In 1932, the U.S. floundered around in the depths of the Great Depression. What to do about it was a question on most people’s minds. The New York Times edition of August 14, 1932, reported on the solution offered by Henry I. Harriman, then president of the Chamber of Commerce. “H.I. Harriman Gives Recovery Program,” boomed the headline in big bold type: “Urges Beer at Once.” (Thanks to James Grant for sharing this headline.)

Well, this was during Prohibition. And why suffer the ills of a financial calamity stone-cold sober? Harriman also suggested a 25% cut in “all governmental budgets” and an overhaul of the tax system. Times do change, after all. It is hard to imagine such a person of prominence making that kind of proposal today.

In any event, the investor today finds himself in the worst stock market since the early years of the Great Depression. Unlike his forebear, he is free to drink beer. But like his forebear, he is likely wondering what to do. I have no political solutions to offer, but I have a portfolio recovery plan of sorts – some ideas as to what areas may do well in the years ahead, even if the economy continues to struggle.

I would invest in those areas of the economy for which there are real physical bottlenecks and scarcity issues: like ports, roads, pipelines and energy. At this very moment, investors are entering a window of opportunity to profit from global infrastructure construction and renovation.

President Obama plans to spend tens of billions of dollars on infrastructure projects. And he is not the only one. The U.K. recently announced a $30 billion stimulus plan – with huge chunks of money for infrastructure. Argentina quickly followed with its own big plan. The news agency AFP calls it “a massive public spending plan to pump more than $21 billion into Argentina’s infrastructure.” China has its own $586 billion New Deal, too, as we’ll see. Where is all that money headed?

A lot of this cash is targeted for public works projects to repair crumbling infrastructure, or build completely new projects. China’s stimulus plan will also include a fresh infusion of cash to promote alternative energy and green technology. Already, China’s infrastructure spending has grown at a pace of 20% annually for the last 30 years.

(The impact on China’s economy has been transformational. For example, new highways now connect small far-flung rural towns to much larger booming cities. As a result, the economic activity between the two areas is in full bloom. The amazing developmental transformation in China reminds me of the effect canals had on trade in the U.S. during the 1820s and ’30s. The Erie Canal alone cut transportation costs by 90%, according to Tomorrow’s Gold by Marc Faber. It linked the Great Lakes grain markets to New York. Canals more closely knit the interior part of the country with the Eastern seaboard, resulting in explosive growth in trade.)

How to pay for these stimulus plans is a question almost no country seems all that concerned with at the moment. There is this belief that you must stave off economic contraction at any cost. And so it has come to pass…

The U.S. government’s fiscal position is atrocious, with a deficit topping $1 trillion and the federal debt approaching $10 trillion. China is in much better financial condition. But China’s stimulus plan is also a very big bet. It’s about 14% of the Chinese economy. As The Wall Street Journal reports: “The central government likely will have to significantly boost its own debt sales to fund the stimulus.”

Both big expansion plans will probably end badly…from a monetary and fiscal standpoint. Often, these governmental infrastructure programs plans lead to wasteful spending and overinvestment. In government intervention, as in an Argentine steakhouse, everything gets overdone…Nevertheless, there is money to be made before the steaks turn to charcoal.

The infrastructure-spending plans around the globe have become a kind of contagion. Soon every government with a slowing economy from Capetown to Moscow, from Brasilia to Bangkok, could follow suit. All of which spells a possible golden age for those companies that make asphalt, water pipes, wind towers and the like.

This infrastructure idea is right in the wheelhouse of the investment themes we have been pursuing in Mayer’s Special Situations. Astec Industries (ASTE:nasdaq), for one, ought to benefit from the road-building efforts. Northwest Pipe (NWPX:nasdaq) has the U.S. water pipe niche nailed down. And ABB Ltd (ABB:nyse) should grab a share of any money for new power systems, wind or otherwise. It should be a nice ride for investors who get in now, especially as prices for these stocks have become so cheap.

Source: Portfolio Recovery Plan

This from Money Morning:

Although ABB Ltd. (ADR:ABB) has been around for 120 years, it’s one of those rare companies that’s kept current with the times. It continues to do so and those efforts are generating tangible results.

Indeed, as Money Morning noted in its July 7 overview of ABB, the Zurich-based industrial giant is a virtual lock to benefit from the many billions in stimulus money governments around the globe will be directing into such infrastructure-related areas as highway, construction and power-generation.

These promising opportunities remain.  In fact – with the $586 billion stimulus China unveiled in early November, and the $825 billion stimulus plan that President-elect Barack Obama is kicking around, ABB’s growth opportunities have probably actually been enhanced, because infrastructure projects and job-creation are at the core of both packages.

In late October, ABB reported strong earnings for its third quarter, beating analysts’ estimates, while reaffirming its strong growth guidance for the firm’s still-to-be-reported fourth-quarter results.

In its third-quarter report, for instance, ABB reported strong (23%) year-over-year revenue growth, as well as a hefty increase in operating-profit margins (as measured by EBIT, or earnings before interest and taxes) to a healthy 14.5%.

So why are we revisiting our earlier report? What’s changed since we last looked at ABB? No surprise here: It’s the increasing uncertainty over the timing of these opportunities, given the ongoing – and, at times, escalating – global financial crisis. ABB took special note of this in the management report that accompanied its third-quarter financial statement.

“It’s too early to say how the recent financial-market turmoil will impact our markets in the short term, but our operational strength and flexibility, leading technology, competitive cost base and solid balance sheet put us in a good position to meet a tougher market. We are on target to deliver on our 2008 growth guidance,” ABB said in a statement that day.

After I published my cautious “Buy” recommendation, ABB shares rallied about 4%, a move that peaked near the end of July – which is right about the time that the Lehman Brothers Holdings Inc. (LEHMQ) saga began exerting pressure on the stock market. That saga – which culminated with the brokerage firm’s Sept. 15 bankruptcy filing – precipitated an entire chain of events, which included the rescue of insurer American International Group Inc. (AIG), and widespread de-leveraging in the hedge-fund sector, all of which we’ve covered closely here in Money Morning.

By October, this financial collapse had evolved into a credit squeeze that paralyzed the world’s key economies – including the United States – in October. As the U.S. financial system ground to a halt, and as the effects reverberated across the world, growth projections for almost every country were revised downward and international-bank financing all but disappeared.  Financing is a key issue in long-term infrastructure projects, since many of those big-ticket jobs could get delayed if financing is not readily available.

Thus, the financial crisis, has affected ABB’s stock price, both because of the forced de-leveraging and because of the downward revisions to estimated earnings per share. The stock came down from about $27 to a double-bottom low of $10 in October and November, and then rallied 50% to close the year at $15.01.

So what’s next for ABB’s shares?

For starters, the company is seeing a slowdown in large contracts: “Large project orders declined significantly, reflecting in part a comparison with a very strong quarter a year ago,” ABB stated when it reported its third-quarter results. “In addition, customers’ decisions on a number of industrial and infrastructure investments have been delayed as a result of the recent market uncertainty.”

ABB will be reporting its fourth quarter results on Feb. 12.  In late December, when it set the date for that report, ABB announced it would be taking a fourth-quarter provision of $850 million for anti-competitive price-fixing, for a legal provision for suspicious payments in the United States, as well as for a tax dispute, restructuring charges and asset impairment.  At the same time, however, the company announced it has found more than $1 billion in cost savings. That latter revelation is consistent with expected continued margin improvements, a conclusion reached in our earlier “Buy, Sell or Hold” column.

Although some issues of concern have arisen, there are a number of mitigating factors. These positive factors might even turn the story completely around in short order and will definitely be a huge plus in years to come.

As the company stated above, ABB has a number of very strong positives working in its favor. Sales in emerging economies outpaced sales in advanced economies for the first time in the company’s history in 2008. The afore-mentioned $586 billion China stimulus is heavily focused on infrastructure projects, as well as consumer spending (For an excellent overview of the overall investment opportunities China presents, take a look at my colleague Don Miller’s recent “Money Morning Outlook 2009 Series” installment on China. To read that report, which is free of charge, please click here).

But this infrastructure theme is not limited only to China. It’s a common threat that runs through virtually all the stimulus plans announced by countries all around the world in recent months. Even President-elect Barack Obama, in unveiling his own stimulus plan, made it clear that infrastructure will be a central component of his job-creating stimulus plan. One key goal: The modernization of the aging-and-inefficient U.S. energy grid.

Europe’s infrastructure is likewise old and in dire need of a major makeover. And emerging economies such as India, Brazil and Chile will continue to use their new-found wealth to stimulate their economies by staying on course with their ambitious infrastructure plans.

There’s an important point to understand here. Anytime major infrastructure investments are planned, investors can be assured that major investments in power-generation and power-transmission will be a central element of the billions in economic infusions. It has to be that way. You see, investments in power generation (and transmission) have a direct correlation with gross domestic product (GDP) growth. What’s more, as much as 90% of the world’s growth this year will come from emerging economies around the world – markets that are already driving sales for ABB.

For example, Chile’s stabilization fund has reached some $24 billion dollars, or 14% of GDP.  This type of savings by countries that pursued sound economic policies during healthy periods is now enabling those same countries to mitigate the effects of the worldwide financial crisis, even as they continue to grow.

There are relatively few emerging markets to totally steer clear of, although Argentina is certainly one to be avoided.

In sum, while the financial disruptions have slowed down the pace of infrastructure spending, stimulus packages are keeping those projects from disappearing completely – and are perhaps even serving to stretch them out.

ABB may be one of the few companies positioned to benefit from all these trends. The company has a bullet-proof balance sheet, strong margins and solid cash flow. These strengths will mitigate the fallout from the financial crisis and over the long haul will keep propelling this giant to higher profits.  The market has already discounted the slowdown, but has not discounted the cost-cutting efforts, whose details have been sketchy so far.  We continue to be very upbeat about ABB’s prospects and will look at any market weakness in the year’s first half as a buying opportunity.

Action to take:  Buy shares of ABB Ltd. (ADR: ABB). The stock has been buoyed in anticipation of the so-called “January Effect,” although the U.S. stock market has badly misbehaved since then.

Given the uncertainty, if you haven’t already established a position in ABB shares – as I urged in my prior column – then I would split my purchases so that they are made before and after the mid-February earnings report. But I would not “chase” it, and I would save some cash in order to possibly add the last 20% towards the end of the first quarter, as visibility about the U.S. and Chinese infrastructure plans improves, and as the company’s legal hassles become more clear.

Source: Buy, Sell or Hold: A New Look at ABB Spotlights a Company That’s Poised to Benefit From Global Bailout Plans

This from Fleet Street Invest:

If you’re looking for a new investment trend for 2009, look no further than infrastructure.

Around the world, diggers are mobilizing, cement lorries are loading up, and armies of road and rail workers and builders are gearing up for action.

From America to London, China to Chile, governments are ready to build their way out of the global recession with huge stimulus packages which will focus to a large degree on new infrastructure.

On 6 December, US President-elect Barack Obama outlined a plan to create millions of jobs in the U.S. by “making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.”

Obama’s plans include investments in roads and bridges as well as work to make public buildings more energy-efficient, modernize schools and improving Internet-based communication and its availability around the country.

Meanwhile, here in the UK the government has also announced a £18 billion stimulus plan – with huge chunks of money for infrastructure. News agency, AFP, also reports “a massive public spending plan to pump more than $32 billion into Argentina’s infrastructure.”

A dominant investment theme for 2009

And as American colleague Chris Mayer puts it, this is a dominant theme for 2009: “Think of it as a kind of contagion. Soon every government with a slowing economy from Capetown to Moscow, from Brasilia to Bangkok, could follow suit.”

Robert Markman, portfolio manager of the Markman Global Build-Out Fund, concludes that Governments around the world “are making plans to jump-start their economies by throwing hundreds of billions of dollars at infrastructure projects”.

This could lead to a great 2009 for companies that make cement, steel, asphalt, and anything else you can think of that goes into building things. Not to mention the companies that supply the machinery which the many infrastructure projects will need to get things built.

Now’s the time to start looking for ways to play this emerging mega-trend, especially as share prices for these kinds of companies have – along with everything else – corrected so sharply in the past year, many of them now look very cheap.

So, how to play it? Well, we’ll be conducting some in-depth research here at Fleet Street on the best ways to profit from the coming infrastructure boom. We’ll pass on our best ideas when we’ve worked things through.

But we have some early thoughts that we’ll be following through to see if they stack up…

Long-term investors keen to buy into the market might consider the kind of companies that will be at the forefront of the building projects. Companies like US-listed Caterpillar (NYSE:CAT) should be in great demand as building gets underway.

According to a recent report from Associated Equipment Distributors, a construction industry body, for every dollar spent on highway construction, an estimated 6.4 cents will be used toward the purchase or lease of equipment or on major repair and maintenance. The report also predicts that, 12 cents out of every dollar spent on water infrastructure projects will go towards construction equipment. That’s good news for companies like Caterpillar.

Eight months ago, Caterpillar was trading at over $85 dollars, but you can pick up shares now for a little over $45. With this kind of planned demand, Caterpillar looks pretty cheap on its current single-digit P/E ratio – one certainly worth taking a closer look at.

Closer to home, another beneficiary could be Zurich-based ABB ltd (ADR:ABB) The company is the global leader in the business of building, refurbishing, and creating the supplies for industrial, municipal, and national power supplies. It should also be a huge beneficiary of China’s $586 billion stimulus package, which is aimed at infrastructure build-out. We’ll be checking that one out, too.

As I said, we’ll be looking closely at this growing trend in the months ahead. When we have found the individual shares that we believe are best placed to deliver solid gains from the global infrastructure boom, we’ll let you know.

Battered ETFs offer an easy way in

In the meantime, consider some of the many tracker investments that have been created for exactly this kind of investment story. In recent years, there have been lots of infrastructure-related exchange traded funds (ETFs) launched. This was as a direct result of investor appetite for an easy way to play the long-term global infrastructure boom driven by emerging-markets countries.

Of course, this boom looked like it had been derailed in 2008 following the credit crunch and the huge slowdown in global growth. Suddenly, emerging markets fell out of favour.

But the smart investor will realise that this is only a temporary setback. Emerging markets will get back on track and keep emerging. And the coming stimulus shock from all around the world will keep countries building new roads, railways, bridges, schools and broadband internet infrastructure.

ETFs investing in industries including construction, engineering, utilities, building materials, industrial equipment and metals may have been battered in recent months. But they could be due a very powerful rebound in the months and years ahead.

Source: Revealed : The Biggest Investment Trend Of 2009

This from Investment U:

Our next President will be faced with unprecedented challenges in health care, energy, global warming, an aging infrastructure and huge “legacy” automobile businesses that are teetering on the verge of bankruptcy.

He’s also being presented with an incredible opportunity… one that, if implemented correctly, could have profoundly positive effects on the economic health of the world, just when we need it.

For years, the engine that fueled global economic growth was the spending of the American consumer. Market crashes because of the dot-coms and the housing boom have left many individuals with too much debt and not enough money. Americans are tapped out, and they’re closing their wallets.

Reinvigorating our economy rests upon jumpstarting consumer spending – and ultimately improving the financial condition of millions of Americans. It’s much easier said than done – and this new administration will have its work cut out for it.

If you’ve got an eye on how these government actions could benefit your bottom line, you should take a look at our past. You might find these newest sources of “economic fuel” and wealth creation look surprisingly familiar. The government’s solution could be just the thing our portfolio needs for a healthy return in the years to come…

The Cause of The Current U.S. Economic Slowdown

Ask most people to give you the cause of the current economic slowdown enveloping the United States and the rest of the world, and their likely answer will be the explosion of housing and the subsequent bubble in the credit markets.

But that was just the peak of the problem, not the beginning. The trouble has its roots in something that started 20 or 30 years ago.

That was when we started seeing the shift away from personal savings in America and toward the beginning of a huge consumer credit crisis.

And now, we are witnessing first-hand the effects of the increasing use of massive leverage can have on the markets, and ultimately on the American consumer. They’re broke and can no longer be the fuel that powers the world’s economic engine.

With consumer spending slowing, layoffs increasing and hiring all but stopped, the prospects for future economic growth aren’t particularly bright. Or are they? We have almost everything we need to fire up the world’s economic engine again: The ingenuity of the American people, plenty of factories, etc.

There’s only one thing missing… the fuel to get it going again. So what’s going to be the new “fuel?” History is a great teacher, and we need look no further than the Great Depression, and Franklin D. Roosevelt’s New Deal.

The New Deal was a series of programs Roosevelt employed between 1933 and 1936 with the intent to provide work for the unemployed, reform of financial and business operations, and economic recovery. Here are a couple of examples:

• The Works Progress Administration (WPA) was the largest of the New Deal agencies. It alone was responsible for providing almost eight million jobs. What did all of those people do? They built public buildings, roads, bridges and other infrastructure projects. Anyone who needed a job could easily become eligible.

• Another program, created by an act of Congress in 1933, was the Tennessee Valley Authority. The TVA, as it was known, was chartered to provide food, navigation and flood control, electrical generation, fertilizer manufacturing and general economic development for the people of the Tennessee Valley, a region hard hit by the Great Depression. And it was just what the doctor ordered: The TVA’s projects were catalysts that fueled unprecedented economic growth in the area that continued through the 1960s. Today, the TVA’s 43 power plants make it one of the largest producers of power in the country.

7 Companies Profiting From a “New” New Deal

While the slowdown we are experiencing is nowhere near as severe as the Great Depression, the solution will be the creation of similar New Deal programs in two specific areas: the infrastructure and energy sectors.

More specifically, developing energy savings, making alternative forms of energy our mainstream sources, and building the green infrastructure to support what will be our growing energy independence.

More insulation in a house’s walls, lower thermostats, fluorescent bulbs, more fuel efficient cars and commercial building energy management systems are just a few of the ways to save energy. Public transportation is another. Expect the new government to provide tax incentives for these and other programs as short-term incentives to save. Companies that stand to benefit are Owens Corning (NYSE:OC): insulation, General Electric (NYSE:GE): lighting and Johnson Controls (NYSE:JCI): energy management systems.

Clearly wind, solar geothermal and tidal energy companies stand to benefit, too. While a comprehensive list is beyond the scope of this article, companies like First Solar (Nasdaq:FSLR): solar panels, Ormat Technologies (NYSE:ORA): geothermal and Vestas Wind Systems (PINK:VWDRY): wind turbines, will do well.

As new green sources of energy begin to come on-line in a big way, the nation’s electrical grids will have to be upgraded to move the power to where it’s needed. This is a huge project, and one of the biggest winners will be ABB (NYSE:ABB): power and automation technologies.

Ironically, the same government that’s trying to find a solution to the energy problems we face has been the biggest roadblock to solving them. The trillion dollar coal and oil subsidies prolong the carbon industry’s advantage over – and are a constant roadblock for – fledgling alternative energy companies.

The new President and his administration have an opportunity to turn the recession ship around, before it runs aground. By implementing new energy and infrastructure projects, thousands of new jobs will be provided at a time when they are desperately needed, and most importantly, these projects will provide the fuel to restart the world’s economic engine.

Source: Obama’s New “Economic Fuel”… and 7 Ways to Profit

Chris Mayer says the next “megatrend” will be a $41 trillion global infrastructure boom. Urbanization on a massive scale in China and India requires huge construction projects. And this will create huge demand for building materials (like cement and steel) and basic commodities (iron ore, copper and nickel).

Chris says power-grid builder ABB (NYSE:ABB) and road-building equipment maker Astec Industries (NASDAQ:ASTE) are stocks to watch…

This from Whiskey and Gunpowder:

Investors are always on the lookout for the next big thing. You know the sort, a big-picture idea so powerful and long-lasting that you can confidently ride your investments through the ups and downs that market life presents. Frank Holmes, CEO of U.S. Global Investors, calls these “global megatrends” – “sustainable and substantial growth in capital expenditures in any country or sector.”

Holmes offered a couple of past examples. There was the massive growth of infrastructure in the ‘50s and ‘60s, which included the postwar rebuilding of Europe and the massive highway system build-out in the U.S. There was the 1990s megatrend, which led to massive growth in information technology and data communications. And there is the present megatrend: “Unprecedented change in global growth driven by globalization, urbanization and wealth creation, [which] leads to a global infrastructure boom on a massive, intractable scale.”

That’s quite a mouthful, but I believe Holmes is right. Holmes also cites numerous studies – one by Booz Allen Hamilton, as well as ones by World Energy Outlook, the U.S. Department of Transportation, the OECD and a host of other official-sounding places. But the total bill, give or take a few trillion, is about $41 trillion out to 2030 – for water, power, roads and bridges, as well as marine and seaports.

This is your next megatrend. Don’t miss it. We have some ideas at work here, but before we get too ahead of ourselves, let’s look again at some of the key points of the thesis.

First, some mega population shifts. By the end of 2008, half of the world’s people will live in urban areas. Leading the way are some 500 million Chinese and another 540 million Indians. The world’s cities are getting a lot bigger. Beijing alone grew from 12 million to 16 million in the past decade. Plus, there are a lot more souls on the orb than ever — 6 billion of us. Next year, the world’s total urban population alone will exceed the total world population in 1965.

This helps drive economic growth. Asia as a whole, for example, is building five times more homes than the U.S. Incredibly, China alone is constructing 80 percent of them. This, in turn, drives consumption of many commodities, including things you may not think of immediately – like cement. Asia, excluding Japan, uses about 14 times as much cement as the U.S. Asia ex-Japan has also overtaken the U.S. in steel production by a country mile. Asian steel production is more than six times the U.S.’ Electricity consumption is 32 percent more than the U.S.’

I could go on like this for pages…the stats are simply amazing. But I think you get the idea. The industrialization of Asia’s enormous populations has unleashed a torrent of demand for the basics.

There was a lot of discussion at the conference in Vancouver about just how much of Asia’s economic growth begins with U.S. consumers. The answer isn’t clear, as you might expect. But it is clear that trade routes in Asia are flourishing. I’ve talked about the New Silk Road before. It’s one of my favorite themes – the opening of old trade routes that stretch across the Middle East through India and into China. Holmes had a chart that showed that the Asian stretch of that old road is still healthy – despite an economic slowdown in the U.S.

Asian trade is ticking up, even as U.S. exports take a dip. It’s not the only data point, either. Asian retail sales are also trending higher as U.S. retail sales head lower. I think it’s a bit arrogant on the part of some analysts to say that China exists to satisfy our needs for rubber toys and cheap underwear. In their view, a U.S. slowdown dooms most of Asia’s export-driven economies. Plenty of evidence shows that’s not the case, at least not yet.

~~~~~~~~~~~~Special~~~~~~~~~~~~

How They Spotted Lehman and Merrill Lynch

As the markets were thrown into turmoil, many investors were able to spot the disaster before it happened. As most people try to figure out what went wrong, these guys are laughing all the way to the bank.

How did they see it coming when the rest of you couldn’t? Click here to find out…

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In fact, Asian demand is on the rise for a whole host of goods. In 2008, vehicle sales in Asia ex-Japan are set to exceed those in the U.S. First time that’s ever happened. Sometime in 2008, also for the first time ever, there will be more Internet subscribers in China than in the U.S. I suspect that’s one top spot that the U.S. will never claim again. There are also four times the number of mobile subscribers in Asia than in the U.S.

All of these points come from Holmes presentation, which I think painted an amazing panorama of the truly historic shifts in the global economy.

As fast as the Asian economies are growing, their demand for power is growing faster. You can also expect to see increasing use of aluminum, copper, iron ore, coal and nickel – all basic infrastructure materials.

Holmes offered that to satisfy the global demand for copper, the world would need to mine as much in the next 25 years as it has up to this point in history. These predictions may prove wildly inaccurate. But even if they are only directionally correct, it points to a long bull market in the basics.

I have recommended stocks that are deeply involved in the megatrend of infrastructure. Companies like ABB Ltd. (ABB:NYSE), the world’s largest builder of power grids, and Astec Industries (ASTE:NASDAQ), a leading manufacture of road-building equipment. Plus, I have also recommended companies that own the basic commodities the world will need – copper, oil, natural gas and more.

As we come to learn early in our investing careers, the market seldom moves in a straight line. Years can separate cause and effect. One of the great megatrends in the market today is this idea of infrastructure and all that it entails. So don’t let the recent volatility in the stock market blind you to long-term investment opportunities.

These are the moments to enter the fray, not to run from it.

Source: Where to Invest After the Collapse

The 52-week low is $29.70, and the Wall Street analyst community remains very negative on the shares of the San Antonio-based company – even though it beat analysts admittedly reduced expectations for both revenue and earning.

The $64 million question (*) is this: Is it time to buy? During the past year, I have watched as many ventured into this stock for a trade – only to get clobbered. The key factor in determining Valero’s profitability – and its stock price – is the refining profit margin, known as the “crack spread” in industry parlance. This is the difference between the cost of oil purchased by Valero and the price it can get for the distillates it obtains by refining the 3.1 million barrels of crude oil that it processes daily.

Recently, the overall industry crack spread has been narrowing. In fact, it has been for some time as governments around the world and gasoline companies actually try to hold down the pain motorists feel at the gas pumps.

The “perfect storm” that hit Valero this year had several catalysts:

• First, we watched as the price of crude oil soared exponentially, the result of rocketing global demand overseas and a lack of effort in both the United States and other countries to increase production.
• Second, demand for distillates in the United States waned as the U.S. economy slowed down and distillate prices soared trying to catch up with crude prices. This made it very difficult for the increases in the price of gasoline to be able to keep up with increases in the price of oil, compressing Valero’s crack spreads from last year.

That was the bad news.

The good news is that crack spreads in the second quarter have increased from the first quarter of this year. Also, since Valero’s refineries can process the cheaper “heavy sour” crude oil, the company has a sustainable competitive advantage over other refiners, giving its refineries staying power through rough times like these. For very-long-term holders, this is when you buy stocks such as this one; since the weaker rivals often disappear (the rivals either eventually get shut down, get sold off – or both), and the strong players emerge as the victors.

In the refinery sector, that strong player – and eventual victor – is Valero. But we are not there yet, and the lack of expansion in refining capacity in the U.S. market over the past decade has established a definite floor under crack spreads, meaning there’s only so low they can go.

The U.S. government expects crack spreads to improve moving forward, but those spreads remain well below where they were in last year’s second quarter. That’s good because it means there’s room for improvement – in both the margins and the share prices.

Another plus is that as oil prices have been dropping precipitously recently from the high of almost $150 per barrel, crack spreads have been increasing. And the drop in prices of natural gas, which is an input to Valero’s refining process, has also declined, further adding to margins.

The bullish argument, then, is this: The drop in oil prices, and sequentially expanding margins (from quarter to quarter, as opposed to year over year), will combine with the low valuation in Valero’s stock price (the current Price/Earnings Radio is 6.76, while the Forward P/E is 11.22) to boost the company’s share price, which appears to have bottomed of late.

This bullish case could very well be accurate; unfortunately, it’s still too difficult to call. And here’s why:

• The U.S. economy isn’t going into a recession. That means U.S. demand for petroleum products won’t abate as much as analysts expected, and may actually soon begin to escalate anew (even if it’s somewhat reduced because of energy-reduction initiatives).
• Emerging-market demand will continue to escalate as incomes rise and more consumers buy cars. The respite there also is likely to be a temporary manifestation: They have curbed gasoline demand subsidies because of the inflationary impact of high crude prices and food prices; as crude prices are abating, demand is likely to reaccelerate.
• Evidence about the resilience of emerging markets has been abundant of late. There was Cisco System Inc. (CSCO), which reported stronger-than-expected sales and profits last week, thanks largely to strong performance in Mexico, Russia and Asia – and especially China. There was the comment by Jeffrey R. Immelt, chief executive officer for industrial giant General Electric Co. (GE), who talked of the undiminished strength in the emerging markets – with a specific reference to the Asian infrastructure boom. And there’s the launch of the $2,500 car – the Nano – in India by Tata Motors Ltd. (TTM), a domestic carmaker with global aspirations.

It’s worth noting, too, that most of these markets outside the United States, which are currently slowing, have plenty of room to cut interest rates. And some will be able to do so, should the prices of commodities and other goods continue to decline.

Unfortunately for our evaluation of Valero, in addition to the ongoing gyrations in oil prices there’s substantial uncertainty being created in Washington, largely because of the ongoing political battle that’s focused on the lifting of the ban on drilling in offshore U.S. waters. The mere possibility of this ban being lifted has added much downside pressure to oil prices by motivating profit-taking by the speculators who had previously been betting that long-term prices were destined to head higher.

Hence, while Valero’s beaten-down shares appear very appetizing right now, and while the shares seem well positioned for a near-term speculative trade, there’s still too much uncertainty to call this an actual “Buy” for investors. Unless we see much-lower oil prices, which would rekindle gasoline demand in the U.S. market and expand Valero’s margins, the upside, if any, in Valero’s stock will remain very limited. So I cannot recommend to buy Valero here. However, since Valero’s stock has come down dramatically, and the company still is profitable (they are still profitable, show mildly expanding sequential margins, and management is committed to support the stock with buybacks), neither do I see a compelling reason to call it “Sell” here. So I will stick with a tenuous “Hold” until we can at least start resolving the uncertainties surrounding oil prices and the U.S. economy.

Action to Take: HOLD Valero shares as we await a bit more certainty in both the oil sector and the U.S. economy.

[Editor’s Note: Horacio Marquez was working as a vice president of the Merrill Lynch Emerging Markets Fixed Income Group in 1994 when he correctly predicted that both Argentina and Mexico were headed for currency crises - cementing his reputation as an expert on both the emerging markets and on the nuances of global finance. Now Marquez brings that expertise to you with his newly created "Shadow Stock Trader" service. To find out how to subscribe, please click here. "Buy, Sell or Hold" is a brand-new Money Morning feature that so far has covered such companies as Cisco Systems Inc. (CS), ABB Ltd (ADR: ABB), Cummins Inc. (CMI), and Chevron Corp. (CVX). Next week, Marquez will write about Berkshire Hathaway Inc. (BRK.A, BRK.B), the investment vehicle run by famed investing guru Warren Buffett. ]

(*) It was once the “$64,000 question,” but inflation has done its work all too well.

Source: Buy, Sell or Hold: Valero Energy Corp.

Indeed, the Wall Street consensus called for Ford to lose 27 cents per share – instead, Ford lost 62 cents per share. Even though Ford outperformed in its European, South American and Asia-Pacific operations, the massive undertow of its U.S. operations was just too much to overcome.

That’s not really a surprise, you see, since auto sales in the United States are the weakest they’ve been since 1993, reports J.D. Power and Associates.

U.S. auto sales have been shot down by three key factors:

• The negative wealth effect of the U.S. housing market.
• The credit crunch for the last year or so.
• And, lately, the meteoric increase in the price of oil and gasoline.

All of these detract from consumer wealth and purchasing power even as they weaken the general economy.

But there’s an additional catalyst for Ford’s malaise: While economies of scale in the car industry are very important and volume is critical to allow to keep manufacturing costs down, compensation for Ford’s work force is problematic.

For decades, Detroit’s “Big Three” – Ford, General Motors Corp. (GM) and Chrysler Corp. (now Chrysler LLC) – which once ruled the worldwide auto industry, have been losing their leadership. Call it the typical story of success sowing the seeds of destruction.

With their global dominance of the auto industry, the U.S. Big Three grew complacent and, despite their market and technological leadership, fell into the trap of granting overly rich compensation-and-benefit packages to their work forces. How rich? The pension plans were super-generous and the health-care plans required no co-payments from workers.

Then came the double-whammy that put the U.S. auto sector on a path to destruction: U.S. health-care costs ballooned and carmakers watched their work forces age, forcing the automakers to assume a massive cost burden – one that they ultimately couldn’t afford.

By 2000, in fact, that cost burden was so huge that the companies were no longer making money from automobile production; any profits they were reaping actually came from their auto-financing arms, which finance auto sales.

These longer-term trends left Ford and GM in a highly vulnerable position. And it likely blunted innovation and kept the companies from quicker development of hybrid vehicle lines.

Then came the energy bubble.

The meteoric rise in the price of oil has put an already heavily cost-burdened U.S. auto industry in a near-panic-mode situation, since customers have shifted away from Detroit’s line-up of trucks and sport-utility vehicles to smaller, more-fuel-efficient cars and hybrids offered by Japanese rivals.

With Ford, at least, there has been major progress on the cost-cutting front. In the first quarter, under the leadership of Chief Executive Officer Alan R. Mulally, the very able engineer who turned around The Boeing Co. (BA), Ford was able to secure a new contract with the United Auto Workers Union that allowed for reductions in 20% of personnel. This allowed Ford to start the process of discontinuing unprofitable models without having to keep the workers employed.

At the same time, Ford announced cuts of another 4,000 employees in the most recent quarter, and is in the process of starting another round of layoffs of some 15% of salaried personnel.

Ford opted to cut loose Land Rover and Jaguar to raise cash and improve profitability. It’s launching new, fuel-efficient cars and has dramatically improved the quality of its products – especially its cars.

To deal with the recent effects of the economy, it has postponed the launch of its redesigned F-150 pickup truck, which has been the industry’s standard-bearer for decades. That’s a huge move, given that the Ford pickup truck is an icon in the industry, with consumers, with collectors, and even with hot rodders – and has been for generations — reaching all the way back to the Ford Model T and Model A trucks of the 1920s and 1930s.

Managing liquidity and maintaining enough cash to complete the restructuring plan is a big challenge for Ford, given the shifting market tastes and the highly uncertain economic environment. Should the company successfully navigate these dangerous financial straits, Ford’s stock will likely enjoy a major increase, generating huge capital gains for current stockholders.

But there is a significant probability that the company’s equity holders will get wiped out and the bondholders will end up owning the company. This reality is reflected in the upfront cost of almost 30% in credit insurance needed for certain Ford obligations.

Therefore, while Ford’s restructuring plan seems to be moving forward well and even accelerating in pace, and Mulally has distinguished himself with his execution, the unpredictability of oil prices and the slow resolution of the housing crisis ahead makes this stock very speculative. I cannot recommend it without warning that Ford shareholders must accept a large degree of risk and accept the potential for some pain.

A much better play, yet also with the potential for pain, is to look for convertible debt, with the view that even in a restructuring, bondholders will end up owning the company and capture the huge upside that this franchise will have once it finishes dealing with its problems and is able once more to deliver competitively the high quality products that it was known for.

Action to Take: BUY Ford Motor Co. (but as a highly speculative position). This once-great U.S. automaker may once again find its way, but possibly only after the bondholders end up owning the company. If you are going to buy Ford shares, keep the position small.

A Better Buy: Ford debt, especially senior convertible issues.
[Editor’s Note: Horacio Marquez was working as a vice president of the Merrill Lynch Emerging Markets Fixed Income Group in 1994 when he correctly predicted that both Argentina and Mexico were headed for currency crises - cementing his reputation as an expert on both the emerging markets and on the nuances of global finance. Now Marquez brings that expertise to you with his newly created "Shadow Stock Trader" service. To find out how to subscribe, please click here. "Buy, Sell or Hold" is a brand-new Money Morning feature that so far has covered Cisco Systems Inc. (CS), ABB Ltd (ADR: ABB), Cummins Inc. (CMI), and Chevron Corp. (CVX). We continue to appreciate all the readers who are writing to us, suggesting stocks they’d like to see analyzed.]

Source: Buy, Sell or Hold: Ford Motor Co.

And history shows that such periods can be the worst for investors to navigate – especially when they follow a record stock-market run, such as the all-time-highs that U.S. share prices reached last fall.

In the United States, for instance, Dow Jones Industrial Average hit 381 on Sept. 3, 1929, a record pinnacle achieved in advance of both the Great Crash and the Great Depression that followed – and a level that wouldn’t be eclipsed again until November 1954 – more than 25 years later.

From the Great Crash, fast-forward 60 years, to 1989 Japan. On Dec. 29 of that year, the Nikkei 225 Index topped out at 38,957.44, before closing at 38,915.87. By the following September, stock prices had nearly been halved – and there was still much more bloodletting to go. (Despite several subsequent rallies up over the 20,000 threshold, the Nikkei ultimately bottomed at 7,830 in April 2003. It closed yesterday – Thursday – at 12,887.95, still down 67% from its trading high 19 years ago).

The fallout from Japan’s slow motion, stock-and-real-estate-market meltdowns was incredible. By early 2004, Japanese houses were selling at 1/10th their peak value, and commercial real estate was selling for less than 1/100th of its record highs. All told, an estimated $20 trillion in stock and real estate wealth was vaporized (although one could easily argue that the peak values weren’t real to start with).

That’s scary stuff, especially because many experts fear the U.S. version of the Lost Decade that’s to follow could be much worse. After all, the U.S. financial crisis is much, much bigger, and the resultant malaise is arguably going to take much longer to work through.

Let’s look at some of the some of the profit plays that will allow investors to sidestep a long U.S. slumber – and profit just the same.

1. Miss the Market Meltdown: The Dow closed at an all-time record high of 14,164.53 on Oct. 9 of last year. With yesterday’s 207-point rally, the Dow closed at 11,446.66 – leaving the 30-stock blue-chip index down 19% from the October record, leaving it right on the doorstep of a bear market.

But what if things were to get much worse? For the Dow to match the Nikkei’s wrenching decline of 67%, it would have to drop all the way down to 4,574.29 – an area it hasn’t seen since the first half of the 1990s.

Will the Dow drop that much? Probably not.

But it doesn’t hurt to hedge. That brings me to a key point: There’s a big difference between “diversification,” which most individual investors equate with “protection,” and actual “hedging,” which is part of an investment-protection package that professional traders employ. If we believe a market poised for a real fall, we want to hedge and find an investment that’s going to go up in value while everything else is going down.

For us, that investment is the Rydex Inverse S&P 500 Strategy Fund (RYURX). RYDEX URSA is a so-called “inverse fund” that’s designed to profit as the Standard & Poor’s 500 Index declines in value. In that way, it complements our other holdings by providing some portfolio stability.

As Money Morning Investment Director Keith Fitz-Gerald says, hedging is such a compelling strategy because financial studies demonstrate that “even though broad sections of the markets may decline over time and our portfolios with it, we need only have a small section permanently hedged at any given time. The reason is that, by having a small portion of our assets (5%-10% or less) earning above-average returns, our overall returns are far higher over time.”

2. Gold Isn’t Just for Hedging Anymore: Mention the word “stagflation” to anyone who worked and invested during the 1970s, and I’ll bet you’ll actually see that person physically shudder at the memory. Stagflation – the double-whammy combination of stagnant economic growth and high inflation – was thought to be an impossibility, until it showed up during that decade, leaving ruin in its wake.

But for our purposes, no matter whether we’re looking at stagflation or inflation, one thing is clear – we’re looking at higher prices. And when prices are on the upswing, gold is the one investment you certainly want to own.

Then there’s also the whole “Lost Decade” outlook for the U.S. economy. In a misguided attempt to slowly deflate the asset bubbles it created with a years of overly expansive monetary policies, the U.S. Federal Reserve is now keeping interest rates at artificially low levels – gambling it will still be able to launch a successful counterattack on inflation later on. What’s more, the central bank also has made the ill-fated decision to diversify into the “bailout business” with its intervention in the Bear Stearns Cos. (BSC) and Fannie Mae (FNM) and Freddie Mac (FRE) debacles.

The artificially low interest rates will continue to punish the U.S. greenback, sending it lower and causing inflation to accelerate. And the trillions in debt the U.S. government’s balance sheet will take on from the Fannie and Freddie bailouts certainly won’t help.

In addition to the bleak-sounding inflation-case for gold, there’s also what I like to call the “wealth case” for the “yellow metal.” As the consumer classes in China, India, Latin America and Emerging Europe grow in both breadth and depth, their ability to buy luxury goods will finally intersect with their desire. And gold will be a major beneficiary.

But how best to play it? There are mining companies, bullion, coins and even jewelry. Everybody has his or her preferences for gold investments, including us. We prefer the SPDR Gold Trust Exchange Traded Fund (GLD). There’s no delivery risk, it’s liquid, and you can buy and sell easily through any online brokerage.

So begins a letter from one of our more-dedicated readers.

In today’s markets, it is extremely difficult to find winners. With a market beset by soaring oil and energy prices, the forced liquidation of securities by large financial institutions that are quickly urged to comply with the U.S. Federal Reserve’s capitalization requirements and the rest of the market afraid of its own shadow, rumors proliferate and bear raids abound.

Stocks that already represent a fine value get hit nonetheless and become even deeper bargains. Yet, it is precisely in these circumstances, as the Chicago Board Options Exchange Volatility Index – usually referred to as the VIX Index – is regarded as a proxy for fear in the markets. The index is once again quickly approaching the July 2007, January and March 2008 spikes above 32 that marked the broader market’s tradable bottoms. We have to remain vigilant and look to scoop up bargains if this market ends up as a fire sale.

Enter Cummins Inc. (NYSE: CMI). This no-nonsense Midwest industrial company is almost 100 years old, has been trading publicly since 1947, and is best known as the maker of bulletproof diesel engines.

But the Columbus, Ind.-based company is actually much more. Indeed, in many ways it’s actually the ideal Money Morning/Money Map Report stock pick: It serves basic industries, is diversified globally and just boosted its dividend payout 40%.
Cummins does business in four areas:

• Diesel and natural-gas-powered engines (52% of the company’s overall revenue).
• Electric-power-generation systems distribution systems (19% of revenue).
• Power-generation systems (19% of revenue).
• Engine components (10% of revenue).

The company holds leadership positions in all of its product areas. All these lines are in the “sweet spot” of increasing growth rates and margins due to the specific reasons that differentiate them from the rest of the market.

Very importantly, Cummins enjoys strong, sustainable competitive advantages in every segment of its business. It has well-integrated product plans, focused on being the low-cost producer and developing strong distribution-and-servicing channels in all its markets across the globe.

That translates into consistent market-share dominance for most of its products. What’s more, even though a great proportion (about 45%) of Cummins’ sales come from the U.S. market, the huge spike in oil and gasoline prices has accelerated the U.S. migration into diesel engines, which are more- fuel efficient and have longer lives – and which is the company’s dominant product line.

Diesel engines already are in widespread use overseas, where Cummins derives the remaining 55% of its overall corporate revenue. The company is particularly strong in Europe (18% of sales), Asia/Australia (20%) and Mexico/Latin America (9%). Cummins can expect a big long-term growth boost from its power-generation business, where the company has a big advantage in such product areas as standby, mobile and distributed power generation. This business is growing quickly overseas, because of the inadequacies of the national electricity-distribution grids and the risks to interruption in many emerging economies.

With global growth across the world established solidly for the next two decades, and especially driven by the vast demands in China and India in power generation due to urbanization and industrialization, this business will be major growth driver for Cummins for years to come.

The company is very strong financially. Cummins has a market value of $13.4 billion. Last year it reported profits of $739 million on sales of $13.1 billion. Free cash flow was $1.23 billion. For all of 2008, Cummins is projecting that sales will advance 5% to $13.71 billion, while cash flow will increase 6% to $1.3 billion.

The input cost increase due to higher electricity and steel prices should pose no problem to Cummins’ margins, since its market dominance, cost leadership, and the scarcity of these products across the board gives this industrial heavyweight plenty of pricing power.

At Friday’s closing price of $65.95, Cummins’ shares were down 12% from their 52-week high of $75.09. But they’re 73% above their 12-month low of $38.11. However, there has been some recent weakness, induced by forced liquidations and unrelated factors to Cummins’ fundamentals. Ignore that as a negative: It actually only provides investors with an attractive buying opportunity. This opportunity is available to the very few, since the stock is under-covered by Wall Street, since it is boringly and consistently profitable.

Action to Take: BUY Cummins Inc. (CMI). Investors should rev up their purchases of this major maker of diesel engines and power-management systems.

[Editor’s Note: Horacio Marquez was working as a vice president of the Merrill Lynch Emerging Markets Fixed Income Group in 1994 when he correctly predicted that both Argentina and Mexico were headed for currency crises - cementing his reputation as an expert on both the emerging markets and on the nuances of global finance. Now Marquez brings that expertise to you with the newly created "Shadow Stock Trader" specialized trading service. To find out how to subscribe, please click here. "Buy, Sell or Hold" is a brand-new Money Morning feature that so far has covered Cisco Systems Inc. (CS), and ABB Ltd., ADR: ABB). Readers should feel free to write to us and suggest a stock they’d like to see analyzed.]

Source: Buy, Sell, or Hold: Cummins Inc.

Up until now, this development has been largely a consequence of the pro-growth policies adopted by the “Group of Eight,” or G8, countries, as well as accelerating growth in the increasingly important “BRIC” economies of Brazil, Russia, India and China.

Going forward, however, investors can expect an additional boost from a $40 trillion global infrastructure boom. And one of the biggest beneficiaries from this massive surge in infrastructure outlays will be Zurich-based ABB, a leading global provider of electrical-system services and components.

With a market value of roughly $63 billion, ABB is the world’s leading builder of power networks, making it one of the real heavyweights in a sector that includes such rivals as America’s General Electric Co. (GE) and Germany’s Siemens AG (ADR: SI). ABB is truly global in focus.

Over the last several months, for example, ABB has announced deals of $233 million in Korea, $74 million in India, $170 million in the Sweden-Finland region, $53 million in Dubai, and $70 million in China, just to name a few. Infrastructure modernization is one area of economic development in which no country with global-growth aspirations can afford to lag. And that’s especially true when it comes to power generation, where the consequences of neglect can be huge. Research demonstrates an almost perfect correlation between electricity-demand growth and economic growth. In recent years, we’ve seen blackouts from Barcelona to Johannesburg, with measurable fallout each time.

BRIC economies such as China and India, which are expanding at rates of 9%-10% annually, are consuming massive amounts of additional power to make that happen. Energy is in the headlines every day, with crude oil establishing new record highs virtually every day. In fact, the World Energy Outlook from the International Energy Agency points to China and India as the areas of highest growth in energy infrastructure for decades to come – and ABB is perfectly positioned to take advantage of this.

And that’s what makes ABB such a great stock, especially right now.

Unlike consumer-oriented markets – where a large percentage of the spending is discretionary, and gets cut back when times get tough – infrastructure spending is a virtual necessity, meaning governments and companies cannot cut back on their outlays for roadways, water systems and power-generation-and-distribution systems.

And we have a huge trend towards urbanization in China and India that will continue strongly, despite the current market turmoil. To give you an idea, China and India will account for 45% of the $22 trillion investment in infrastructure needed to meet demand growth over the next 20 years. And both countries are awash in money that can be deployed into infrastructure projects.

ABB is a company of superlatives. They have been in business for 120 years and now lead the world markets in both power-transmission and power-management systems, as well as in industrial-automation products and systems. In power, about a quarter of the company’s sales emanate from high-growth Asia and about a half come from Europe. In the automation field – where growth is steady, though unspectacular – ABB has installed more than $100 billion of these systems through the years, which at least provides the company with an ongoing source of revenue for replacement parts.

ABB spends as much time focusing on internal improvements as it does on market opportunities. It constantly re-examines its “core competencies” to make sure it remains at the head of the pack, and it also strives to consistently improve its internal operational efficiency.

These initiatives are leading to an ongoing expansion in ABB’s profit margins. That, in turn, should boost ABB’s competitive position vis-à-vis the very few other global firms that have the ability to tackle the massively complex, highly technical power projects that are being built in the emerging markets today.

We like ABB’s clear commitment to its shareholders. Back in April, the company said that sales growth would average 8%-11% a year for the period from 2007-2011. Profits will advance at an even-brisker 11%-16% during the same period. The company also announced plans to buy back $2 billion worth of its own shares – almost always a positive sign for stockholders.

At ABB’s annual shareholders’ meeting in May, interim Chief Executive Officer Michel Demare said the company is “relatively little exposed” to the global financial crisis and noted that powerful global trends are in place to support the company’s business for years to come. The firm’s first-quarter revenue rose 17% on a year-over-year basis, and net income reached $1 billion, a jump of 87%. Orders rose 16%, topping the $10 billion mark for the first time ever.

ABB still intends to create 20,000 new jobs over the next five years, in order to deliver on those strategic objectives.
At Friday’s close of $27.37, ABB’s shares are down about 18% from their 52-week high of $33.39, and are 34% above their 12-month low of $20.42.

In terms of the valuation on ABB’s shares, you have to take a very close look at the ultra-low “PEG” ratio (Price/Earnings ratio divided by the Earnings Growth Rate). For a company of this quality, a PEG ratio of 1.0 or less is a steal – and ABB is trading at 0.79!

As we noted earlier, ABB should deliver double-digit growth this year, which means that the stock should rally nicely from its current level. The next earnings report is scheduled for July 24, and we’re expecting the results to beat expectations. Analysts are anticipating a good quarter and are raising earnings estimates.

To be sure, ABB does face some challenges. There’s a slowdown in Europe. Authorities in China and India are actively battling inflation, which might cause these economies to slow. However, these slight slowdowns shouldn’t affect ABB in a meaningful way, given the huge deficiencies in infrastructure that both these countries face, and the overall global push for additional generating capacity for clean, reliable power.

We would advise investors to buy ABB shares up to $30 a share; but given the current market volatility, and the fact that the stock already has consolidated, look for downdrafts in the stock price to establish an initial position or to pick up additional shares. Cautious investors might want to wait and see the results of the quarterly report – if the announcement is close at hand, as it is, now (the risk, of course, is that investors who follow this strategy could well pay a higher price in return for added degree of certainty that comes with knowing the actual results).

Action to Take: BUY ABB. Investors should plug into this global supplier of power-generating systems.

[Editor’s Note: Horacio Marquez was working as a vice president of the Merrill Lynch Emerging Markets Fixed Income Group in 1994 when he correctly predicted that both Argentina and Mexico were headed for currency crises - cementing his reputation as an expert on both the emerging markets and on the nuances of global finance. Now Marquez brings that expertise to you with the newly created "Shadow Stock Trader" specialized trading service. To find out how to subscribe, please click here. "Buy, Sell or Hold" is a brand-new Money Morning feature that last covered Cisco Systems Inc. (CS).]

Source: Buy, Sell or Hold: ABB Ltd.