JBL: A Market of Stocks

"It's a stock-picker's market" will be the cry this week on financial television. Hello? It is always a stock picker's market. Too often this phrase is used to avoid the question of where the market is headed and what sectors will be successful; it is a politic way of saying, "I don't know."

Still, no stock exists in a vacuum. Macro events affect where to invest and stay invested. It's important to realize the macro events that affect the equity markets.

Iran, for example, is a problem for world oil markets and the world in general; it has been for a long time. We created Mr. Chavez in Venezuela due to having no real energy plan (from both sides of the aisle), and now we are dealing with communism in South America. Terror will be with us, unfortunately, for some time. Russia's dispute with Ukraine over natural gas prices raised concern but was really about reversing former Soviet energy policies that are no longer valid. Finally, China and India are growing like crazy.

Now, let's make some money.

Oil prices are going to stay high. Natural gas will not keep going lower. This means that alternative energy is a place to make a lot of money, because it makes it more economically viable to use and build infrastructure. I have a stock for you that's a perfect fit for future energy, water, and defense investments.

Way, Way Ahead of the Curve

General Electric (GE) is a terrific company whose death has been greatly exaggerated. Recently, a Barron's article questioned how former chairman Jack Welch funded the insurance arm of the company. Mr. Welch defended his actions in a very well written reply.

In the earnings call Friday morning, the insurance arm, Swiss Reinsurance Co., was reported to have caused GE to take a $2.7 billion charge, resulting in a 46% year-over-year drop in earnings. The stock suffered accordingly. What is very important to note is that the charge was due to the discontinued operations of the insurance arm. Otherwise, GE, matched analysts expectations.