Just One Man's Opinion - 09 July 2005
by JMac
Normally, I do not like sector picks, but prefer to be stock specific, however here are some sectors which I have screened for fundamentals and found there to be not one stock to make the grade:
AIRLINES- With the exception of Southwest and JetBlue, management sucks. Twenty-five years after deregulation these guys still have no clue. The hub and spoke system does not work fellas! There is not an overcapacity of seats, there are too many airlines flying the same routes. As a result there is no brand loyalty and seats are now a simply a commodity. We only need four national carriers and until the weakest finally die, or are merged, it will only get worse, no matter the price of oil. If you want to make money in the airlines, go to law school and upon graduation join a firm that specializes in bankruptcy.
DOMESTIC AUTOMAKERS- Management has no clue about the U.S. consumer and hasn't for twenty years. They are FINALLY catching up in quality, but it is too late. Now, they think they can compete by giving away cars, and the UAW has a death wish. During the salad days management gave away the store, now they are paying the price. The consumer has shown over and over it will pay a premium price for a car, but want a premium car in return and Japan, South Korea and soon China will provide that. Why can we design and build the world's finest airliners and combat aircraft, but we can not build a safe, reliable and attractive automobile ? Are all the great design engineers in Seattle ? Within this decade the "Big Three" may be : Toyota/GM, Daimler/Chrysler and Honda of America. The city of Detroit will go the way of Akron (former tire capital of the WORLD) and Youngstown, Ohio. LOOKOUT taxpayers, you will soon be picking up GM's pension benefit plan, and it is a doozy !
LONG DISTANCE CARRIERS- Three years ago I was paying $.12p/m, last year $.09 and today $.06. This has become just another commodity also. Within this decade long distance will be free.
Side lights- Do not like The John Deere Classic, but like John Deere the stock. Farm income in 2005 will be up.
China is growing at 8% and buying huge amounts of coal, iron ore and other basic commodities from Australia (one of the most stable economies and government in the Pacific Rim). Screen some Aussie mining companies for fundamentals.
With more deregulation, nice dividends (at 15% tax rate) and a growing economy, electric utilities are in a sweet spot, e.g. Duke Power, FPL and just about anything in the SW U.S., HOWEVER: be on alert, AEP was recently hit with major litigation by the feds and the states over pollution control, past and present.
Normally, I do not like sector picks, but prefer to be stock specific, however here are some sectors which I have screened for fundamentals and found there to be not one stock to make the grade:
AIRLINES- With the exception of Southwest and JetBlue, management sucks. Twenty-five years after deregulation these guys still have no clue. The hub and spoke system does not work fellas! There is not an overcapacity of seats, there are too many airlines flying the same routes. As a result there is no brand loyalty and seats are now a simply a commodity. We only need four national carriers and until the weakest finally die, or are merged, it will only get worse, no matter the price of oil. If you want to make money in the airlines, go to law school and upon graduation join a firm that specializes in bankruptcy.
DOMESTIC AUTOMAKERS- Management has no clue about the U.S. consumer and hasn't for twenty years. They are FINALLY catching up in quality, but it is too late. Now, they think they can compete by giving away cars, and the UAW has a death wish. During the salad days management gave away the store, now they are paying the price. The consumer has shown over and over it will pay a premium price for a car, but want a premium car in return and Japan, South Korea and soon China will provide that. Why can we design and build the world's finest airliners and combat aircraft, but we can not build a safe, reliable and attractive automobile ? Are all the great design engineers in Seattle ? Within this decade the "Big Three" may be : Toyota/GM, Daimler/Chrysler and Honda of America. The city of Detroit will go the way of Akron (former tire capital of the WORLD) and Youngstown, Ohio. LOOKOUT taxpayers, you will soon be picking up GM's pension benefit plan, and it is a doozy !
LONG DISTANCE CARRIERS- Three years ago I was paying $.12p/m, last year $.09 and today $.06. This has become just another commodity also. Within this decade long distance will be free.
Side lights- Do not like The John Deere Classic, but like John Deere the stock. Farm income in 2005 will be up.
China is growing at 8% and buying huge amounts of coal, iron ore and other basic commodities from Australia (one of the most stable economies and government in the Pacific Rim). Screen some Aussie mining companies for fundamentals.
With more deregulation, nice dividends (at 15% tax rate) and a growing economy, electric utilities are in a sweet spot, e.g. Duke Power, FPL and just about anything in the SW U.S., HOWEVER: be on alert, AEP was recently hit with major litigation by the feds and the states over pollution control, past and present.
posted by TandaPundit at 12.7.05
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