Budget Poker
Research for Online Investors

by John Dalt

4/08/11

We can’t get through today without commenting on the budget battle that dominates the news programs. It seems like an orchestra building to a crescendo. CNBC has a countdown clock until the lights turn out in Washington. My thoughts…so what. We now know that President Obama is not a poker player. He doesn’t understand the other players ‘hole card.’  He is too busy laying the ground work for 2012.  He has announced his candidacy, and is now in full campaign mode.

If the House Republicans can keep their nerve, they win.  Remember, their goal is to cut government.  What better way to cut the budget than shut the whole thing down?  I wish they would include a rider to cut off all funds for Obama’s excursion into Libya.  What the heck are we doing there?  No funds to NATO in support of the mission either, it’s just a back door for the U.S. to be involved.

Rueters reports that Defense Secretary Robert Gates told a solder in Iraq that if the government shutdown, paychecks would be delayed.  Since it is occurring on April 8, and the military pays twice a month the next paycheck would be one-half normal size.  If the shutdown extended through April 30, members of the military would miss the second April paycheck.

The House sent a continuing resolution (CR) to the Senate this morning.  The CR funds the military for the balance of the fiscal year, and rest of government for one more week, with $12 billion in cuts.  Oh, the humanity of it all!  Harry Reid took to the Senate floor this morning; I thought he was going to cry over Planned Parenthood funding.

Speaking of the negotiations with House Leadership, Reid told Reuters, "This has been a moving target but now we've come to realize that the moving target is now focused on a bull's eye on women in America."  Just the latest issue after his concern over cowboy poets didn’t spark a public outcry.

USA Today reports that The White House has labeled the one-week CR that funds the military for the rest of the year a “distraction.”

By the time you read this, the battle will have been won or lost.  Or, we may go into next week with network TV showing crying kids that went to Washington only to be locked out of the Smithsonian.  The problem for conservatives in this battle is they have no allies, except those who believe the government is too big and spends too much.  The mainstream media will paint them, and us, as extremists for wanting to cut less than 1% from this year’s spending.  Funny thing, they never called Obama an extremist when he, Pelosi and Reid rammed through Obamacare.

The market is marking time until earnings season starts Monday with Alcoa (AA).  We are not, we are analyzing our holdings for our Long-Term Subscribers this weekend.  We have conservative buy prices on 20 great stocks.  We may have a sell order on an existing holding and are researching a company Ben Graham would be proud of.  We found a company that has over $5.00 in cash on the balance sheet.  The stock has been beat down on rumors, it's for sale at just a little over $6.00!  We don't normally recommend stocks under a ten dollar share price, but a gift is a gift.  We are trying to understand some of the flotsum circulating on the internet blogs.  You can subscribe and get in on this great money doubler, if we go with the recommendation.

The Mailbag:
I have recommended you to a friend, letting them know how my portfolio has grown and how responsive you are to your clients. The head of the household is still working so I don't know if he will have time to take an active role in his retirement account; I wish I had worked with your services last year; I would have an even higher balance. Thank you again. I know you work very hard for us.---Buy, Sell, Hold and Long Term subscriber G.C.

John’s reply:  Thank you for the kudos and the recommendation to your friend.  We offer portfolio management services for customers still working, or that are busy in their retirement.  Have them contact us if interested.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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