SCRABBLE...

Currently, we are in a market that is swinging up and down. So instead of guessing which letter to put in your portfolio I would suggest an alphabet soup of stocks that are being snapped up by veteran investors. Here are a few on my short list:

Boston Scientific (BSX)

CIT Group (CIT)


Becton Dickinson (BDX)


Corrections Corp of America (CXW)


Citrix (CTXS)

Wells Fargo (WFC)

Republic Services (RSG)

Legg Mason...Do they have a Legg to stand on?

Like Fifty Cent said, "I've been patiently waiting for a track to explode on". Well my game isn't music, its stock picking. And I am glad I was patient. I saw some indicators that would have lead me to purchase Legg Mason (NYSE: LM) between 28 on up. I admit I haven't been following individual securities lately but I was very suprised to see LM’s recent decline after it began picking up steam towards the end of last year (see the charts). The catalyst (for the decline) after some quick analysis was the recent quarterly earnings report. For financial firms, these meetings have caused serious havoc to the stock prices. The stock is now under both its 50 and 200 day moving averages. I am going to assume that this means new support levels will need to be established and all those investors that bought a few months ago will need to cost average down. But in order for them to buy in again at these lower a level they need to believers in what Legg Mason does and that’s asset management. Yep, these guys make their money investing in the damn stock market (Sigh).

Here is a quick rundown of the Pros:

- Good indicators show support for the stock
- Bill Miller is a fund manager that historically has had a great track record. He finds great companies and holds onto them for a long duration
- The stock has broken through its technical moving day averages, which could lead to additional support needed from investors
- I believe that I read that retirement portfolio outflows have stabilized, likely due to the run-up in the economy since last March
- I have the basic belief that the Federal Reserve won’t turn the spigot off too soon, which should keep the economy from “double-dipping”

Here is a quick rundown of the Cons:

- The stock broke through its technical moving day averages which could lead to investors cutting their losses…why would they cut their losses see the next bullet
- Although Bill Miller is the man, his fund consists of a large number of financial institutions…arguably one of the most volatile sectors right now
- The economy, which is still teetering could send the funds managed by Legg Mason lower

Superbowl Investing Tip ~ Invest in What You Know

This simple tip comes from the mastermind, Peter Lynch. I am completely engrossed in this strategy but rarely put it into existence and it has cost me dearly. It is so simple sometimes that we overlook the power of our own consumption and what it means. Here are some solid stocks where I have used their service and in some instances I keep returning. And if I would have bought the stock I would a very happy man.

Dominos (NYSE: DPZ) - Lets take this pizza chain. I decided to buy pizza and because I consider myself tech savvy I wanted to place the order over the internet. So I decided to use Dominos new site and technology to place and monitor my order. For someone like me, this was great to create my own pizza with toppings, see the price as I made it, and know how long it would take to expect a delivery or to go in and pick up my pizza. I did this over 2 or three months ago and had such a positive experience that I would definitely buy my pizza that way again. To read about Dominos new site and technology check out these articles from the Wall Street Journal and the website 'Storefrontbacktalk' for more information:


http://online.wsj.com/article/SB10001424052748704779704574552080042033284.html

http://www.storefrontbacktalk.com/e-commerce/dominos-gets-e-commerce-creative/

Amazon.com Inc. (NASDAQ:AMZN) - To be honest I love the fact that I know when I shop on their website that I am getting quality products at the best prices out there. My holiday shopping is quick and easy and the one thing I know is a money maker is shipping and handling, because we all have impulses and will pay more to have our goods quicker.

Wal-Mart Stores Inc. (NYSE: WMT) The last company I will right about is Walmart. I go out of my way to shop and buy products online at this store because they truly care about service and offer me the lowest prices out there. In this economy I don't want to have to think about who is giving me the best deal...I know already WMT will deliver. And I truly believe their website and site to store capability will continue to allow shopper convenience like it did for me when I found my Playstation3 bundle package there at a price that could not be matched.

SuperBowl Sunday Predictions

My predictions for this game are easy. I think the New Orleans Saints will come marching in on a wave of energy and make it an exciting game. The seasoned vets known as the Indianapolis Colts will regain the upper hand and gallop to the finish line. I love the Colts, and being that I am from Indianapolis, its a slightly biased prediction. I am proud of my boys in blue and no city deserves to be forgotten in this game.

I hope that we can remember that this is just a game and many things need to be done to bring our economies back and our vibrant cities. These two teams are perfect examples of that. Indianapolis is definitely a working class city in a state has been decimated by manufacturing jobs being lost. I am a testament to the brain drain of Indiana with great college educational institutions, but with limited jobs to keep natives in state. When you can boast about the likes of Purdue, Indiana Univ, and Notre Dame to just name a few, this state should be churning out companies, products and innovation. New Orleans and the lower ninth ward deserve not to be forgotten either. After suffering from a natural disaster that ravaged the coast, this city should a beacon for how we all need to rally around each other. A victory will be much needed for both cities and more importantly lets hope that we don't forget their stories when the game ends and a champion is crowned.

You've Got Mail: Trade a Recall

I used to have a phrase that I would use when I felt like I was getting a good deal. I would say “Who Could Ask for Anything More……. Toyota”. This was the old tag line from old commercials that won me and millions of Americans over for this Japanese automaker. But my point for this simple post was to give an example of keeping your ear to the streets. After following the reports, this trade was easy to sniff out. I placed a NEGATIVE rating on Toyota Motors (TM) shares when the rumors came out that they were going to be halting production. Not only have they halted production but more rumors are coming out recalls and problems with their different models and car lines.

Stay tuned I have a post that I have been sitting on for awhile. Oddly enough it started with me thinking about the situation of interestingly large group of Americans who still have a job, can easily pay their bills, but happen to be underwater on their mortgages. Should you stay, should you go and what to do if you are in this situation…some say the moral thing, but I was wondering if there is another option. Stay tuned for Urbanomics 101 and my interesting take of how you should calculate your next move.

How Low Can Mortgage Rates Go...

Its interesting as I look back almost a year ago... we wondered how low the mortgage rate environment could go. A year ago I remember following a CNBC article that quoted a market expert who said the 30 year mortgage rate would fall to nearly 4 percent!!! Its safe to say that we didn't hit that historic mark on the 30 year rate but as we dropped under 5 percent there were days when we wondered.

History books will go back and reflect on this time period and wonder whether the monetary policies by the Federal Reserve were helpful. The policy used by the Fed was commonly called monetary or quantitative easing and involved their buying of mortgage backed assets in large amounts to keep pushing down the rates. In turn, by depressing rates you attempt to spur economic activity in a housing market that was on its death bed. The overall goal is and was to put a floor on the troublesome housing market and now it appears its working. Home prices now appear to be stabilizing but a few things appear to be forming like clouds that will predict the direction of rates.

The first is the admission by the Fed that they will stop by mortgaged back assets by the end of March. This will begin to have an immediate impact on rates. I would anticipate that rate inch up from there and they will then move up further on the potential that the Fed may raise interest rates by the end of the year.

So look for rates to move up in April, possibly hampering the stabilization seen recently in housing. But you wonder if the government has already anticipated that. The timing of newly communicated program look to spur one last effort in demand before rates begin to creep up. Here is a quick summary of programs (new and improved):

- Home Affordable Mortgage Program - new requirements to have documents before you get the modifications

- The FHA allows investors who "FLIP" homes to buy FHA homes in a bid to offer remodeled homes to first time home buyers. With pricing guidelines included this should keep prices affordable

- Fannie Mae is offering new incentives to home buyers. 3.5% in assistance can be used for closing costs or brand new appliances and only for owner occupants.