Saturday, July 28, 2007

Welcome to the Financial Bullet!

Well hello. Thanks for stopping by. This is the initial post for my financial blog, the Financial Bullet. The goal of my blog is going to be two-fold. In Mortgage Matters, I will discuss the state of mortgage lending, builders, real estate agents, the home buying process, and tips in general regarding everything mortgage. I have been in the mortgage arena for the last seven years and have seen a lot of things transpire all mortgage related and have learned how the rest of the stock and bond market and mortgage lending all are interconnected. From my experience and perspective, I should be able to give you a good overall idea of the mortgage market. The second part of this blog is going to focus on building a personal stock portfolio. This is an area that I think that I can be successful at, following the market on a daily basis, but I have never really tried to put it all together. I am going to share my ideas, successes, and very likely some awful failures. Today's blog post is going to focus on the latter, I am going to give my first portfolio picks.

My Guidelines

I am going to build my portfolio over the next few blog posts. My goal is to have a portfolio of 10-12 stocks at any one time. Why 10 to 12 picks? For starters I'm not a financial analyst, nor do I do this full time and following 10 or so stocks is going to take a good portion of my time. I may adjust my picks based on my comfort level and overall market conditions at any time. I should keep you updated when I decide to move in a new direction.

Enough Already! Let's DO Something


Building the Core

I have five for picks for today. Proctor & Gamble (PG), PepsiCo, Inc. (PEP), Las Vegas Sands (LVS), Ford (F), and Barrick Gold Corp (ABX).

It isn't a good week to start a stock portfolio, or smoking, drinking, or try to sell debt on the market. So my first picks are those companies that I feel are going to good to hold onto for quite some time, especially my first 2 picks.

Proctor & Gamble are set to report earnings for their financial fourth quarter next week. It looks to be a good report. PG pretty much makes everything under the sun. The business is broken up into 3 main product groups, Beauty & health, Household products, and Gillette. The make Tide, Febreze, Swiffer, and the list goes on and on. This is my anchor to this portfolio. I plan to hold this unless something extreme happens. People always need to clean clothes, diaper their kids (yeah they make those too), and shave. PG is pretty much cyclical proof.

My secondary anchor is PepsiCo, Inc. Sure, they had to admit that Aquafina is really tap water
but does that really surprise anyone? Not me. And will it stop people from purchasing Aquafina or bottled water in general (Aquafina certainly is not alone)? Nope. It won't make any difference. Bottled water is now part of the main stream. But will they them take those mountains off the bottle's label? PepsiCo released their most recent earnings this past week and raised their full year guidance. And their commercials say 56% of diet cola drinkers thinks Diet Pepsi has more cola taste.

Ah, how we love to gamble. Isn't that why we "play" the stock market? Las Vegas Sands fits our gaming needs. There seems to have been lots of discussion whether the Macau operation is going to be successful. But I don't think there is any question at all. Macua seems to be full steam ahead for the fall opening. And it seems the Chinese love to gamble too.

Ford posted a surprise profit of $750 million when analysts had been predicting an eighth straight quarterly loss. I have liked Ford for the last year or so. I am very high on CEO Alan Mulally who took over the reins from Bill Ford. There were plenty of questions about Mulally entering into the automobile market but it seems like the move is starting to pay off. The car maker has been successful with new models such as the Edge crossover and seems to be winning over some fans. Is this really the Fix Or Repair Daily Ford that I knew from my youth? The question really will be can they keep this up?

My final pick is Barrick Gold Corp. This may the riskiest of my picks (believe it, I think gold is more risky than Ford) but with the dollar still falling lower almost everyday it seems I think having exposure to gold is still a good thing. I know that this might not be the best hedge since gold has been on a tear in the last few years but I think mining companies such as ABX which is the world's largest producer of gold bullion but in general still may be good. ABX releases their quarterly earnings August 1. I'll revisit them shortly thereafter.


















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