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For Immediate Release: Thursday, February 14, 2008
New Technology Stock Added to TSA Portfolio: Becton, Dickinson and Company (BDX)
Raleigh, N.C. The Technology Stock Advisor, a weekly internet newsletter covering investments in high technology stocks, initiated coverage today on Becton, Dickinson , and offered analysis about the economy and stock market.
The WSJ reported today that the participants at the Federal Reserve Bank’s August meeting generally saw the degree of uncertainty surrounding the outlook for economic growth as having risen appreciably.
In other words, economic uncertainty is up, and so is the stock market, after its monthly bout with depression, evidenced by the loss of the entire years gains in a week of trading.
Something else is up. The members of the Federal Reserve admitted that they generally have no economic explanation for what is wrong with the U.S. economy. As the WSJ reported, the members noted that the “economic expansion appeared to be weaker than it had been in past recoveries, but that the reasons for the weakness were unclear, contributing to greater uncertainty about the economic outlook.”
The WSJ wording in their story left it unclear whether it was the Fed members who had greater uncertainty or members of the general investing public who had greater uncertainty. The wording about uncertainty was unclear and uncertain, just like the opinions of the members of the Fed have about the U. S. economy.
In their state of economic confusion about the cause of the U. S. economic weakness, the members appeared to thrash around looking for a policy cure to the unexplained economic sickness. “A couple (of the members) noted that the cyclical impetus to additional asset purchases could be used to provide more accommodation by lowering longer-term interest rates.”
In other words, one possible economic policy the Fed could use to address the unknown economic problem would be the old tried and true policy of buying more bonds, and injecting liquidity into the economy.
After all, they had used this same policy idea several times since October of 2008, and it seemed to have worked great, except that the economic result was also uncertain and unclear, since the economic conditions since the application of the policy had subsequently deteriorated.
Some other members thought that one alternative policy option could possibly be changing out short term bonds in their Fed portfolio for long term bonds. Similar to re-arranging the chairs on a very large boat in the North Atlantic, on its maiden voyage.
“A few participants noted that a reduction in the interest rate paid on excess reserve balances could also be helpful in easing financial conditions,” noted the WSJ.
In response to the mere hint of more liquidity, the stock market asset bubble shot up several hundred points, and reached break even for the year. And, upon hearing the news, Paul Krugman wrote another socialist cheerleading op-ed in the New York Times calling for even bigger government stimulus.
The best economic analysis at the Fed meeting came from Charles I. Plosser, the CEO of the Federal Reserve Bank of Philadelphia. Plosser is an economist, of the old school tradition (very old).
The WSJ reported that Plosser hinted that the other Fed members may have a negative attitude. (Bad ‘tude).
“Although financial markets had been volatile and incoming information on growth and employment had been weaker than anticipated, Plosser believed the (proposed policy) statement conveyed an excessively negative assessment of the economy and that it was premature to undertake, or be perceived to signal, further policy accommodation.”
Aside from suggesting that his fellow members may have a bad ‘tude, Plosser absolutely nailed the problem with the U. S. economy. “He also judged that the policy step would do little to improve near-term growth prospects,” the WSJ noted, “given the ongoing structural adjustments and external challenges faced by the U.S. economy.
Plosser is still enough of an economist to remember the teachings of a very wise perfesser at NYU named Wassily Leontief, and Plosser was channeling Leontief when he said the U. S. economy was undergoing “structural adjustments.”
Unlike the political advice given by Snakehead to President Clinton on getting elected, Plosser, however, did not call his fellow Fed members stupid.
But, it is economic structural change that is causing U. S. economic weakness. The other Fed members will never admit this, because it is, after all, the Fed that caused the economic structural change, when they became Bankers For The World in 1997.
The external challenges he mentions are those caused by the one-world-government-seamless global economy that central bankers imposed on the world in the 1990’s. Centralization of bank policy and one-world government, just like socialism, is not working, and will never work economically.
If, and when, the members of the Federal Reserve return to their original purpose of protecting the sovereign economic interests of U. S. citizens, they may also begin to get a grip on what is wrong with the U. S. economy, and how to fix it. (Note to members of the Fed: Go back and read Leontief’s last paper in 1989 right before he died).
In the meantime, since it is a new world order, the best investment advice is to buy global technology companies, like Becton, Dickinson. The Technology Stock Advisor added BDX to it’s A Stock Portfolio, with an initial buy target price under $68.
Becton, Dickinson and Company (BDX), a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. The company’s BD Medical segment produces medical devices for use in various healthcare settings. This segment’s products include needles, syringes, and intravenous catheters for medication delivery; prefilled IV flush syringes; syringes, pen needles, and other drugs to treat diabetes; prefillable drug delivery systems; anesthesia needles and trays; and sharps disposal containers. Its BD Diagnostics segment provides products for the safe collection and transport of diagnostics specimens, as well as instrument systems and reagents to detect various infectious diseases, healthcare-associated infections (HAI), and cancers.
All of the stocks mentioned in the TSA Newsletter were selected based upon a 2007 stock selection and asset allocation patent issued to Thomas Vass, the investment advisor to the newsletter. The method of the patent explains what stocks to buy, the target buy price, the target sell price and the best asset allocation for an investor’s risk profile.
After a stock has been selected for coverage, it is added to one of three TSA portfolios, based upon its quality rating, as provided by Standard & Poors®. BDX is an A rated stock. Stocks from the three portfolios are added to a client’s portfolio based upon their risk profile, provided by the results of the TSA new client risk questionnaire.
Investment Disclosure: The past performance of an investment is no guarantee of future performance. All investments bear risk of loss of principal invested. There are no guarantees related to investing. Please visit the TSA website and read our ADV Part II disclosure document for information about our investment management fees.
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About the Author
I am a portfolio manager and an insurance agent. I also manage a new crowd funding website called the Private Capital Market.com, where tec
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