Defensive Stocks
Once again today we were told that defensive stocks are the place to be. Johnson & Johnson (JNJ) bought Pfizer Inc’s (PFE) generic products unit and the price of JNJ fell but now the stock is at $64 and it looks to goto $70. JNJ has shown that it is recession proof. Kelloggs Company (NYSE:K) was also talked about as a stock he predicted would go higher. Merck & Co (MRK) may have lost its verdict on Vioxx 10 days ago and now the stock is above where it was before it lost the lawsuit. The Procter & Gamble Company (PG) and The Coca-Cola Company (KO) are also headed up. People buy their products regardless of how the economy is doing. Alcan Inc. (NYSE:AL) reported a great quarter recently but the stock is stuck at $45 since last month. Honeywell International Inc (HON) who deals in aerospace, also reported a great quarter. Nobody wants these stock right now, in three months they will go up but not right now. The housing business is weak and people are pausing because they are discouraged.

Sector/Stock Talk
The housing sector is in trouble and this will cause a ripple effect. Williams Sonoma Inc (WSM) was beaten down because they have too much merchandise. Right now nobody wants to fix their homes up. IBM (IBM) was once a stock that was once up and down but for a long time it has been stagnant. The acquisitions they have made have made no sense. They have made 12 this year alone in an attempt to revitalize business but they can not develop their own products. The buyback acquisitions will do nothing for the company. Look to buy Computer Associates (CA) or Oracle Corp (ORCL).

On Demand
The “On Demand” stock of the week was Arch Coal Inc (ACI). Coal will become more and more important to the U.S. over the next six to 10 months. Once again calling the U.S. the “Saudi Arabia of coal.” ACI and Peabody Energy Corp (BTU) are the two best plays. Pull the trigger when ACI hits $30.

Caller Questions
UST Inc. (NYSE:UST) was referred to as possibly the best stock he was asked about this week. A defensive stock. UST will go to $60 according to Jim. Shaw Group Inc (SGR) is a “worst of breed in infrastructure.” Dump SGR and buy UST. Ring the register on China Mobile Ltd (CHL), China is an unstable place to invest. Move from Nordstrom Inc (JWN) and move to J.C. Penny (JCP). Burlington Northern Santa (BNI) is your way to ship coal and ethanol, even though they are your worst of breed in this sector, Jim likes them. Now is not the time to be in rails but the Jim called on CSX Corp (CSX) is a rail he recommended. Corning Incorporated (GLW) was asked about. The inventory build that was reported by Circuit City Stores Inc (CC), Best Buy Co Inc (BBY) and 3M Company (NYSE:MMM) has been worked off and GLW should rally. You are told to buy on pullback.