Where should I start? I keep thinking someone will wake me out of my nightmare. The market has taken a huge nosedive since last week and almost everyone thinks there is more of the same in store for us. The S&P 500 is down over 30% from last year. We are at five year lows for the DOW. Six consecutive days of losses and boy do I mean losses. The Emergency Economic Stabilization Act of 2008 was passed on Monday. Yay.
There is a ton of blame to go around for this economic crisis. From cheap money to unscrupulous investment banks to overzealous consumers. It amazes me that it is the “Joe Six Pack” taxpayers that end up paying for it all. AIG felt compelled to rub our noses in it. After an $85 billion loan from the government to save them from bankruptcy, they have the gall to spend $440,000 on a retreat at a luxury resort in California. Is this some kind of practical joke?
AIG attempted to defend their expense today. Their CEO, Edward Liddy, indicated that this was “standard industry practice” to reward the top performers. You know what pal? Maybe it is that “standard industry practice” that has your company dumping terds all over Wall Street. This guy and all the others are simply rolling up hundred dollar bills and lighting cigars off while we worry about what will happen next. They know full well that the government will bail them out.
The Thoroughbred Folio has fallen on hard times along with the rest of the market. It is hard to believe we were actually up just a couple of weeks ago. Bank of America (BAC) has become the latest casualty of the dreaded dividend cut. The Dividend Aristocrats will look much different next year as companies continue to fall off.
One nice piece of news this week. Wrigley (WWY) finally sold out at $80 per share. We made a nice profit, actually an exceptional profit of almost 34%. Family Dollar (FDO) is hanging in there through all the turmoil in second place. Rohm and Haas (ROH) is still in the third spot with Anheuser-Busch is a solid forth with almost a 21% gain. We have four stalwarts out of 40. Ouch.
It should come as no surprise that the banks are clustered up at the bottom of the Folio. All three of the bottom stock are at -56%. You may as well call it a tie. KeyCorp (KEY), Gannett (GCI), and Regions Financial (RF) share the shameful position together this week. Hot on their heels is Bank of America which I mentioned earlier cut their dividend this week.
This was a really bad week and I believe this article has to be one of the most negative I have written, ever. On the up side, people should consider the opportunities that lay before them during this downturn. I will continue to dollar-cost-average into my positions. I have no idea when this will turn around. Some people say two years others say five. When you look at the place we are now from where we have been you have to believe one day we will be back to those old levels.
Thoroughbred Performance (Week 42 of 52): $-517.96 (-17.27%) Dividends To Date: $78.36
Top 3 Stocks
- WM Wrigley $25.38 (33.84%)
- Family Dollar $23.21 (30.95%)
- Rohm and Haas $18.79 (25.05%)
Bottom 3 Stocks
- KeyCorp $-42.24 (-56.32%)
- Gannett $-42.08 (-56.10%)
- Regions Financial $-42.04 (-56.06%)
Stocks used in this post:
- (AIG: 1.44, 0.00%, Yield: 56.94%)
- (BAC: 11.25, 0.00%, Yield: 22.76%)
- (FDO: 25.07, 0.00%, Yield: 1.95%)
- (GCI: 6.09, 0.00%, Yield: 26.27%)
- (KEY: 6.91, 0.00%, Yield: 18.86%)
- (RF: 7.66, 0.00%, Yield: 16.19%)
- (ROH: 71.25, 0.00%, Yield: 2.25%)
- (WWY: 0.00, N/A, Yield: N/A%)
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