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China Has 60 ICBMs Which Are Nuclear Capable – How About a …

By JAMES B. STEWART

“Pessimism is your friend, euphoria the enemy.” — Warren Buffett, in his 2009 letter to shareholders.

With the market averages now down to levels unseen since 1997, and panic selling sweeping the globe again this week, pessimism is rampant. if mr. Buffett is right, we’re in the friendliest environment for investors in my memory.

This seems small comfort when your portfolio is being ravaged by declines. Every recent purchase, even at what seem bargain prices, is greeted with the negative conditioning of a further decline. While I feel mr. Buffett’s homespun wisdom has never been more timely, in my experience it has never been more difficult to implement.

Mr. Buffett himself is a case in point. he acknowledges a “mistake of commission,” pointing to his purchase of integrated oil giant ConocoPhillips “when oil and gas prices were near their peak,” presumably last summer. I sold half my position in COP (and other energy positions) last year after pointing to all the signs that oil and commodities were in a bubble. if even I could discern the “euphoria” that mr. Buffett warns about, surely he could, too. And yet he bought: over $7 billion worth, evidently, now worth even less than the $4.4 billion reflected in mr. Buffett’s letter.

Mr. Buffett takes himself to task for this, but how could the Cassandra of overpriced markets, have done such a thing? Maybe he’ll be more forthcoming at the Berkshire Hathaway shareholder meeting, but whatever the reasons, it is a testament to the power of the herd instinct that even a Buffett could be swept up in the euphoria.

ConocoPhillips isn’t mr. Buffett’s only big mistake. he reports that he’s continued to build up his position in Burlington Northern Santa Fe and now owns 20% or more of the shares outstanding. Because it hauls coal and other commodities, the railroad is sensitive to commodity prices, as well as overall industrial activity, and its share price has closely tracked the commodities market. BNI traded as high as $114 a share in June; this week it was near $55.

And then there’s Moody’s, the bond-rating firm that has become a poster child for the recent breakdown in regulatory controls. mr. Buffett warns his readers to “Beware of geeks bearing formulas.” given mr. Buffett’s fervor on this score, it seems highly ironic that Berkshire Hathaway owns more than 20% of Moody’s. true, he reports that this is the result of buying shares years ago, and that he hasn’t added to the stake since. at best, that qualifies as a sin of omission. Moody’s shares were briefly over $45 last year; this week they’re about $16.

There’s much to commend his letter this year, especially his calm reaction to the market slump that has slashed prices in many cases to bargain levels (“Price is what you pay; value is what you get.”) All investors (including myself) sometimes buy stocks that then go down. Nearly all of mr. Buffett’s long-term holdings are down this year, which is hardly surprising since nearly all stocks are down. COP, BNI and MCO leap out because mr. Buffett’s actions in these investments seem to so clearly contradict his words.

If even mr. Buffett can succumb, then the rest of us shouldn’t be too hard on ourselves. at the same time, we should learn from his and our mistakes. so if you’re feeling some pressure to sell into the current pessimism, stop and think: if pessimism is your friend, euphoria your enemy, is this the time to sell?

James B. Stewart, a columnist for SmartMoney magazine and SmartMoney.com, writes weekly about his personal investing strategy. Unlike Dow Jones reporters, he may have positions in the stocks he writes about. for his past columns, see: www.smartmoney.com/commonsense.

Printed in the Wall Street Journal, page D2

Lessons From Oracle Warren Buffett's Investing Missteps

Play the generic pharmaceutical market! President Obama recently passed healthcare reform in the United States. This requires everyone to get health insurance. One of the things the bill does to save money is to allow subsidies on drugs and medicines. An additional money saver is to allow subsidies on generic medication.

Lannett CO (LCI) is one of the few generic medication manufactures in the United States. They just recently got approved for their generic medication of Zofran, an injectable GlaxoSmithKline drug used to minimize nausua. Zofran sold about $58 million last year. Last year they mate their first profit after two years of disappointing earnings and getting FDA warnings for their generic drugs. Do you think out of that $58 million people will by willing to switch to a generic version that costs at least 20% less? You betcha! It’s pretty easy to see that their stock can easily double if they took 10% of that Zofran market share.

Other fundamental things that look good – cash is decent and debt is at a reasonable level. Technicals show a bottoming at $4.40 and there’s strong support going back 10 years. Their net income has increased for in a qtr-to-qtr basic for the past year. It also has doubled from the past quarter. With the low stock price and continuing drugs to come aboard the generic medication line, this might be a great time to get in.

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Grand Buisiness inn hotel Bangkok the Grand Buisiness Inn, is a 3 star hotel situated in the heart of Bangkok. I stayed there for five days in January. the hotel itself, is okay it’s pretty basic and the rooms are average. But it is very cheap (1600baht) which is about $25 a night for …

Manhattan Hotel Bangkok I travel to Thailand and China almost monthly and is rather familiar with these citiesFor any budget traveller looking to visit Thailand, Bangkok, there are few hotels I like to recommend and one of these hotels is Manhattan Hotel Bangkok. the nearest metro station is the Nana Station. There …

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Thailand places to stay I have been to Thailand three times and stayed in 5 different hotels, different standards, but all truly great.D Ma Pavilion Hotel in Bangkok. Lovely hotel, really friendly staff and good rooms and food. I was on 25th Floor and the room looked out onto a blank wall opposite, …

Bangkok Indra Regent Hotel If you are visiting Bangkok then the Indra Regent is the ideal hotel to spend your vacation or business trip. it is located in the heart of the city and is a short distance from all the sights and sounds of Bangkok. Bangkok is the ultimate shoppers paradise and …

Viengtai Hotel Bangkok Viengtai is a little hotel located in the inner city of old Bangkok. it is 3 stars, so not a luxurious hotel. This is definitely not the hotel for you if you are wanting a more upmarket place to stay during your visit to Bangkok. However, if you are …

First Hotel, Bangkok, Thailand recently I went to Bangkok for four days and decided to stay at first Hotel. I have stayed here before a few years ago and the condition was still the same as I remembered. the hotel was old and it had two small and slow elevators for guests. the …

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By Steve Christ

Here is something that you may not realize about Warren Buffett: counting only his take-home pay, the Oracle of Omaha is a pauper compared to his peers.

With a yearly salary of just $100K from Berkshire-Hathaway (BRK.A), the grandfatherly Buffett just barely finds himself among the top 30% of earners — a mere pittance for one of the world’s richest individuals.

But as we all know, there is more to this story than meets the eye. after all, Warren is not exactly wondering where his next meal is coming from…

The difference, in this case, is in the dividends.

Dividend Stock Strategies

You see, aside from the paycheck he received from his “day job,” Warren earned an estimated $42,583,971 in income last year from the dividends spun off from his own personal holdings.

Those dividend money machines accounted for 99.76% of his estimated 2009 income, keeping him flush with cheeseburgers and business jets.

And with the yields on the benchmark 10-year Treasury note hovering in the 3.8% range and the market struggling to rebound, Buffett’s dividend portfolio will likely outperform in 2010, adding to his massive fortune.

True to form, he buys them, holds them, and watches them grow. Simple — but effective.

But that is not the only advantage to be had by building a portfolio like Warren’s. the other benefits of a divided-based portfolio include:

• Safety – if preserving your money is as important to you as it is to Buffett, dividend investments are preferable because of their low risk.

• Diversification – if the balance of your portfolio tilts towards growth, dividend investments can help you diversify acting as buffer against unpredictable market swings.

• Access - Dividend-paying stocks offer investors ready access to their income streams, unlike similar investments in 401(k)s and IRAs, which are retirement based and carry penalties for early withdraws.

So don’t believe for a second that income investments are boring and are only suited for the gray-haired crowd. the larger truth is that dividend-paying stocks should be a part of every well-balanced portfolio — young, old, or somewhere in between.

Here’s why…

Even in bear markets, dividend-paying stocks typically do well, especially if those companies have a strong history of increasing the dividend payout.

That’s because investors win two ways when a company increases its dividend. first, the yield on your initial investment goes up with the dividend; second, and even better, the dividend increase often propels the share price higher.

That’s an unbeatable combination in today’s tough markets. And it’s the reason that investors are so eager right now to gobble up companies with solid dividend yields.

So What is Dividend Yield?

In short, a dividend yield is a cash payout that you receive for simply being a shareholder, sort of like receiving a bonus based on a company’s earnings.

Moreover, these “bonuses” also offer lower tax rates than similar investments in savings, CDs, or money market accounts. thanks to a change in the tax law, dividends are now taxed at only 15%. That’s considerably better than the 35%+ taxation levied against ordinary income. (Even though these tax changes may eventually be eliminated.)

Dividend yield is simply your rate of return from the dividend payouts, exclusive of any stock price appreciation. It’s calculated by dividing the dividends you receive over a year’s time by the price you paid for the stock.

I’ll give you an example: Your dividend yield is 5% if you paid $20 per share, and you receive $1 per share in dividends ($1/$20) over the 12 months following your purchase.

Dividend yield, however, is not a fixed number. it changes along with the share price. for instance, say someone else buys the same stock a week later when the share price had moved up to $25. instead of 5%, their dividend yield would only be 4% ($1/$25).

However, as Warren Buffett would surely tell you, picking successful dividend-paying stocks is not as simple as buying the stocks with the highest yields. in fact, the stocks with the highest yields often trip up investors the most.

So if you really want to invest like Warren Buffett, you can spend your time poring over his annual letter to shareholders, or you can create a dividend money machine of your own by following the famed investor’s own personal holdings.

Warren Buffett’s Personal Portfolio

The latest filings from his personal portfolio showed that he had multi-million-dollar stakes in 10 companies as of the end of last year.

Per the SEC, they included investments in:

• Wells Fargo (NYSE: WFC)………………………… 14, 812,857 shares

• Johnson & Johnson (NYSE: JNJ)………………….4,973,200 shares

• Procter & Gamble (NYSE: PG)……………………..4,375,000 shares

• Kraft Foods (NYSE: KFT)…………………………….8,000,000 shares

• Wal-Mart (NYSE: WMT)………………………………4,200,000 shares

• US Bancorp (NYSE: USB)……………………………..8,365,000 shares

• General Electric (NYSE: GE)…………………………7,777,900 shares

• United Parcel Service (NYSE: UPS)…………………1,429,200 shares

• Ingersoll-Rand (NYSE: IR) ……………………………….636,000 shares

• Exxon Mobil (NYSE: XOM)……………………………..421,800 shares

Among them, they pay an average dividend yield of 2.3%, with Buffett concentrating 77% of his investments in the top five stocks. That plan allows Buffett to “get by” on the $1,923.08 found in his weekly paycheck.

That, my friends, is how the other half lives.

The good news is that by building a five stock dividend portfolio of your own, you can jump on the road to wealth right there with ‘em.

Next week, I’ll be detailing the one that got away — a stock with a 6.6% dividend yield that I think even Warren would be happy to own.

• 10 Dividend Stocks That Help Buffett Make Ends Meet

Jim Rogers :”I expect the Yen to go higher I am not selling Yen” both US Dollar and Yen are both involved in the carry trade and so I am holding my yen explains Jim Rogers , I have not bought any yen recently but I have been buying dollars and Euros ..amongst the commodities Jim Rogers recommends silver Natural gas agricultural commodities may be there are opportunities amongst the things (commodities ) that are cheap Jim Rogers explains good places to look for opportunities are cotton and sugar …amongst the Chinese stocks Jim Rogers recommends the airlines companies from which he expect to make a lot of money …Jim Rogers explains that there is a real estate bubble in the big Chinese cities but that the government is trying to cool things down…

Jim Rogers is buying Dollars and Euros and expects the Yen to go …

Here is a list of this morning’s top companies upgrades, downgrades, and initiations by brokerage firms.

Upgrades:

• Alcoa (AA) upgraded to Neutral from Underweight at HSBC Securities
• Baidu.com (BIDU) target raised to $728 from $720 at Susquehanna Financial
• Chipotle Mexican Grill (CMG) upgraded to Buy from Hold at Jesup & Lamont; price target $149 from $96
• F5 Networks (FFIV) target raised to $80 from $72 at Miller Tabak
• Nabors Industries (NBR) upgraded to Outperform from Underperform at Calyon
• Netflix (NFLX) upgraded to Buy from Hold at Citigroup
• Red Robin Gourmet Burgers (RRGB) upgraded to Buy from Hold at KeyBanc Capital Markets; price target $33
• SanDisk (SNDK) target raised to $52 from $37 at Caris & Company
• Starbucks (SBUX) upgraded to Buy from Hold at Jesup & Lamont; price target $32 from $25

Downgrades:

• Array BioPharma (ARRY) downgraded to Neutral from Buy at UBS
• Dendreon (DNDN) downgraded to Hold from Buy at Lazard
• eBay (EBAY) downgraded to Sell from Neutral at MKM Partners; price target $20
• Elan (ELN) downgraded to Sell from Neutral at UBS
• Time Warner (TWX) downgraded to Perform from Outperform at BMO Capital Markets

Coverage Initiated:

• AirMedia Group (AMCN) initiated with a Hold at Auriga; price target $6
• Delcath Systems (DCTH) initiated with a Buy at Roth; price target $15
• Dollar Thrifty (DTG) initiated with a Buy at Goldman
• Focus Media Holding (FMCN) initiated with a Buy at Auriga; price target $23
• QLT (QLTI) initiated with a Buy at Roth; price target $14

Top Pre-Market Stock Upgrades/Downgrades April 22, 2010

Activision Blizzard continues to bring in good news. They received an upgrade from the street on last Wednesday. Here’s what they got to say: “Activision Blizzard has gained 18% during the past year, trailing major benchmarks. The stock trades at a price-to-book ratio of 1.4 and a price-to-sales ratio of 3.4, 73% and 48% discounts to peer averages. It’s also cheap based on projected earnings.” Link. – http://www.thestreet.com/_yahoo/story/10731104/1/honda-activision-mt-ratings-upgrades.html

World of Warcraft continues to make them millions of dollars. They must have the best marketing/sales/product team in the industry. In the past week, they created a new horse called the ‘Celestial Steed.’ They charged WoW players $25 to buy it. In just four hours, they made over $2 million dollars off it. It must have took the designer maybe 1-2 days to design the 3D horse model. Even if it took him a week, they still made tons more than the price to pay the designer to create it. I’m sure Activision will continue to find ways to monetize their games. It’s definitely a model that will be built into future gaming.

They also have a few big hits coming out at the end of the year. Star Craft II is planned to be released in the late summer or fall. Disablo III is planned to come out early next year. The next expansion to World of Warcraft is set to be released for the holidays. There’s still plenty of time to get in before all the action happens, but you can bet the second half of 2010 will be big for the company.

Gamestop is already selling pre-orders for Starcraft II. If you are an avid gamer, you can get into the beta just by pre-ordering the game. They will give you a beta key to start warming up your keyboard touches and mouse clicks. It has already been a hit on Amazon as a ‘Bestseller’ being ranked in the top 200 sellers in video games. They also still have Call of Duty: Modern Warfare 2 making tons of cash. It got recently rated ‘Best Successful Launch in Video Games’ by making over $400 million within one day. It surpassed Grand Theft Auto which had the record at over $300 million.

What can they do for the early part of 2010?

I’d hope they have started creating games for the iPad and moved into the mobile phone field. You can bet Electronic Arts is establishing themselves in these fields after lackluster sales from their console games. Activision has to continue to make strong games that sell. Short-term the outlook is cloudy, but the stock charts have shown strong support to keep the price up. Long-term this stock is a keeper. You have the most popular computer games being released from Blizzard. They will all sure be hits when they come out.

Let’s see what the earnings say on May 6th.

Disclosure: I’m in ATVI and I have puts in ERTS

April 12 (Bloomberg) — at the end of 2006, Citigroup Inc.was the fourth-largest company in the Standard & Poor’s 500Index, with a market value of $274 billion, almost four timesthat of Apple Inc. now investors say the maker of iPods is worth$7.7 billion more than the biggest financial services provider.

Citigroup, reeling from the collapse of the subprimemortgage market, has lost 13 percent in value since reportingthe biggest quarterly loss in its 196-year history in January.That followed a 47 percent drop last year. even after a 26percent decline in its own shares this year, Apple has a marketvalue of $129.3 billion to Citigroup’s $121.6 billion.

The shrinking of Citigroup underscores the devastation thathas rocked the financial industry, highlighted by the FederalReserve-managed takeover of Bear Stearns & Co. last month.Apple, on the verge of bankruptcy 10 years ago, has emerged as atechnology star under Chief Executive Officer Steve Jobs. Itsshares more than doubled last year.

“The market looks at what Steve Jobs has done and whathe’s likely to do,” said Michael Holland, who oversees morethan $4 billion as chairman of Holland & Co. in New York. “Themarket is valuing that far more than the financial assets ofCitigroup.”

Holland sold his Citigroup shares a year and a half agobecause he felt the “prospects were pretty lousy” and insteadbought JPMorgan Chase & Co. shares. He also holds Apple andGoogle Inc., owner of the most popular Internet search engine.

“While we don’t comment on our stock price, Citi remainsfocused on serving customers and implementing the prioritiesVikram Pandit has developed, including better managing thefirm’s capital resources and risk management for improvedprofitability, stability and future growth,” spokesman MichaelHanretta said.

Apple declined to comment, spokesman Steve Dowling said.

Subprime Writedowns

New York-based Citigroup, whose market value dipped below$100 billion on March 17 for the first time since 1998, nowranks 19th globally by that measure. among the other companiesthat have overtaken it in the last quarter are InternationalBusiness Machines Corp., Coca-Cola Co. and JPMorgan.

Citigroup fell 35 cents to $23.36 yesterday in New YorkStock Exchange composite trading. Apple fell $7.41 to $147.14 onthe Nasdaq Stock Market.

Of 29 analysts tracked by Bloomberg, 26 recommend investorsbuy Apple shares, two suggest holding and one says sell. Sevenanalysts recommend investors buy Citigroup’s shares, five sayhold and six suggest selling.

Citigroup, the biggest bank by assets since the merger ofCiticorp and Travelers Group Inc. in 1998, took $24 billion insubprime writedowns and reduced its dividend 41 percent inJanuary, the first cut since Citigroup was formed.

Pandit Takes over

CEO Charles O. “Chuck” Prince stepped down in Novemberand was replaced by Vikram Pandit, who has eliminated about6,000 jobs and plans more cuts. The bank may be poised todispose of more than $200 billion of loans and securities toshore up its capital, a person with knowledge of the plans saidlast month.

“Citigroup got itself into a really big mess,” saidRichard Sylla, a financial historian and professor of economicsat New York University. “Apple is an innovative company, havingcome up with iPods and iPhones, and they seem to have a lot ofpromise for the future.”

The slump in market capitalization puts Citigroup behindtechnology companies that themselves slid this year, includingGoogle and Cisco Systems Inc., according to data compiled byBloomberg. Bank of America Corp. passed Citigroup last year.Bank of America now ranks ninth and JPMorgan is 11th.

Citigroup also ranks below Wal-Mart Stores Inc., Procter &Gamble Co., Johnson & Johnson and Pfizer Inc. — so it trailsthe world’s largest retailer, the top U.S. consumer-goodsproducer, the largest health-products maker and the biggestdrugmaker even as slowing consumer spending weighs on the U.S.economy.

Apple’s Jobs relied on iPod music players, the Web-surfingiPhone handset and Macintosh computers to drive profit to morethan $3 billion last year for the first time in the Cupertino,California-based company’s 32-year history. Sales may rise 31percent to almost $31.5 billion this year, according to theaverage of 23 estimates in a Bloomberg survey.

Citigroup had a record loss of $9.83 billion in the fourthquarter and may post another loss when it reports first-quarterfinancial results next week, said Ed Maran, who helps manageabout $10 billion at Thornburg Investment Management in SantaFe, New Mexico.

Citigroup shares may bounce back, Maran said. at itscurrent valuation, Citigroup is “extremely attractive” hesaid, because the company seems poised to reap the benefits ofefforts in emerging market lending, wealth management, brokerageand even consumer lending in the U.S., which he says may havebetter long-term prospects than it seems today.

“The market is completely ignoring the earnings power ofCitigroup and is completely focused on the balance sheet damagethey have incurred,” said William Fitzpatrick, an equityanalyst at Optique Capital Management in Racine, Wisconsin,which owns Citigroup. He says this is a buying opportunity.“This franchise has tremendous value, particularly from aglobal perspective.”

Citigroup’s prospects in international banking convincedhistorian Sylla to buy the shares a few months ago. He said hemay add to his holdings if the shares decline further.

“Once they get some infusions of capital, then life willgo on again and Citigroup will come back,” Sylla said. In themeantime, “there’s an opportunity for bottom feeding.”

To contact the reporters on this story:Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net;Bradley Keoun in New York at bkeoun@bloomberg.net.

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