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Thursday, March 08, 2007

For What It's Worth

I'm crunching numbers, and those numbers aren't looking too good.

In a period like this, everyone's aim should be to ensure that there's a little cash at hand and that investments are constructed to conserve capital.

Walmart same store sales in the US increased .4% in February.

Careful, Mama! You don't want to start a run on the bank!!
You mean a run on Merrill Lynch and Goldman Sachs, don't you? After all, bank deposits are insured (within limits).
I think those firms have SIPC insurance up to $1,000,000 and have external insurance above $125 million(per account).
Does that mean sit out the stock market right now? What does this mean?
What is your take on Exxon these days?
CF - the problem is that such insurance can only hold for a smaller problems, such as misdealings in a particular arm or office. But a market break could cause illiquidity that would limit pullouts for some period of time, and insurers would be included in the losing parties.

Dr. M. You want to have some very liquid funds where you can get at them, and you want to have them in several places. Money markets, etc, but don't go over FDIC limits. At least two banks, or if you have managed accounts at financial firms, pull some out and put it in an insured deposit. I do not believe that we are going to see a true bust, but we are at the point where it is not impossible.

Viola - in theory, energy stocks are cyclical and they should be heading toward their down cycle. In practice, this may not be as true. In this cycle, I think clearly understandable businesses that have a recognized way of raising cash by selling a product will outperform.

Whether this is a good investment for you and any other person at this time I cannot say. It would depend on how soon you might need the money and how much of your total reserve was invested, as well as other factors.

Because I believe that we are going into a recession and that oil and gas prices should slowly trend down, this is not a stock I would buy right now. But there is real value in the company, so I wouldn't sell it unless I had a better investment candidate. I believe the analysts' target price of around $80 is a bit optimistic, but not nearly as optimistic as the target prices of many other stocks.
Thanks so much for your great information. My husband works for Exxon and we have a lot invested there.
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