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Taking Stock: If you’re a believer, take a word to the wise

Updated: December 26, 2011 7:22PM



Dear Mr. Berko: I have $86,000 in CDs and have never been in the market. My new broker and I feel that the stock market will be great in 2012 and 2013, and he has advised that I invest in three mutuals. But I would also want to own different, good stocks, too.

Could you tell me the names of maybe six top stocks that’ll do real well in the market? I’ll tell them to my broker, and we could put half the money in his mutuals and half in your stock picks. Please pick some good ones for me because I’d really like to make good money in the market in 2012.

— SA, Chicago

Dear SA: If you believe that the political solutions to Europe’s economic problems will be successful; that Europe’s banks won’t suffer the ignominy of begging for new capital; that the European economy will prosper; that Europe’s problems are finally over; or that the kerfuffle across the pond will not affect our economy or our banks, then you share a majority opinion with wise investors who are buying U.S. stocks.

If you believe that there is little risk in China; that Chinese real estate is far from a bubble; that inflation is less than 5 percent; that Chinese banks are strong; and that China’s economy is not dependent on demand from Europe or the U.S., then you share a majority opinion with wise investors who are buying U.S. stocks.

If you believe that U.S. employment will be strong in 2012; that consumer income and spending will grow; that housing prices will begin to improve; that U.S. exports will continue to boom; and that corporate profits will continue higher this year, then you share a majority opinion with wise investors who are buying U.S. stocks.

If you think that Congress will come to a consensus on the national debt and the deficit; that Congress will balance the budget; that Social Security and Medicare are untouchable; that interest rates will remain low; that federal spending will decline; and that the administration will create new jobs, then you share the majority opinion with wise investors who are buying U.S. stocks.

And finally, if you believe that Occupy Wall Street is a fad that will soon fade into the ethers; that OWS protests won’t continue spreading to major cities across the U.S. and Europe; and that the anger won’t give way to violence, then you share a majority opinion with wise investors who are buying U.S. stocks.

So if you honestly in your heart of hearts believe all of this, then you should believe that the following six issues will help make your first venture into the stock market an overwhelming success.

Procter & Gamble (PG-$64.14) is an $85 billion consumer packaged goods company with 129,000 employees and a 3.3 percent dividend that has been increased for 30 consecutive years. Apple Inc. (AAPL-$385) is a magnificent manufacturer of communications devices that employs 61,000 folks in the U.S. and 70,000 in China, and there’s rumor that AAPL may initiate a dividend in 2012. Goldman Sachs ($95), which has 39,000 employees and yields 1.8 percent, is the most powerful investment bank in the world, and its officers and directors are on a first-name basis with the world’s most important politicians, industrialists and billionaires — and their mistresses.

Wells Fargo (WFC-$25) has more than 9,000 branches in 39 states and may be the largest bank in the U.S. serving ordinary Americans; WFC has $76 billion in revenues, a profit margin of over 20 percent (wow) and a 48-cent dividend that should be increased in 2012. Whirlpool (WHR-$46.74) may be the finest manufacturer and marketer of home appliances in Europe, North America and Latin America, and the company boasts $19 billion in revenues, 71,000 employees a swell 4.3 percent yield. Temple-Inland’s (TIN-$31.50) 10,600 employees helped the company sell over $4 billion of corrugated packaging and boxes used in bulk shipping, and they also manufacture wall board, particle board and gypsum building products. The TIN dividend yields 1.6 percent and could be raised in 2012.

If you and the majority of wise investors are right, 2012 should be a wonderful year for you.

Address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com.



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