Daily Posts Archive

Ideally, you want to invest in industries where the dominant factors are positive, where booming demand for products and services means revenue growth is rapid and profit margins are high. Trouble is, in the current market climate, the best growth stocks, which have enjoyed great advances earlier this year, are in retreat. Buying them is a high-risk proposition. But there is one exception, and it’s interesting enough to discuss here.

These basics will help any growth investors improve their portfolio results.

Paul Goodwin tells why growth investors need a disciplined sell strategy.

The investment idea that I’m floating in this issue is just that, an idea. But it’s a big idea. Taleo Corporation is a California-based company, founded in 1999, that’s trying to do two huge tasks: First, get companies the talent that they need to succeed; and, second, reduce the cost of an in-house human resources department. Taleo uses talent management software that is designed to recruit, manage and develop different classes of employees, from Professional to Hourly to Contingency (temporary). Among other tasks, Taleo’s online programs guide clients through recruiting on campuses, complying with labor laws, and transitioning a new hire from candidate to employee.

And now one brief recommendation. It’s a gold stock, Freeport McMoRan (FCX). Freeport owns the Grasberg open pit mine in Indonesia, which is not only the world’s richest gold mine but also the world’s third-largest copper mine. And it acquired Phelps Dodge earlier this year, making it the largest publicly traded copper company in the world.

Back at the beginning of this email, I mentioned the American Association of Individual Investors (AAII). I’m a life member; they made me an offer I couldn’t refuse about a decade ago, and I expect to come out ahead on the deal. Anyway, AAII regularly tests investing systems to see which ones perform best, and over the long run, two systems stand head-and-shoulders above the rest. The first is the CANSLIM approach advocated by Investor’s Business Daily (IBD). The second is Martin Zweig’s system.

Of course, I couldn’t finish this weekend’s Wealth Advisory without at least mentioning the overall market. In case you missed it ... the sellers have taken control. But the most important thing is that the sellers had taken control of most stocks before this week - I wrote two weeks ago about how there was a growing divergence between the few leading glamour stocks and the broad market.

Legalizing marijuana would not only create a great new source of revenue, it would also bring quality control to the industry, create thousands of new legal jobs, and - best of all - stop the practice of imprisoning people who were only working to make a buck by filling the market’s demand ... which could save us many billions of dollars a year, reduce ancillary violent crime, return people to the labor force and make families whole again.

Crocs, the maker of the deliciously comfortable, horrendously ugly shoes reported its earnings on Wednesday, October 31 after the market closed. The good news is that the company’s profits more than doubled, reaching $0.66 a share vs. $0.25 for Q3 last year. This profit exceeded expectations by a few cents. Hurrah. But when the company issued its outlook for total 2007 earnings, raising its guidance by about a nickel over last quarter’s estimate, the Street wasn’t pleased.

It’s the largest provider of cell phone service in Turkey, with a 60% market share, and it’s named, appropriately enough, Turkcell. The firm’s ADRs (American Depositary Receipts) trade on the NYSE under the symbol TKC. With 32 million subscribers, Turkcell is the third-largest provider of GSM service in Europe. It has $5 billion in annual revenues; it’s expected to grow earnings 42% this year and 21% in 2008; and it pays an annual dividend of 3.8%!