rr wealthbuilders

8/8/2019 RR wealthbuilders

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AGENDA1. Introduction2. Review from previous months themes3. The Ostrich Investor4. Bull/Bear Tug-O-War

5. Cloudbanks A Technical Pattern6. Market Scans with Stockcharts.com7. John Murphy and Monty Guild8. Energy Update with David Hill9. Central Texas Real Estate Trends10. Gold Sector Update

11. Wisdom of the Crowds Stock Picks12. Questions and Answers

Round RockWealthbuilders

August 05, 2010


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What are you doingwith your dash?

Occupy yourselves with that which profiteth yourself and others.Bahai Writings

guide me in my doings in that which benefits me for the Glory of

Thy Cause and loftiness of the state of Thy servants.

Bahai Prayer

Well done, good and faithful servant; you were faithful over a little, I

will set you over much, enter into the joy of your master.

Holy Bible, Matthew 25:21

For whoever has, to him more will be given, and he will have

abundance; but whoever does not have, even what he has will be takenaway from him. Holy Bible, Matthew 13:11

The essence of spiritual wealth is a love of God and the desire to serve humanity. The essence of materialwealth is the capacity to be of service. Material wealth, (the capacity to serve) combined with spiritual wealth(the desire to serve), is a divine blessing and a means for the advancement of mankind. It is light upon light.

Bahai Writings

WHY ARE YOU OFFERING THIS

INFORMATION FOR NO CHARGE?


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Some principlesof the Bah' Faith

Oneness of humanity Oneness of religion Religion must be the

cause of unity Religion must be harmonious with science and reason Independent investigation

of truth Equality between men and

women The abolition of all forms

of prejudice Universal peace Universal education A universal auxiliary

language Spiritual solutions for

economic problems An international tribunal

A New NameFounded in the mid-nineteenth century, the Bah Faithhas spread to some 236 nations and territories and is nowaccepted by more than five million people. The word"Bah" means follower of Bahullh. Bahullh, theFounder of the Bah Faith, is the Messenger of God for

this day. His name in Arabic means The Glory of God.

The sun shines equallyupon all, regardless ofrace, creed, religion,sex, or social status.

His followers believe that, just as children progressthrough grade levels at school with different

teachers, so does mankind progress throughthe ages under the tutelage of the

different manifestations of God.


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Getting Rich Is Contagious -- So Catch the BugYou pick up the habits for growing wealth -- or frittering it away -- of your friends and family. Find out howto make this rich-network effect work for you.

Tuesday October 2, 12:33 pm ETBy Jean Chatzky, Money Magazine editor at large

"Social networks determine social norms and social behavior," she says. "What's acceptable, what's notacceptable. I expect we'll see a lot of parallels in other fields."

Money among them. Academics and other researchers who have dipped a toe into the networking pool are findingthat if you're surrounded by people who save and invest, you're likely to do the same. And if your pals spend likecrazy, well, you're in trouble.

"The people around you affect how you approach education, family, consumption, when you get married andwhere you go to school. Those things affect wealth," she theorizes.

So how do you make the network effect work for you?

Hang with the smart kids

Pamela York Klainer, a senior adviser and wealth manager at Forte Capital in Rochester, N.Y., works with peoplewho have a variety of money problems. Some have money but aren't comfortable handling it. Others burn throughtoo much too quickly.

Before "social networking" became a buzz phrase, she told her clients to "find people who have the moneybehaviors you want to learn and start hanging out with them." She suggests, for example, joining an investmentclub.

Statistics show that you will rise tothe level of, but not higher than, your5 closest friends or family members.


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Become Your Own Portfolio ManagerBy Ron DeleggeWednesday November 25, 2009

SAN DIEGO (ETFguide.com) - Everyday more and more people are making a choice they never thought they would make: Tobecome the manager of their own investments.

Among the top reasons for self-directing one's investments are greater control and flexibility. But there's one other very good reasonfor becoming your own portfolio manager: The potential for better performance.

Many academic studies show that during both good and bad times the vast majority of Wall Street's portfolio managers consistentlyunderperform versus corresponding benchmark indexes. However, making the decision to supervise your own investments won'tnecessarily guarantee better results. To avoid the same type of market underperformance that characterizes most of Wall Street,you'll need to build your investments on the right foundation.

Constructing Your PortfolioHow can you build a rock solid investment portfolio that matches your risk tolerance and unique financial goals?

First, you must begin with an unobstructed view of the entire asset class universe. This is where you begin. No discussion of

securities or investments should happen until you first determine which asset classes you want exposure to and what precisepercentage amounts they should be.

The key asset classes include stocks, bonds, commodities, real estate, collectibles and cash. Within each one of these areasthere are sub-divisions too. For example, within stocks there's foreign equities and U.S. equities.

Select the Appropriate VehiclesTo get accurate exposure to each of the important asset classes you'll need to select investments that best represent each of theserespective areas.

The Periodic Tune-upOnce you've chosen your asset allocation mix and which specific index funds or ETFs you'll use, the next part of your job as portfoliomanager involves the maintenance of your investments. Be sure to avoid the two extremes of rebalancing.

The first extreme is a negligent approach, where a rebalancing policy is either lacking or nonexistent. The second extreme is hyperactive rebalancing, which often adds unwanted trading costs and tax liabilities.

ConclusionManaging your own money is an important responsibility that requires financial maturity and education. I suggest reading booksby individuals that know about the truth of successful investing. Also, becoming your own portfolio manager, if done right, should

not become a daily chore that requires you to be in front of a computer 24/7. Once your portfolio's allocation has been determined(with your risk tolerance and goals in mind), stick with it and periodically tweak it. Much like a growing a garden, you'll needpatience and discipline. Trust me, pulling up the plants every single day to check the roots won't do you much good!


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WHAT DO YOU SEE WHEN YOU LOOK N THE MIRROR?

I have not failed700 times.

I have not failedonce.

I have succeeded

in proving thatthose 700 ways

will not work.

When I haveeliminated the

ways that will not

work, I will findthe way that willwork...

Thomas Edison


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DisclaimerThe investment opinions expressed on the following slidesare personal opinions developed through personal researchand experience, are for educational purposes only, and in no

way represent opinions or suggestions on how to manage

your own investments. Moderator and presenters are inmany cases NOT investment professionals, and have NOTpassed applicable exams or otherwise credentialized

themselves as advisors. Remember that you can lose moneyon your investments and nothing presented or discussed in

the meetings should be taken as a recommendation to buy or

sell a particular security or investment.

D. Caldwell

Investing with ConfidenceRound RockWealthbuilders

02 Sept 2010

"Money is always there, but the pockets change."-Gertrude Stein


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the Fed's job is to protect the banking system.

A lot of people say they are there to protect the economy, they are there to protectthe consumer, the average American.

No, that's not it.

The Feds job is to protect thebanking system so that when you

have banks or financial institutionsin distress such as we have today,the Fed is going to do whatever ittakes to reflate the asset prices.

Jim Pulpava, Financialsense.com, Sept. 22, 2007

"The money power preys on the nation in times of peace, andconspires against it in times of adversity. It is more despoticthan monarchy, more insolent than autocracy, more selfishthan bureaucracy. It denounces, as public enemies, all whoquestion its methods or throw light upon its crimes."- Abraham Lincoln

Know Thy Enemy (the Fed is NOT a US Government Department)


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Bernanke DoctrineThe seven steps that the Federal Reserve needs to take (to combat deflation) are:

1) Increase the money supply (M1 and M2)."The U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost.""Under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation."

2) Ensure liquidity makes its way into the financial system through a variety of measures."The U.S. government is not going to print money and distribute it willy-nilly ..."although there are policies that approximate this behaviour."

3) Lower interest rates - all the way down to 0 per cent.Bernanke observed that people have traditionally thought that, when the funds rate hits zero, the Federal Reserve will have run out ofammunition. However, by imposing yields paid by long-term Treasury Bonds, "a central bank should always be able to generate inflation,even when the short-term nominal interest rate is zero ...[this] more direct method, which I personally prefer, would be for the Fed toannounce ceilings for yields on all longer-maturity Treasury debt."He noted that Fed had successfully engaged in "bond-price pegging" following the Second World War.

4) Control the yield on corporate bonds and other privately issued securities.Although the Federal Reserve can't legally buy these securities (thereby determining the yields); it can, however, simulate the necessaryauthority by lending dollars to banks at a fixed term of 0 per cent, taking back from the banks corporate bonds as collateral. (Carry trade)

5) Depreciate the U.S. dollar. Referring to U.S Monetary Policy in the 1930's under Franklin Roosevelt, he states that:"This devaluation and the rapid increase in money supply ... ended the U.S. deflation remarkably quickly."

6) Execute a de facto depreciation by buying foreign currencies on a massive scale. (Think recent Euro/Dollar swap support)"The Fed has the authority to buy foreign government debt ... [t]his class of assets offers huge scope for Fed operations because the quantityof foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt."

7) Buy industries throughout the U.S. economy with "newly created money" (i.e. 2208 Bank Bailout)In essence, the Federal Reserve acquires equity stakes in banks and financial institutions. In this "private-asset option," the Treasury couldissue trillions in debt and the Fed would acquire it - still using newly created money.

The Bernanke Doctrine refers to measures that the Federal Reservecan use in conducting monetary policy to combat deflation. In 2002,when the word "deflation" began appearing in the business news,Bernanke gave a speech about deflation entitled

"Deflation: Making Sure "It" Doesn't Happen Here


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STAGFLATION

Election Years


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Today there aremore investment

tools available tothe individualinvestor than atany other time inhistory.

ETFs that are

short the market

via differentsectors orindexes are agreat option tositting on thesidelines in cash.

Hidden Credit Risks of ETFs

Many ETFs use swaps and these derivatives open those ETFs tocounterparty risk, the risk that the institution on the other side oftheir trade will default, which could leave a fund with no return on itsassets or even a loss. The ETFs vulnerable to counterparty risk fallinto two major categories: leveraged funds and commodities funds.

(The Bear Market) ETFs cannot invest directly in a basket ofequities twice the size of their index or short-sell their entire portfoliodue to restrictions on the investments allowed in a U.S. mutual fundstructure, so they instead use swap derivatives to capture thedesired daily leveraged returns.

if a major counterparty defaultsthe investment bank may not haveenough capital to make the other parties whole and may be forcedinto default.

If you were in a Bear Market ETF in 2008you probably doubled your money.

Stick withwhats normal

and avoidexotics.
http://www.morningstar.com/


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1. Home prices peak as speculation in R/E tops out.

2. Housing construction stalls, home builder stocks drop.

3. Undocumented temps laid off first, government data still positive.

4. Mortgage lending impacts/layoffs; ARMS start resetting; foreclosures rise.

5. R/E home prices fall, inventory builds and bank raise reserves to compensate.6. Credit tightens and financial paper assets fall as liquidity in the system contracts.

7. Tight credit impacts small businesses and consumers putting more loans at risk; more layoffs

10. Commercial R/E vacancy rates rise; increase in commercial loan defaults

8. Consumers tapped out; consumer discretionary spending impacts; sector BKs and layoffs.

9. Business spending contracts

11. More layoffs, more home foreclosures, more bank failures; credit tightens even further.

12. Income, property and sales tax revenues decline; local government layoffs

14. More layoffs, foreclosures, business closings, contracting businesses & govt.

RECESSION SEVERE RESSION DEPRESSION

Until bank writedowns bottom and their reserve requirements stabilize and bankshave excess money available for lending to small businesses, for home purchases,

and for business expansion things will get worse before they get better.

Dans Opinion: Fed must continue to pump liquidity into the system

to prevent a wholesale meltdown. This = inflation, but will reach apoint where the selling price of real estate is well below cost tobuild, effectively putting a floor under the value of asset backed

paper, and the need for banks to raise reserves.

13. Muni-bond defaults

Jan. 2009

Jan. 2007

Jan. 06

Jun. 2007

Jun. 2008


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End of Review

Please Hold All Questions

To the End of the Presentation


14/42

WINDOW DRESSING

The deceptive practice of some mutual funds, in which recently weakstocks are sold and recently strong stocks are bought just before the fund's

holdings are made public, (end of Quarter) in order to give the appearancethat they've been holding good stocks all along.

Thursday, September 30th, 2010

Wh i l i h k


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The Ostrich Investor

Why investors are leaving the market

When higher oil prices spark a rally in every sector exceptoil stocks, the market is broken. It's no wonder investorsare going elsewhere.

Posted by Jim Cramer on Thursday, August 26, 2010

Technology makes a run off of oil's rally but not the oil stocks. Health care

rallies on oil but not oil stocks. Retail rallies on oil. But not the oil stocks.Food stocks leap on a turn in oil. But not the oil stocks. That's how thingsplayed out all Wednesday afternoon. Will it play out that way today?

Excuse me for sounding like Dr. Seuss, but what a joke this market hasbecome. Food and retail, both incredibly sensitive to rising oil prices, rallyon oil getting better because oil's upturn is a sign that the consumer isfeeling better? What hogwash. Rising oil prices hurt the food companiesbecause it is their biggest expense, more than the food commodities theypackage.

Retail? Rising oil prices are demonstrably bad for them. Tech? There is nocorrelation in real life whatsoever. However, we are not in real life. We arein some sort of bizarre world where the only correlations we can find are thewrong ones.

Again and again I come back to a market that's broken, just a hugecommodity asset class that is careening out of control on a daily basis, withthe only true north compass being companies that rally because they pay agood dividend.

It is true that you don't have to love the market to make money on it.Nevertheless, there is a tolerance level that is totally unnerving, and wereached that a long time ago. So what happens? People leave. They goelsewhere.

The last creators of the exchange-traded funds that are driving thisnonsense win, though. If I had it to do over again, I guess I would just starta lot of ETFs to take advantage of the brainwashing about how that's theway to make money. Why not? For them, the chaos is becoming.

And people wonder why investors are leaving this market. To me it is a

wonder that anyone stays.

K I S R h


16/42

One indicator I thought it was worth taking a closer look at this weekend was the AAII Investor Sentiment survey. In general the survey isviewed by technicians as a contrary indicator when it reaches extremes.

This past week the number of bears rose to 49.5% and the bulls dropped to 20.7% so it is now at fairly extreme levels. The last time the Bull-Bear

Spread was this low was in early July as the July rally was just beginning. Prior to that is was the first week of November of '09 just as that rallywas kicking off, and the time before that was early March of '09 just before that rally began.

Key Investor Survey ReachesExtreme LevelsBY ROB HANNA | AUGUST 30, 2010

Buy Stocks "In the Face of Fear" BY DAVID GRANDEY | AUGUST 31, 2010

Believe it or not, this is the secret to successfulinvesting - to keep your most important asset inthe game, that being YOUR STATE OF MIND.We'll continue to drill this in your head so that itbecomes second nature to you. Consider yourselfwarned. The funny thing about all this is that noneof it has to do with stocks or indexes or chartpatterns, its that of managing your emotional stateof being. They say YOUR perception creates yourreality and to a big degree that is true. But Ahhhwhen looking at the market through the reality of

what is vs. what we want to see? That is thesecret - The standpoint of the un-opinionatedobserver. It's a mindset you really want tocultivate.

So far, every other day, the S&P 500 has testedthe key 1,040 level exactly, and each time -including this morning - buyers have rushed in tosupport the market, causing a sudden up-burst inprice immediately following the test.

1040 going once, 1040 going twice, SOLD at 1040. The market has now defended the 1040 level twice and in both instances we've bounced offof it. If you were watching the indexes this morning at the 1040 level you'll have seen before we pulled away from it to the upside, the leaders(AAPL, BIDU, NFLX) all took off before the index did. It showed you that the market always moves with the leaders first.


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Bull or Bear? by Chris Puplava | Sep 1, 2010

August 19, 2010 Investor sentiment for stocks is at a very low level, but some well-known investors are taking positions in stocks. According tothe video below, Warren Buffett and Berkshire Hathaway (BRKA/BRKB) just added significantly to Berkshires already large stake in Johnson &Johnson (JNJ). In addition, Buffett is buying other healthcare related stocks such as Becton Dickinson (BDX).

Stanley Druckenmiller, who just closed his very successful hedge fund, bought Wells Fargo (WFC). And, Druckenmiller and George Soros both

bought Internet technology firm Akamai (AKAM).This billionaire buying binge should not necessarily be taken as a vote of confidence on the stock market overall, but rather that these brilliantinvestors believe there is real value in these stocks. Incidentally, Wells Fargo was just purchased by Druckenmiller, but it is also one of Buffettstop holdings.

What stocks are Buffett, Soros & Druckenmiller buying?

30 August 2010 7:30 p.m. EST

$1/4 Trillion in M&A activity in the last 30 days

Smart money Buffett, Soros,Druckenmiller are buying.

Companies with cash see anopportunity to buy other companies.

WHY ARENT YOU BUYING?

Is it a bull or is it a bear? I would hold off making that call for now.

Simply looking at the major trend following indicators I track suggests that we are in a bear market as four of the five signals are flashing sells.However, two of them are barely negative and could easily switch to buy signals if the market heads just a little higher, leading to whipsaws andmore frustration. Rather than attempting to get out in the first inning of a bear market, I would suggest taking a more moderate approach andwait for confirmation. You can be an incredibly successful investor without ever timing market tops and bottoms perfectly. In terms of a baseballgame, just playing the second to eight innings or the third to seventh innings will keep you in the bulk of bull markets and out of the bulk of bearmarkets, and at the same time help you keep your sanity as you wouldnt be whipsawed as much trying to be a perfect market timer.

In addition to tracking the five trend following indicators mentioned above I would suggest watching the 50 RSI level on the monthly 14 period forthe S&P 500 in addition to the lower 200d BB. If the lower 200d BB fails to hold and the monthly 14-period RSI for the S&P 500 dips lower thenwe can be sure with further certainty that we are indeed in a bear market rather than something temporary like the 1998 Asian Currency Crisis or

2004 consolidation. The fact that 4 of my 5 trend following indicators are on sell signals does suggest having a below market exposure, but at thesame time the character of the market (montly/weekly RSI, lower 200d BB support) resembles a bull market, and so with conflicting trends andcharacter it is perhaps best to wait before becoming overly defensive. Thus, Id hold off on making any major market calls at this juncture.


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19/42

Bear Acceleration Confirms New Trade Signal (SPY)Seasonality suggests that we could see strong selling pressure in September while the mid-term election cycle suggests a one year rally startingafter the elections... It would seem likely that a sharp seasonal sell-off could take place in September following by a strong fourth quarter rally.

BY ANDREW HART | AUGUST 26, 2010

BY STEVE SAVILLE | AUGUST 24, 2010

5 YR Bond Yields

Stark Disconnect Between InterestRates and Stock Prices

US economic data have been deteriorating over the past three months andare likely to deteriorate further over the next three months, but that's notnecessarily a problem for the stock market. The stock market alwaysattempts to discount the future, which means that economic weakness isonly ever a threat when it hasn't been discounted. This is why the stockmarket often makes a sustainable up-turn months before the economicdata begin to show any signs of improvement. In such cases it isn't somuch that the stock market is able to presciently look beyond the currentweakness to the brighter days that lie well into the future, it's that a lot ofadditional economic weakness has already been factored into current

stock prices. So, more evidence that the US economy is deteriorating willonly be a problem for the stock market if the market is expecting a rosierscenario. Assuming that the economic numbers are going to get worse, therelevant question with regard to the stock market's likely reaction istherefore: how much additional economic weakness is the marketexpecting?

We mentioned above that the stock market could be approaching a point ofrecognition -- in this instance, the point where the market stops discountingadditional recovery and starts discounting recession. The bond market,

however, seems to have reached this point a few months ago, whichmeans that there is presently something of an expectation mismatchbetween the stock and bond markets.

When inflation expectations are low, interest rates tend to decline inanticipation of economic weakness. So, either the bond market iscompletely wrong or the stock market will soon make a catch-up move tothe downside.

Cash In The Air


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Cash In The Air

Cloudbanksby Thomas N. Bulkowski

During the 30 years I have spent investing in or trading the markets, I havediscovered many chart patterns, including pipes, horns, and barrs. Heresanother, which I call the cloudbank pattern. Investing in cloudbanks gives youthe opportunity to make a lot of money if you are patient and price rises backinto the clouds.

How often does that happen? To answer that, I found 184cloudbanks in 574 stocks from January 1990 to February 2010.Unfortunately, many of the cloudbanks are too recent to havereturned to the clouds, but 59% did so. Using a cutoff in 2005 for theend of the cloudbank (which is the date before the stock makes alarge drop), 90% of those cloudbanks had price return to the base ofthe cloud. If you have patience, you have a 90% chance of having asuccessful investment.

Now that we know cloudbanks make for a good investment, how doyou buy one?

1. Look for 52 week lows; use a weekly chart, not a daily chart.2. The stock must drop a minimum of 56% (Fibonacci)3. Wait and buy when the stock price rises through the 30 week

simple moving avg. (SMA) The SMA works better than theEMA and waiting for the rise will confirm the rebound to thecloud bank.

4. Confirm with other signals, such as RSI or CCI positivedivergence signs, double bottoms, etc.

5. When the price reaches the base of the clouds SELL!

Identification guidelinesFigure 1 shows an idealized example of a cloudbank chart pattern. It begins with price moving horizontally for several years, but the duration canvary from pattern to pattern. The shortest length in my study was five months and the longest was almost 17 years, with the average durationbeing 2.75 years. The cloudbank is nothing more than a ceiling of overhead resistance.

The theory behind the cloudbank is that the stocks normal price, established over years, represents where the stock should be selling. If a bearmarket takes it down, when the market recovers, so too should the stock. It should regress back to the mean rise back into the clouds.

CLOUDBANK

PositiveDivergence


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More Bullish Than Bearish


22/42

More Bullish Than Bearish


23/42

Current Ratio by Investopedia

A liquidity ratio that measures a company's ability to pay short-term obligations.

The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. Aratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this

shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways toaccess financing - but it is definitely not a good sign.

Things I look for (simplified):

1) Cash left over after bills are paid (Liquidity), measured as free cash flow. If that info isnt available use the Current Ratio(explained above), greater than 2.0 preferred..

2) Low Debt to Equity ratios for their industry. This varies widely by industry or sector, i.e. Apples D/E ratio isnt the sameas Bank of America.

3) Paying > 6% dividend yield, for at least 2 years4) Equal to or < 2x Book Value (Most companies get bought out for 2-3x book value, so I want undervalued companies5) Low Price to Sales ratio for their industry. A price-to-sales ratio under 1.0, coupled with rising revenue growth in the

previous 12 mo., is one of the most potent combinations on Wall Street.

SpeculativeStory Stocks stocks at deaths door, but they manage to recover. Think Ford at $1.50 in 2008 to $+14 one yr later, or AmericanAirlines at $1.34 in 2003 to +$30 in 2006. Have to really pay attention to these companys liquidity issues are their costs undercontrol and can they meet their day-to-day obligations? These stocks wont be paying dividends, but have the potential for a 200% ormore gain.

What I dont pay attention to, or I discount, is the price to earnings ratio, since earnings can be influenced by holding onto bills anextra two weeks to roll them into the next quarter, etc., by one time charge-offs, etc. Sales and revenue growth and cash flow arebetter indicators of a companies health than so called earnings. JMHO.

Dan

Open High Low Close Volume


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Open High Low Close Volume

LFC China Life Insurance Co. Ltd. NYSE Financial Insurance (Life) 58.4 59.2 57.97 58.97 979,297

CSC Computer Sciences Corp. NYSE Technology Computer Services 40.39 40.8 39.76 40.77 1,980,204

HPQ Hewlett-Packard Co. NYSE Technology Computer Hardware 38.3 38.55 37.32 38 37,171,708

URS URS Corp. NYSE Capital Goods Construction Services 35.57 36.29 35.09 36.23 710,892

UNT Unit Corp. NYSE Energy

Equipment 34.14 34.94 33.36 34.84 356,472

SWN Southwestern Energy Co. NYSE Energy Oil & Gas Operations 32.64 33.5 31.89 33.35 3,906,542

BBY Best Buy Co, Inc. NYSE Services Retail (Technology) 32.24 32.27 30.9 31.86 7,578,670

LPS Lender Processing Services Inc NYSE Technology Software & Programming 29.58 29.92 29.23 29.78 809,489

CVS CVS/Caremark Corp. NYSE Services Retail (Drugs) 27.85 27.92 27.13 27.51 13,479,742

CYH Community Health Systems NYSE Healthcare Healthcare Facilities 26.99 27.02 26.32 26.93 1,851,202

WDC Western Digital Corp. NYSE Technology Computer Storage Devices 23.82 25.32 23.06 25.23 9,160,532

AVT Avnet, Inc. NYSE Technology Electronic Instr. & Controls 23.12 23.84 22.39 23.76 1,632,054

BGC General Cable Corp. NYSE Technology Electronic Instr. & Controls 22.08 23.27 21.68 23.19 1,168,724

GVA Granite Construction Inc. NYSE Capital Goods Construction Services 21.69 22.57 21.22 22.52 383,791

KOP Koppers Hold ings Inc. NYSE Basic Materials Chemical Manufacturing 20.79 21.14 20.4 20.99 190,586

IRM Iron Mountain, Inc. NYSE Services Business Services 20.58 20.91 20.35 20.76 2,213,650

NRG NRG Energy Inc. NYSE Uti lities Electric Uti lities 20.45 20.71 20.02 20.63 2,527,073

CTV Commscope, Inc. NYSE Technology

Equipment 18.97 19.32 18.39 19.27 1,347,120

GPS Gap, Inc. NYSE Services Retail (Apparel) 16.99 17.05 16.62 17.03 10,874,960

VLO Valero Energy Corp NYSE Energy Oil & Gas Operations 15.72 16.15 15.49 16.1 7,806,640VVI Viad Corp. NYSE Services Business Services 15.29 15.5 14.97 15.47 139,833

BHE Benchmark Electronics Inc. NYSE Technology Electronic Instr. & Controls 14.36 14.57 14.03 14.54 329,047

ITG Investment Technology Group NYSE Financial Investment Services 13.85 14 13.73 14 330,235

HRB H & R Block, Inc. NYSE Services Personal Services 13.53 13.63 13.19 13.59 3,924,369

SCHW Charles Schwab Corp. NYSE Financial Investment Services 13.28 13.31 13.08 13.22 16,403,613

CMC Commercial Metals Co. NYSE Basic Materials Iron & Steel 12.58 13.03 12.12 13.02 2,162,712

BAC Bank Of America Corp. NYSE Financial Money Center Banks 12.57 12.72 12.41 12.64 158,555,677

SVU Supervalu, Inc. NYSE Services Retail (Grocery) 10.07 10.24 9.87 10.19 3,540,521

ONB Old National Bancorp NYSE Financial Regional Banks 9.48 9.65 9.33 9.64 408,871

DM Dolan Co. NYSE Services Printing & Publishing 9.46 9.52 9.25 9.51 124,134

HTZ Hertz Global Holdings, Inc. NYSE Services Renta l & Leasing 8.86 8.9 8.41 8.84 4,092,231

DY Dycom Industries, Inc. NYSE Capital Goods Construction Services 7.53 7.89 7.3 7.86 478,627

STM STMicroe lectronics NV NYSE Technology Semiconductors 6.91 6.93 6.67 6.82 2,883,650

MYE Myers Industries, Inc. NYSE Basic Materials Containers & Packaging 6.42 6.56 6.3 6.4 181,669

FSS Federal Signal Corp. NYSE Cons. Cyclical

Manufacturers 5.11 5.15 4.91 5.13 361,599

DVR Cal Dive Intl., Inc. NYSE Energy

Equipment 4.76 4.8 4.66 4.71 1,016,584

SD Sandridge Energy, Inc. NYSE Energy Oil & Gas Operations 4.08 4.08 3.87 4 14,483,104

ODP Office Depot, Inc. NYSE Services Retail (Specialty) 3.58 3.63 3.45 3.58 6,582,386

RRI RRI Energy, Inc. NYSE Uti lities Electric Uti lities 3.42 3.49 3.35 3.47 3,228,140

UMC United Microelectronics, Inc. NYSE Technology Semiconductors 2.65 2.7 2.6 2.7 1,211,148

CBB Cincinnati Bell Inc. NYSE Services Communications Services 2.39 2.41 2.32 2.37 938,849NLS Nautilus Group, Inc. NYSE Cons. Cyclical Recreational Products 1.35 1.38 1.3 1.33 128,221

JTX Jackson Hewitt Tax Service Inc. NYSE Services Personal Services 0.79 0.91 0.75 0.78 340,453

Cal Dive International Inc 1 00 Id l


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Cal Dive International, Inc. is a marine contractor. TheCompany provides manned diving, pipelay and pipeburial, platform installation and platform salvage servicesto a diverse customer base in the offshore oil and naturalgas industry. It offers its customers these services on anintegrated basis for more complex subsea projects. Itsglobal footprint encompasses operations in the Gulf ofMexico Outer Continental Shelf (OCS), the Northeastern

United States, Latin America, Southeast Asia, China,Australia, the Middle East, India and the Mediterranean.The Company owns and operates a fleet of 31 vessels,including 21 surface and saturation diving supportvessels, six pipelay/pipebury barges, one dedicatedpipebury barge, one combination derrick/pipelay bargeand two derrick barges.

Cal Dive International Inc

Positive

Divergence

Positive

Divergence

Fwd P/E. . . . . . 7.88

Cal Dive Awarded $56M Bahamas Contract 9/1/10

2.0; = cash liquidity


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Top 20 Takeover Targets in the Options MarketAugust 30, 2010

The following is a list of 20 takeover targets, based on open interest in the options market. To develop the list, we started by creating a universeof about 80 stocks that have been labeled as takeover targets by various publications, including Barrions, Wall Street Journal, Marketwatch,TheStreet.com and StreetInsider.

We then collected data on open options positions for this universe of takeover targets. The stocks mentioned here have the lowest Put/Call ratiosin this universe of takeover targets (i.e. most bullish sentiment in the options market).

1. Cott Corporation (COT): Soft Drinks Industry. Market cap of $566.61M. Call open interest at 21,408 contracts, vs. put open interest at 274 contracts (Put/Callratio of 0.01). Price/FCF ratio at 5.79. Short float at 3.21%, which implies a short ratio of 2.92 days.

2. Falconstor Software Inc. (FALC): Business Software & Services Industry. Market cap of $152.64M. Call open interest at 250 contracts, vs. put open interest at

10 contracts (Put/Call ratio of 0.04). Price/FCF ratio at 90.86. Short float at 4.18%, which implies a short ratio of 9.35 days.

3. California Pizza Kitchen Inc. (CPKI): Restaurants Industry. Market cap of $375.03M. Call open interest at 7,021 contracts, vs. put open interest at 866

contracts (Put/Call ratio of 0.12). Price/FCF ratio at 9.17. Short float at 5.79%, which implies a short ratio of 3.99 days.

4. Quicksilver Resources Inc. (KWK): Independent Oil & Gas Industry. Market cap of $2.01B. Call open interest at 31,886 contracts, vs. put open interest at 3,762contracts (Put/Call ratio of 0.12). Short float at 7.63%, which implies a short ratio of 2.86 days.

5. Cal Dive International Inc (DVR): Oil & Gas Equipment & Services Industry. Market cap of $443.73M. Call open interest at 4,139 contracts, vs. put open

interest at 647 contracts (Put/Call ratio of 0.16). Price/FCF ratio at 5.14. Short float at 4.82%, which implies a short ratio of 4.29 days.

6. Ameristar Casinos Inc. (ASCA): Resorts & Casinos Industry. Market cap of $974.98M. Call open interest at 3,712 contracts, vs. put open interest at 678contracts (Put/Call ratio of 0.18). Price/FCF ratio at 11.18. Short float at 7.15%, which implies a short ratio of 5.53 days.

7. Sourcefire, Inc. (FIRE): Security Software & Services Industry. Market cap of $747.04M. Call open interest at 7,230 contracts, vs. put open interest at 1,309contracts (Put/Call ratio of 0.18). Price/FCF ratio at 25.34. Short float at 12.08%, which implies a short ratio of 6.21 days.

8. Fortinet Inc. (FTNT): Computer Peripherals Industry. Market cap of $1.43B. Call open interest at 10,460 contracts, vs. put open interest at 1,934 c ontracts(Put/Call ratio of 0.18). Price/FCF ratio at 20.96. Short float at 6.69%, which implies a short ratio of 4.62 days.

9. Biogen Idec Inc. (BIIB): Biotechnology Industry. Market cap of $13.21B. Call open interest at 25,185 contracts, vs. put open interest at 6,864 contracts (Put/Callratio of 0.27). Price/FCF ratio at 11.67. Short float at 4.42%, which implies a short ratio of 3.16 days.

10. Smithfield Foods Inc. (SFD): Meat Products Industry. Market cap of $2.71B. Call open interest at 22,031 contracts, vs. put open interest at 6,310 contracts(Put/Call ratio of 0.29). Price/FCF ratio at 35.88. Short float at 6%, which implies a short ratio of 3.89 days.

11. Novell Inc. (NOVL): Security Software & Services Industry. Market cap of $2.00B. Call open interest at 18,853 contracts, vs. put open interest at 7,111contracts (Put/Call ratio of 0.38). Price/FCF ratio at 37.96. Short float at 2.02%, which implies a short ratio of 2.21 days.

12. SLM Corporation (SLM): Credit Services Industry. Market cap of $5.47B. Call open interest at 76,919 contracts, vs. put open interest at 29,024 contracts

(Put/Call ratio of 0.38). Short float at 5.68%, which implies a short ratio of 5.81 days.

13. Hasbro Inc. (HAS): Toys & Games Industry. Market cap of $5.72B. Call open interest at 8,135 contracts, vs. put open interest at 3,179 contracts (Put/Call ratio

of 0.39). Price/FCF ratio at 14.44. Short float at 2.15%, which implies a short ratio of 1.25 days.

14. Barnes & Noble, Inc. (BKS): Specialty Retail, Other Industry. Market cap of $868.09M. Call open interest at 23,178 contracts, vs. put open interest at 9,475contracts (Put/Call ratio of 0.41). Short float at 42.77%, which implies a short ratio of 11.83 days.

15. AK Steel Holding Corporation (AKS): Steel & Iron Industry. Market cap of $1.39B. Call open interest at 103,026 contracts, vs. put open interest at 44,553contracts (Put/Call ratio of 0.43). Short float at 10.85%, which implies a short ratio of 1.29 days.

16. E*TRADE Financial Corporation (ETFC): Investment Brokerage Industry. Market cap of $2.83B. Call open interest at 335,934 contracts, vs. put open interestat 146,076 contracts (Put/Call ratio of 0.43). Price/FCF ratio at 7.98. Short float at 2.53%, which implies a short ratio of 1.4 days.

DIA AND QQQQ FILL THEIR GAPS WITH


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Sept. 01, 20104:57 PM ET

DIA AND QQQQ FILL THEIR GAPS WITHBREAKOUTS -- OFFENSIVE SECTORSGAP AND SURGE HIGHER -- BONDS

DECLINE AS MONEY FLEES SAFETY --SHANGHAI COMPOSITE SHOWS

RELATIVE STRENGTH

OFFENSIVE SECTORS GAP AND SURGE HIGHER... The next four charts show the offensive sectors: consumer discretionary,finance, industrials and technology. I focus on these four to ascertain the underlying strength or weakness in a broad market move.

Consumer discretionary represents the most economically sensitive sector. Finance represents the banks and financial system.Industrials represent manufacturing might. Technology represents the appetite for risk at the high-beta end of the market. It isimportant to see upside leadership from at least two of these sectors. Overall, the performance of these four remains mixed. All fourgapped higher and broke short-term resistance with big moves on Wednesday. At the very least, these gaps and breakouts arebullish until proven otherwise. Chart 3 shows the Industrials SPDR (XLI) breaking resistance with a long white candlestick. Chart 4shows the Consumer Discretionary SPDR (XLY) holding well above its July low and surging above resistance. Both formed higherlows and todays breakouts reversed the August downtrends. No signs of weakness here.

LONG-TERM BONDS ARE NOT A WISE INVESTMENT IN OUR


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LONG TERM BONDS ARE NOT A WISE INVESTMENT IN OUR

OPINIONPosted: August 27, 2010 By: Monty Guild

It is disturbing to us when a huge percentage of investors agree that one type of investment is the superior vehicle. We recall the era of 1998 to2000, when tech stocks could do no wrong and many unsophisticated investors and speculators believed that tech stocks were a one way streetto riches. Today, we have a similar mania where 98 percent of investors believe that buying U.S. treasury bonds including long-term bonds is awise idea. We dispute this idea and strongly warn our readers to watch out. In our opinion, longer term investors should avoid long durationbonds!

Long-term bonds in this country are discounting a continuation of a low inflation environment; and we all know that inflation in the U.S. is currentlynot a problem. How do we know that inflation will not return in the future? Many investors seem to be discounting a non-inflationary or even adeflationary environment for years to come. If inflation were to return, purchasing a 30 year bond at current low interest rates could produceimmense losses for the unwary.

We further believe that people are ignoring certain signs. For example, there is high and rising inflation in India and rising inflation in China, Braziland many other parts of the world. Just as the United States engendered inflation in the 1970s and exported it to Europe and much of the world,the inflation currently taking place in Asia and elsewhere could easily be exported to the U.S. and Europe in coming years.

GOLD AND STOCKSClearly, the stock markets of the developed world have spoken. They are interested in high yielding stocks with assured and growing incomeand they are not interested in most other stocks. Gold related shares are the only sector that does not pay high dividends which appears to bedoing well in this environment.

Gold itself is acting brilliantly, as continued efforts to hold the price down by those who do not like to see the price of gold rise, are beingneutralized by those governments, institutions, and individuals who continue to use every price decline as a buying opportunity. Wise goldinvestors will use dips to buy.

SUMMARY

Investors should avoid long-term bonds, and continue to focus on using dips to buy gold and high yielding income stocks [especially in the oilsector]. We believe that the recent decline in oil prices has ended, and expect oil prices to rise over the next few weeks and months. Demandfor energy from the developing world continues to grow and Saudi Arabia is starting to think more about conserving some of their oil resources forfuture generations.

China, India, and other growing nations will be well situated for investment, but we prefer to wait to add money to global stock markets until wesee how the seasonally volatile September-October time frame unfolds.

Historically, many stock markets, especially in the U.S. and Europe have been very weak in September and into October as investors return fromsummer holidays. Accordingly, we hold large cash positions and very few equity positions other than high yielding energy stocks or gold stocks

in the portfolios.

Thanks for listening.


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Leaked German Military Report Warns Of Apocalyptic


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Leaked German Military Report Warns Of ApocalypticPeak Oil ScenariosGus Lubin | Sep. 1, 2010

The German army doesn't want you to know how freaked out it is about peak oil. But an internal report has leaked to the internet,with excerpts translated by Spiegel.

The report says there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected tobe felt 15 to 30 years later."

Nightmare scenarios include:

Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As thetransportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in thesupply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the productionof 95% of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of theindustrial supply chain. "In the medium term the global economic system and every market-oriented national economy

would collapse."

Global chain reaction: "A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil,"says the study. "It is likely that a large number of states will not be in a position to make the necessary investments in time,"or with "sufficient magnitude." If there were economic crashes in some regions of the world, Germany could be affected.Germany would not escape the crises of other countries, because it's so tightly integrated into the global economy.

Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of thepopulation could comprehend the upheaval triggered by peak oil "as a general systemic crisis." This would create "room forideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely

and could "in extreme cases lead to open conflict."

Energy Update with David Hill


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BullishEnergy

Services

Enterprise Products Partners LP (EPD)


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Enterprise Products Partners LP (EPD)

Enterprise Products Partners L.P. is a North American midstream energycompany providing a range of services to producers and consumers ofnatural gas, natural gas liquids (NGLs), crude oil, refined products andcertain petrochemicals. In addition, the Company is engaged in thedevelopment of pipeline and other midstream energy infrastructure in thecontinental United States and Gulf of Mexico. It operates through itssubsidiary, Enterprise Products Operating LLC. It has five segments:

NGL Pipelines & Services; Onshore Natural Gas Pipelines & Services;Onshore Crude Oil Pipelines & Services; Offshore Pipelines & Services,and Petrochemical & Refined Products Services.

Dividend Yield 7.71%

Kinder Morgan Energy LP (KMP)


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Kinder Morgan Energy LP (KMP)

Kinder Morgan Energy Partners, L.P. (KMP) is a pipelinetransportation and energy storage company in North America.KMP owns an interest in approximately 28,000 miles ofpipelines and 180 terminals. It has five business segments:products pipelines, natural gas pipelines, CO2, terminals andKinder Morgan Canada. On October 1, 2009, KMP acquired the

natural gas treating business from Crosstex Energy, L.P. andCrosstex Energy, Inc. On November 1, 2009, KMP acquired40% ownership interest in Endeavor Gathering LLC, the naturalgas gathering and compression business of GMX ResourcesInc. In May 2010, the Company completed a 50/50 joint venturewith Kinder Morgan Energy Partners, L.P. (Kinder Morgan)involving the Company's midstream business in the HaynesvilleShale, and the sale of Terryville Field.

Dividend & Yield 4.36 (6.48%)

Plains All American Pipeline


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a s e ca pe e(PAA)Plains All American Pipeline, L.P. (Plains) is engaged in thetransportation, storage, terminalling and marketing of crude oil,refined products and liquefied petroleum gas and other naturalgas-related petroleum products. It is also engaged in thedevelopment and operation of natural gas storage facilities. TheCompany operates in three business segments: Transportation,

Facilities, and Supply and Logistics. In December 2009, theCompany acquired an additional 21% undivided joint interest inthe Capline Pipeline System and additional tankage in SouthcapPipe Line Co. (Southcap). In September 2009, Plains acquiredthe remaining 50% interest in PAA Natural Gas Storage, LLC. InMay 2008, Plains acquired the crude oil gathering andtransportation assets in Alberta, Canada from Rainbow PipelineCompany (Rainbow).

Dividend & Yield 3.77 (6.23%)


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Metro-area population: 1.71 million

RankingsCost of doing business: 160th

Projected economic growth: second

Projected job growth: second

Educational attainment: 19th

Income growth: 100th

Net inbound migration: sixth

Forbes.com's search for the best places for business and careers spanned 200 communities, ranging in size from the New Yorkmetropolitan area, home to 11.7 million people, to the Merced, Calif., area, with a population of 245,000.

Each community was ranked according to 12 metrics, including costs (business and living), job growth (past and projected), incomegrowth, educational attainment and projected economic growth.

Quality-of-life issues, including crime rates, cultural and recreational opportunities, migration patterns, were also given weight, aswere such factors as the number of highly ranked four-year colleges in the community and the percentage of subprime mortgageshanded out over three years.

No. 10 Austin, Texas

Greater Austin AreaReal Estate Update

Gold Market Update


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Gold Market Update

@ 55:1 gold ratio = +/- $40

Chinese Gold Demand Explodes As Inflation Fears


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Chinese Gold Demand Explodes As Inflation FearsAnd Government Curbs Take HoldVincent Fernando, CFA | Aug. 26, 2010,

Germans, And A Wave Of Swiss Bank Accounts,Are Piling Into Gold As If It's A New CrisisVincent Fernando, CFA | Aug. 26, 2010,

As the Eurozone crisis made headlines, European retail demand for gold surged in the second quarter.

While this was to be expected, given the concerns which emerged in regards to the value of the euro and a European financial crisis, the scale ofthe buying is a bit shocking, not to mention the concentrated buying from Germany and its German-speaking neighbors:

World Gold Council:

Net retail investment growth in Europe was again concentrated in the German- speaking countries (Germany, Switzerland and Austria).Germany (+59% YoY) and the US (+32% YoY) both recorded gains in excess of the 23% global total, while Switzerland posted a solid+19% gain over Q2 2009. In France, purchases of bars and coins just outweighed profit-taking, with net investment demand scraping in at

0.4 tonnes, which was marginally below the 0.6 tonnes from Q2 2009.

Chinese demand for gold surged in the second quarter of 2010 according to the latest data from the World Gold Council. Mainland China is thesecond largest source of gold demand in the world, after India, and has even closed the gap with India considerably.

Chinese retail demand amounted to 36.3 tons compared to the U.S.'s already size-able 30.3 tons. Note that one year ago, during Q2 of 2009,

U.S. retail demand for gold had been higher than that of China.According to China Daily, both China's efforts to clamp down on its property and stock markets and domestic inflation concerns have caused a'buying spree' by Chinese investors seeking a safe haven for their wealth.


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You must attendthe meeting to get

these stocks


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Luck happens

when

PREPARATIONrecognizes

OPPORTUNITY

-- Mark Twain


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