The market jumped higher Monday in anticipation of the Fed rate decision tomorrow. Stock prices now reflect the belief that the Fed cut rates again. The Sept. 18 rate cut helped send stocks flying off their late-summer lows and eased concerns over a credit and liquidity crisis.
With the financial sector dealing with turmoil, and oil and tech stocks trading at or near all-time highs, I would like to focus on a different sector altogether in looking at
last wrote about the company in early August, following a big drop in its second-quarter earnings.
International Paper has manufacturing operations in the U.S. and abroad. It operates in all aspects of the paper-making industry; taking forest trees to factory, producing the paper, and packaging and selling the finished product. While at heart the company is a paper company, much of its earnings come via land sales.
Last year alone, IP sold $6.6 billion worth of forest land. The company holds onto a large amount of real estate as a land investment in order to enhance profits.The stock took that large hit after warning that disappointing land sales will keep profits below estimates.
I often like buying stocks that are victimized by market overreactions. The negativity from International Paper's impending earnings report is already built into its share price, recently at $36.40. At this point, there is little room for IP to do anything but pleasantly surprise over the reduced estimates. Furthermore, management believes that profits will come in above the second-quarter number. With that in mind, I will place a limit order for 10 April 30 calls (IPDF) at $7.10 or better.
Game of Life
Commercial stores suddenly disappear in early September as enormous banners cover the windows to promote Halloween. On crowded city streets, four or five costume stores sit within a two-block radius. Costumes ranging from $10 to $150 fill the stores' inventories.
For most, these Halloween stores are perfect substitutes for each other, which means whichever store has the costume you like will be the store that gets your business. Prices may vary $2 or $3 among stores, but in general, they're similar. Consequently, due to the incredibly high demand, those who don't have the prowess or motivation to make their own costumes rely on the inflated prices of Halloween costume stores.
Finding a costume is often a difficult task. You want to be original but at the same time eye-catching. No repeats from previous years. The wig, the jewelry, the enlarged sun glasses all add up. Before you know it, you've spent over $100 on an outfit you'll wear once. But after all, it is Halloween!
With the spirited holiday inching closer and closer, it seems fitting for a group called Superheroes Anonymous to make its debut. On Sunday, the group descended on Times Square in super-hero costumes, ready to tackle the problems of New York City. They took to the streets gathering litter and handing out fliers informing passers-by about crime prevention.
Chaim Lazaros, a Columbia University student, discovered the group on MySpace and organized it for a documentary he plans to complete on the city. The superheroes refused to give up their anonymity, but maintain that they are active fighters of crime in their communities.
"Street Hero," a former prostitute trained in martial arts, says she hits the streets at night trying to protect the young girls who remind her of herself years before. Other superheroes have less-severe duties, such as Street Hero, who acts as the handyman, fixing whatever needs fixing in the houses of community residents. The group is fighting crime in a completely legal way, and how better to do than in costume!
More admirable than their efforts, however, is their desire to remain anonymous. They sacrifice the individual acclaims they would receive for the integrity of being a real superhero. If only we all strived to be as humble and generous.
The Players Club realizes the rarity of such modest and giving people in our world. Even those who may have the power to make changes in a community, as these super heroes do, often relent from doing so. By guaranteeing recurring cash flow to professional athletes through our strategic partner, thus ensuring financial security, The Players Club endeavors to give those capable of making a difference the motivation and freedom to act. As you dress up in police suits and pull on Superman's cape, consider taking the actions to do something as important and admirable as those characters whom you are emulating in costume.
Always remember: Life is a journey; enjoy the ride!
At the time of publication, Dykstra had no positions in stocks mentioned.
Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."