Nokia Corporation (NOK), Garmin LTD (NASDAQ:GRMN), Global Imaging Systems Inc (GISX), The Southern Company (SO), GlaxoSmithKline PLC (GSK), MetLife Inc (MET), Prudential Financial Inc. (PRU), Allstate Corporation (NYSE:ALL) and Genzyme Corp (GENZ).

Rackable Systems Inc (NASDAQ:RACK), Brunswick Corp (BC), International Paper (IP) and Alkermes Inc (ALKS)

Last week was rough and this causes people to bargain hunt. You should look at the stock’s price tag along with considering the company’s fundamentals. Because everyone shops for damaged stocks you should know the right way to do it otherwise you could end up loosing money.
A stock that has been beaten up and a stock you should not buy is Amazon.com Inc (AMZN). The stock is cheap but not worth buying. A damaged stock should be compared with five other stocks in a similar business. AMZN sells a lot of merchandise but at heart they are a bookstore. As such, compared to Borders Group (BGP) and Barnes and Noble (BKS), AMZN is expensive. AMZN is a $14 billion company and too big to be a takeover target, also they sell at 44 times earnings. BGP is a $1.1 billion company and sells at 12 times earnings and BKS is a $2.2 billion company and they sell at 15 times earnings. When looking to growth AMZN is not cheap either. Jim said that this stock needs to be trading at half of where it is right now.” They are damaged because they fail to expand business beyond selling books. You should stay away from AMZN and BKS may be too cheap. Jim told us that BKS will report a bad quarter so when they do you should look to buy the stock.

Amazon.com Inc (AMZN) is a stock that doesn’t get cheaper as it goes down, but their are stocks that do get cheaper as they decline. Analysts in general do not seem to understand this and continue to tell people to buy as stocks sink then sell when they bottom. AT&T Inc (T) is the example we were given. Analysts loved the stock since it was in the $30s, but Jim has despised the stock. At $6 analysts turned on T. Right now the company is becoming more valuable compared to competitors. They are a take over target at $6 also. The same is the case for XM Radio. The stock has been hated by Jim for awhile and now at $11.60 he rates it a “triple buy.” To solidify the fact that this stock has bottomed he pointed to a CIBC analyst who has been on the band wagon cutting and running. Analysts who are consistently wrong on stocks that cut and run should change your mind also. The problems XM has had with the FTC are a short term issue also.
Right now competition is the only thing hurting companies. The Fed is giving us a mandated recession with the only stop being for them to stop raising rates. Five years ago this happened spurring cereals, soaps and soups on for six months. Right now we are seeing the same and this is month three. PepsiCo (NYSE:PEP), General Mills Inc (GIS) and H.J. Heintz Company (HNZ) have about three months to perform well left.
Jim recommended lightening your load on any thing that peaked on May 11. He sees 14 more bad weeks before we see improvement.
Altria Group Inc (MO) and Wells Fargo (WFC) were two stocks that he said to take a look at for purchase.

CEO Mike McCallister from Humana Inc (HUM) joined he show today. Jim asked about Medicare membership increases and earnings from Medicare Advantage and how this will continue. McCallister said that they have always targeted the PDP program and over time they will move these people to Medicare Advantage, this will provide HUM with growth opportunities. They look at Medicare as a long term opportunity also. Research has provided them with them some targeted information on who they may be able to enroll to make money in the future. HUM plans to invest more in marketing efforts during the latter of 2006. Jim said that HUM was the one to buy when Aetna Inc (AET) and CIGNA Corp (CI) mess up.

Avon Products (NYSE:AVP) chief executive Andrea Jung’s head is being called for. This quarter should cost her, her job, and Jim is recommending buying shares in anticipation of this firing. He said “if this board wakes up you should pick up 5 points.”
Tyson Foods Inc (TSN) was also taken to task. TSN is down 3% after a lack luster report. Jim feels he got “snookered.” The switch is to Smithfield Foods Inc (SFD).

Oil Thoughts
People might get angry at oil companies and government officials and even car companies in the hope that the anger will fester into something more and cause the price of oil to go down, Jim said on his radio show Monday, but it doesn’t look like oil is going to quit. The U.S. consumes the most oil on Earth, with China coming in second place. Yet, Massachusetts’ governor is against the planned liquefied natural gas plant in that state, he said. In addition, Jim said Nigeria, which is the fourth-largest producer of oil, has become much worse, with more workers getting captured and more destruction taking place. The companies that drill in Nigeria are going to pull out, he said, adding that Venezuela and Iran, which met last week, are trying to make us feel insecure about our oil supply. There has also been much hoopla over alternative energies, Jim said. Although ethanol is at 50 cents a gallon, we can’t have it, since the government is blocking it. Supply is the problem here, he said. Even though gasoline is at $3 a gallon, people continue to use it more and more and are cutting down everywhere else. Demand is not shrinking, he said.

Natural Gas Take
Jim talked about how short sellers aren’t doing to well with shorting natural gas stocks which are on fuego for the last 10 days. Jim thinks the hot weather is causing natural gas to surge 50% in two weeks. Jim thinks Chesapeake Energy Corporation (CHK) is going to $35 and Devon Energy Corp (DVN) which he owns for his trust will go to $70.
Sector Talk
Jim talked about how there may be some money to be made in cell phones after he saw a Bloomberg interview of an executive from Texas Instruments Inc (TXN). The executive told Bloomberg that business is picking up for its three main customers Nokia (NOK), Sony Ericsson and Motorola Inc (MOT). Cell phones are better than TVs and PCs, Jim said, while recommending that his listeners keep an eye on cell phone companies. While people might believe that the current situation is favorable for retail stocks, Jim said they are a horrible place to be if we get into a recession, which could possibly happen. Jim cautioned investors to be careful with retail stocks if the U.S. goes into a recession. Jim thinks consumers are spending less at the pump and this could cause for a cutback at the retail level. If investors think the opposite then J.C. Penny Company Inc (JCP) could be a good back-to-school play.
Caller Questions
Jim thinks that Yahoo Inc (YHOO) is going to go up when the roll out there new search engine. Jim owns YHOO for his trust and he thinks in six months the stock can go to $31. A caller asked about Activision (ATVI) and Jim likes Electronic Arts Inc (ERTS) better. Jim told a caller he would play the call options or the stock of ABB Ltd (ABB) which he owns for his trust. Jim thinks that Sirius (SIRI) will go up tomorrow and will go to $5 in the next few days. Jim doesn’t think that Conexant Systems Inc (CNXT) is the place to invest right now. Jim told another caller that Microsoft (MSFT) wont move until investors get data on Vista. Once Vista ships this should help Intel Corp (INTC) which he thinks is a buy and is too cheap. Jim told a caller to buy CSX Corp (CSX) even before the stock splits because it has a big buyback and management is pro-shareholder.

Tonight’s show was a repeat of previously broadcasted clips. I will try and dig together the actual episodes and repost links to them, but Jim made it really nice by taking pieces from a few different shows without expressing the actual dates of the original broadcasts. The topics were leaderless markets, volatility and the difference between speculating and investing, all of which would be geared to making money. If anyone knows the original dates of these shows please email them to me at rrtrader@gmail.com. Have a great weekend and good luck trading.

Because of the way the market is acting we need a new set of rules, and today we were given “10 Commandments of Trading.” Trading and investing are not the same thing, with trading you need to take some off the table, while investing takes long term holding of a stock. The day you buy a stock you must make the decision whether it is an investment or a trade. The commandments are:

1. Never turn a trade into an investment. When buying for a trade if the catalyst doesn’t happen get out. Never hold the stock for an investment, the company hasn’t changed so your mind shouldn’t.
2. Your first loss is your best loss. Cut losses quickly and get over them quickly, this will cause your losses to have less of an impact on you. Do not let ego or pride rule you.
3. It is ok to take a loss when you already have one. Do not pretend that a loss is not a loss just because you still have a trade on the table. Jim said “a loss is a loss whether it is realised or not.” Acknowledge it before it hurts you to the point that you can not recover from.
4. Never turn a trading gain into an investment loss. The example used was a trader who bought Altria Group Inc (MO) before the quarter, watched it jump then couldn’t decide whether to hold the stock or take the gain. The lesson is “if nothing is booked, nothing is gained.” Remember to never overstay your welcome.
5. Tip are for waiters. You need to do your homework, never trade on hearsay.
6. You do not have a profit until you sell. People sit on paper gains trying to avoid paying taxes when they sell but the tax is nothing compared to the potential loss if you don’t sell.
7. Control your losses because the winners take care of themselves. As a trader you need to spend the majority of your time looking at problem stocks. Never say “I’ll just wait for this one to come back and then not do it again.”
8. Do not be afraid that you are missing out. If this is your mindset you are probably coming in late. Jim said “acknowledge that you’ve missed out on the opportunity.”
9. Do not trade on the headlines. He always talks about this, the press is almost always wrong in the quick takeaways.
10. Do not trade on flow. When watching a financial channel you may see multiple takes, multiple trades to the upside you might think they know something you don’t. Do your homework before any trade or you will lose more money than you will make.

Bullish
Abercrombie & Fitch Co (ANF), Corning Inc (GLW), Crystallex International (AMEX:KRY), United Technologies Corp (UTX), Inco Ltd (N), FMC Corporation (FMC), Conceptus Inc (CPTS), Pike Electric Corporation (PEC), Suncor Energy (SU), and Marathon Oil (MRO).
Bearish
StrataSys (SSYS), Aetna Inc (AET), Intuitive Surgical (NASDAQ:ISRG), Grant Prideco Inc (GRP), and Andrew Corporation (ANDW)

Tonight the award for “the absolute worst piece of research of the month” was given. Protecting you from the bad information is part of Jim’s job. The award goes to Merrill Lynch (MER) and the lowered raking of Halliburton (HAL), along with reduced earnings etimates. The arguement from MER was explained and the analyst was beaten down by Jim. HAL was already overweighted in a lot of indices. When a stock goes down for the wrong reasons this is a reason to buy, downgrades create buying opportunities. HAL gets a “buy to the ninth power.”