BULL MARKET CONTINUES! BREAKOUT IN TECH!

The BULL MARKET continues this week; the past few months have been a lot of fun! Some of my readers have listened to me and done extremely well. Others were slow to get on board; they made some money but not what they could have made. It is frustrating to write and write about how attractive stocks are and then have readers confess that they are putting their money in over-heated resort real estate. The real estate run is not over but the BULL in stocks still has a long way to run. Today it was the telecom equipment and services stocks that broke out.

While at Myrtle Beach, I added HDTV to one of my condos and as usual I had to deal with the horrible service from Time Warner Cable. My family owns shares in the company and we receive service at at least 20 locations but, boy! is this an industry that needs competition! The employees can never get an order right and they don't care. I am sure there are caring persons working at TWX but you seldom run into them when trying to set up new service.

Today, a bill was introduced in congress to deregulate telecom services. This would be a blessing to consumers. SBC, VZ, BLS and many others are chomping at the bit to be able to offer cable service without fighting through layers of local bureaucrats. Internet phone service and TV services is ready to expand rapidly. Yes, cities earn franchise fees from cable companies; yes, the citizens pay dearly in the poor service and weak selections they receive.

Google and others have invested in new broadband service through electricity lines. The recapture of the tremendous amount of radio spectrum dedicated to analog TV is going to make Wi-Max omnipresent. The future is coming but not soon enough. Deregulation would set off a tremendous round of upgrades to equipment in homes and offices. When the AT&T monopoly was killed, a long distance call cost more than $2 per minute in today's dollars. Today people carry a phone in their pocket for less real dollars than a home phone cost before the deregulation.

Sprint doubled its earnings this quarter. The demand for wireless communications is there. The second phase of the telecommunications revolution has begun! Motorola, for example, just introduced a thin "email phone". The amount of computing power in these mini-computers is more than was in a desk top computer a few years ago!

FOR THE PAST FEW MONTHS, I HAVE POUNDED THE TABLE! I HAVE SAID ALL I KNOW TO SAY TO ENCOURAGE YOU TO INVEST IN TIME TO CATCH THE MOVE! IT IS NOT TOO LATE TO MAKE SERIOUS MONEY!

The market has a lot of momentum now but many stocks have already made a big run. The risks have increased in the past few months. On the other hand, pundits such as Jim Cramer are now fully on board--shouting to the public to buy-buy-buy! Yes, he hits the sell-sell-sell button often because his style is that of an active trader but he is telling investors to aggressively buy stocks. In the next couple of years, late adapters will buy digital TVs, pocket computers, and more.

Earlier this week, I encouraged a family member to sell Wal-Mart to buy TXN. It is not that I dislike WMT. The situation is that TXN is well positioned for the build out of the digital communications networks that is taking place. TXN is particularly strong in cell phone tech and in flat screen TV tech. I was tempted to put the money into GLW (Corning). GLW has been a sweet stock. We paid around $2 for our first shares and bought more at $4, $6, and $9. The stock was strong to day around $19. TXN has already been a good stock to us but we think the potential is big.

It is interesting that this has been such a great year so far because it surely started off in the wrong direction. The key was that after the market went down, we went into an aggressive mode. We sold low beta slow movers, added cash and bought high beta stocks. Our aggressive account is up more than 30% on the year.

The reason to report the numbers is to encourage others to join us in making money. A river crossing always seems risky. The water flows to fast, it is too deep and you can't see what is swimming in the dirty water. However, the other side is a neat place to visit. Give it a try!

BUY THE BULL! THE MARKET IS OVERBOUGHT A BIT AND THERE WILL BE PULL BACKS BUT STOCKS ARE STILL CHEAP RELATIVE TO BONDS AND REAL ESTATE!

HOW MANY TIMES HAVE I WRITTEN THAT STOCKS ARE CHEAP RELATIVE TO BONDS AND REAL ESTATE! THE REASON FOR THE REPETITION IS THAT INVESTORS SHOULD FOCUS ON VALUE AND NOT GET CAUGHT WHINNING WITH THE NAYSAYERS. THE BEST MARKETS ALWAYS ARE IN THE MIDDLE OF ONE CRISIS OR ANOTHER. THERE ARE TRILLIONS OF DOLLARS ALWAYS LOOKING FOR A HOME AND RIGHT NOW THE BEST HOME IS STOCKS--NOT BONDS OR REAL ESTATE! BUY THE BULL!