index: Up .4% in August. Deflation Year over Year is tracking at its lowest levels since 1950.

Inflation: Core inlation came in at rate of 1.4%. There are no inflation risks in the short term.

Employment: The rate of job losses has slowed, but employment, or lack thereof remains a problem and is expected to persist well into 2010.

Overvaluation: Not anytime soon, The S&P is sitting in at a PE of somewhere around 14.5 times 2010 earnings and is considered a very reasonable value.

Summary

The cyclical bull market remains intact. Buy on the dips. Single digit pull backs are expected to be the norm for the remainder of the year.

In search of morning meal in the back yard.

Personal Portfolio

~ Couldn't resist

Not a bad month all in all. I think this is going to be a slow recovery though. Probably going to take a couple years for all the issues to work their way through the system.

I plan to continue on picking up equities when they present themselves at bargain prices. There are a number of quality issues which still look attractive because I think most stocks were severely oversold over the last year. Cyclical stocks currently out of favor are ones worth looking at in particular.

YTD

Personal Portfolio

Got what I wanted out of NEP and kept a small amount for speculative purposes.

SPF

The bulk of the proceeds went back into Standard Pacific Homes, which has been performing quite will as a trading stock.
You just have to buy enough to make it worth your while.

The Cramer Effect - One Month Later

True to form, B&G Foods (BGS) returned to normalcy after the Cramer effect and a share dilution announcement.
I am now all in again with more shares of B&G, and before the dividend payout. That worked out nicely.

Anything Else?

No not this month, other than looking forward to a bunch of new shares in the form of reinvested dividends.

Alas, the Dog Days of Summer are coming to an end.