This is an open letter from Countrywide to its brokers regarding the recent market situation. This is the third such communication in a series that started here, and continued here. What are you thoughts? Honest, genuine insight in to Countrywide or marketing drivel to placate an important (but problematic) revenue source?

Dear Business Partner:

My previous note in this series of communications outlined some of the decisive steps that Countrywide^®, America’s Wholesale Lender^® has taken to address projected industry declines in loan origination volume for the remainder of 2007 and into 2008.

The focus of this note is the ongoing importance of the mortgage broker “value proposition” in today’s mortgage market. This topic is particularly significant to all of us in the wholesale lending channel—lenders and brokers alike—as our industry adapts to the new realities of the current market environment.

With a shared goal of revitalizing the wholesale lending channel, we can and must work together to strengthen customer loyalty and enhance your prominence as a trusted advisor. This is not only an appropriate response to the growing misperceptions about wholesale lending, but it’s also the key to a prosperous and sustainable business model.

Succeeding in Today’s Environment and Beyond

In my mind, succeeding in today’s environment is primarily about a return to basics. Now, and into the future, success will be based on the fact that borrowers in all stages of the homeownership cycle will truly benefit from working with a seasoned mortgage professional. We have returned to the days when your value proposition is based on:

• providing borrowers with access to leading and competitive options in the marketplace;
• ensuring that options align with borrower financial needs and the ability to re-pay;
• guiding borrowers in making informed buying decisions; and
• serving as a long-term advisor for borrowers who may need some time and/or an “action plan” before they are able to qualify for a home loan.

In fact, I believe that the need for your expertise in these areas is stronger than ever before, especially as it relates to your advisory role. The complexity of financing a home is now heightened for many borrowers given the changes that have occurred over the past several months to lending guidelines and product selection. In addition, customers are confronted with a never-ending stream of often confusing media reports about what’s going on in today’s real-estate finance market.

Thus, an essential element of your value proposition is educating borrowers on the specific terms, conditions and even consequences of potential financing solutions. Best practices include:

• explaining loan program disclosures;
• illustrating, comparing and contrasting product features such as interest-only payment options, varying loan terms, etc.; and
• providing guidance and assistance throughout the home loan process - including after the loan has funded.

These simple, return-to-basics practices can strengthen consumer loyalty, solidify your role as a trusted advisor, and create a long-term referral stream from satisfied clients.

Consumer Awareness Resources

If you don’t already have tools in place to assist you with some of the practices outlined above, you may want to refer to the recent Interagency Guidance on Non-Traditional Mortgage Products. The guidance will give you insight into the steps that lenders are being encouraged to take to better inform borrowers on the features, benefits, and risks associated with non-traditional mortgages like Interest-Only and Payment Option ARM loan programs. The Federal Reserve’s web site also offers some basic consumer awareness brochures and other resources that may be helpful. In addition, here at Countrywide, we are currently developing new materials to assist you with further educating your borrowers on non-traditional loan products and other special programs. These materials will soon be made available through www.cwbc.com< or directly from your Account Executive.

For your convenience, I have provided links at the bottom of this e-mail to both the Interagency Guidance documents and some of the Federal Reserve consumer-education resources in case you are not familiar with these tools.

Focused on Your Success

At Countrywide, America’s Wholesale Lender, we remain focused on helping you provide your borrowers with the most appropriate, high-quality financing solutions. We also remain dedicated to supporting your value proposition. The two go hand in hand. The return to basics means catering to the needs of various borrower segments while developing informed “customers for life.”

Our organization remains fully committed to the wholesale channel, to the broker community and to boosting your business today and into the future. Thank you once again for your business and for the opportunity to share these thoughts with you.

Todd A. Dal Porto
Senior Managing Director & President
Countrywide, America’s Wholesale Lender

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This can’t be good. UBS will take a $3.42 billion write down relating to credit woes, primarily in its fixed-income portfolio (see mortgage backed securities). This is the first quarterly loss for the financial giant in 9 years. And $3.42 billion ain’t a blip on the old radar screen, even if you are the world’s largest wealth manager. It sounds eerily similar to this story of an employee doing mortgage backed securities deals on Wall Street. From the CNBC article:

The bank’s losses resulted from applying sharply lower market values to asset-backed bonds, after it took a conservative view, the Journal said, citing people close to the matter.

The losses, which far exceed those reported so far by other investment banks, are expected to trigger the departure of Huw Jenkins, who runs UBS’s investment banking business, the Financial Times said on its website.

…

Persistent worries about the health of the banking system have weighed on financial markets around the world. A meltdown in the U.S. subprime mortgage market, sparked by growing defaults on riskier loans, has created a squeeze in credit markets around the world.

An interesting point here is that these banks and financial institutions are taking their own write downs on assets that are not being sold. This means that they can give them whatever value they feel is reasonable (based on today’s market sale price and some highly technical analysis). UBS takes a large write down for being “conservative” about the value; but the true value of these underlying assets both short and long term is murky at best. As our friend Keith likes to say their value isn’t truly known until they are “Marked to Market“. Even using today’s sale prices of these assets it is impossible to get a bead on future value because the performance of the underlying collateral (the mortgages) has been poor and continues to worsen. Until these assets are sold there is no way to get an accurate assessment of their true worth.

Think of it this way: you have a a pack of cards which you are fairly certain contains Barry Bonds rookie baseball card, which Beckett baseball card guide says is worth $800. You decide that you aren’t going to sell the pack of cards, because you want to keep it as an asset for yourself. Someone asks you to value the card. You say that while Beckett values the card at $800, you are taking a conservative approach due to the recent steroid scandal with Bonds and value it at $550. You’ve written down your asset worth $250. But you won’t really know what someone will give you for that card until you take that pack of cards to the traveling baseball card trade show and shop it around. You could get $150 for it. You could find out that the supposed Barry Bonds card in that pack is actually a Razor Shines rookie and its worth $0.15.

The scary implication is that these firms taking write downs on their fixed-income portfolios are determining what those write downs should be with out the true value of the asset being known. In other words, it’s devalued and Marked to Market within a market that is currently in turmoil. No one knows what the true future value of the asset is, because no one knows how poorly the underlying mortgages will perform. I mean, while the housing market has no sign of bottom, at least the assets are being marked to market on a daily basis; we can’t even get that on Wall Street yet.

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Filed under: International markets, Google (GOOG), Yahoo! (YHOO), China, Newsletters, Japan, Technical Analysis, Stocks to Buy

Jim Collins, editor of OTC Insight, uses a proprietary quantitative system to isolate high growth and momentum stocks trading at reasonable valuations relative to that growth.

His latest two featured stocks based on these criteria are both China-based companies: Internet search provider Baidu.com (NASDAQ: BIDU) and online gaming firm Shanda Interactive Entertainment Limited (NASDAQ: SNDA).

Collins notes that Baidu’s search engine was the most frequently used in China in 2006. Last December, he adds, Baidu announced its intention to enter the Japanese search market, which is currently dominated by Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG).

In March, he adds, the company launched a limited beta trial of its Japanese language search services, which included web and image search.

For the quarter ended June 30, 2007, he reports, Baidu showed earnings of $0.61 a share, compared with $0.21 per share in the prior year. Revenues, he states, increased 121% to $53 million. The stock, he explains, has a relative strength rating of 99 (out of 100) and garners a B+ for accumulation and distribution.

Meanwhile, his growth and momentum strategy also favors Shanda Interactive, which offers online games. Collins notes that Shanda’s most popular games are known as massively multi-player online role-playing games.

The games, he explains, allow thousands of users to interact with one another in a virtual world by assuming ongoing roles or characters with different features. They are continuous, and players accumulate features and communicate with one another through instant messaging.

In July, he adds, Shanda announced that it signed an agreement to acquire Aurora Technology, which he contends is recognized as one of the top brands in this market. Also, the company acquired over 50% in Actoz, a South Korea online game developer.

For the quarter ended June 30, he observes that Shanda reported net income of $0.37 per share compared to $0.12 in the prior year. Revenues increased 45% to $74 million. He notes that the stock earns a relative strength rating of 94 and receives a B+ for accumulation and distribution.

Each day, Steven Halpern’s TheStockAdvisors.com features the latest stock picks and investment ideas from the nation’s leading financial newsletter advisors.

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Filed under: International markets, Google (GOOG), Yahoo! (YHOO), China, Newsletters, Japan, Technical Analysis, Stocks to Buy

Jim Collins, editor of OTC Insight, uses a proprietary quantitative system to isolate high growth and momentum stocks trading at reasonable valuations relative to that growth.

His latest two featured stocks based on these criteria are both China-based companies: Internet search provider Baidu.com (NASDAQ: BIDU) and online gaming firm Shanda Interactive Entertainment Limited (NASDAQ: SNDA).

Collins notes that Baidu’s search engine was the most frequently used in China in 2006. Last December, he adds, Baidu announced its intention to enter the Japanese search market, which is currently dominated by Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG).

In March, he adds, the company launched a limited beta trial of its Japanese language search services, which included web and image search.

For the quarter ended June 30, 2007, he reports, Baidu showed earnings of $0.61 a share, compared with $0.21 per share in the prior year. Revenues, he states, increased 121% to $53 million. The stock, he explains, has a relative strength rating of 99 (out of 100) and garners a B+ for accumulation and distribution.

Meanwhile, his growth and momentum strategy also favors Shanda Interactive, which offers online games. Collins notes that Shanda’s most popular games are known as massively multi-player online role-playing games.

The games, he explains, allow thousands of users to interact with one another in a virtual world by assuming ongoing roles or characters with different features. They are continuous, and players accumulate features and communicate with one another through instant messaging.

In July, he adds, Shanda announced that it signed an agreement to acquire Aurora Technology, which he contends is recognized as one of the top brands in this market. Also, the company acquired over 50% in Actoz, a South Korea online game developer.

For the quarter ended June 30, he observes that Shanda reported net income of $0.37 per share compared to $0.12 in the prior year. Revenues increased 45% to $74 million. He notes that the stock earns a relative strength rating of 94 and receives a B+ for accumulation and distribution.

Each day, Steven Halpern’s TheStockAdvisors.com features the latest stock picks and investment ideas from the nation’s leading financial newsletter advisors.

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Filed under: International markets, Google (GOOG), Apple Inc (AAPL), Cisco Systems (CSCO), Time Warner (TWX), Home Depot (HD), China, Indices, Halliburton (HAL), Altria Group (MO), NYSE Euronext (NYX), Goldman Sachs Group (GS), Duke Energy (DUK), Dow Chemical (DOW), Top Picks 2007, Valero Energy (VLO), PetroChina Co Ltd ADR (PTR), Huaneng Power Intl ADS (HNP), Level 3 Communications (LVLT), Kraft Foods’A’ (KFT), Bargain stocks, Chasing Value, S and P 500, DJIA, Stocks to Buy, Rite Aid Corp (RAD), Savient Pharmaceuticals (SVNT)

This Chasing Value post marks my 400th story for BloggingStocks over the last 18 months. I originally agreed to do about five per month, so I have exceeded what I thought was practical, given my other responsibilities. Through this time I have learned a lot about writing, blogging, editing, the internet, AOL, and have continued to improve my investing acumen, which is a never-ending process. Many of our readers have contributed with some thought-provoking commentary and made this time a more interesting journey. I created the Chasing Value section after discussions with Senior Editor Amey Stone, and it seems to have gathered a modest following. This is the latest installment tracking my 2007 picks.

Through September, the market has benefited from a 0.5% interest rate cut by the Federal Reserve Board, recovering much of August’s losses. This has also stimulated oil and gold prices to new highs and caused the dollar to shrink in value overseas. To some degree I think this resulted in foreign stocks rising significantly, most notably Huaneng Power International ADS which derives 100% of its revenue outside the United States. Last December, I made a strong case for HNP; prior to its recent rise I did so again for our Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years.

This year continues to be a stock picker’s market, as the volatile James Cramer of TheStreet.com and I have both topped the indices. Cramer made the best and worst picks for the year among those I’ve been tracking monthly. Apple Inc. (NASDAQ: AAPL) is the best performer among all the stocks and indices in this review, and has stabilized what might have otherwise been a mediocre showing. It has been a good year for energy and tech stocks. The past few months have been dismal for the financial sector, and anything lingering near its giant shadow.

The Dow Jones Industrial Average is once again approaching its high of 14,000 and looks like there might be room to exceed it. The housing market and subprime loans continue to worry investors, but unlike last month when an interest rate cut was not a certainty, the market seems to be betting now that another cut is not far off.

The month of September continued the trend of stock-picking outperforming the indices … again. Earnings reports will be upon us again as another quarter has come to a close. The global economy is still clicking along in a positive direction and September was another month where Chinese stocks did very well. Mergers and acquisitions are showing some signs of slowing or being renegotiated. This is my ninth follow-up where I compare my stock picks to Cramer’s and the indices. For reference, check out my original December 28, 2006 post on the topic.

Summary of Results:

• Google Inc. (NASDAQ: GOOG) has jumped in recent weeks to attain new highs, and once again Wall Street analysts are jumping on the bandwagon. There were two stories in Barron’s (subscription required) that sought to temper investor enthusiasm. The first related to Google’s questionable return on invested capital, and the second questioned whether advertising income could be sustained in a slowing economy. Judging by the recent share price, few investors give much credence to either discussion point. It closed at $567.27, for a solid +22.64% gain through nine months of the year, holding the top spot again. This time by a wide margin.
• Jim Cramer’s average return on his nine picks was 11.9% over the nine months, beating the Standard & Poor’s index, the DJIA and the NASDAQ and changing positions with me this month. Adding the dividend portion of 0.5% (0.66% x 0.75) brings Cramer’s gain to +12.4%. Apple Inc. (NASDAQ: AAPL) was the best pick of the year among those discussed herein. Given new product and software launches and the continuation of current products and programs there is every reason to believe 2007 will finish as another one for the record books.
• My picks continued to advance through September improving to a 9.37% gain year-to-date. Adding the dividend portion of 2.17% (2.89% x 0.75) brings the total return to +11.54% (improving on last month’s +8.08% gain). Dividends make a difference when the returns are modest. Valero Energy (NYSE: VLO) continued to be the most consistent among my top picks — +30.17 — but my best overall pick is now the 46.61% from Huaneng Power International ADS (NYSE: HNP). My biggest disappointment is Time Warner Inc. (NYSE: TWX), which is down over 20%.
• All of the indices gained ground in September, with the DJIA, NASDAQ and S&P all making a good showing for an overall average of +9.9.% year-to-date. Adding their portion of the dividend yield of 1.35% (1.8% x 0.75) brings it up to a total gain of +11.25%, a notable improvement beating out most fixed income securities.

Note that portional dividends have been added to the results. This is one of the criteria I use in my stock picks and it is having an impact on the results thus far. Only three of Cramer’s picks pay dividends, averaging about 0.66%. The indices pay a higher average of 1.8% and my picks average still higher at about 2.89%. Google does not pay a dividend. The flatter the market is this year, the more the dividends will be a factor.

Google has not shined all year, wavering at times as most speculative stocks do, but it was the best bet for the third month in a row, although it was beaten by several individual picks in the group. I still maintain that Value will beat Growth and indexing over the long run. Two of my picks continue to be mentioned as buyout candidates but the rhetoric has died down considerably: The Dow Chemical Co. (NYSE: DOW) and The Home Depot (NYSE: HD). Home Depot continues to receive the most negative discussion in business circles these days, although now the subprime loan mess is stealing headline space on a daily basis. The two subjects have been tied together at the hip lately.

The following are the closing prices as of December 28, 2006 and eight month returns for the seven stocks I recommended, plus the addition of Spectra Energy Corp. (NYSE: SE) that was spun out of Duke Energy (NYSE: DUK). Among Cramer’s picks, Kraft Foods (NYSE: KFT) which was spun out of Altria Group, Inc. (NYSE: MO), is included in the calculations.

1. The Dow Chemical Company: $40.02 is Up to $43.06 (+7.6%) 3.54% yield
2. Duke Energy: $33.02 (incl. of Spectra Energy (NYSE: SE)) is Down to $30.93 (-6.76%) 4.31% yield
3. The Home Depot Inc.: $39.73 is Down to $32.44 (-22.47%) 2.31% yield
4. Huaneng Power International ADS: $36 is Up to $52.78 (+46.61%) 3.62% yield
5. PetroChina ADR: $142.12 is Up to $185.11 (+30.25%) 4.5% yield
6. Time Warner Inc. (NYSE: TWX) $22.00 is Down to $18.36 (-19.83%) 1.1% yield
7. Valero Energy: $51.61 is Up to $67.18 (+30.17%) 0.84% yield

The following index comparisons are also from December 28, 2006 :

• Dow Jones Industrial Average: 12,501.52 is Up to 13,895.63 (+11.15%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,701.50 (+11.38%)
• Standard & Poor’s 500 Index: ($INX): 1,424.73 is Up to 1,526.75 (+7.16%)

The Cramer Speculative Stocks for 2007:

1) Level 3 Communications (NASDAQ: LVLT) $5.66 is Down to $4.65 (-21.72%) No dividend
2) Rite Aid (NYSE: RAD) $5.49 is Down to $4.62 (-18.83%) No dividend
3) Savient Pharmaceuticals (NASDAQ: SVNT) $12.01 is Up to $14.55. (+21.15%) No dividend

The Cramer Growth Picks are:
1) New York Stock Exchange Group (NYSE: NYX) $97.51 Down to $79.17 (-23.17%) No dividend
2) Apple Inc. (NASDAQ: AAPL) $80.87 Up to $153.47 (+89.77%) No dividend
3) Cisco Systems (NASDAQ: CSCO) $27.42 Up to $33.13 (+20.82%) No dividend

The Cramer Value Picks are:
1) Altria Group (NYSE: MO) $86.23 Up to $69.53 +(Kraft at .692024 x $34.51 = 23.88) to $93.41 (+8.33%) 4.12% yield
2) Goldman Sachs Group (NYSE: GS) $200.80 Up to $216.74 (+7.94%) .72% yield
3) Halliburton Co. (NYSE: HAL) $31.26 Up to $38.40 (+22.84%) .97% yield

The New Powerhouse Google

What an amazing month for Google, up significantly, and passing its high prior to dropping after its last quarterly report. The Wall Street darling Google is being tracked since it is of broad interest to the investing public and internet users alike. Google closed December 28, 2006 at $462.56, rose in January, then traded downward for a few months before hitting new highs in June followed by another all-time high of $558.58 in July. A 3-cent earnings miss, based on analysts expectations, caused an immediate drop of about 10%. But Google coming on strong ended the month of September at $567.27, for a solid YTD gain of $104.71 per share (+22.64%), doubling last month’s YTD gain. Google does not pay a dividend.

In Closing

After watching Time Warner falter all year long for what I consider to be no good reason, or maybe there is: Time Warner (TWX): No catalyst or no leadership? Some comparisons I’m dreaming of an invite to a board meeting to share my thoughts personally. I have a feeling Jim Cramer would like to do the same with the board of Rite Aid. I will continue to report during the week following the closing stock prices each month.

One last note: It would be very unusual for someone to expect a beginning investor or novice to hold just a single stock in their portfolio, but if they did, that stock could very well be Google. For that reason, in this unique circumstance, such a person would have beaten Cramer and I at stock picking, and 99% of Wall Street, and doubled the return of the indices as well. Did someone say I would rather be lucky than good?

Disclosure: I own shares of DOW, DUK, HNP, PTR, SE, TWX, and VLO.

To find more potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. Check out his other posts for BloggingStocks here.

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Filed under: International markets, Google (GOOG), Apple Inc (AAPL), Cisco Systems (CSCO), Time Warner (TWX), Home Depot (HD), China, Indices, Halliburton (HAL), Altria Group (MO), NYSE Euronext (NYX), Goldman Sachs Group (GS), Duke Energy (DUK), Dow Chemical (DOW), Top Picks 2007, Valero Energy (VLO), PetroChina Co Ltd ADR (PTR), Huaneng Power Intl ADS (HNP), Level 3 Communications (LVLT), Kraft Foods’A’ (KFT), Bargain stocks, Chasing Value, S and P 500, DJIA, Stocks to Buy, Rite Aid Corp (RAD), Savient Pharmaceuticals (SVNT)

This Chasing Value post marks my 400th story for BloggingStocks over the last 18 months. I originally agreed to do about five per month, so I have exceeded what I thought was practical, given my other responsibilities. Through this time I have learned a lot about writing, blogging, editing, the internet, AOL, and have continued to improve my investing acumen, which is a never-ending process. Many of our readers have contributed with some thought-provoking commentary and made this time a more interesting journey. I created the Chasing Value section after discussions with Senior Editor Amey Stone, and it seems to have gathered a modest following. This is the latest installment tracking my 2007 picks.

Through September, the market has benefited from a 0.5% interest rate cut by the Federal Reserve Board, recovering much of August’s losses. This has also stimulated oil and gold prices to new highs and caused the dollar to shrink in value overseas. To some degree I think this resulted in foreign stocks rising significantly, most notably Huaneng Power International ADS which derives 100% of its revenue outside the United States. Last December, I made a strong case for HNP; prior to its recent rise I did so again for our Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years.

This year continues to be a stock picker’s market, as the volatile James Cramer of TheStreet.com and I have both topped the indices. Cramer made the best and worst picks for the year among those I’ve been tracking monthly. Apple Inc. (NASDAQ: AAPL) is the best performer among all the stocks and indices in this review, and has stabilized what might have otherwise been a mediocre showing. It has been a good year for energy and tech stocks. The past few months have been dismal for the financial sector, and anything lingering near its giant shadow.

The Dow Jones Industrial Average is once again approaching its high of 14,000 and looks like there might be room to exceed it. The housing market and subprime loans continue to worry investors, but unlike last month when an interest rate cut was not a certainty, the market seems to be betting now that another cut is not far off.

The month of September continued the trend of stock-picking outperforming the indices … again. Earnings reports will be upon us again as another quarter has come to a close. The global economy is still clicking along in a positive direction and September was another month where Chinese stocks did very well. Mergers and acquisitions are showing some signs of slowing or being renegotiated. This is my ninth follow-up where I compare my stock picks to Cramer’s and the indices. For reference, check out my original December 28, 2006 post on the topic.

Summary of Results:

• Google Inc. (NASDAQ: GOOG) has jumped in recent weeks to attain new highs, and once again Wall Street analysts are jumping on the bandwagon. There were two stories in Barron’s (subscription required) that sought to temper investor enthusiasm. The first related to Google’s questionable return on invested capital, and the second questioned whether advertising income could be sustained in a slowing economy. Judging by the recent share price, few investors give much credence to either discussion point. It closed at $567.27, for a solid +22.64% gain through nine months of the year, holding the top spot again. This time by a wide margin.
• Jim Cramer’s average return on his nine picks was 11.9% over the nine months, beating the Standard & Poor’s index, the DJIA and the NASDAQ and changing positions with me this month. Adding the dividend portion of 0.5% (0.66% x 0.75) brings Cramer’s gain to +12.4%. Apple Inc. (NASDAQ: AAPL) was the best pick of the year among those discussed herein. Given new product and software launches and the continuation of current products and programs there is every reason to believe 2007 will finish as another one for the record books.
• My picks continued to advance through September improving to a 9.37% gain year-to-date. Adding the dividend portion of 2.17% (2.89% x 0.75) brings the total return to +11.54% (improving on last month’s +8.08% gain). Dividends make a difference when the returns are modest. Valero Energy (NYSE: VLO) continued to be the most consistent among my top picks — +30.17 — but my best overall pick is now the 46.61% from Huaneng Power International ADS (NYSE: HNP). My biggest disappointment is Time Warner Inc. (NYSE: TWX), which is down over 20%.
• All of the indices gained ground in September, with the DJIA, NASDAQ and S&P all making a good showing for an overall average of +9.9.% year-to-date. Adding their portion of the dividend yield of 1.35% (1.8% x 0.75) brings it up to a total gain of +11.25%, a notable improvement beating out most fixed income securities.

Note that portional dividends have been added to the results. This is one of the criteria I use in my stock picks and it is having an impact on the results thus far. Only three of Cramer’s picks pay dividends, averaging about 0.66%. The indices pay a higher average of 1.8% and my picks average still higher at about 2.89%. Google does not pay a dividend. The flatter the market is this year, the more the dividends will be a factor.

Google has not shined all year, wavering at times as most speculative stocks do, but it was the best bet for the third month in a row, although it was beaten by several individual picks in the group. I still maintain that Value will beat Growth and indexing over the long run. Two of my picks continue to be mentioned as buyout candidates but the rhetoric has died down considerably: The Dow Chemical Co. (NYSE: DOW) and The Home Depot (NYSE: HD). Home Depot continues to receive the most negative discussion in business circles these days, although now the subprime loan mess is stealing headline space on a daily basis. The two subjects have been tied together at the hip lately.

The following are the closing prices as of December 28, 2006 and eight month returns for the seven stocks I recommended, plus the addition of Spectra Energy Corp. (NYSE: SE) that was spun out of Duke Energy (NYSE: DUK). Among Cramer’s picks, Kraft Foods (NYSE: KFT) which was spun out of Altria Group, Inc. (NYSE: MO), is included in the calculations.

1. The Dow Chemical Company: $40.02 is Up to $43.06 (+7.6%) 3.54% yield
2. Duke Energy: $33.02 (incl. of Spectra Energy (NYSE: SE)) is Down to $30.93 (-6.76%) 4.31% yield
3. The Home Depot Inc.: $39.73 is Down to $32.44 (-22.47%) 2.31% yield
4. Huaneng Power International ADS: $36 is Up to $52.78 (+46.61%) 3.62% yield
5. PetroChina ADR: $142.12 is Up to $185.11 (+30.25%) 4.5% yield
6. Time Warner Inc. (NYSE: TWX) $22.00 is Down to $18.36 (-19.83%) 1.1% yield
7. Valero Energy: $51.61 is Up to $67.18 (+30.17%) 0.84% yield

The following index comparisons are also from December 28, 2006 :

• Dow Jones Industrial Average: 12,501.52 is Up to 13,895.63 (+11.15%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,701.50 (+11.38%)
• Standard & Poor’s 500 Index: ($INX): 1,424.73 is Up to 1,526.75 (+7.16%)

The Cramer Speculative Stocks for 2007:

1) Level 3 Communications (NASDAQ: LVLT) $5.66 is Down to $4.65 (-21.72%) No dividend
2) Rite Aid (NYSE: RAD) $5.49 is Down to $4.62 (-18.83%) No dividend
3) Savient Pharmaceuticals (NASDAQ: SVNT) $12.01 is Up to $14.55. (+21.15%) No dividend

The Cramer Growth Picks are:
1) New York Stock Exchange Group (NYSE: NYX) $97.51 Down to $79.17 (-23.17%) No dividend
2) Apple Inc. (NASDAQ: AAPL) $80.87 Up to $153.47 (+89.77%) No dividend
3) Cisco Systems (NASDAQ: CSCO) $27.42 Up to $33.13 (+20.82%) No dividend

The Cramer Value Picks are:
1) Altria Group (NYSE: MO) $86.23 Up to $69.53 +(Kraft at .692024 x $34.51 = 23.88) to $93.41 (+8.33%) 4.12% yield
2) Goldman Sachs Group (NYSE: GS) $200.80 Up to $216.74 (+7.94%) .72% yield
3) Halliburton Co. (NYSE: HAL) $31.26 Up to $38.40 (+22.84%) .97% yield

The New Powerhouse Google

What an amazing month for Google, up significantly, and passing its high prior to dropping after its last quarterly report. The Wall Street darling Google is being tracked since it is of broad interest to the investing public and internet users alike. Google closed December 28, 2006 at $462.56, rose in January, then traded downward for a few months before hitting new highs in June followed by another all-time high of $558.58 in July. A 3-cent earnings miss, based on analysts expectations, caused an immediate drop of about 10%. But Google coming on strong ended the month of September at $567.27, for a solid YTD gain of $104.71 per share (+22.64%), doubling last month’s YTD gain. Google does not pay a dividend.

In Closing

After watching Time Warner falter all year long for what I consider to be no good reason, or maybe there is: Time Warner (TWX): No catalyst or no leadership? Some comparisons I’m dreaming of an invite to a board meeting to share my thoughts personally. I have a feeling Jim Cramer would like to do the same with the board of Rite Aid. I will continue to report during the week following the closing stock prices each month.

One last note: It would be very unusual for someone to expect a beginning investor or novice to hold just a single stock in their portfolio, but if they did, that stock could very well be Google. For that reason, in this unique circumstance, such a person would have beaten Cramer and I at stock picking, and 99% of Wall Street, and doubled the return of the indices as well. Did someone say I would rather be lucky than good?

Disclosure: I own shares of DOW, DUK, HNP, PTR, SE, TWX, and VLO.

To find more potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. Check out his other posts for BloggingStocks here.

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Filed under: Major movement, Google (GOOG), Exxon Mobil (XOM), Market matters, Countrywide Financial (CFC), Lennar Corp’A’ (LEN), S and P 500, DJIA

Don’t expect the rally that pushed the Dow Jones industrial average past 14,000 today to last.

The world isn’t going to end for investors tomorrow, but it may not have the perfect storm of bullish signals that investors are reacting to today that sent the index to record levels. I’ve listed a few of them below.

After warning of a 60% earnings decline in the third quarter, Citigroup Inc. (NYSE: C) Chief Executive Chuck Prince said he expects the fourth quarter to be more “normal.” Former Fed Chairman Alan Greenspan said the credit slump may be ending. Shares of Lennar Corp. (NYSE: LEN) and other homebuilders rose after a Citigroup analyst said the worst may be behind the companies.

Today’s rally lifted a broad array of stocks including Google Inc. (NASDAQ: GOOG), General Electric Co. (NYSE: GE) and ExxonMobil Corp. (NYSE: XOM). Even beleaguered Countrywide Financial Corp. (NYSE: CFC) got a lift as investors seem to have no doubt that at least one more rate cut was coming from the Federal Reserve after the Institute for Supply Management reported that manufacturing grew at its slowest pace in six months.

“There’s a perception that the worst is over, now that the Fed is on our side,” Federated Investment’s Igor Golalic told Bloomberg News.

Before investors start wading into the market, it’s important to remember a few things. First, markets rarely move straight up or straight down. There may be some detours on the way even if the market is rebounding which, I’m not sure myself is happening. The market is still very volatile, which leads to both wide swings in optimism and pessimism.

Interestingly, on the day that investors are celebrating the surging Dow, people are remembering the 20th anniversary of the 1987 stock market crash. People, though, shouldn’t avoid the markets just because times are uncertain. MarketWatch points out that “$10,000 invested in the Dow on Friday, Oct. 16, the last trading day before the crash, and held until the present would still have more than quintupled.”

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Filed under: Major movement, Google (GOOG), Exxon Mobil (XOM), Market matters, Countrywide Financial (CFC), Lennar Corp’A’ (LEN), S and P 500, DJIA

Don’t expect the rally that pushed the Dow Jones industrial average past 14,000 today to last.

The world isn’t going to end for investors tomorrow, but it may not have the perfect storm of bullish signals that investors are reacting to today that sent the index to record levels. I’ve listed a few of them below.

After warning of a 60% earnings decline in the third quarter, Citigroup Inc. (NYSE: C) Chief Executive Chuck Prince said he expects the fourth quarter to be more “normal.” Former Fed Chairman Alan Greenspan said the credit slump may be ending. Shares of Lennar Corp. (NYSE: LEN) and other homebuilders rose after a Citigroup analyst said the worst may be behind the companies.

Today’s rally lifted a broad array of stocks including Google Inc. (NASDAQ: GOOG), General Electric Co. (NYSE: GE) and ExxonMobil Corp. (NYSE: XOM). Even beleaguered Countrywide Financial Corp. (NYSE: CFC) got a lift as investors seem to have no doubt that at least one more rate cut was coming from the Federal Reserve after the Institute for Supply Management reported that manufacturing grew at its slowest pace in six months.

“There’s a perception that the worst is over, now that the Fed is on our side,” Federated Investment’s Igor Golalic told Bloomberg News.

Before investors start wading into the market, it’s important to remember a few things. First, markets rarely move straight up or straight down. There may be some detours on the way even if the market is rebounding which, I’m not sure myself is happening. The market is still very volatile, which leads to both wide swings in optimism and pessimism.

Interestingly, on the day that investors are celebrating the surging Dow, people are remembering the 20th anniversary of the 1987 stock market crash. People, though, shouldn’t avoid the markets just because times are uncertain. MarketWatch points out that “$10,000 invested in the Dow on Friday, Oct. 16, the last trading day before the crash, and held until the present would still have more than quintupled.”

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Filed under: Google (GOOG), Hilary On Stocks, Stocks to Buy

This is the fourth in a series of trend-spotting tips from Hilary Kramer’s newly-released book, Ahead of the Curve.

Everyone was told at some point that if something sounds too good to be true, it probably is. As much as we’re drawn to follow the crowd, we’re also hardwired to be suspicious of what seems like a free lunch. This kind of healthy skepticism is essential to successful investing, but sometimes a spade really is a spade and you can join the crowd on the way to making serious money.

One key point in this tip is to know that even if you didn’t get in at the very beginning, you can still make money off a stock. Or, as I put it in my book, “the payout might be greater for the first spotter of a trend, but a trend rider who rides the wave a bit later can still make out just fine.”

Probably the best example of this trend tip from the past few years is Google Inc. (NYSE: GOOG). This company went public in August 2004 at $85. Now it’s trading in the $560s. Obviously someone who got in at the IPO would have made quite a profit. But even if you’d bought two years after the IPO, you’d have bought at $468. Many people at the time would have thought $468 was simply crazy to pay for any stock, but a year later the people who invested then are looking at a 25% return a year later, which isn’t bad at all.

And the fact is that if you buy now at $568, you still have a good chance of making a solid return on your investment. Google’s revenues continue to grow and the company continues to reveal fascinating new plans for growth. They have tons of cash and little debt and are poised to keep acquiring companies here and abroad, and I fully expect Google to hit $600 in 2008 and to keep growing.

Type of stock: The wildly popular Internet stock that shows no sign of stopping.

Price target: I’m not sure there is one. Buy when you can before it goes up any further.

Hilary Kramer,author of the newly released Ahead of the Curve, is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

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Filed under: Google (GOOG), Hilary On Stocks, Stocks to Buy

This is the fourth in a series of trend-spotting tips from Hilary Kramer’s newly-released book, Ahead of the Curve.

Everyone was told at some point that if something sounds too good to be true, it probably is. As much as we’re drawn to follow the crowd, we’re also hardwired to be suspicious of what seems like a free lunch. This kind of healthy skepticism is essential to successful investing, but sometimes a spade really is a spade and you can join the crowd on the way to making serious money.

One key point in this tip is to know that even if you didn’t get in at the very beginning, you can still make money off a stock. Or, as I put it in my book, “the payout might be greater for the first spotter of a trend, but a trend rider who rides the wave a bit later can still make out just fine.”

Probably the best example of this trend tip from the past few years is Google Inc. (NYSE: GOOG). This company went public in August 2004 at $85. Now it’s trading in the $560s. Obviously someone who got in at the IPO would have made quite a profit. But even if you’d bought two years after the IPO, you’d have bought at $468. Many people at the time would have thought $468 was simply crazy to pay for any stock, but a year later the people who invested then are looking at a 25% return a year later, which isn’t bad at all.

And the fact is that if you buy now at $568, you still have a good chance of making a solid return on your investment. Google’s revenues continue to grow and the company continues to reveal fascinating new plans for growth. They have tons of cash and little debt and are poised to keep acquiring companies here and abroad, and I fully expect Google to hit $600 in 2008 and to keep growing.

Type of stock: The wildly popular Internet stock that shows no sign of stopping.

Price target: I’m not sure there is one. Buy when you can before it goes up any further.

Hilary Kramer,author of the newly released Ahead of the Curve, is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

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