TEARS AND ANGER!

Listening to the reports of the day in London flooded me with tears and anger. I hope and pray that tears and anger are common around the world tonight. We need world wide resolve to stop senseless bombing of innocent men, women and children.

The stock market recovered today. The markets believe terror will be contained. One must avoid the word defeated because there will always be lunatics somewhere who will cause problems.

Today my purchases included shares in Friedman Industries, Ford, Merck, Rock-Tenn, Conagra, Google and NWAC. I am considering the purchase of additional shares in TXN or MOT tomorrow as well as Commerce Bank and TWX. Another recent purchase was a substantial stake in VTSMX. VTSMX is the Vanguard "all stocks" index. Of the stocks purchased, Friedman, Ford, Merck and Conagra are all high dividend payers. Merck is facing law suits, Ford, Rock-Tenn and NWAC are facing restructuring and Google is over-priced.

If it were possible to find the perfect company, the perfection would be a sound reason not to buy. There are always reasons not to buy.

Today the market showed again that this is a resilient market. I keep hearing that it is a difficult market. Tonight I heard yet another commentator suggest AMTD should be sold at $18.50 as the $6 special dividend is already baked into the stock price. I am glad I did not listen to the sell suggestions at $7, $11 and $13! Trading activity is ready to explode. Millions of investors have grown comfortable trading online. They like the savings. Low cost trades lead to more active trading. ET and SCH were both strong today. AMTD has successfully assimilated 7 other purchases. The company is good at merging operations to save costs.

BULL markets have traditionally climbed a wall of worry. That is what is happening now. Those who were caught in the tech bubble are still skeptical. However, those who got back into the market in late 2002, after the recession, have done very well for almost three years. The second leg of the BULL should start soon.

Tears and anger are appropriate reactions to the terrorist attacks. Avoiding the markets is not an appropriate reaction. One who "flies" to quality under the circumstances will buy bonds at near all time high prices. The safer route is to own quality stocks.

My family takes an aggressive approach. We own quality stocks but we also own many more aggressive positions. Right now, high yielding blue chip stocks are good bond substitutes. I know many advisors would disagree, but good quality high yielding stocks are typically less volatile than bonds and even go up during recessions. The current yields on many quality stocks are higher than bond rates.

BUY THE BULL! THE GROWTH STAGE FOR CELL PHONE AND INTERNET TECH IS READY TO ENTER THE ACCELERATION STAGE. NEW EQUIPMENT AND SERVICES WILL BE ADOPTED BY MILLIONS OVER THE NEXT FEW YEARS. BONDS ARE NOT GOING TO BE ATTRACTIVE INVESTMENTS IF ECONOMIC GROWTH IS STRONG. STOCKS SHOULD OUTPERFORM REAL ESTATE, BONDS AND CASH!