Roll With The Cycles, Grab Some Cisco While It’s Cheap Again

Darwin's ideas work in stocks, too

“If I’d known I was going to live this long, I would have taken better care of myself.” – Eubie Blake, American composer (1887–1983)

You cannot underestimate the power of cycles.? They reoccur in nature, business, and financial markets with great regularity.? When we ignore them, cycles seem obvious in hindsight.? Foresight is where you’ll make your money.

Time frames may be different based on secular trends, weather phenomenon, innovations in health care, and government intervention, but generally, what goes around, comes around.? For example, economic booms and busts occurred, on average, every 14 years for 2,000 years.?Beginning in the late 20th?century, they began cycling every seven years as a direct result of government efforts to stimulate economic activity during recessionary downturns.? While they occur more frequently, they’re cycles nonetheless.

Tall Parents Have Shorter Children, On Average
Charles Darwin and his cousin, Francis Galton, were the first to note that tall parents have shorter children, on average, and vice versa.? With Karl Pearson, they studied over one thousand father and son pairs.? Galton termed this phenomenon in nature “regression to mediocrity.”? Since then, the method of studying how one variable leads to another variable has been called “regression analysis.”

Financial market observers see it all the time.? Excessively high prices eventually lead to excessively low prices.? The key to succeeding as an investor is knowing where the excesses are when they’re happening and exploiting them.

Special Offer: Make the most of explosive moves in gold and silver but don’t get left holding the bag when it’s time to run.? Click here for instant access to market timing analysis and specific gold, silver and hard asset model portfolios in Curtis Hesler’s?Professional Timing Service.

“Joining The Dow Can Be The Kiss Of Death”
In September, Jeff Reeves of InvestorPlace.com conducted research showing that by the time companies have grown to become the recognized leaders in their industries, share prices are inflated.? For example, turning the clock back to March 1999 when the Dow Jones Averages closed above 10,000 for the first time, then crested to 11,000 a few months later, four of the biggest names of the day joined the Dow 30. Here’s how they fared: AT&T (then SBC Communications), down 38%; Intel, down 50%;?Microsoft, down 47%;?Home Depot, ?down 38%.

During subsequent reformulations of the Dow Jones Industrial Average, laggards were replaced with other leaders of the time.? They included Pfizer, Verizon, Bank of America, Cisco, and AIG.? As a group, these stocks have been shellacked since they joined the Dow 30, but along the way they have continued to make a lot of money for anyone who purchased shares when stock prices were excessively low.? Many have tripled off of lows in 2003 and 2009.

The point is this: You cannot fight the power and magnitude of cycles.? They can make or break an investor.? Here’s one stock that appears far too low right now:

Fallen Angels Focus Stock: Cisco Systems? (CSCO, 20.15)

Cisco is the dominant player in the global networking industry.? Shares plummeted more than 16% on ?Thursday following a less than stellar outlook presented by company management.? While management cited near term challenges, we believe the selling has provided an attractive entry point for longer-term investors.

The company has a solid balance sheet, operating profit margins of more than 20% and net margins in the high teens.? Our fair value estimate (based on discounted cash flow analysis) is $30 per share; providing investors with 50% potential upside from current levels.

Gabriel Wisdom and clients of American Money Management LLC, including mutual funds managed by AMM may buy or sell securities mentioned without prior notice.

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Roll With The Cycles, Grab Some Cisco While It’s Cheap Again

Darwin's ideas work in stocks, too

“If I’d known I was going to live this long, I would have taken better care of myself.” – Eubie Blake, American composer (1887–1983)

You cannot underestimate the power of cycles.? They reoccur in nature, business, and financial markets with great regularity.? When we ignore them, cycles seem obvious in hindsight.? Foresight is where you’ll make your money.

Time frames may be different based on secular trends, weather phenomenon, innovations in health care, and government intervention, but generally, what goes around, comes around.? For example, economic booms and busts occurred, on average, every 14 years for 2,000 years.?Beginning in the late 20th?century, they began cycling every seven years as a direct result of government efforts to stimulate economic activity during recessionary downturns.? While they occur more frequently, they’re cycles nonetheless.

Tall Parents Have Shorter Children, On Average
Charles Darwin and his cousin, Francis Galton, were the first to note that tall parents have shorter children, on average, and vice versa.? With Karl Pearson, they studied over one thousand father and son pairs.? Galton termed this phenomenon in nature “regression to mediocrity.”? Since then, the method of studying how one variable leads to another variable has been called “regression analysis.”

Financial market observers see it all the time.? Excessively high prices eventually lead to excessively low prices.? The key to succeeding as an investor is knowing where the excesses are when they’re happening and exploiting them.

Special Offer: Make the most of explosive moves in gold and silver but don’t get left holding the bag when it’s time to run.? Click here for instant access to market timing analysis and specific gold, silver and hard asset model portfolios in Curtis Hesler’s?Professional Timing Service.

“Joining The Dow Can Be The Kiss Of Death”
In September, Jeff Reeves of InvestorPlace.com conducted research showing that by the time companies have grown to become the recognized leaders in their industries, share prices are inflated.? For example, turning the clock back to March 1999 when the Dow Jones Averages closed above 10,000 for the first time, then crested to 11,000 a few months later, four of the biggest names of the day joined the Dow 30. Here’s how they fared: AT&T (then SBC Communications), down 38%; Intel, down 50%;?Microsoft, down 47%;?Home Depot, ?down 38%.

During subsequent reformulations of the Dow Jones Industrial Average, laggards were replaced with other leaders of the time.? They included Pfizer, Verizon, Bank of America, Cisco, and AIG.? As a group, these stocks have been shellacked since they joined the Dow 30, but along the way they have continued to make a lot of money for anyone who purchased shares when stock prices were excessively low.? Many have tripled off of lows in 2003 and 2009.

The point is this: You cannot fight the power and magnitude of cycles.? They can make or break an investor.? Here’s one stock that appears far too low right now:

Fallen Angels Focus Stock: Cisco Systems? (CSCO, 20.15)

Cisco is the dominant player in the global networking industry.? Shares plummeted more than 16% on ?Thursday following a less than stellar outlook presented by company management.? While management cited near term challenges, we believe the selling has provided an attractive entry point for longer-term investors.

The company has a solid balance sheet, operating profit margins of more than 20% and net margins in the high teens.? Our fair value estimate (based on discounted cash flow analysis) is $30 per share; providing investors with 50% potential upside from current levels.

Gabriel Wisdom and clients of American Money Management LLC, including mutual funds managed by AMM may buy or sell securities mentioned without prior notice.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

Roll With The Cycles, Grab Some Cisco While It’s Cheap Again

Darwin's ideas work in stocks, too

“If I’d known I was going to live this long, I would have taken better care of myself.” – Eubie Blake, American composer (1887–1983)

You cannot underestimate the power of cycles.? They reoccur in nature, business, and financial markets with great regularity.? When we ignore them, cycles seem obvious in hindsight.? Foresight is where you’ll make your money.

Time frames may be different based on secular trends, weather phenomenon, innovations in health care, and government intervention, but generally, what goes around, comes around.? For example, economic booms and busts occurred, on average, every 14 years for 2,000 years.?Beginning in the late 20th?century, they began cycling every seven years as a direct result of government efforts to stimulate economic activity during recessionary downturns.? While they occur more frequently, they’re cycles nonetheless.

Tall Parents Have Shorter Children, On Average
Charles Darwin and his cousin, Francis Galton, were the first to note that tall parents have shorter children, on average, and vice versa.? With Karl Pearson, they studied over one thousand father and son pairs.? Galton termed this phenomenon in nature “regression to mediocrity.”? Since then, the method of studying how one variable leads to another variable has been called “regression analysis.”

Financial market observers see it all the time.? Excessively high prices eventually lead to excessively low prices.? The key to succeeding as an investor is knowing where the excesses are when they’re happening and exploiting them.

Special Offer: Make the most of explosive moves in gold and silver but don’t get left holding the bag when it’s time to run.? Click here for instant access to market timing analysis and specific gold, silver and hard asset model portfolios in Curtis Hesler’s?Professional Timing Service.

“Joining The Dow Can Be The Kiss Of Death”
In September, Jeff Reeves of InvestorPlace.com conducted research showing that by the time companies have grown to become the recognized leaders in their industries, share prices are inflated.? For example, turning the clock back to March 1999 when the Dow Jones Averages closed above 10,000 for the first time, then crested to 11,000 a few months later, four of the biggest names of the day joined the Dow 30. Here’s how they fared: AT&T (then SBC Communications), down 38%; Intel, down 50%;?Microsoft, down 47%;?Home Depot, ?down 38%.

During subsequent reformulations of the Dow Jones Industrial Average, laggards were replaced with other leaders of the time.? They included Pfizer, Verizon, Bank of America, Cisco, and AIG.? As a group, these stocks have been shellacked since they joined the Dow 30, but along the way they have continued to make a lot of money for anyone who purchased shares when stock prices were excessively low.? Many have tripled off of lows in 2003 and 2009.

The point is this: You cannot fight the power and magnitude of cycles.? They can make or break an investor.? Here’s one stock that appears far too low right now:

Fallen Angels Focus Stock: Cisco Systems? (CSCO, 20.15)

Cisco is the dominant player in the global networking industry.? Shares plummeted more than 16% on ?Thursday following a less than stellar outlook presented by company management.? While management cited near term challenges, we believe the selling has provided an attractive entry point for longer-term investors.

The company has a solid balance sheet, operating profit margins of more than 20% and net margins in the high teens.? Our fair value estimate (based on discounted cash flow analysis) is $30 per share; providing investors with 50% potential upside from current levels.

Gabriel Wisdom and clients of American Money Management LLC, including mutual funds managed by AMM may buy or sell securities mentioned without prior notice.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

Back in the saddle again after wreck

AUSTIN (KXAN) - Just past a year after Angi Hughes almost died in a car-bicycle wreck, she and her husband want to make one thing very clear: They did not deserve what happened to them.

?

What happened to them was this: Sam Hughes got hooked on bicycling.

"You get some exercise in the morning and then you're rejuvenated and ready for work," he said. "You know, you've worked out your stress; it just helps you have a better day."

Hughes wife, Angi, took some convincing.

"I was afraid of the traffic; I'm paranoid," she said.

But eventually, Angi warmed to the idea and the couple invested in a top-of-the-line tandem bike, the so-called "bicycle built for two." Finally, husband and wife began commuting along Parmer Lane to their jobs in North Austin.

"Once you get going, you really like it," Angi recalled. "I felt better; I had more energy. We spent more time together because we rode in the afternoons. We had to ride home, of course."

"If you had stress during the day," her husband agreed, "then we had a 12-mile ride home; work that stress out going home. Plus then you've ridden quite a bit and you can eat whatever you want when you get home; it's really nice," he laughed.

Still Angi worried a bit.

"I'm on the back and I would fuss at him if he got more than, like, 10 inches from the edge of the shoulder," she said. She drew comfort though, from her husband's experience.

"I've ridden on Parmer since 1998 and it is a busy road," he said, "but you know, there's two or three lanes and the nice super-wide shoulder, and I have never, you know, had any problems before."

Early in the pre-dawn darkness of November 3, 2009, all that changed.

"We had all our safety equipment on," Sam remembered. "We had our lights on, headlight, tail light, helmets, gloves. We had two different red strobes on the back of our bike flashing at different intervals, very bright, so in the dark, they really stand out. We were on the shoulder, way out of the way."

And yet, as they commuted to work in light traffic just before 6 a.m., the driver of a car veered off the road and crashed into the Hughes at 60 mph. Sam recalled that the driver was issued a citation for illegally driving on the shoulder of the road.

The collision took a severe toll. Sam suffered three broken ribs, severe bruises and a gash in his scalp that required staples to close. Angi fared worse, with five broken ribs, a broken neck and a broken back.

"She also had a very deep laceration on the inside of her left knee that we were later told she almost bled to death from," Sam said, his voice breaking and tears appearing on his cheek. "I wouldn't have had her out there if I had ever dreamed anything like this would happen.

"The reason her injuries were so extensive was she came straight off the back of the bike into the windshield of the car," he explained. "The car was totaled mostly from a body hitting the windshield and the roof."

For her part, Angi Hughes said her husband downplayed his own suffering. It took a couple of weeks for her head to clear after the collision. By that time, Sam had already begun to heal.

"I did not realize how bad he was hurt until my son showed me a picture on his cell phone," her voice, too, breaking at the thought.

Eventually, though, husband and wife got a new tandem bike and went for a ride.

"We rode one mile around our neighborhood," said Sam.

"I was freaking out pretty good; I think I hyperventilated a couple of times," Angi recalled. "I rode with my eyes closed and if I heard a car, he had to turn immediately because I couldn't stand anything coming up behind me. But I did it. I cried the whole way, but I did it."

In October, the couple journeyed to San Francisco, rented a tandem bike and rode from Fisherman's Wharf, across the Golden Gate Bridge to Sausalito.

"We were back!" said Sam.

He decided to say so, out loud. In an e-mail to KXAN Austin News, Hughes suggested a follow-up.

"We watch the news all the time," he said, "and we see news stories of people getting injured or stuff happening to people. We see it for one day and then we never know what happened to those people. So one of the reasons was I wanted people out there who; I mean because it was a big traffic jam that morning, you know. Traffic was backed up for a long time. So I want all those people who saw us and prayed for us, saw our mangled bike, to know we're OK."

There was something else, though. Incredibly, when the original story about the incident appeared on the KXAN Austin News website, lots of anonymous commenters blamed the Hughes for what happened.

"The people who wrote that stuff need to stop and think because that's just mean," said Angi. "There are people out there in cars who are rude; there are people out there on bikes who are rude. Everyone just needs to be considerate of each other. There's bicyclists who ride in the way on purpose to prove a point. So there's rudeness on both sides. But I just want everybody to just be aware that it's legal for bikes to be on

the street."

"There are many people out there in this supposed bike-friendly town that feel we got what we deserve," said Sam. "We were run over and they say we deserved it even though we were on the shoulder, out of the way, minding our own business, helping Austin stay green, right? And they feel we got what we deserved. So I want it to be known, we didn't get what we deserved. The bikes and the cars should be able to get along, and I just hope that this story can help bikes and cars get along.

"A month after the collision, the Hughes' first grandchild turned three years old. A month after that, they celebrated their 25th wedding anniversary. Three months later, a son was married and in another three months, another grandbaby was born. Sam Hughes shudders at the thought of watching all that happen without his wife.

"I can't imagine what it would be if I'd lost her that day," he cried.

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