USG HAS BEEN GOOD TO US

Our Stock of the Week selections have done well. Today, we bought shares in one of the stocks that has increased 40% since first appearing on our list. Even after the 40% rise, USG is still a value stock. The price to earnings ratio is still under 6!

The risk feared by investors is that the asbestos legislation that has passed a senate committee will never be signed into law. My market fear is that I will be hit by something new not something old. Old news is built into stocks. New trouble hits and hits fast. Really bad news comes when there is no trouble in sight. The worst of the decline from bad news typically occurs in the first few days of trouble.

One of the reasons we like USG is that many of the building products sold are for commercial buildings. We are too nervous to buy home-building stocks at today's prices. Home-builders have low P/E ratios and have been on very long market moves. We don't pretend to know when the end will come.

Jim Cramer says many of the home builders have become land trust; he implies that they have years of profit growth ahead. One of Papa John's favorite old jokes was to suggest that "you better buy land now because they are not making any more of it". Papa John was wise enough to know that every thing has its own season.

Home-building will eventually slow. When it does, it may be because the economy is so strong that interest rates have risen. The rise in rates may be because businesses have gotten into a panic to build before their competitors build. Building product makers can ask almost any price when the market gets "hot".

BUY THE BIG BULL! SPREAD YOUR RISK AMONGST VARIOUS SECTORS BUT BUY THE MARKET! AVOID MUTUAL FUNDS AND HIGH BROKERAGE COMMISSIONS! INDIVIDUAL STOCKS OFFER THE LOW COST TAX ADVANTAGED WAY TO MAKE HIGH LONG-TERM RETURNS!