Rapid fire thoughts before the weekend

I am still working on part II of “We are our best analysts”, Rich has put a lot of pressure on me to get this one right so I am taking my time with it.  I did want to spend some time quickly covering and sharing some thoughts in a rapid fire format before going into the weekend.

1.  I was wrong about the market today.  There is no other way to say that.  I thought we were going to end the week strong and we didn’t.  I thought the market would respond positively towards the insurance sector today. . it didn’t.  I was wrong.

2.  I want to restate my target price for CNO at $11 within a year and above $5 in the short term.

3.  I’ve changed the setup on this blog in preparation for my move off of wordpress and out on my own at blogtoamillion.com.  The transition process is not complicated but it is time intensive.  I had promised myself that I would move off of wordpress when I was averaging greater than 500 visitors a day.  I am happy to announce that Blog to a Million has averaged over 1000 visitors a day for the last six days.

4.  I have received many ideas in the past few days.  I have not had the time to research all of them, but here are the two strongest ideas at first glance.  I do not recommend any of these companies because I have not had the time to fully explore their business model and financials, however I am including them here as recommendations for your research this weekend.

New Market Technology (NMKT)  (From “Jay”) A true penny stock trading at less then 3 cents per share.   With companies of this size, the risk is high and there is no way of getting around that.  However, the pedigree of their management team is quite impressive to say the least.  Their CEO communicates openly and honestly with the shareholders.  They are predominately an IT solutions company for emerging markets (I am sure that is an over simplifying their product line, but it’s in the ballpark) and despite their very low stock price, they have been around since the mid-90′s and have survived thus far.  I have spent several hours looking at this company and intend to do much more, before formally recommending it and/or investing in it, but at this stage I highly recommend you take a look at the opportunity that is presented here.

The Providence Service Corporation (PRSC)   The company provides social services on primarily the government’s dime.  From their website, “The Providence Service Corporation provides and manages government sponsored social services to individuals and families in the United States. The company’s services include home based and intensive home based counseling, substance abuse treatment, school support, misdemeanant private probation supervision, workforce development, foster care, therapeutic foster care, and not-for-profit managed services, including administrative support, information technology, accounting and payroll services, monitoring, and case management, as well as intake, assessment, and referral services.  Whether you agree or disagree with the current administration’s plan to significantly increase the size of our government and expand social programs (I happen to disagree), it is pretty clear to me that PRSC stands to benefit from this eventuality significantly.  I have no analyzed their financials so I am not making a recommendation at this time, but if you have some time this weekend, the company certainly warrants a bit of research. (Thanks, Nicolla from Italy.)

 5.  I am looking to add some advertisements on my new site.  I have a list of companies that I trust and feel very confident in recommending.  It is very important to me to include banner ads only from companies that provide true value to their customers.  If you have any recommendations or feedback on this matter, please share them with me.

6.  Months ago, a friend and I were discussing the economic climate and while bouncing random thoughts back and forth, he blurted, “There is a 25% excess in our country – on everything, house prices, stock prices, jeans, cars. . you name it.”   This was  a “Blink” moment for me (for those of you have read Malcolm Gladwell’s book Blink, you know what I mean).  The super simplified version of the theory is that sometimes your gut instinct exceeds the most detailed and complex analysis.  Let’s look at what the future might hold if my friend’s gut instinct is correct:

- We would expect to see the SP500 tend towards 75% of its high $1557 or $1167

- GM would close approximately 1850 of its 7400 car dealerships.

- The average cost of a house in America would be $234k from its peak of $313k in 2007. 

I encourage you to play out this ‘gut assessment’ in your mind and use examples with stock prices, car prices, etc etc and maybe even write them down.  I acknowledge the simplicity of the theory but when you considered the sustained affects of a national negative savings rate and the excesses of consumer credit; my gut tells me this theory is not far off.

Have a great weekend.

Don’t forget to subscribe to my blog to receive my newsletter, updates and weekly stock tips.  You can subscribe in the upper left hand corner.

Advertisement