Meeting Update 10/19/09

Market Update Summary:

Economic Strength/Weakness

Retail sales rose in September, the first time in over 12 months. The dollar is still falling against the Euro, at $1.49/Euro. Gold is still up, but the Dow Jones Industrial Average has also passed 10000, with a 53% gain in 7 months. That level is psychological; keep an eye on it in the upcoming future.

M&A/IPO Action

Citibank sold off Phibro to Occidental. A lot of these deals need to be backed by more equity than they have in the past, though in the past there were LBOs with as much as 40% financing. There has also been over $10b in IPOs in the first week of October, a huge surge considering the drought in IPOs over this year. Companies that have gone public need to have solid financials now more than ever.

Policy & Other News

They're looking to have a tax on financial transactions, from .1 to .25% of the transaction. Fannie and Freddie common shares price target is at 0 according to a KBW analyst.

Portfolio Update Summary:

Recently we sold 300 shares of MSFT, bought 1000 shares of ATVI and did nothing with our XOM position. Pfizer also bought Wyeth last year, and we received Pfizer shares in return for our Wyeth shares. It leaves us with $25,450 in cash at the moment.

Our best performing stocks are XTO, Diamond Offshore, and Ultra Petroleum. BBBY and GS were down this week, but only 3 of our stocks were down over the past two. Our largest holdings are USG and KBR. We are also beating our benchmark of the S&P500.

Click here to download the Powerpoint presentation, including a buy pitch for TBF, a reevaluation pitch for KBH, and a sell pitch for KMX.

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