In June, financial advisor and CNBC contributor Dennis Gartman even called Buffett “an idiot.”

But now that Berkshire has rallied more than 35% from its March lows, the only idiots to be found are those that ever doubted the world’s second-richest man’s business savvy. Indeed, many of the moves Buffett made during last year’s market melee are paying off in a big way.

Take, for instance, his $5 billion investment in Goldman Sachs Group Inc. (NYSE: GS). Berkshire last September agreed to buy $5 billion in perpetual preferred Goldman shares that pay 10% interest.  In addition, Berkshire received warrants giving it the right to buy $5 billion worth of Goldman’s common shares at any time over the next five years at a price of $115 per share.

Critics lampooned that deal when shares of Goldman Sachs fell to a 52-week low of $47.41 in November. Since then, however, Goldman’s stock has rocketed more than 240% to close yesterday (Tuesday) at $160.25.

If Berkshire cashed in it’s warrants today, it would make a 40% profit or about $2 billion. But Warren Buffett has always been a long-term investor, which makes that highly unlikely.

“We will hold the warrants,” Buffett said on Fox Business Network. “Every instinct in my body tells me that we will want to hold those warrants until they’re very close to their expiration date. The preferred pays us the dividend and the warrants are going to make us the money.”

While Berkshire waits, the $5 billion in preferred Goldman shares pay an annual interest of $800 million in dividends.

Berkshire’s total stake in Goldman is now worth more than $9 billion – $4 billion more than the company paid for it – according to University of Louisiana finance professor Linus Wilson.

Berkshire’s investment in BYD Co. Ltd., a Chinese producer of both cars and specialized batteries, has also paid off.  Berkshire’s MidAmerican Energy Holdings Co. agreed last Sept. 26 – just three days after the Goldman deal was announced – pay roughly $230 million for a 9.89% stake in BYD. MidAmerican bought 225 million shares of BYD at a HK$8 a piece. Those shares have since risen 430% to close yesterday at HK$42.40, handing Buffett a paper profit of about $1 billion.

Berkshire reported second-quarter profit of $3.3 billion, up from $2.88 billion a year earlier. The boost was largely attributable to derivative gains, which soared to $2.36 billion from $689 million the year prior.

Berkshire’s book value rose 11.4% in the second quarter, to $73,806 a share, and Barron’s estimates that it already could have increased since to around $79,000 now.

What Buffett’s Buying

So if Buffett’s supposedly cold hand has suddenly turned hot, how can investors benefit? Simple: By following the leader.

A 2007 study by two university professors titled “Imitation is the Sincerest Form of Flattery” showed that buying what Buffett has bought – even a month after his purchases – is a pathway to superior returns.

“The market … appears to under-react to the news of a Berkshire stock investment since a hypothetical portfolio that mimics Berkshire’s investments created the month after they are publicly disclosed earns positive abnormal returns of 14.26% per year,” the study said.

And according to a regulatory filing disclosed Aug. 14, Berkshire is reading the tealeaves on healthcare reform. As of June 30, the company had loaded up 1.2 million shares of Becton Dickinson & Co. (NYSE: BDX), a maker of such medical equipment as scalpels, catheters and syringes, while winding down its positions in healthcare insurers. Berkshire cut its holdings in WellPoint Inc. (NYSE: WLP) by 27% to 3.5 million shares and sold 3.4 million shares, or 24%, of its UnitedHealth Group Inc. (NYSE: UNH) stock.

“If the government is going to open health care to more people, demand for health care supplies would increase,” Gerald Martin, a finance professor at American University’s Kogod School of Business told Bloomberg. “The plan that’s going through Congress could be a real negative to the health insurers, but the people who provide the supplies could really benefit.”

Berkshire also increased its holdings in Johnson & Johnson (NYSE: JNJ), the world’s largest maker of health-care products, by 14% to 36.9 million shares. The purchase of J&J shares marks the second straight increase in the size of Berkshire’s stake, according to Bloomberg.

All of the biggest holdings listed in Berkshire’s filing gained in value in the second quarter. American Express Co. (NYSE: AXP) rose 71% in the period, Wells Fargo & Co. (NYSE: WFC) rose 70%, and Burlington Northern Santa Fe Corp. (NYSE: BNI) jumped 22%. Berkshire’s single largest holding, The Coca-Cola Co. (NYSE: KO), rose 9.2% in the three months ended June 30.

Source: Berkshire’s Back, So What’s Warren Buffett Buying Now?

Earnings Announcements: Novellus (NVLS)

Two months later I recommended it to my readers. In the following six months its shares rose 15 percent. On February 25, 2009 utility company, FPL Group (NYSE:FPL), made a similar announcement. I began looking into the company right away. This time it only took me two weeks to recommend the company to my readers. In the following four months its shares rose 33 percent.

On March 11 Coke (NYSE:KO) made the same announcement. On April 1st, 2009 I recommended it. In just three months it’s gone up nine percent.

These three companies are members of a class of companies I call the “Group of 88.” They all love to please their shareholders.

So, what is this Group of 88?

Many of the companies belonging to the Group of 88 you know: Not only Coke, but also companies like Johnson and Johnson (NYSE:JNJ), IBM, Verizon (NYSE:VZ), McDonalds (NYSE:MCD) and Starbucks (NASDAQ:SBUX).

Many of them you don’t know. You probably haven’t heard of companies like VSE Corporation (NASDAQ:VSEC), W.P. Carey & Company (NYSE:WPC) and National Fuel Gas Company (NYSE:NFG).

These companies come in all sizes and from all kinds of sectors. And, since the beginning of the year, they all have one thing in common. All of them have raised their dividend.

Increasing dividends has always been a surefire way to please shareholders. So why have dividend hikers increased in popularity?

•    They’re now in the minority. For the first time in decades more companies are cutting rather than raising dividends.
•    They’re the ultimate “show-me-the-cash” companies. Dividends can’t be faked or staged. They must be paid for by real cash earnings.
•    They’ve become the alternative safe-haven group of companies to triple-A rated companies. The rating agencies – S&P, Moody’s, and Fitch – had given triple-A status to junk assets that crashed the global economy. Their grades aren’t taken nearly as seriously anymore.

Many of these dividend-paying companies give you interest payments of 4, 5, 6 percent and more. Compare that with 2-year U.S. government bonds giving 2 percent interest … or 10-year bonds giving 3.66 percent interest … or Canadian 10-years giving 3.43 percent and Germany’s giving 3.5 percent.

This is the perfect time to invest in recent dividend hikers. Several have been raising dividends not just over, say, the past 10-20 quarters but over the past 10-20 years!  Think about it. Many of them have raised dividends during oil embargoes, dotcom busts, and stagflation. They’ve proven themselves many times over.

And by recently raising their dividends, they’re showing investors once again that they’re the companies you can trust … they’re the ones generating real cash earnings … and that they’re the ones which will make it through these treacherous times and lead the market back up on the other side of the recession.

Invest well,
Andy

Source: Investors Are Flocking to a New Group of Companies

But by the end of the month, Immelt’s resolve had collapsed under the weight of the global financial crisis and his company announced its first dividend cut since the Great Depression. GE slashed its payout by more than two-thirds, from 31 cents to 10 cents per share.

GE is not alone. Companies typically abhor dividend cuts, as they are widely viewed as a sign of desperation. But lean times – like those we’ve experienced in the past year and a half – have left even the proudest U.S. firms with little recourse.

By cutting its dividend, GE will save about $9 billion a year.

The 117-year old American icon was joined by a record number of companies that issued dividend cuts in the first quarter of 2009. Companies slashed a total $77 billion from investor payouts in the three months ended March 31. For the first time since 1955, dividend cutbacks actually outweighed dividend increases.

“While the number of dividend decreases is at a record high, the number of increases has set a new record low,” said Standard & Poor’s Chief Index Analyst Howard Silverblatt.  “The average has been for every 15 increases there is one decrease.  Now it is three increases for every four decreases.”

The long list of businesses that have cut their dividends reads like a “Who’s Who” of Corporate America.  Bank of America Corp. (NYSE: BAC), Citigroup (NYSE: C), Motorola Inc. (NYSE: MOT), CBS Corp. (NYSE: CBS), and Pfizer Inc. (NYSE: PFE) were among the victims.

Now that even America’s proudest, most-reliable labels have reduced their payouts, it’s hard to tell exactly which companies will be the next to cut their dividends. But here are some simple rules to follow when looking for a safe place to invest your money for long-term dividend growth.

Three Rules for Dividend Investing

Dividends remain a critical element of investing success, Money Morning Investment Director Keith Fitz-Gerald has repeatedly said. That’s especially true in the uncertain, whipsaw market conditions that have dominated since last fall.

According to Fitz-Gerald, one study by Ned Davis Research is particularly telling, noting that dividend-paying stocks provided returns of more than 10% a year from 1972 to 2005. Non-dividend paying stocks, in contrast, posted gains of just 4.1%.

Other experts say there are three rules to follow in order to identify companies whose dividend payouts are likely to remain in place – or even grow.

1. History Repeats Itself: Look for companies that have a history of raising their dividend.  For some organizations, dividend growth is a top priority and their track record will show that.  Although GE is clearly an exception, if a company has consistently raised its dividend for decades at a time, it will likely continue to do so.
2. Earnings vs. Payout: Research is key when investing in any stock. When looking at companies that offer a dividend, a good question to ask is: “What does the company pay per share versus its assets and earnings?”  Dividend payouts cannot grow if a company’s earnings do not grow, so check a company’s earnings history.
3. Black-and-Blue Stocks: Avoid stocks whose earnings have been hammered. While in today’s market most stocks are beaten down, stocks valued below $10 a share are generally there for a reason.

Three Companies That Are Unlikely to Cut Their Dividend

NYSE Euronext (NYSE: NYX): NYSE Euronext is a diverse exchange group that offers a 4.69% dividend yield, making it an extremely attractive investment opportunity. While the company was hit hard during the beginning of the recession (trading at over $100 a share to a meager $25.59 as of yesterday’s close), it still shows strength for long-term investment.

“The dividend is intact for 2009 and we have no plans to change it,” NYSE Euronext Chief Executive Officer Duncan Niedereaur said during a recent appearance on the 1,000th episode of CNBC’s “Mad Money.”

NYSE Euronext completed its takeover of the American Stock Exchange (AMEX) in October.  And the company has seen a tremendous improvement in its overall trading activity over the past month. Its cash equity business is up 11% on a month-over-month basis, and its U.S. consolidated equity volumes were close to record levels at 12.3 billion shares.  That’s a 48% increase from last year, and a 12% jump from February.

Additionally, the U.S. Securities and Exchange Commission (SEC) recently had a hearing and ruled unanimously in favor of reinstating five rules against short selling following the guidelines of the former “Uptick Rule.”  This ruling is important to the Big Board’s growth because short sellers helped drive down share prices.

The recession that’s plagued the markets over the past year and a half has severely diminished trading volumes, and therefore the profits of the New York Stock Exchange. The newly established rules on short selling can only make the company stronger.

“We are a three-year-old public company,” CEO Niedereaur said. “Long-term prosperity for this company is based on fairly run markets and the reinstatement of the uptick rule is a major plus for this company.”

Johnson & Johnson (NYSE: JNJ): Johnson & Johnson is a strong company with a solid dividend that yields 3.51%. Its stock remains undervalued, down 23% from its 52-week high of $72.76 a share.

Johnson and Johnson is the quintessential dividend growth stock. Its dividend has grown 14.10% on average every year since 1999.  A growth rate that high means the company’s dividend is doubling about every five years.  This has been the pattern since 1974.

Last year, JNJ’s revenue was $63.7 billion, producing a net profit of $13 billion – an increase of 22% from 2007.

JNJ’s most recent acquisition of Mentor Corp. (NYSE: MNT), a global supplier of medical products for the cosmetic-surgery market, gives JNJ the opportunity to compensate for a decline in its pharmaceutical sector (the unit has cut more than 900 sales jobs and is dealing with drug-approval  issues).

“Mentor will become the cornerstone of a broader Johnson & Johnson strategy for aesthetic medicine – serving both consumers and medical professionals,” Johnson & Johnson Chairman Gary Pruden said in a statement. “We will use our combined strengths and experience to build a market-leading aesthetic business that capitalizes on Johnson & Johnson’s broad-based commercial capabilities, worldwide surgical care footprint, and clinical scientific capabilities.”

The Proctor & Gamble Co. (NYSE: PG): Proctor & Gamble offers a healthy dividend of $1.60 a share, yielding 3.26%. At $54.02, its stock down 26.5% from its 52-week high of $73.57 share.

P&G is another example of a classic dividend growth stock:  It has been raising its dividend for the past 55 years. For 10 consecutive years, P&G has delivered its shareholders an annual average return of 3.10%.  Since 1973, dividend payments have doubled every seven years.

Proctor & Gamble offers branded consumer goods that branch off into three global markets: Beauty, household care, and health and wellness. Many common household items come from this company, such as Gillette Co. shaving products, Tide laundry detergent, Pampers baby diapers and Bounty paper towels, to name a few. During troubled times, a stock such as this is often a nice defensive play, since families are unable to do without these items.

“Today we reach a little more than half of the world’s 6.7 billion consumers,” Proctor & Gamble CEO Alan G. Lafley recently told BusinessWeek. “We want to reach another billion in the next several years, and much of that growth is going to be in the emerging markets, where most babies are being born and where most families are being formed. We see growth across our entire portfolio.”

Since 61% of P&G’s sales come from outside the United States, a weaker dollar is going to be a large factor in this company’s success.  A weaker dollar makes U.S. made exports cheaper for foreign consumers to buy. While the company is timid about its earnings and fears that business conditions may have slowed from last year, the Cincinnati-based company raised its dividend in March.  From an investment-research standpoint, increasing dividends despite expectations of a decreased consumer market is typically a good sign.

Source: Three Dividend Plays That Can Offer Stability in the Face of Uncertain Financial Markets

• A day after posting better-than-expected quarterly earnings, Goldman Sachs Group Inc. (GS) sold $5 billion in stock to repay federal bailout money. All totaled, Goldman sold 40.65 million in shares at $123 a piece, 5.5% below Monday’s closing price, Reuters reported. Goldman received a total of $10 billion from the Troubled Asset Relief Program.
• Amsterdam-based Royal Phillips Electronics NV (PHG) said its cost-reduction program will save the company more than 500 million euros ($664 million) this year, Bloomberg reported. The announcement came with its quarterly earnings report, in which Europe’s largest consumer-electronics maker reported its second-consecutive loss.

• First quarter earnings for pharmaceutical and health care retail giant Johnson & Johnson (JNJ) fell, but beat estimates by cutting costs, Reuters reported. The company $3.51 billion, or $1.26 a share, in the first quarter compared with $3.6 billion, or $1.26 a share, in the first quarter last year. Johnson & Johnson reaffirmed its 2009 profit forecast of $4.45 to $4.55 a share.

• Singapore’s economy may shrink 6% to 9% this year, the government said in its third reduced forecast this year. To counter contraction, the government will adjust the trading range of the Singapore dollar. “The situation is really dire and the central bank’s policy will improve sentiment and help the economy,” Vishnu Varathan, an economist at Forecast Singapore Pte., told Bloomberg.

• Discover Financial Services (DFS), will cut 500 jobs in May, or 4% of its workforce, Reuters reported, citing company sources. Discover, the fourth-largest U.S. credit card network, last month posted a deeper-than-expected quarterly operating loss, cut its dividend and set aside more money to cover bad loans as defaults increase.

• In a sign bankers are gaining confidence that the worst of the financial crisis is over, the London inter-bank offered rate (LIBOR) for three-month dollar loans is dropping at the fastest pace since January, Bloomberg reported. Debt strategists at Credit Suisse Group AG (ADR: CS) Societe Generale SA (ADR: SCGLY) and Royal Bank of Canada (RY), three of the 16 banks that provide the data that sets Libor each day, say the declines will continue.

• Weak demand and a supply glut could cloud the coal industry’s prospects for the rest of the year, even as U.S. coal miners are likely to show strong quarterly profits this month, Reuters reported. But big U.S. coal producers should weather the economic downturn because they sold much of this year’s production at higher prices negotiated before the recession hit last September. Coal prices are expected to stay low throughout 2009 until production cuts by major miners begin to restrict the coal supply.

• Madoff Securities International Ltd., filed for bankruptcy protection in Florida under Chapter 15 of the federal bankruptcy code. The code is designed to block U.S. lawsuits against foreign companies reorganizing overseas that have U.S. operations, Bloomberg reported. Bernard Madoff pleaded guilty last month to 11 counts including fraud and money laundering for directing the largest Ponzi scheme ever.

Source: Global Investment News Briefs Wednesday April 15, 2009

This from Today’s Financial News:

It is do-or-die time in corporate America. If companies do not get their finances in line and make a turnaround during the first quarter of 2009, their days as a going concern are over.

Indeed, the bankruptcy courts will be busy as we countdown President Obama’s first 100 days in office, but that does not mean we will not see long lines of investors cashing in their market-creaming gains. This is a time of great flux in the American markets, which requires savvy, well-researched investing techniques.

Make the right choices and the next 100 days will be like no other. Make the wrong choices, and you will be begging for the good ‘ole days of the Bush administration.

When the final closing bell of 2008 rang, the Dow closed the year with a price/earnings ratio of 13.27. While that figure is about 10% below the historic average of 15, you will quickly realize it is quite high if you have been tracking the amount of 2009 earnings forecasts that have been dramatically slashed.

Scores of companies across all industries, including bellwethers like Johnson & Johnson (NYSE:JNJ), have cut their 2009 earnings forecasts. That means P/E ratios, the most basic of financial measurement tools, are screaming that shares of many companies remain intensely overvalued.

While the bears are raising hell on Wall Street, there are a few straggling bulls roaming free – more than enough to give investors a very real shot of actually smiling the next time they open their 401(k) statement.

Over the next few minutes, I want to share three dangerous companies you should keep your distance (and your savings) from and three that you should be socking every spare dollar you can find into. All of them will make significant moves during the first 100 days of Obama’s presidency.

Let’s start with the companies that will be around to see all of Obama’s presidency. There may be less than you think.

The winners…

No matter what happens to the economy or who is leading the government, Americans are always going to get sick and they are always going to get old. Granted, how much we pay for our healthcare and who pays for it will always be a hot debate, but we all know Obama is not going to revolutionize the nation’s healthcares system in just 100 days.

That means The Ensign Group (NYSE:ENSG) is worthy of your investing dollars. The company specializes in nursing and rehabilitative services in the western section of the nation, an area that attracts the company’s target demographic like moths to a streetlight.

While so many other companies are contracting, Ensign is expanding at an exciting clip. Not only is this $330 million company using some of its $56 million in cash to buy its competition (it finalized two deals earlier this month), it is increasing the amount of its earnings it sends directly to its consumers by 12%.

That’s right, while countless companies were cutting their dividends, Ensign raised its investor reward. With an annual payout of just $0.18, which represents just 1% of the current share price, the dividend is not much, but the folks that have studied signaling theory known this is an extremely bullish signal from the company’s management team.

In fact, the company’s CEO, Christopher Christensen, recently said of the increased dividend, “ It reflects our continued confidence in our operating model, and in our ability to return value to our shareholders in a difficult economy.”

He is not lying.

Some other important things to know about this company:

- It has a current ratio of over 2, meaning it will have no problem paying its bills even in this shaky credit market.

- It is expected to post earnings growth of over 15% over the next five years.

- Its share price performance has beaten the pants of the major equities over the past six months (look at the chart.)

The Ensign Group is a well-managed company with a high-demand product that does not suffer at the mercy of consumer demands. Its books are squeaky clean and its management team is signaling that things are only going to get better.

That is all the reason you need to put shares of this company in your portfolio.

Spinoffs are good

Wall Street does not like General Electric (NYSE:GE) right now, but it since the market reached its lows in November, one of its former subsidiaries has surged by more than 35% and shows no indication of slowing down.

In 2005, Genpact (NYSE:G) was spun off of GE Capital, with equity investments from General Atlantic and Oak Hill Capital Partners. The public did not get a shot at the new company’s revenue stream until 2007.

Since going public less than 18 months ago, Genpact’s earnings made significant gains. During its first quarter as a public company, the company lost $8 million. Last quarter, it showed investors its true potential with earnings of nearly $34 million on just $270 million in sales. That’s a 12% profit margin.

Genpact makes these profits by maximizing profits for other major companies spread throughout the world. It specializes in providing process and analytical insight that allows companies to squeeze every penny of potential profit from their operations.

Have you read the stories lately of companies refining their process, working to increase their margins and eliminate operations waste? If not, I can tell you I could wallpaper my office in the articles printed just this week.

When the economy is on the rocks, consumers are not spending and revenues are plummeting, companies must do everything they can just to stay in business. That is why they turn to Genpact.

If the company started under the eye of Jack Welch, you know it contains his core values to this day. What could possibly be a better investment in a time of economic contraction than a company that specializes in helping companies get back on track?

Genpact is a $1.8 billion company with $315 million in cash, just $113 million in long-term debt and has seen its earnings rise by an average of 30% per quarter since becoming a public company.

If Genpact can get the rest of the nation’s businesses to look so appealing, the economy will look better in no time.

Buy what you know

So far we have looked at companies that are considered growth investments. Any well-managed portfolio has a proper allocation of growth and value prospects. That means we need a company that is selling for pennies when it should be selling for dollars.

Prestige Brands (NYSE:PBH) may not be selling for less than a buck a share, but it is definitely trading for a fraction of its true value. A single-digit P/E multiple of 9 proves it.

This company is all about the value of its brand. You may know the company through its Comet, Spic and Span, Cutex or its Chloraseptic brands. Chances are, if you open any bathroom or below-sink cabinet in your house, the company’s products will be right there in your face.

Investing in this company is the definition of investing in what you use, the strategy Warren Buffet used to get rich.

But it takes more than a few powerful brands to make a winning investment. It takes a strong set of books and an undervalued share price. Of course, Prestige has both.

Let’s go back to that single digit P/E. In this economy, financial figures from the past mean very little as earnings can change with the wind. But Prestige is expected to announce quarterly earnings that are down by just a few pennies per share even in the heat of a nasty recession. That means, unless share prices rise (my bet) we will continue to see a rock-bottom ratio.

When it comes to managing its debt, the mature company does quite well. Over the next twelve months, Prestige has just under $38 million in bills. With nearly $89 million in short-term assets and anticipated continued positive cash flow, the company has more than enough in reserves to see it through these economic doldrums.

Shakespeare asked, “What’s in a name.” Prestige proves there is a lot more than a shot at love riding on its brand names.

Check out Prestige Brands and the two other stocks I mention and see if they fit your portfolio.

As for the three stocks you absolutely must avoid over the next 100 days, well, you will just have to check back in here tomorrow afternoon.

Source: The three best (and worst) stocks of Obama’s first 100 days

• Toyota Motor Corp. (ADR:TM) yesterday (Tuesday) named Akio Toyoda, the grandson of the company’s founder, as the new company president. The announcement car the same day Toyota announced 2008 sales figures, down 5% in Japan and down 4% worldwide.

• Constellation Energy Group Inc. (CEG) said it agreed to sell the majority of its London commodities unit to Goldman Sachs Group Inc. (GS), a move to boost the power company’s liquidity, Reuters reported. A dollar amount of the deal was not released. Constellation is also trying to sell its Houston-based gas trading operation.

• For the first time in 6 years, China’s urban unemployment rate rose, climbing from 4% to 4.2% in the three months ended Dec. 31. “Growth has fallen off a cliff in China in recent months. It does already feel like a recession for a lot of people,” Paul Cavey, chief China economist at Macquarie Securities Ltd. in Hong Kong, told Bloomberg.

• Kingdom Holding Co., the investment company owned by Saudi Arabia’s Prince Alwaleed bin Talal, reported a massive $8.26 billion fourth-quarter loss. “The loss is phenomenal. This is the biggest corporate story for Saudi Arabia in many years,” John Sfakianakis, chief economist at Saudi British Bank, told Bloomberg.

• Warner Bros. Entertainment Inc. said yesterday (Tuesday) that it plans to cut 800 jobs, or 10%, of its global workforce, as the company struggles with the current recession. “We are very sad to announce that based on the global economic situation and current business forecasts, the studio will have to make staff reductions in the coming weeks in order to control costs,” Barry Meyer, chairman and chief executive, and Alan Horn, president of the studio said in a statement.

• Johnson & Johnson (JNJ) yesterday (Tuesday) reported a 14% increase in fourth-quarter profit. The company earned $2.71 billion, or 97 cents per share, up from $2.37 billion, or 82 cents per share, in the year-ago quarter. However, revenue fell 4.9% to $15.18 billion from $15.96 billion — the first drop since 2004. Excluding charges and gains, J&J earned 94 cents a share.

• Rohm and Haas Co. (ROH) yesterday (Tuesday) said it would cut 900 jobs, or 5.5% of its workforce. The company plans to adjust production schedules in certain manufacturing facilities, reducing sales and marketing positions and freezing discretionary spending and employee salaries, Reuters reported.

• Google Inc. (GOOG) said yesterday (Tuesday) that it would end its Print Ads program on February 28, Reuters reported. The program was intended to create a new revenue stream for newspapers, but was not having the desired impact and fell by the wayside as Google retrenched amid the current global downturn.

Source: Global Investment News Briefs Wednesday, January 21st, 2009

Foreclosures jumped 81 percent nationwide last year. That’s 3.2 million homes.

In December alone, foreclosures jumped 41 percent versus the December 2007 reading.

The readings for the reports this week anticipate further drops in both December Building Permits and Housing Starts. The only question is by how much. Last month, expectations for both reports were off by at least 10 percent. This month is expected to be nearly identical to last month for Building Permits, and a drop of about 15k units in the Housing Starts report.

Try as I might, I can’t see either of these reports coming close to expectations. I don’t think a slowdown of 75k units on each is unrealistic. The housing market is just in terrible shape. Excess inventory is growing, not shrinking. A reading of 550k or even less on both reports is reasonable. I guess we will find out Thursday.

Earnings:
Tues: BAC, CSX, IBM, JNJ,
Wed: ABT, AAPL, EBAY, USB, UTX
Thur: BAX, GOOG, MSFT
Fri: GE, HOG,

Source: Nothing Left for The Big Bad Wolf

The forces of the universe are pulling against one another. Tomorrow at noon, the nation will gain a leader that has inspired hope in millions of Americans. Economically, Obama’s stimulus plan is viewed as the last chance to keep the nation’s economy from retreating to a full-on depression.

I will be watching closely to see if Obama’s 6-foot-1-inch body shrinks at the exact moment he places his left hand on the bible as the weight of numerous global crises is piled on his back. It will take one heck of a leadership team to get us out of this financial mess. We had better hope Obama is as good as his campaign (and the mainstream media) says he is.

With the huge events in Washington this week, Wall Street is going to be devoid of attention. With numerous major companies expected to release quarterly earnings this week, that may be the best news we heard in a while. Any widespread bad news could send the equities market plunging once again. It may be best if the results stay quiet.

What to watch

Some key items to watch this week will be crude prices, the dollar and, of course, those pesky earnings reports. The crude markets are in for a wild ride as reserves across the nation begin to fill to maximum capacity. With demand down and suppliers hoarding their oil until prices rise, we are quickly running out of room to store the energy. If supplies are not significantly reduced in the very near future, crude prices could plunge below the $30 mark. It may happen this week.

With central banks cutting interest rates and news that England is putting several billion more pounds into its banking industry, the currency markets are likely to be busy over the next few days. That means the dollar, which has strengthened recently, could make even more gains. That is good news for a country that imports just about everything it needs.

Finally, with Blue Chips like Johnson & Johnson (NYSE:JNJ) and International Business Machines (NYSE:IBM) releasing their latest results tomorrow, all eyes will be on the lookout for major surprises. We got just a glimpse of the horrific potential this earnings season possesses last week. It caused share prices to plummet across the board. Traders will be hard-pressed to take the markets drastically lower without the news of a financial Armageddon, but if it is going to happen, it will happen this week.

Some plays worth taking a look at are Johnson and Johnson and the gold market. If JNJ releases earnings of better than $0.93 per share, expect a sizeable surge, making call options a worthy investment. Even if the company misses expectations by a penny or two, do not expect a wild swing to the downside, especially after giving up a few dollars in share price last week.

With the dollar in play and investors starting to look for safety outside the less-than-lucrative Treasury market, gold is getting plenty of attention. The precious metal gave back some of its recent gains last week, but showed signs of life late in the week. If earnings season turns sour, expect a bullish run.

This is going to be a news-filled and hectic week. Investors will have more than enough to digest. Smart traders will understand the news, conceive a strategy and profit as the nation jukes and jives through this critical period.

It will be an interesting few days.

Source: The news will dominate Wall Street this week