Friday, August 06, 2010

August 6, 2010 Dodged that bullet we thinks?


August 6, 2010 Dodged that bullet we thinks?

The July jobs number was disappointing, but the real bad part of the number was in the government sector. That should not have been a surprise with 48 of 50 Sates looking for ways to save money. I like the California IOU idea. I plan on using it next April when my taxes are due. Although the private sector hiring was up, it was not at expectations which made it the real anchor during the early hours of the market. You had to look for good news in the report, and there were little pieces of coal which could be diamonds some day. Wages increased slightly, and the average hours per week expanded slightly. Typically companies will give workers more hours and pay slightly more BEFORE hiring new employees. A possible tell of things to come. Volume was light and the market closed basically flat.

Buy Beer not Bonds

There was a bit of a sell off in the brewery sector today on news that Russia will stop shipping many grains due to the wild fires stretching for hundreds of miles. (Think about a wild fire from San Francisco to Chicago) Anyway escalating grain prices are worrying beer stock owners that margins will get squeezed, and they will. However after every significant grain increase in the last fifty years, beer prices have gone up and never come back down in relations to the commodities. Sounds a lit like oil and gasoline. My linkage play would be buy the beer stocks at the discount, wait for the fires to be put out, wiat for some rain, and in a season or two, margins will be back in line and it will be Miller Time! (You have to be thinking 18-36 months on this play so look for a brewer with a nice divided. (Think AmBev 2.8%, TAP 2.1%, Untied Brewers 2.7%, and Rocky Mountain Brewery Trust 7+%)

I'll stick with the Bush bashing since that audience seems to be a bit thick skinned.  From the W archives:

"And that is why today, I am appointing Tony Blair as the next President of the United States."
circa February 2001

Short and sweet today as I am headed across the pond to Jolly ol' England.

Salve Lucrum


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