Tuesday, July 10, 2007

Breaking the Pattern

We've seen a nice gradual run up over the past couple of weeks, which has finally slowed today. Retailers are reporting some poor numbers, and Alcoa(AA), which is often an indicator for the entire earnings seasons, reported less than stellar numbers.

I still see some room to go up in this market. Oil stocks keep plugging along. Portfolio holding Frontier Oil(FTO) seems to have so much strength right now. Financial names are continuing to get hit, and are starting to look pretty favorable from a valuation standpoint. I'm going to use this opportunity to pick up more shares in Bank of America (BAC), and to add a position in U.S. Bank (USB), which is a great name in this industry. They produce higher margins than their peers, and thus carry a little higher valuation. But I think it is worth paying up for. Warren Buffett is also a holder in U.S. Bank, which never hurts.

Here's an interesting article about adjustable-rate mortgages. Its something to keep in mind as we head toward this fall.

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