BerkAdvisory

Democratic Economic Policies - They Don't Work Except in the Minds of Intellectuals

$AZO: 12 consecutive quarters of 20% EPS growth; 21 consecutive quarters of double digit growth.

AutoZone, Inc. (NYSE:AZO) today reported net sales of $1.9 billion for its first quarter (12 weeks) ended November 19, 2011, an increase of 7.4% from the first quarter of fiscal 2011 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 4.6% for the quarter.

S&P 500 Fails to Keep Pace with Corporate Earnings

Stock prices follow profits - there is a pretty big gap between price and profits now - You have to think prices are below intrinsic value.  We do.  That's why we are bullish and proud.  Just like Don Hays' crew. (Here)  When it closes the gap, and profits do not come down then the market price for the S&P 500 would go up about 25%.  When? I don't know, but that's what investing is all about - analysis and patience.

Hardest Hit Stocks Up the Most in the Last Month

The average stock in the S&P 500 is now up a whopping 20.94% since the close on October 3rd.  But the stocks that got hit the hardest during the summer correction are up much more than that.  We broke the S&P 500 into deciles (10 groups of 50 stocks each) based on stock performance from July 7th (the day before the big summer selloff started) through October 3rd (the recent low), and then we calculated the average performance of the stocks in each decile since October 3rd.  As shown below, the 50 stocks that were down the most from July 7th through October 3rd are up an average of 35.3% since then!  Conversely, the 50 stocks that held up the best during the summer correction are only up an average of 6.9% during the current rally, which is severe underperformance.

via www.bespokeinvest.com

Riding the North Dakota Oil Boom - WSJ.com

Highly Paid Truck Drivers - Carrying Oil

The trains, trucks and trailers point to what has become a central challenge facing North Dakota's rise as a U.S oil-producing power: how to get crude out of the massive Bakken Shale reserve and to the refineries far away that process it.

A truck delivers crude to the Bakken Oil Express Rail Hub in Dickinson, N.D., where it is loaded onto rail cars.

A Month to Remember for Markets, But Most Missed the Profits

October may have been the best month in nine years for stocks, but many investors—from individuals to hedge funds—missed out.

Now there is evidence that some buyers are starting to tip-toe back into the market, not just for stocks but also other risky assets like junk bonds and emerging-market debt.

94% of S&P 500 Stocks Above 50 Day Moving Average - Most since 1996

Since at least 1996, we've never seen a day when more than 94% of S&P 500 stocks were above their 50-day average.  Until today.

via www.sentimentrader.

 

BerkAdvisory's ValueAligned Portfolio (VAP) +14% Last 12 Months

As September ended, measures of sentiment registered record breaking fear. (Click Download BerkAdvisory_3rd qtr2011 letter_FINAL for my full letter to clients)

Cash is spilling over everywhere we look.  Monetary conditions and stock market valuation are at the most bullish levels.  We have maintained since early August that it is time to move out of cash and bonds and into stocks of great companies to the extent that your unique circumstances allow.  

It's not too late, but clients that took that advice are up about +10% for October.

Gap to Slash Namesake Store Count: Never Too Late, I Guess

Gap Inc. plans to shut more than a fifth of its Gap stores in North America over the next two years, a comedown for the struggling retailer and a stark symbol of the way the tepid recovery and rise of online shopping have altered the landscape at shopping malls.

Once the world's largest specialty apparel chain by revenue, Gap pioneered the strategy of developing a popular store and expanding it to every viable shopping location in the U.S.—then beginning the process all over again with a new brand.

But that approach, which produced heady growth as Gap and other retailers raced to build a coast-to-coast presence, came back to haunt it after the recession exposed an oversaturated market, with far more stores than shoppers to fill them.

Don't believe the small intellectual elite in a faraway capital,, Buddha style.

Do not believe anything because it is said by an authority, or because it is supposed to come from angels or from Gods, or from an inspired source. Believe it only if you have explored it in your own heart and mind and body and found it to be true.

Gautama Buddha

via shilpaunalkat.typepad.

BERK: If I have one message at BerkAdvisory it is this..."experts" don't know and can't predict the future but they do influence perception which changes today's stock prices.