BUY & SELL

Today we decided to cut our losses on two Stock of the Week stocks and invest the proceeds into Ford Motor Company(F)
Sunrise Assisted Living Centers (SRZ) has been dragging the Stock of the Week portfolio down for months now. Today when we sold it at -26.94 , we cut our losses.
Additionally, we sold Dierdich Coffee (DDRX) which was down 13% to put our Stock of the Week portfolio in a positive position. With a loss of $1600, we took the proceeds of the sale on both stocks to add 757 shares of Ford Motor Company(F) to the portfolio. We bought Ford (F) at 8.44 and hope to watch it ride!

45% RETURN!

Current Value of the SOW Portfolio:

$167,433

Simple Return: 45.03%

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S & P 500 Value : $134,536
Simple Return:5.59%

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Treasury Bond Value : $125,260
Simple Return: -2.11%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index Be sure to check out other Stock of the Week picks to see if any are right for you. We bought Air Methods (AIRM) in November at $13.99 and today it posted at $24.20--a 72% return in just 4 months. Another great performer for us beside the airline stocks have been US Gypsum (USG) up 160% since last April and (JCTFC) Jewett Cameron up 51% since last July

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

CHECK OUT BUNGE--THE NEWEST STOCK OF THE WEEK

This week Kupsky has chosen to research Bunge (BG) for our stock of the week. Bungeis a global agri-business and food company with operations that encompasses the world. They make their profits by producing and selling fertilizer to farmers; buying, handling and selling oilseeds and grains and soybean byproducts. After adding Bunge to our stock of the weekportfolio total returns were showing and investment increase of 45%. Be sure to see if any of our stock .stock picks are right for you.

BLOG WORLD

Airline Predictions
The Airline Bulletin notes some of the more positive trends expected in the industry during 2006: including at least two airlines, : United Airlines, and Aloha Airlines, who plan to exit bankruptcy sometime early in 2006.. Airline statistics showed strength for most carriers during the typically slow month of January. Additionally, load factors are up with higher yields on the horizon.

Retail Sales Post Strong January Gains
Consumer spending put January spending at 6 year highs The overall increase was more than double what economists had been forecasting. The market awaits the new Federal Reserve Chairman Ben Bernanke, delivery of his first report to Congress tomorrow.


Eddy Elfenbein of Crossing Wall Street comments that Capital One (COF) is an incredibly profitable stock Capital One uses a combination of heavy mass marketing and forecasts earnings this year of $7.40 to $7.80 a share, which translates to growth of 10% to 16%. It also means that Capital Oneis going for 11.0 to 11.6 times this year’s earnings.

Analysts have INTC is the most undervalued Dow stock, with a price target nearly 30% above its current price

2 Billion by 2011
Computer Almanac reports The worldwide number of Internet users surpassed 1 billion in 2005—up from only 45M in 1995 and 420M in 2000. The 2 billion Internet users milestone is expected in 2011. Much future Internet user growth is expected to come from China, India, Brazil, Russia and Indonesia. Additionally Smartphone and mobile device Internet usage will supplement PC use.

OLYMPIC DOLLARS

NBC will pay the International Olympic Committee $613 million for the U.S. broadcasting rights for these Games. NBC will spend another $100 million in production. Then add on the cost of entertaining clients, throwing lavish parties, and buying Grappa for everyone in sight and it all adds up to $750 million--


BUY A CUP
Starbucks is targeting China as its number 1 growth market. At $6 a cup, Starbucks coffee will cost the average Chinese laborer more than they make in one day.

ALL's WELL THAT ENDS WELL

According to numbers supplied by James L. Williams, Energy economist, the US is completing oil wells at an ever more rapid pace. For example, in November of 2005, the US completed 927 oil wells versus 639 completions in November of 2004.

There are two reasons so many wells are being finished. The first is that there are more rigs drilling. The world wide rig count is up about 200% in the past 6 years. Even the Saudi's have doubled their rig count. The second reason is that technology has reduced the number of dry holes.

In the US in November of 2005, we produced 458 dry holes and in November of 2004 we produced 389 dry holes. The total number is higher but as a percentage of producing wells the number is lower.

Horizontal drilling is a part of the new technology that reduces the total costs of drilling. When a deep hole has already been drilled, it requires less work to drill sideways to the next pocket of oil.

There is much more good news for the oil consumer. US refineries are producing more gas this year than in the past two years at the same time of year. Total available supplies are building. Crude oil supplies now sit at 11% higher than the five year average at this time of year.

Weather forecasters predict that cold weather is on the way. January was unusually warm. The Iran situation is still a risk. However, the weather effects will be temporary and Iran cannot afford to not sell oil. The country needs money.

Exxon and other oil patch companies are enjoying record earnings but please remember that cyclical stocks move up and down based on future increases or decreases in earnings. It is becoming more and more difficult for oil companies to grow earnings as the current price is promoting the substitution of alternative fuels.

That last sentence does not imply that one should run out now to invest in alternative fuel production. These firms have the same problem as the oil companies; they cannot grow earnings rapidly if demand dies at higher prices.

Watch the data closely in the next few weeks. I believe you will see that growing supplies in storage will exert downward pressure on oil prices. Natural gas is finally trading back in line with distillates. The weird prices are getting back to normal. I believe the next move is down to the $55 range before the end of spring.

Doing the Google Gulp

Over the past few weeks, I sold several hundred shares of Google. I did not forecast the big drop yesterday but in a few aggressive accounts I simply traded out of the Google in order to invest more in faster moving stocks. After yesterday's big decline, I will probably be doing the Google Gulp again today.

With Google's VOIP service almost ready for prime time and with the expected growth in TV and Music, it does not seem to be a hard swallow after a 12% decline in price. We will have to see how the stock opens, but at one point in after market trading the stock was off $80 per share.

I hope no one is upset that I did not write about the Google sells. Marilyn and I have been very busy for the past few weeks so my blogging time was reduced. Besides, I offer to help manage accounts at no charge. Knowing that I have studied investments for 43 years (my Dad taught me much of what I know when I was 12 to 15 years old), several folks allow me to help them manage accounts.

I have not taken the time to calculate the results from 2005 but several of the accounts I manage did spectacularly well. I am very optimistic about 2006. The big problem is that the markets are very segmented. I was looking at the list of new highs the other day and most of the stocks were not common names. This market is one where you make a lot if you are in the right stocks, lose a lot if you are in the wrong stocks and have mediocre performance if you are broadly diversified.

Yahoo, Google and Ebay are all well off their highs. These companies will grow their way to higher highs. With prices down, it should be a good time to add shares.

22 Million Barrels

Another 22 million barrels of oil was found in Siberia. Drop by drop, oil is being discovered.

Imperial Energy, said the find is significant because it shows there is much more oil in the area.

There are many more large pockets of oil to be found. Saudi Arabia continues to expand the number of drilling rigs in operation. In three years, the Saudi's have increased the big rigs from 200 to 400 and are adding more. The Saudi's expect to increase production by 50% in just a few years.

Last night, President Bush proposed a 22% increase in spending on research and development of alternative energy. In my experience, once the economies of the world are aware of a way to make or save billions of dollars, the solutions are just a matter of time.

Today, UAL comes out of bankruptcy. I do not like the management at UAL relative to the management at AMR and CAL. At the present moment, I plan to take a good look at the opening price of the new stock but I will most likely continue to add to CAL or AMR.

UAL made many serious cost cuts while in bankruptcy. However, their costs per seat mile are still in line with AMR and CAL which made the cuts without having to spend the shareholders money on bankruptcy fees (enormous fees).

Oil is being discovered, airlines are flying with more seats full than ever before, non fuel costs have been cut and fares are rising. I expect three great years for the airline business. CAL and AMR could very possibly zoom from around $21 to around $84 in three years.

Investors should be mindful that the huge leverage cuts both ways. With mountains of debt, the airlines are not "over the hump". However, the upside is also huge. Patient investors should do well by buying and holding the major international carriers for the next three or more years.