Tuesday, June 19, 2012

Deere Apple: GARP's Time Is (Approximately) Here and Now

Just wanted to put in a quick stock comment.  Since I think that "safe" govvies are "played", I have gone to stocks with fortress balance sheets and unique large niches in core areas of the global economy.  Thus I bought back into Deere (DE), which I have traded at higher prices this year, perhaps making a buck or two but jumping out as I sensed the downtrend in the shares.  DE is heading for its 175th birthday.  It has seen a lot worse than the mess going on in Europe!  The P/E is about 9X projected 201s earnings, and its CEO was on CNBC a day or two ago reaffirming guidance and saying that construction is doing well in the US of A.  Value Line's "fair value" or "value line" for DE puts fair value at about $110, not the $75 it's now at.

Also, I scaled further back into AAPL, having largely gotten out around $620+ after the DOJ lawsuit broke and trading had gotten just too crazy in the stock.  Meanwhile, Microsoft came out with some event this evening that announced something more than vaporware but less than an actual product-- and was thus in stark contrast to Apple's recent WWDC where actual products ready to be shipped were announced.

Here is a pretty funny take on the event:

I also received an impressive e-mail from a techie who may be switching from PC's to the new Empire after being blown away by seeing the Retina display on Apple's new MacBook Pro 15 inch portable computer that was unveiled at the WWDC.  He is looking at much higher AAPL prices, soon.  Unlike yours truly, he actually knows the hardware-software industry as a veteran insider.  I'll publish his comments in full if he allows me to.

With interest rates so low, patient money that does not have to mark to market and thus can ride out what might be a very stormy time in the weeks and months ahead will, I think, outperform most bonds with a truly select group of dominant equities that generate strong free cash flow.

Thus I have added select GARP companies to bond-like utility stocks as I have moved away from the highly-appreciated bonds that now have more risk than reward as I see it.

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