dow

The Dow’s 11.1% gain on Monday was the fifth-biggest percentage gain on record. The 9.8% gain on Toronto the next day was the biggest ever. Markets remain volatile and have moved down since, but my view is that governments around the world are now taking the kind of steps that will contain the crisis and eventually restore liquidity in the banking system. You can only spot market reversals in hindsight, so it’s too early to declare if we are near a bottom. But even if we are, markets are apt to remain volatile and some stocks are bound to go to lower lows....

The Dow’s 11.1% gain on Monday was the fifth-biggest percentage gain on record. Markets remain volatile and have moved down since, but my view is that governments around the world are now taking the kind of steps that will contain the crisis and eventually restore liquidity in the banking system. You can only spot market reversals in hindsight, so it’s too early to declare if we are near a bottom. But even if we are, markets are apt to remain volatile and some stocks are bound to go to lower lows. We recommend that you continue to hold on to good-quality stocks, and that you spread your investments out across the five main economic sectors....

ECONOMIC INVESTMENT TRUST $75.50 (Toronto symbol: EVT) holds a well-diversified portfolio of high-quality Canadian, U.S. and foreign stocks. The $589.8 million fund’s largest holdings include E-L Financial, Algoma Central Railway, Chevron, Nissan Motor, Royal Dutch Shell, Altria Group, Dow Chemical, ConocoPhillips, Allianz SE, Arcelor Mittal, ING Groep, Vodafone Group plc, Renault, Xstrata plc and Sumitomo Mitsui Financial. The fund breaks down geographically as follows: Canada, 50.7%; the U.S., 15.7%, Europe, 20.6%, Asia, 12.3%; and Latin America, 0.6%....

KRAFT FOODS INC. $33 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $49.5 billion; WSSF Rating: Above average) has replaced troubled insurance provider American International Group Inc. in the Dow Jones Industrial Average. This 112-year-old index of 30 stocks is one of the most widely followed stock market indexes in the world. Many institutional investors and mutual funds aim to mimic the Dow, so this move will certainly increase their interest in Kraft. Kraft Foods is a buy. CEDAR FAIR L.P. $22 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.1 million; Market cap: $1.2 billion; WSSF Rating: Average) reports that its revenues through Labor Day were $852 million, up 3% from the same period in 2007. Cedar Fair earns most of its money in the summer when all of its amusement parks are open. During this time, attendance rose 3%. If you disregard one of its parks that closed in 2007, attendance grew 5%. However, average in-park guest spending was unchanged....

Despite a stream of nerve-rattling financial news, starting with the failure of the first U.S. bailout package, the Dow Industrials and the S&P 500 managed to hold above Monday’s lows this week until just before Friday’s close. It’s a mistake to read too much into this, of course. But it is encouraging to see these two indexes move sideways in this depressing news environment. The plunge to new lows by the Canadian market reflects the heavy resources content in our economy and stock market. The Resources sector stands to suffer in an economic setback, and that’s already begun to happen with the drop in oil, copper and other metals. In addition to the decline in our market, our dollar lost nearly four cents this past week, relative to the U.S. dollar. We continue to recommend that you spread your investments our across the five main economic sectors, and devote around a quarter of your portfolio to U.S. stocks. Market turnarounds often occur in times of high volatility and bad news. Our advice is to resist any urge you may feel to sell good-quality stocks, just because you fear they may go lower....

Despite a stream of nerve-rattling financial news, starting with the failure of the first U.S. bailout package, the Dow Industrials and the S&P 500 managed to hold above Monday’s lows this week until just before Friday’s close. It’s a mistake to read too much into this, of course. But it is encouraging to see these two indexes move sideways in this depressing news environment. The plunge to new lows by the Canadian market reflects the heavy resources content in our economy and stock market. The Resources sector stands to suffer in an economic setback, and that’s already begun to happen with the drop in oil, copper and other metals. In addition to the decline in our market, our dollar lost nearly four cents this past week, relative to the U.S. dollar. We continue to recommend that you spread your investments our across the five main economic sectors, and devote around a quarter of your portfolio to U.S. stocks. Market turnarounds often occur in times of high volatility and bad news. Our advice is to resist any urge you may feel to sell good-quality stocks, just because you fear they may go lower....

Despite a stream of nerve-rattling financial news, starting with the failure of the first Congressional bailout package, the Dow Industrials and the S&P 500 managed to hold above Monday’s lows this week until just before Friday’s close. It’s a mistake to read too much into this, of course. But it is encouraging to see both indexes move sideways in this depressing news environment. Market turnarounds often occur in times of high volatility and bad news. Our advice is to resist any urge you may feel to sell good-quality stocks, just because you fear they may go lower. WACHOVIA CORP. $6.21, New York symbol WB, has agreed to merge with WELLS FARGO & CO. $34.56, New York symbol WFC. Wachovia stockholders will receive 0.1991 of a Wells Fargo common share for each Wachovia share they hold. The deal requires stockholder and regulatory approvals....

THE WESTERN UNION CO. $28 (New York symbol WU; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 740.0 million; Market cap: $20.7 billion; WSSF Rating: Above average) provides money transfer and foreign exchange services. It operates in more than 200 countries through a network of 335,000 agents, such as post offices, banks and retailers. Over 80% of Western Union’s agents are located outside of the United States. The company began operations in 1851, and was one of the original 11 companies included in the Dow Jones average. In recent years, Western Union was a wholly owned subsidiary of First Data Corp. On September 29, 2006, First Data spun off Western Union to its own stockholders as a special dividend. Western Union’s main business is consumer-to-consumer transfers of money, which accounts for roughly 85% of its total revenue. The company charges the sender a fee based on the size of the transfer and the destination. Western Union also makes money on the conversion of funds from one foreign currency to another. In 2007, it processed 167.7 million transactions, up 14% from 2006....

Many investors limit their holdings in the Finance sector to well-established banks. However, much of the world still operates on a cash basis. As well, the increasing migration of workers to faster-growing economies has spurred strong demand for reliable money-transfer services. Western Union is the world’s largest provider of cash transfers. Its strong reputation and large international network should continue to give it a competitive advantage in a growing market. THE WESTERN UNION CO. $28 (New York symbol WU; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 740.0 million; Market cap: $20.7 billion; WSSF Rating: Above average) provides money transfer and foreign exchange services. It operates in more than 200 countries through a network of 335,000 agents, such as post offices, banks and retailers. Over 80% of Western Union’s agents are located outside of the United States....

Every investor would like to find a fits-on-a-T shirt formula or stock philosophy for deciding when to buy or sell. It would make investing life so much simpler. In my experience, however, these formulas and the solutions they give you never provide dependable guidance. Sometimes a stock philosophy will work and other times it will not. The outcome of applying a stock philosophy or formula in any single instance is largely a matter of chance. The problem is that you are looking for a number that falls on a one-dimensional scale, with ‘buy’ at one end and ‘sell’ at the other. To make intelligent decisions, however, you have to look at a variety of factors that sit on a variety of scales....