Tuesday, November 25, 2008
New Stock Picks
This is it! The bail out of Citigroup has bolstered the market and Citigroup rose 58% in one day. The market will not challenge new lows again. Goldman Sachs is raising new money through issuing new notes. Merrill Lynch will follow. The flow of money is loosening up. Is the recession over? No! But historically stocks go down at the beginning of a recession and then go up through the duration of the recession. Stocks will also move up because there are some great buys. Energy stocks are as low as they will get. So are the steel stocks. Citigroup will seesaw before taking another huge step forward. The government won't let them fail and they are required to trim even more expenses which will lead to a better bottom line.
My picks for this week are: Gerdau American Steel (GNA) at $3.75, AK Steel (AKS) at $7.00, US Steel (X) at $28.00, Exxon Mobil (XOM) at $75.00, Chevron (CVX) at $73.00, Citigroup at $6.00. Goldman Sachs went up $13.00 yesterday and is at $67.00. I would wait to see where it adjusts to in the next couple of days.
One wrench in the works is that Obama's stimulus plan is unclear. His plan will lead to higher taxes according to analysts. But the markets did OK when Clinton was president and we had higher taxes.
Now may be the time to buy your retirement fund.