For 2009 I will be tracking a real portfolio created this quarter in scary times, when everyone is second guessing themselves, the market, and the economy. Last week I wrote Chasing Value: Annaly Capital Mgmt -- from watch list to buy noting that Annaly Capital Management (NYSE: NLY) was acquired, for among other things its 15% yield and basic stability. It trounced the market in 2008, but the yield by itself was very rewarding and I expect that to continue.

Yesterday General Electric (NYSE: GE) dropped over 8% from $17.39 to $15.96. This triggered a buy order I had in at $16.00, after a negative outlook by rating agency Standard & Poors suggested that there was the potential that GE could lose its prized AAA rating sometime in the next two years based on stress it was feeling on its balance sheet related to its financial services division, and GE's uncertainty in other businesses.

Continue reading Chasing Value: Add General Electric to the list

Chasing Value: Add General Electric to the list originally appeared on BloggingStocks on Fri, 19 Dec 2008 15:08:00 EST. Please see our terms for use of feeds.

Kraft Foods, Inc. (NYSE: KFT) is in a bit of a pickle. As the following article makes clear, the company knows it has to raise prices. There's just no choice in the matter. Commodity input costs are on the rise, and something has to give. But the problem is, consumers not only have to pay more for Kraft foodstuffs, they have to ante up more of the green stuff for everything else too -- fuel for the car, heating oil for the home, you know the drill.

If you're a Kraft shareholder, should this concern you? What about if you own other consumer-oriented stocks based on the supermarket shelves that are feeling the inflationary pinch, companies such as General Mills, Inc. (NYSE: GIS) -- which reported earnings today -- or Kellogg Company (NYSE: K), or maybe even beverage businesses like The Coca-Cola Company (NYSE: KO) or PepsiCo, Inc. (NYSE: PEP)? Well, it should, of course. Inflation is no fun, and with the price of oil hitting new highs recently, a trend that seems very much intact, consumers will be strapped. In fact, Kraft is now trying to make up for lower volumes by raising the cost of its goods; this isn't ideal, perhaps, but Rick Searer, who is the president of Kraft North America, brings up an almost humorous point -- "consumers have to eat." I have yet to meet one that doesn't, come to think of it!

But I think the consumer companies are relatively sophisticated with their data-analysis protocols and are, perhaps, a bit more nimble in terms of deducing what shoppers want to buy for purposes of stocking their pantries. At least, I would hope they are -- we've been hearing about better data-mining techniques for years. Kraft obviously will promote a wait-and-see attitude in terms of the consumer and her reaction to the recession, but I don't think shareholders should be overly worried at this point. A lot of these defensive names have international exposure and stand to benefit from the falling dollar, for one thing. For another, we all have to eat! And since the defensive names generally have dividend yields, they tend to be safer bets during a recession; don't think they can't fall, though, because they can. One just hopes they don't fall as much as, say, your typical financial entity or a broad market index.

Disclosure: I own shares of Coca-Cola; positions can change at any time.

Kraft has to raise prices, but people have to eat! originally appeared on BloggingStocks on Wed, 19 Mar 2008 16:39:00 EST. Please see our terms for use of feeds.