Meeting Update 11/2/09

Market Update Summary:

Economic Data

The US GDP is up by 3.5% and the dollar is moving higher. But the major indexes are down, which is the exact inverse of the dollar. The economy is not improving as much. Home resales jumped by 9.4% but new home sales fell to 3.6. Consumer confidence is at 47.7, with the lack of new jobs and recovery.

ISM October Report

The PMI rose to 55.7, and the employment subcategory showed growth. A PMI above 50 says that the economy is expanding, and the subcategory of employment showed growth for the first time since February.

CIT filed for Chapter 11 Bankruptcy

They have a prepackaged plan that may allow them to leave by the end of the year. They have 71b in assets and 65b in liabilities. Taxpayers lose 2.3b of their dollars and small businesses, especially retailers will lose loans from CIT. Bondholders will get 70% of their debt, which is good for them. They loan to small-sized businesses and issue bonds to finance this. They also moved into subprime mortgages, whcih was profitable at the time but resulted in this situation.

Portfolio Update Summary:

Recently we sold 180 shares of KBH, bought 400 shares of KMX and bought 250 shares of TBF. In the past two weeks our best performers have been CalMaine Foods and Dolby. Our worst performers have been USG, KBR, Activision and Bank of America, most of the stocks that are affected by changes in the market. USG and AstraZenca are some of our largest holdings. We're heavily concentrated in financial services and healthcare.

Click here to download the Powerpoint presentation, including sell pitches for EQY and PFE.

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