JBL: No Tricks, Two Stock Treats

This is the cheapest stock among the big banks when you consider its growth opportunities. The yield curve will remain flat for a while due to demand for our debt. The Japanese 10-year yields only 1.5%, the German 10-year only 3.4%. The best value is in America at 4.5%. The flattened yield curve is largely a matter of foreigners' insatiable demand for U.S. Treasuries, which explains the "conundrum" of why long-term rates have remained relatively low despite the Fed's tightening campaign.

Bank of America has been hurt by this but, like most big banks, it is not as affected by the yield curve as the regional banks. It makes a lot of its money in fees, and with the acquisition of MBNA, through consumer credit.

Bank of America has a dividend yield of 4.6%. With a yield like that, one can buy this stock and afford to wait on the Great Pumpkin.

Hold the Ball, Lucy

Charlie Brown believed Lucy would hold the ball for him to kick. Wrong. Boston Scientific (BSX Quote) investors thought that Boston Scientific had cornered the market on drug-eluting stents. Wrong.

Johnson and Johnson's (JNJ Quote) Cordis unit developed the first drug-eluting stent, Cypher. This was a breakthrough for angioplasty procedures. The first stents used in catheters to open up arteries created scar tissue, and about 40% of the patients had to be reopened. But drug-eluting stents prevented scar tissue from forming.

Johnson & Johnson was first on the scene with a drug-eluting stent. Boston Scientific was second with Taxus, which soon dominated the market in Europe and captured two thirds of market share in the U.S. In sum, Boston Scientific built a better mousetrap that was also cheaper.

Then, J&J commissioned its own study, which Boston Science disputes, showing that J&J's Cypher was more effective than Taxus. The J&J marketing machine kicked in and J&J took market share from Boston Scientific.