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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Stock of the Week


December 12th 2008 General Electric
NYSE symbol: GE
Industry: Conglomerate
Stock Price as of 12/12: $17.11

There is one constant in this market. The bad news keeps coming and it's only getting worse. Like I said last week, no sugar coating the economic news, it's bad. The one bright spot recently is mortgage rates are coming down. Unless you refinanced at the lows in June of 2003, you seriously need to call your bank and look at refinancing. Even if you have a bad FICO number, it doesn't hurt to call. This is the best advice I can give anyone. I feel like shouting it from the top of a mountain. If the whole country could refinance their mortgages lower, this could be the best stimulus package THE GOVERNMENT WOULDN'T HAVE TO PAY FOR. In theory, lower mortgage rates should halt the consistent decline in housing prices because individuals can now afford more house at lower rates. Hopefully this will work.
Getting back to the stock market, it's tax season time and everyone has plenty of tax loss stocks to deal with. I'm not a big fan of going to cash. if you're looking to sell stocks for tax losses, then I would prefer investors look to put the proceeds into other positions.
Over the last several weeks I have featured income ideas and growth stocks. Defensive plays like Altria, Phillip Morris, and Kraft will continue to provide good dividends. People will continue to smoke and eat. Altria is a 8% yield, Phillip Morris is at 5%, and Kraft is a 4% yield. With the recent slide in GE, the yield is over 7%. Two other Dow components DuPoint and AT&T last week announced intentions to cut thousands of jobs. DuPont yields 6.8% and AT&T is at 5.7%. AT&T actually raised the dividend by a penny a quarter this week. Rival Verizon is also at 5.7%. Last week Cramer on CNBC recommended Energy Transfer Partners, a unique firm that ships natural gas through their pipe lines in the Southwest. Cramer believes the firm will remain highly profitable. There has been insider buying which is good and the company provides a dividend yield of 10%. Another pipe line company is Boardwalk Pipeline Partners which is partly owned by Loews Group and the Tisch family. Boardwalk provides a dividend yield of 9.5%.
For investors looking for growth, I have featured plenty of large cap techs which dominate their industry and have billions in cash verse little or no debt. Stocks like Intel and Google have dropped dramatically, but both have no debt and billions in cash. These two companies will continue to dominate their industry through this tough economic environment and re-emerge stronger than ever on the other side of this downturn.
Another growth area which is getting more popular every day is the ETF market. A number of companies are providing ETFs for U.S. indexes, foreign markets, sector funds, commodity, and others ETFs that use leverage on the long side and short side. ETFs are another execellent place to rotate tax loss proceeds to keep money in the marketS. The leverage ETFs should be for traders and aggressive investors only.