A slew of big acquisition news came out this Monday morning, as
major names like Oracle (
), Mattel (
), J.M. Smucker Co. (
), and Cigna (
) made moves to cement their top position with key purchases. As is
always the case, some takeovers will pan out and some won't.
Although it is important to make key acquisitions over time,
innovation is what will give shareholders the biggest long-term
reward. Like in sports, it's the companies whose executives and
workforce remain hungry that win out over the long term. It
certainly felt like a bit of melt-up in the markets today as fund
managers chased the recent winners.
We also had a good amount of earnings reports out this morning,
but the rest of the week promises to be much heavier. Moving the
needle up today on better-than-expected earnings were shares of
), V.F. Corp (
), and Eaton Corp (
). On the flipside, stocks like Kimberly-Clark (
) was lower and Lorillard (
) bounced off earlier lows to close fairly unchanged.
New Mortgage Refi Proposal Coming from President Obama
Our president will unveil a plan later today to help borrowers
(as many as 1 million perhaps) refinance underwater mortgages. The
move is aimed to prevent homeowners from walking away from their
mortgages, but the even bigger goal is for the borrowers to take
the new-found money they'll be saving and spend it, thus augmenting
Unfortunately, the message from Washington is almost never to
save your money. But then again, the saver has seen little in the
way of thanks in the past several years. Maintaining historically
low interest rates and bailing out people who can't afford their
loans are a kind of slap in the face to responsible savers.
Again, the more we see Washington intercede in the economic
cycle, the more a true recovery will be delayed. Don't forget there
are millions of people who are set to see unemployment benefits run
out at year-end. What do you think will happen to those folks?
Their benefits will no-doubt be extended yet again. Rather than
putting the emphasis on getting people back to work, the easy
choice is to buy time and print more dollars to add to everyone's
eventual tax burden.
International regulators are following America's lead now, and
are pushing through their own brand of fiscal irresponsibility. The
ramifications of all these programs that are created with the
purpose of short-term relief are usually never thought out when it
comes to the long-term effects. Eventually all the money being
printed will cause a good dose of inflationary pain. The danger is
if the pain comes quickly, and when many least expect it.
The irony will be when the real estate market starts to show
signs of life, but the Federal Reserve being behind the inflation
curve needing to raise rates dramatically to soak up all the
currency they printed. This development will lead to yet another
hard landing that politicians will have to patch together a
makeshift solution. It'll be just enough to extend their own
careers, of course.
We continue to eye these economic developments closely, as well
as how the markets react to the news. If and when we see a true
recovery in the works, we won't be be afraid to say things have
reached a turning point.
Employment-Based Health Insurance Coverage Declining
According to the Employee Benefit Research Institute (EBRI),
employment-based health insurance coverage remains well below the
levels of the 1990s. The percentage of workers with coverage either
in their own name or as a dependent was slightly above 61 percent
in 1998. Fast forward to April of 2010, the percentage of workers
with employment-based coverage was down to 56.2 percent.
We are hearing more and more about people rolling the dice on
not carrying health insurance, which could deal a fatal blow to
one's chances of building wealth in the event of an unexpected
health event. If you are struggling to afford health care for your
kids, there are government programs worth checking out, including a
. States also tend to have plans you can look into, so be sure to
check these resources out. A simple Google search for "NJ kids
health insurance" (substitute your own state in there) yields
plenty of free resources to look into.
Speaking of health insurance, retail giant Wal-Mart Stores (
) announced late last week that all future part-time employees who
work less than 24 hours a week on average will no longer qualify
for any of the company's health insurance plans. Also, any new
employees who average 24 hours to 33 hours a week will no longer be
able to include a spouse as part of their health care plan, but
children can still be covered. This is a big change from the stance
the company took just a couple of years ago. If you remember, I
noted recently about the big hike in health insurance rates we saw
for our company after a couple of years of little to no
A wealth plan without a viable health plan can be quite
precarious, so I would advise anyone that is currently "rolling the
dice" to do whatever you can to get some sort of coverage against a
major health event that could jeopardize your financial future.
Be a Dividend Millionaire
My publisher (FT Press/Pearson) is giving away a free chapter of
Be a Dividend Millionaire
book to download for free. Anyone interested can visit the Facebook
page here to check it out:
Did You Miss Our Weekend Updates?
I hope everyone had a chance to check out our
members-only weekend articles, including new features that
highlight some of the biggest winners and losers from the week that
was, such as analyst upgrades/downgrades and earnings/story stocks.
These articles are a great way to catch up on the week that was in
the markets. We also have a rundown of how various Dividend ETFs
performed on the week.
Thanks for reading everybody. I'll see you tomorrow!
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, as well as a detailed explanation of
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