Daily Stock Pick of the Day - Thurs., Nov 4, 2010

Stocks rallied a bit at the end of the day’s session to close higher. The response to the Fed’s announcement that will buy $600 billion in long-term Treasurys, starting next month and into next year, in order jump-start our economy’s lackluster growth. The Dow closed 26 points higher at 11,215. The S&P rose 4 points and the Nasdaq rose 6 points, closing at 1,197 and 2,540 respectively.


In economic news, ADP reported that private sector jobs rose by 43,000 from September to October (seasonally adjusted). September’s data was initially reported as a loss of 39,000. On Friday, the government will release it’s October non-farm payrolls report which is expected to show an increase of about 60,000 jobs.

Today’s stock pick of the day is: Silver Wheaton (SLW). Silver Wheaton is in what the call the “silver streaming business”. This means they make upfront, cash payments to finance the mine. In return, they get the right to buy the secondary metals that are produced from that mine. Silver Wheaton derives 95% of it’s revenue from the sale of silver on long-term contracts purchased from counterparties. With the recent run-up in gold, silver has followed in similar fashion and Silver Wheaton has enjoyed the benefit of  earnings and revenue growth over the past year. They have mines all over the world, including Mexico, Chilie, Argentina, Peru, Sweden, Greece and Portugal. This helps them reduce their exposure to the geopolitical risks.

Sliver has been in demand recently, just like gold. In times of uncertainty, political or economic, silver and gold become more attractive investments compared to paper currency. Silver Wheaton has been at record highs over the past month and over the past three months, has risen about 40%. It’s closing price today was $29.61 and making a small entry on any mild pullbacks could be a good starting point in which to build.

As always, stay cautious and happy trading!

Obligatory Disclaimer: This blog is not authored by a financial advisor or a broker/dealer. The author(s) of this blog are not registered investment advisers or registered broker/dealers. The author(s) of this blog do not provide investment or financial advice or make investment recommendations, nor are in the business of transacting trades, nor do they direct accounts or give trading advice tailored to any particular reader’s situation. Nothing contained in this communication constitutes a solicitation, recommendation, promotion or endorsement or offer by the author(s) of any particular security, transaction or investment.

Trading securities involves high risk and the loss of any funds invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. The suggestions contained in this blog are for informational purposes only and the author is not liable for any losses incurred as a result of actual investment activity on the part of the reader. This blog is presented for information purposes only and past results do not guarantee future performance.

Daily Stock Pick of the Day - Tues., Nov. 2, 2010

“Chop” is the word today when stocks closed mixed just ahead of Tuesday’s mid-term elections and ahead of Wednesday’s decision by the Fed regarding monetary policy (“quantitative easing”). The Dow rose about 6 points, .1%, and closed at 11,124. The Dow was actually up about 125 points earlier today, but fell as the trading session wore on. The S&P 500 rose 1 point, .1% to close at 1,184 and the Nasdaq closed down 2 points, .1% at 2,504. The Volatility Index rose to about 22.


Mostly, traders and investors are playing the waiting game. In addition to elections and Fed policy, there is a jobs report expected on Friday. The good news today that ignited the short-lived rally was news on the manufacturing front. The Institute for Supply Management reported theat national factory activity rose to 56.9 in October – an increase from 54.4 reported for September. In addition, China reported their purchasing manager’s index (PMI) rose to 54.7 in October, an increase from 53.8 in September. Both reports proved higher than anticipated by analysts polled by Reuters.

Speaking of China, the stock pick of the Day is Dow Chemical (DOW). Dow manufactures plastic, chemical and agricultural products for the global food, transportation and other markets. Rising demand and a weakened dollar make this stock worth a look. Last Thursday, Dow surprised by beating analysts earnings expectations – thanks in large part to the rising demand in plastics. The whole industry, including competitors like Eastman Chemical (EMN), is doing well right now. Many of these companies have divested the parts of their business that were not profitable. In addition, raw material costs have become much cheaper in recent years. Dow’s 50-day crossed it’s 200-day today and this makes it a very bullish sign. The stock closed today $30.89 and I like the $30 range as an entry point. I think this stock will work it’s way up to the $38 range, if you’ve got some time – over the next four to six months.


As always, stay cautious. This week will be interesting for sure. Happy Trading!

Obligatory Disclaimer: This blog is not authored by a financial advisor or a broker/dealer. The author(s) of this blog are not registered investment advisers or registered broker/dealers. The author(s) of this blog do not provide investment or financial advice or make investment recommendations, nor are in the business of transacting trades, nor do they direct accounts or give trading advice tailored to any particular reader’s situation. Nothing contained in this communication constitutes a solicitation, recommendation, promotion or endorsement or offer by the author(s) of any particular security, transaction or investment.

Trading securities involves high risk and the loss of any funds invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. The suggestions contained in this blog are for informational purposes only and the author is not liable for any losses incurred as a result of actual investment activity on the part of the reader. This blog is presented for information purposes only and past results do not guarantee future performance.