The past month saw most publicly traded companies report their 3rd quarter earnings, and it provided a useful snapshot of the economy. The picture was decidedly mixed. Among the companies that we're more familiar with for instance, business is still terrible for Cemex (cement) and Vulcan (aggregates). Although we do not expect conditions to improve in the immediate future for these cyclical stocks, we feel that the survivors will thrive once the economy recovers thanks to a lower number of competitors.

 

Business conditions are clearly stabilizing and better times seem right around the corner for others, particularly in the technology or financial area. This is the case with Cisco (networks) or Intel (microprocessors) for instance.

The big announcement this past month was the acquisition of Burlington Northern (a railroad) by Warren Buffet's Berkshire Hathaway. As the man himself confirmed, this is a bet on a recovery in the US as railroads are very sensitive to the economic cycle. We agree: although timing is difficult, remember that after the rain comes the sun... eventually. 

 

In this issue, we revisit a subject first discussed back in our September digest:  the Roth IRA conversion. Although it can be confusing, we think that it could be a lifetime opportunity for some of our clients, so we'll keep bringing you articles on the subject.

Finally, we need your feedback. Please tell us what you would like to see in our monthly digest: general economic news, company news, personal finance articles, investing process? Let us know by emailing: info@bristlecone-vp.com.

Thank you!