Yesterday I was grateful for all the trips Devin made down stairs with our golden Max.  Last night was my turn.  A cold nose was inserted in my back at 2:04 am this morning.  When I turned around, Max was at the door with that "I am going to explode." Look on his face.  It took him about 3 seconds to make his way to the back door.  Once out he did explode all over the back yard, poor guy. 

Then we got to repeat the experience at 4:07, 4:53, and 5:50.

That gave me plenty of time to do some pre-market analysis of my AA option call, which explains the correction I sent out early this morning.  Sorry about that. 

Max got a trip to the vet today, but we still do not know the cause of the problem.  But we feel our Christmas basket from Dr.Kelp growing with each visit.  Some day our basket will be as big as yours Russ.

Jack, unbeknownst to me had another early morning session with his teacher.  I missed my chance to swim again today, but grabbed a bowl of Cheerios and blueberries before heading out to the salt mines.  I got my e-mails cleared up and took care of business business and personal business.  I can't share the business business as I work in a very technical secret keeping industry and if I divulged what I know, I'd have to hunt you down and kill you.  There are a few of you I really like, so let's not do that. 

Don't know why I thought of this but yesterday I saw a truck in our parking lot and got such a kick out of the name of the truck I just had to take a picture.

No matter how I tried, my pronunciation kept coming out Ass Ender.  I just crack myself up some times.

Had a great lunch today with two of my peeps.  We were talking about strategic planning and stuff.  I did learn that Sharon does not like cilantro.  What's not to like about the little plant aka coriander or Chinese parsley.  From ancient greek times Korijadra has been used for anxiety and insomnia cures.  But what can I say, the nice people at Hanna's gave us a credit for the slight tasted soup.  (I had a hot dog that was not on the menu.  GGGRRREat.)

In the afternoon I had a meeting with person who used to work here about 20 years ago.  Nice visit.  Bright girl with some good ideas.

When I got home, I heard some great news that Jack had gone one on one at basketball and football with Will.  Will is an incoming freshman at 6 foot 2 inches and 320 pounds.  Jack came home alive.  He felt good and looked proud.  He also aced a math test and is getting good grades all around.  We all had various flavors of fast food tonight and then we all went for a swim.  Life was good.

I think Devin might have had an epiphany tonight as we were in the pool and she went to pick something on Jack's face and he grabbed her wrist.  She had just realized, her little baby could hold her wrist and she could not pull away.

All in all a great day.

Getting Started

Let see what happened today in the market.

The scares over the Italian situation were abated when their bond sale went relatively well, but the market was still in a funk from the losses yesterday.  NVLS Novellus did not have nice things to say about the balance of the year and that brought the market back down.  The interesting minutes from the Fed z z z z z z indicated they were contemplating a QE III, which helped the market a bit, but finished down again.  Volume was heavier than yesterday but still nothing to get excited about.  Another yucky day.

I know there are about 8-10 readers who want to get started in investing but are concerned about loosing their money or wondering if this is the right time and if they have enough money to get started.

You can start with as little as $1,000.00.  (yes you can start with less than that, but if you want to have a balanced portfolio it is hard to do for under 1,000.)  My suggestion would be to find the money.  But first, assess your situation.  Assuming you are employed, make sure you have exhausted your employee investment opportunities.  If you employer has a 401 K program, get in that first before ever entertaining investing on your own.  WHY?

First off, your investment in a 401 K is pre tax dollars.  That means you get to lower your tax base by investing in the stock or bond market.  Then you have the company matching funds.  Almost all companies with 401 Ks have a matching fund program.  Whether that is 5%, 25% or 50%, that is yet another gain before you even decided to put money in the market. 

Also make sure you are well insured before you invest.  Have the best health and disability insurance you can afford before investing a dime in any program outside of your 401 K.  One little set back physically can eat away at all the great investing strategies you implement.

Then and only then should you begin to get in the game.

Generic Or Brand Name

You can call it with NVS Novartis AG, through its subsidiaries, engages in the research, development, manufacture, and marketing of healthcare products worldwide. Its Pharmaceuticals division offers prescription medicines in various therapeutic areas, including cardiovascular and metabolism; oncology; neuroscience and ophthalmics; respiratory; integrated hospital care; and other additional products. The company's Vaccines and Diagnostics division provides preventive vaccines and diagnostic tools. This division sells influenza, meningococcal, pediatric, and traveler vaccines; and blood testing and molecular diagnostics to prevent the spread of infectious diseases. Its Sandoz division provides prescription medicines, as well as pharmaceutical and biotechnological active substances. This division offers active ingredients and finished dosage forms of medicines; active pharmaceutical ingredients and intermediates, primarily antibiotics; protein or biotechnology-based products; and cytotoxic products, as well as provides biotech manufacturing services to other companies. The company's Consumer Health division consists of three business units: over-the-counter medicines (OTC), Animal Health, and CIBA Vision. OTC unit offers readily available consumer medicines. Animal Health unit provides veterinary products for farm and companion animals. CIBA Vision unit manufactures contact lenses and lens care products. It has strategic partnership with Lonza, a Swiss pharmaceuticals manufacturing company; and a research collaboration agreement with BioVista LLC. The company was founded in 1895 and is headquartered in Basel, Switzerland.

This one might have it all.  If you are looking for a core pharmaceutical, this could be your play.  Your time line should be 6-24 months.  We had a position on NVO (not to be confused with this stock NVS) back in April and stopped out with a 7.8% loss.  We have been on the look out for another pharm.  We are liking what we are seeing. 

First off we like the yield at close to 4%.  Dividend hounds check this one out.  It is a sustainable yield with a payout ratio of less than 50%.  Its price to book is a reasonable 2.1.  Its P/E is 14 and change and the forward looking multiple is under 11.  Nearly every key stat is leading the industry. 

Its fair value is in the range of 70 and 71 and is currently selling for 61 and change.  That creates a decent 15% margin of safety.  In taking a broader look, as we have said many times in the blog we have done well in the pharm sector.  The last time was during the SARs and Swine Flu epidemic.  It may have been ambulance chasing, but we did well. 

The sector had been tired and beat up with the advent of proprietary drugs drying up, tougher and more convoluted FDA requirements, and government health care initiative being blurry at best.  Yet we keep looking because we believe in the underlying demand as we live in a world made better by chemistry. 

We think we might have a core investment opportunity with NVS.  Novartis is more than just a pharm, they do consumer products, diagnostics as well as brand and generic drugs and vaccines.  Acquisitions over the last several years (Sandoz, Chiron, and Alcon) have really widened the competitive more for this Swiss enterprise. 

This would be a good stock to ease into and start collecting those dividends.  We would suggest a long position bought in over a period of 3-5 weeks chipping away 20% sections of you desired position.  We would say try and accumulate under 63 so buy on the dips.  Put a stop in at 57.00 just to watch your downside and hang onto it until we see it break out of the 60-64 range it has been channeling in for the last several months. 

It could be just what the doctor ordered.  

Salve Lucrum