Before I get to today's pick, check out this quote from Richard Russell on Dow Theory; I believe many investors can relate to the sentiments.
If the Dow Theory can call the turns accurately, why doesn't everybody follow it? The answer is largely greed, laziness, lack of knowledge and wishful thinking. When prices are advancing, the public, holding large amounts of stock, wishes to be reassured. Investors like nothing better than bullish counsel during a bull market. Caution does not mix with greed, and the Dow Theorist grows cautious as the market climbs. As to ignorance, Wall Street is not immune. Moreover, it is easier to follow another's advice than to form one's own conclusion. ... Lastly, the Dow Theory suffers from that prejudice which afflicts all technical market studies; it does not answer the question, "why?" The Dow Theorist has learned not to question the validity of a bear market signal which predicts a turn in the economy, nor does he deny the probability of an advance after industrials and rails transports today better their previous highs. For him it is sufficient that the Theory has been tested and that it works.
Right now, the stock market has billions of dollars changing hands every day, with thousands of companies being traded, and millions of people being affected. This is a serious business, and we play for real money, so you better be prepared, or you will lose money, that I can guarantee.
One way to avoid losing money is to pick solid stocks, and today's pick fits that bill:
J.P. Morgan Chase
, the financial services giant that is the very epitome of financial strength, with assets of $1.4 trillion and operations in more than 50 countries.
The company is a leader in investment banking, financial services, commercial banking, credit card processing and asset management. The bank serves millions of consumers worldwide, and I consider J.P. Morgan Chase best of breed. It ranks 11th in the Fortune 500, with revenue of $61.78 billion, and ranks third among financial service companies.
J.P. Morgan Chase will announce earnings July 18 and I believe it will announce a solid number and beat Street expectations. Should that happen, I envision the stock trading through $50. So for today's deep-in-the-money call, I will take advantage of the anticipated quarterly earnings and place a limit order to buy 10 December 40s (JPMLH) at $9.60 or better.
Before we get to today's Game of Life, I want to correct something from my June 25 column. When I was listing the merits of
(which was a nice 2-day win), I referenced a column by Ken Fisher and said the article was written in March 2002; it was written in March 2000.
Game of Life
As baseball pauses for the all-star break, the entire NL East has been limping. Despite a spate of losses, the Mets continue to maintain a small lead over the Braves and Phillies. With yesterday's win over the Rockies, the Phillies manage to postpone, at least until the end of the week, their history-making 10,000th loss.
The Brewers continue to lead the NL Central by 4.5 games over the charging Cubs, and out West, the Padres maintain a slim lead over the Dodgers, with the Diamondbacks falling somewhat off the pace.
Meanwhile, the Red Sox continue to have it on cruise control in the AL East with a double-digit lead over the Blue Jays and Yankees. The Tigers have the slimmest of leads over the Indians in the AL Central, in a race that seems destined to go down to the wire. In the AL West, the Angels have a slim lead over the Mariners, who have been playing exceedingly well since the surprise resignation of Mike Hargrove.
From the individual stand point, A-Rod continues to put up tremendous numbers, leading the majors with 30 homers and 86 RBI. Prince Fielder, living up to his name, is right behind A-Rod with 29 homers to lead the national league. C.C. Sabathia and Josh Beckett are the only 12-game winners in the majors thus far.
A one-night pitcher, if there ever was one, Ramon Hernandez, the Phillies bullpen coach, will be in the spotlight tonight when he pitches to Ryan Howard, who is defending his home run derby title. Hernandez is seeking a three-peat, as he pitched to Bobby Abreu two tears ago and Ryan Howard last year, and both won the derby.
There were two events that took place in London over the weekend. The Tour de France, clouded by doping allegations of past performers, began on Saturday in London with more talk concerning last year's winner Floyd Landis (who may be stripped of his title) than who could win it this year.
The other event in London took place on Center Court at the All England club, Wimbledon. Unfortunately, the rainy weather that so characterizes British summers, dominated the headlines; however, it could not dampen the magnificence of the tennis on display. Venus Williams, who was not even mentioned as a potential winner this year, became the lowest seeded female player ever (31st in the world) to win the Wimbledon championship. She triumphed in the final over Marion Bartoli of France to claim her fourth singles championship at Wimbledon.
On the men's side, the incomparable Roger Federer won his fifth consecutive Wimbledon men's championship in an epic battle against Spain's Rafael Nadal. For the first time in his five Wimbledon victories, Federer required five sets against the equally brilliant effort of Nadal, who with any luck, could have claimed his first Wimbledon title.
Adding to the moment was the presence of Bjorn Borg in the crowd, the only man to previously win five consecutive Wimbledon championships. Barring injury, the rivalry between Federer and Nadal should be something special in the years to come, as these two have clearly distanced themselves from the rest of the field in tennis.
The Players Club recognizes and appreciates the quality of the competition that elevates talents, such as Nadal and Federer, to perform at unparalleled heights. Moreover, The Players Club appreciates when the old (Borg) and the new (Federer) coalesce on one world's stage.
By guaranteeing recurring cash flow through our strategic partner, The Players Club endeavors to ensure that the old can view the new without either having to concern themselves with their financial futures.
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 during his Major League Baseball career, Lenny Dykstra was an integral member of the powerful Mets of the mid-1980s, including the world champion 1986 squad, and the Phillies in the early 1990s.
Today, Dykstra manages his own stock portfolio and serves as president of several of his privately held companies, including car washes; a partnership with Castrol in "Team Dykstra" Quick Lube Centers; a state-of-the-art ConocoPhillips fueling facility; a real estate development company; and a new venture to develop several "I Sold It on eBay" stores throughout high-demographic areas of Southern California.