Lee Is A Philly (Again)

Cliff Lee shocked the baseball world today by turning down the Yankees and Rangers, and signing instead with the “mystery team” in these negotiations, the Philadelphia Phillies.

For Yankees fans looking for a bright side to this story, the news could have been worse. At least Cliff Lee did not sign with the Rangers (or the Red Sox). At least the Yanks will face Cliff Lee only in interleague play, and perhaps in the World Series. Also, we won’t have to read any snarky MSM stories about how the Yankees used their money to overwhelm the rest of baseball and grab yet another $20 million plus free agent. Instead, we’ll have to read the snarky stories about how the Yankees weren’t able to sign Cliff Lee even with all of the money they offered him.

Our focus now will shift quickly to the Yankees’ so-called “plan B” to improve the team for 2011. For the moment, I advise deep cleansing breaths and a rational approach. The Yanks did manage to win 95 games last year without the help of Mr. Lee.

For those who are historically inclined, this is the second time in 150 years that a Lee spurned the Yankees. Maybe we should have seen it coming.

More on this story will follow here in the upcoming days and weeks.

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Lee Is A Philly (Again)

Cliff Lee shocked the baseball world today by turning down the Yankees and Rangers, and signing instead with the “mystery team” in these negotiations, the Philadelphia Phillies.

For Yankees fans looking for a bright side to this story, the news could have been worse. At least Cliff Lee did not sign with the Rangers (or the Red Sox). At least the Yanks will face Cliff Lee only in interleague play, and perhaps in the World Series. Also, we won’t have to read any snarky MSM stories about how the Yankees used their money to overwhelm the rest of baseball and grab yet another $20 million plus free agent. Instead, we’ll have to read the snarky stories about how the Yankees weren’t able to sign Cliff Lee even with all of the money they offered him.

Our focus now will shift quickly to the Yankees’ so-called “plan B” to improve the team for 2011. For the moment, I advise deep cleansing breaths and a rational approach. The Yanks did manage to win 95 games last year without the help of Mr. Lee.

For those who are historically inclined, this is the second time in 150 years that a Lee spurned the Yankees. Maybe we should have seen it coming.

More on this story will follow here in the upcoming days and weeks.

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Roll With The Cycles, Grab Some Cisco While It’s Cheap Again

Darwin's ideas work in stocks, too

“If I’d known I was going to live this long, I would have taken better care of myself.” – Eubie Blake, American composer (1887–1983)

You cannot underestimate the power of cycles.? They reoccur in nature, business, and financial markets with great regularity.? When we ignore them, cycles seem obvious in hindsight.? Foresight is where you’ll make your money.

Time frames may be different based on secular trends, weather phenomenon, innovations in health care, and government intervention, but generally, what goes around, comes around.? For example, economic booms and busts occurred, on average, every 14 years for 2,000 years.?Beginning in the late 20th?century, they began cycling every seven years as a direct result of government efforts to stimulate economic activity during recessionary downturns.? While they occur more frequently, they’re cycles nonetheless.

Tall Parents Have Shorter Children, On Average
Charles Darwin and his cousin, Francis Galton, were the first to note that tall parents have shorter children, on average, and vice versa.? With Karl Pearson, they studied over one thousand father and son pairs.? Galton termed this phenomenon in nature “regression to mediocrity.”? Since then, the method of studying how one variable leads to another variable has been called “regression analysis.”

Financial market observers see it all the time.? Excessively high prices eventually lead to excessively low prices.? The key to succeeding as an investor is knowing where the excesses are when they’re happening and exploiting them.

Special Offer: Make the most of explosive moves in gold and silver but don’t get left holding the bag when it’s time to run.? Click here for instant access to market timing analysis and specific gold, silver and hard asset model portfolios in Curtis Hesler’s?Professional Timing Service.

“Joining The Dow Can Be The Kiss Of Death”
In September, Jeff Reeves of InvestorPlace.com conducted research showing that by the time companies have grown to become the recognized leaders in their industries, share prices are inflated.? For example, turning the clock back to March 1999 when the Dow Jones Averages closed above 10,000 for the first time, then crested to 11,000 a few months later, four of the biggest names of the day joined the Dow 30. Here’s how they fared: AT&T (then SBC Communications), down 38%; Intel, down 50%;?Microsoft, down 47%;?Home Depot, ?down 38%.

During subsequent reformulations of the Dow Jones Industrial Average, laggards were replaced with other leaders of the time.? They included Pfizer, Verizon, Bank of America, Cisco, and AIG.? As a group, these stocks have been shellacked since they joined the Dow 30, but along the way they have continued to make a lot of money for anyone who purchased shares when stock prices were excessively low.? Many have tripled off of lows in 2003 and 2009.

The point is this: You cannot fight the power and magnitude of cycles.? They can make or break an investor.? Here’s one stock that appears far too low right now:

Fallen Angels Focus Stock: Cisco Systems? (CSCO, 20.15)

Cisco is the dominant player in the global networking industry.? Shares plummeted more than 16% on ?Thursday following a less than stellar outlook presented by company management.? While management cited near term challenges, we believe the selling has provided an attractive entry point for longer-term investors.

The company has a solid balance sheet, operating profit margins of more than 20% and net margins in the high teens.? Our fair value estimate (based on discounted cash flow analysis) is $30 per share; providing investors with 50% potential upside from current levels.

Gabriel Wisdom and clients of American Money Management LLC, including mutual funds managed by AMM may buy or sell securities mentioned without prior notice.

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Roll With The Cycles, Grab Some Cisco While It’s Cheap Again

Darwin's ideas work in stocks, too

“If I’d known I was going to live this long, I would have taken better care of myself.” – Eubie Blake, American composer (1887–1983)

You cannot underestimate the power of cycles.? They reoccur in nature, business, and financial markets with great regularity.? When we ignore them, cycles seem obvious in hindsight.? Foresight is where you’ll make your money.

Time frames may be different based on secular trends, weather phenomenon, innovations in health care, and government intervention, but generally, what goes around, comes around.? For example, economic booms and busts occurred, on average, every 14 years for 2,000 years.?Beginning in the late 20th?century, they began cycling every seven years as a direct result of government efforts to stimulate economic activity during recessionary downturns.? While they occur more frequently, they’re cycles nonetheless.

Tall Parents Have Shorter Children, On Average
Charles Darwin and his cousin, Francis Galton, were the first to note that tall parents have shorter children, on average, and vice versa.? With Karl Pearson, they studied over one thousand father and son pairs.? Galton termed this phenomenon in nature “regression to mediocrity.”? Since then, the method of studying how one variable leads to another variable has been called “regression analysis.”

Financial market observers see it all the time.? Excessively high prices eventually lead to excessively low prices.? The key to succeeding as an investor is knowing where the excesses are when they’re happening and exploiting them.

Special Offer: Make the most of explosive moves in gold and silver but don’t get left holding the bag when it’s time to run.? Click here for instant access to market timing analysis and specific gold, silver and hard asset model portfolios in Curtis Hesler’s?Professional Timing Service.

“Joining The Dow Can Be The Kiss Of Death”
In September, Jeff Reeves of InvestorPlace.com conducted research showing that by the time companies have grown to become the recognized leaders in their industries, share prices are inflated.? For example, turning the clock back to March 1999 when the Dow Jones Averages closed above 10,000 for the first time, then crested to 11,000 a few months later, four of the biggest names of the day joined the Dow 30. Here’s how they fared: AT&T (then SBC Communications), down 38%; Intel, down 50%;?Microsoft, down 47%;?Home Depot, ?down 38%.

During subsequent reformulations of the Dow Jones Industrial Average, laggards were replaced with other leaders of the time.? They included Pfizer, Verizon, Bank of America, Cisco, and AIG.? As a group, these stocks have been shellacked since they joined the Dow 30, but along the way they have continued to make a lot of money for anyone who purchased shares when stock prices were excessively low.? Many have tripled off of lows in 2003 and 2009.

The point is this: You cannot fight the power and magnitude of cycles.? They can make or break an investor.? Here’s one stock that appears far too low right now:

Fallen Angels Focus Stock: Cisco Systems? (CSCO, 20.15)

Cisco is the dominant player in the global networking industry.? Shares plummeted more than 16% on ?Thursday following a less than stellar outlook presented by company management.? While management cited near term challenges, we believe the selling has provided an attractive entry point for longer-term investors.

The company has a solid balance sheet, operating profit margins of more than 20% and net margins in the high teens.? Our fair value estimate (based on discounted cash flow analysis) is $30 per share; providing investors with 50% potential upside from current levels.

Gabriel Wisdom and clients of American Money Management LLC, including mutual funds managed by AMM may buy or sell securities mentioned without prior notice.

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Think Sprouts of Brussels and cauliflower are agricultural products? Think again.

While the discarded motor vehicle manufacturers, banks and other groups to the recent economic crisis left financial rescue plan a funny taste in the mouth of some Americans, a former U.S. regulator hopes efforts to prevent another panic go rotten.

The Commodity Futures Trading Commission is immersed in the drafting of dozens of rules to help increase once opaque OTC derivatives market surveillance widely blamed for exacerbating the recent financial crisis.

Among the rules must craft is what is the definition of an agricultural product?Courses, corn, cotton, soybeans and cattle, among others, fall into this area.

But what these "other"food such as Brussels sprouts, artichokes, cauliflower, or with curry? A former President of the CFTC says they are "abhorrent to American sensibilities" and should be banned.

"Like every American citizen, there are certain agricultural products which are hateful to me", says Philip McBride Johnson, who is now the law firm Skadden, Arps, Slate, Meagher and Flom.

In a letter from his former agency comments, he said that there is a "natural link" between the definition of agricultural products and a provision in an act that require the regulator to protect the public by prohibiting the list of certain products which "are abhorrent to American sensibilities.

Clearly prohibited under this Act are financial products based on wars, terrorism and assassinats.Si Johnson carries out its objectives, regulators will be able to protect consumers from a dozen of foods that are consistent with his palace.

"I truly hope that the Commission loses not this rare opportunity to rid the world of these terrible excuse for agricultural products, and I appreciate this opportunity to contribute to the proper public", he said.

To display the letter by Mr. Johnson, go to: http://link.reuters.com/wez29p

Photo credit: Reuters/Darrin Zammit Lupi (farm workers harvesting artichokes, California April 2008)

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