MARKETPULSE
Fed chief Ben Bernanke has attempted to make Fed decision-making more transparent. At first glance that’s an admirable goal, especially given his predecessor’s penchant for obfuscation. The problem, though, is that in our very complex economy, the attempt to be so forthright can backfire. In fact, what has become most transparent is how little the Fed actually knows. (How many mistakes did Alan Greenspan ever admit to making? The answer starts with a “z.”) When…
FRONT PAGE
Health and Wealth: The Medical Stocks to Own Now
When it comes to health care plays, not all companies are created alike. Below we single out those companies that will be most immune to the growing push to keep health care costs under control.
GROWTH PORTFOLIO
Baxter and Varian: Tops In Medical Devices, But We Sell Lilly As Its Blockbuster Potential Fades
We’re making a few changes to Growth Portfolio to batten down for a likely sharp slowdown in U.S. growth and at least a modest slowdown worldwide. As discussed on pp. 1-2, the right health care companies will be outstanding defensive plays set to grow whatever the economy does. That’s why we’re adding two standouts in medical equipment and services: Baxter International and Varian Medical Systems (added online in January in a Red Alert). Pure drug companies,…
INCOME PORTFOLIO
Income via the Rising Euro: with Italy’s Eni, an All-In-One Play on Currency and Energy
Our newest Income pick has a lot to recommend it—not least of which is that it’s domiciled in Europe, allowing U.S. investors to benefit from the surging euro. The stock is Italian energy giant Eni SpA. If the name sounds familiar to some of you, it was a subsidiary, Eni Petroleum, that purchased the Gulf of Mexico offshore natural gas and oil operations of our holding Dominion. But there’s a lot more to the company…
FUNDFOLIO
Broadening Our Horizons: Not just Chindia®: a Fidelity Fund Bolsters Our International Roster
Our sole Chindia fund—T. Rowe Price New Asia—returned better than 66 percent in 2007. It’s no slur on the fund to say it’s unlikely to repeat that sparkling performance in 2008, or ever, for that matter. Given China’s bloated stock market, is the fund still a good choice? We think it is. As of the November report, the latest available, manager Frances Dydasco had made some smart changes—reducing the fund’s relative exposure to China and Hong…
FUND FINDS
What They’re Buying
An Alluring Utility from a 5-Star-Rated Fund: California’s Sempra Energy Moves into LNG
FAST TRACK
Suppressing Those Surges: An Energy Tech Leader That Helps the Grid to Function Better
With oil hitting $100, and voters increasingly attuned in this political season to the need for clean and renewable fuels, the alternative energy industry is ripe for investment. This issue we’re adding a relatively small—a market cap of $1.2 billion—but leading energy technology company: American Superconductor. Based in Devens, Massachussetts, American Superconductor designs and sells products geared to utilities, industrial companies, and wind energy developers. Its offerings are designed to help these customers to generate and…
SECTOR SENSE
The Biotechs: All Grown Up, The Best Have Moved Beyond Speculative Bets on Research
Many drug companies, as we note on p.1, are risky investments because they’ll be in the front lines of efforts to control spiraling health care costs. But the exceptions—those with unique products not facing generic competition—should be stalwart performers, able to generate strong growth even in an ailing economy. This fortunate group includes well-placed biotechs, which develop and produce drugs derived from plant and animal proteins. While traditional pharmaceutical companies also use such methods, the biotechs…
MARKET BITES
Market Bites
Parsing the Dollar, Betting with the Best, CHINDIA, MasterKey
WHAT THEY'RE THINKING
Byron Wien: Soothsaying Again
“It’s that time of year when we like to present to you soothsayer Byron Wien’s annual list of “10 Surprises.” Wien, chief investment strategist at Pequot Capital Management, has been issuing his economic, market, and political predictions every year since 1986. He defines a “surprise” as an event that the consensus on the Street rates as having no better than a 1 in 3 chance of occurring but that he thinks has at least a…
SMALL CAP VALUE PORTFOLIO
Aircastle Can Fly Again: Meanwhile, Its Hefty 12% Dividend Is No Mere Castle in the Air
When you come across a stock yielding more than 10 percent, alarm bells generally should start ringing in your head warning you to steer clear. After all, in a world where the average blue chip yields less than 2 percent and high-grade long-term corporate bonds yield just 6 percent, a double-digit payout typically signifies a company is in serious trouble. Sometimes, though, investors get things wrong, marking stocks sharply down because of some irrational fear. This…
