August 2007 Issue

Laurent & Villchur…

Back in 1967, Acoustic Research’s demonstration room on Mount Auburn Street in Cambridge, Massachusetts, was ground zero for state-of-the-art high fidelity. My experiences in Cambridge led me to buy the Acoustic Research AR3 speakers and AR turntable that I am playing today, four decades later, as I write to you. And I am also using the same Dynaco PAT-4 preamplifier and Dyna Stereo 120 power amplifier that first powered my AR3s 40 years ago. AR’s founder Edgar Villchur and Dynaco designer Ed Laurent were the legendary forces behind this ground-breaking equipment. Today, as I play Johnny Lytle’s The Loop, Jack McDuff’s Tough ‘Duff and The Beatles’ Sgt. Peppers, the sound from vinyl is every bit as warm and enjoyable as it was with my earliest AR/Dynaco experiences back in the 1960s.

Vinyl for Warmth

CDs were never collectible and never matched vinyl for warmth. I own a number of high-fidelity systems, including a dearly priced and excellent Conrad Johnson-based reference system. But for day-to-day listening, I turn on my AR/Dynaco system and records–no question about it.

45-RPM Tops

All of this, of course, flies in the face of music industry hype for CDs and downloads, the ultimate in a low-fidelity music experience for the masses. While perfect for jogging and the Wal-Mart experience, this is not high fidelity. And the cherry on the cake of my musical high-fidelity experience for you is the revelation that sound from a properly mastered 45-RPM record is best of all. If you ever saw the classic 1982 movie Diner, you may remember the scene in which Shrevie utters, "Every one of my records means something." Vinyl was and remains the way to go. What I find most encouraging is that young listeners are coming into the vinyl market every day.

Treasured Since 1934

As I write to you today, the single investment book on my desk is the same book that was on my desk when I began in the investment business at Clayton Securities in 1963. Graham, Dodd & Cottles’ Security Analysis is as treasured as it was since its first edition in 1934. Like high fidelity, the guts of investing have really not changed so much through the decades. Compound interest, value, and patience are still the key. Ben Graham was fond of saying, "One of the most persuasive tests of high quality is an uninterrupted record of dividend payments for the last 20 years or more." In his Intelligent Investor, Graham followed up with, "Indeed, the defensive investor might be justified in limiting purchases to those meeting this test." Nothing has changed.

Dividends Since 1893

Coke began paying a dividend in 1893, Exxon in 1882, GE in 1899. Things sure have gotten different, haven’t they? The balanced Vanguard Wellington Fund, founded in 1929, is the oldest and largest balanced fund and features dividend-paying blue chips. Committee-managed Dodge & Cox Balanced, also loaded with dividend-paying blue chips, was founded in 1931. Regardless of the climate, neither fund has changed much for decades. Over its nearly 80 years of existence (including the 1929 Crash and the Great Depression), Wellington’s average annual total return has been an excellent 8.4%.

Inference Reading & Patience

Inference reading is the basis for much of the strategy advice I bring to you in these letters. My approach is pretty mellow. I take the long view, as epitomized by my favoritism for my AR/Dynaco system and my 1962 edition of Security Analysis. Good things have legs. For years I’ve keyed you to my basic investor tenet of diversification and patience built on a foundation of value and compound interest. I have owned a number of my investment positions for nearly as long as I have owned my ARs. Talk about compounding. Over and over I’ve found that it is what you don’t do that is as much or more important than what you do. Big mistakes, certainly rash mistakes, can be killers. Remember, when you lose 50% on an investment, you must make 100% next time out just to get even. And you still have zero return. A mellow, thoughtful, yet rigorous approach lets you sleep well, avoid investor noise and clutter, and, of course, achieve comforting, consistent long-term returns.

100% Dividends

Young Research’s Retirement Compounders Program is 100% focused on dividend-paying stocks. Compound interest are the two most important words in investing. And low taxes (15%) make dividends the certain fuel for compounding success. Most of the names on my Common Stock Monster Master List are dividend-payers. Conservative investors will want to stick 100% with dividend-payers.

Dividends offer investors both a source of cash for compounding and built-in oversight of company management. Many misguided management teams squander shareholder wealth on pet projects and overpriced acquisitions. The focus for this crowd is building the biggest corporate empire. A strategically designed dividend policy jams a wedge in the spendthrift tendencies of empire-building CEOs. Only projects offering the highest returns can be pursued.

The field of public companies that offers meaningful dividend yields has narrowed sharply in recent years. Dividends have fallen out of favor and share buybacks have become all the rage. There is little economic justification to favor share buybacks in place of higher dividends when capital gains and dividends are taxed at the same rate. Executives who tout buybacks as a maneuver to increase shareholder value are telling half-truths; such a sales pitch is motivated by self-interest. Share buybacks help increase the value of stock options granted to the folks in the executive suite by reducing the number of outstanding shares, which increases earnings per share and, in turn, the company’s stock price. Even small share-price increases result in windfall profits on executive stock options. Admittedly, buybacks increase shareholder value, but for conservative investors, the consistency and reliability of dividend payments outshine the variable nature of share buybacks.

Use Shareholder Yield

Unfortunately for both you and me, my dividends-first approach is the minority opinion. To build a diversified portfolio today, conservative investors must accommodate the growing popularity of share buybacks by focusing on shareholder yield. Shareholder yield is the next best indicator after dividends as a tool to keep management honest. I define shareholder yield as the dollar amount of dividends paid plus the dollar amount of net share buybacks plus the dollar amount of net debt-reduction, all divided by the company’s market capitalization. Shareholder yield shows you how much cash is being returned to shareholders each year. You want the bulk of your stock portfolio to include companies with high shareholder yields.

Disney a Headliner

Calculating shareholder yield can get a bit hairy if you do not have an accounting background. Cash-flow reporting conventions vary across companies, the calculation changes for financial companies, and for some companies, shareholder yield is not a good proxy of investment merit. If you do not have the time, expertise, or desire to calculate shareholder yield, take comfort knowing that my staff at Young Research tracks the shareholder yield of every company on my Monster Master List. A few shareholder-yield mentionables on my Monster Master List are Disney (NYSE: DIS), with a 9.6% shareholder yield, ExxonMobil (NYSE: XOM) 7.7%, Federated Investors (NYSE: FII) 6.9%, Pepsi (NYSE: PEP) 6.8%, Plum Creek (NYSE: PCL) 6.2%, Polaris (NYSE: PII) 6%, Boeing (NYSE: BA) 5.7%, and Coke (NYSE: KO) 5.5%. Continue to add to your position in all eight stocks. For those of you interested in the details of my shareholder yield calculation, I have posted a primer on my website at www.youngresearch.com

XOM the King

ExxonMobil is the king of shareholder yield. The company is a pioneer in returning value to shareholders through dividends and share buybacks. In the last five years alone, ExxonMobil’s share count has been reduced by 16%. A hearty serving of share buybacks and dividends keeps ExxonMobil management disciplined in an industry full of wildcat empire-building management teams. The benefits of high shareholder yield are evident in my long-term relative-strength chart on ExxonMobil. The company has outperformed the market consistently over the last 37 years. If I could own only one stock, it just might be XOM.

Love Wellesley Income

I recently added to my position in Vanguard Wellesley Income. Wellesley is a top holding for me personally and at my family-run investment company. The fund is managed by Boston-based Wellington Management Company. Established in 1928, Wellington is an institutional investment manager with $573 billion under management. How many investment managers do you know who have been in business since 1928? The stock market Crash of 1929, the secular bear market of the 1970s, or the tech-bubble of the 1990s likely wiped them out. Not Wellington Management—the company has endured all panics and manias of the past 79 years. Your gateway to Wellington Management’s durable institutional-investment expertise is Wellesley Income.

Balance = Consistency

Vanguard Wellesley Income targets a conservative mix of 60% in fixed-income securities and 40% in equities. The balanced mix has served investors well. My chart on the annual historical performance of Wellesley shows that the fund has experienced only five down years, with a maximum loss of 6.43%, since its inception in 1971. That’s a .864 batting average. A healthy yield of 4.28% and an investor-friendly expense ratio of .25% for investor shares or .14% for Admiral shares are two more reasons to load up on Vanguard Wellesley Income.

Standard Deviation the Key

Young Research relies heavily on standard-deviation analysis to research and study everything from stocks and bonds to commodities and currencies. The key to successful use of standard-deviation analysis is the empirical rule. The guiding principal of the empirical rule states that in a normally distributed series, 95.5% of all observations fall within plus or minus two standard deviations of the mean. In simple terms, when a series is outside of plus or minus two standard deviations, its chances of staying there are not very good. A real-world example may help you understand this important concept.

Sugar Blow-Off

My sugar chart shows the year-to-year rate of change in the price of sugar, with the mean and two standard deviations dropped in. The year-to-year rate of change in the price of sugar has moved above the plus two standard deviations marker three times since 1965. On all three occurrences, returns over the next year quickly dove back below the two standard deviation marker and into negative territory. The key takeaway here? Avoid assets that are trading outside of plus two standard deviations.

Avoid the Euro

The euro is a currency to avoid. My chart on the euro-yen exchange rate is now approaching the plus two standard deviations marker. I look for a quick snap back over the next 24 months. If the yen does not snap back, the profits of Japanese exporters should power forward and give Japanese stocks a lift. Either scenario points to relative outperformance for iShares Japan. Add to your cheap Japanese shares.

Fidelity Nordic Clearance

For equity exposure to Europe, I want you to focus on the Nordic countries. I again recommend purchase of Fidelity Nordic. I added the fund to my Mutual Funds Monster Master List earlier in the year, only to see Fidelity propose a merger between the Nordic Fund and Fidelity Europe, subject to shareholder approval. Shareholders shot down Fidelity’s proposal in a vote that was not even close. Fidelity’s decision to merge a non-euro-denominated fund with a euro-denominated fund was puzzling in the first place. Fidelity Nordic will remain independent and open to all investors. Initiate a position today or add to your shares in the fund. You can also buy my favored iShares Sweden for Nordic-country exposure.

ETNs in Play

Barclays has filed to issue a cadre of exchange-traded notes (ETNs) linked to a series of commodity index funds. The ETNs will offer investors exposure to exciting DJ-AIG commodity subindexes. There are important differences between ETNs and their close cousins, exchange-traded funds (ETFs). Like ETFs, ETNs are exchange traded and track a market index, but the similarities stop there. ETNs are actually considered debt instruments issued by Barclays Bank. When you buy an ETN, you are buying a promise from Barclays. Not to worry, though, because Barclays is one of the world’s largest banks, and the company’s debt is rated AA/Aa1 by S&P and Moody’s. The chances of a default are slim to none.

You want to consider the tax and liquidity implications of ETNs carefully before you invest. ETNs are considered debt, which is taxed as ordinary income, but Barclays recommends capital gains treatment. Barclays recommendation is based on a legal opinion that has not been approved or denied by the IRS. Until the IRS passes judgment, the correct tax treatment for ETNs remains uncertain.

My liquidity concerns about ETNs revolve around their creation and redemption feature. ETNs offer only weekly creation and redemption, compared to the daily opportunities of ETFs. The weekly feature is likely to cause wide divergence of an ETN’s market price and underlying value on days of extreme market volatility. The investors’ actual returns will diverge widely from returns on the ETNs’ underlying index. I recommend a wait-and-watch approach with ETNs. More seasoning and clarification are needed on these new products, but I see promising potential.

The Russian Bear

Last month, I added Norilsk Nickel (OTC: NILSY) to my Monster Master List. Norilsk is the world’s leading producer of palladium and nickel, and a leading producer of platinum and copper. My relative-strength chart on Norilsk shows consistent power versus the S&P. Add to your shares of Norilsk.

Honda/Harley Joke

Did you catch the outlandish media reports that Honda Motor Co. was in talks to acquire Harley-Davidson (NYSE: HOG)? My chart on Harley shows a pop in the stock price based on the news, followed by a retrenchment to the pre-takeover speculation price. Anybody who rides a Harley knows a Honda-Harley merger would be brand suicide–Harley is the antithesis of Honda. A more likely acquirer is private equity, but I view that as unlikely at this time. I am still on the sidelines with Harley.

Check ’em Out

In this month’s Economic Analysis, you will notice that many of my old charts have been replaced by new ones. My goal is to provide you with content that updates more frequently. I have also reorganized the layout of my charts into categories to keep the report fresh and user-friendly. I have also revamped the Mutual Funds Monster Master List. The funds are now in categories, and I indicate which are open-end, ETFs, or closed-end. Last month, I added nine ETFs to my MML. To make room, I have to delete other funds. If you own any of the funds that I’ve dropped, you can hold on to them. All are solid long-term holdings.

Top 10 Common Stock Countdown

1. General Electric (NYSE: GE): My price chart on General Electric shows a powerful upside breakout, clearing the way for the stock to make a run at its all-time high of $60.50. GE is a simple-is-sophisticated investment in the global economy. In one stock you can gain exposure to booming emerging economies, an infrastructure rebuilding cycle in the developed world, and growth in the use of alternative sources of energy–think windmills and clean coal technologies here. GE boasts one of the largest market capitalizations in the world and the coveted AAA rating from S&P. Today the shares pay you a 3% dividend yield and sell for a market earnings multiple.



2. Citigroup (NYSE: C): I have been pounding the table on Citigroup for months now. The stock has been on my Top Ten Countdown every month since February of this year. If you do not already own shares, buy them now. A who’s who of value investors are piling into the stock, and a higher share price will not be far behind. My relative-strength chart on Citigroup shows the stock is nearing a bottom versus the S&P 500. Add to your position or, if you have not yet, initiate one soon.



3. T. Rowe Price (NASDAQ: TROW): Can you afford not to own shares of T. Rowe Price? Check out my relative-strength chart on the stock. T. Rowe shows consistent power versus the S&P 500. T. Rowe Price is the beneficiary of a massive shift from employer-managed to employee-managed retirement plans. The growth rates and dollar amounts here are stunning. According to the Federal Reserve, the assets in employee-managed retirement plans increased by $1.63 trillion, or 100%, over the past 10 years, while assets in employer-managed retirement plans increased by $667 billion, or 40%, over the same time period. Buy.



4. Boeing (NYSE: BA): The next best thing to a monopoly, which is illegal or heavily regulated in most countries, is a "duopoly"—a two-firm industry. Large commercial aircraft manufacturing is a duopoly, with Boeing and Airbus. Airbus is in shambles right now. Customers are cancelling orders left and right and ordering planes from Boeing. Even Air France-KLM, 18% owned by the French government—the same government that owns 30% of Airbus—is buying Boeing aircraft. My relative-strength chart on Boeing shows the stock is back on the way up after a period of consolidation. Buy Boeing today; the French are.



5. Coca-Cola (NYSE: KO): Coke has announced that it is buying Glaceau, the maker of VitaminWater, for $4 billion. VitaminWater is great for Coke, and you as well. The vitamin content is a bit suspect, but the product’s marketing angle and taste are great. I especially like the XXX flavor, with its splash of acai, pomegranate, and blueberry—three antioxidant superstars. Pick up a case or two of XXX VitaminWater today. My relative-strength chart on Coke shows the stock building a nice base versus the S&P 500. Add to your position.



6. Illinois Tool Works (NYSE: ITW): My long-term-trend chart on ITW shows that the stock has lots of upside potential. ITW is one of the few serial acquirers I condone. The company buys up businesses in related industries and retrofits them with ITW’s trademark 80/20 rule. The 80/20 rule shifts the focus of a business to the 20% of products and customers who generate 80% of the revenue. By focusing on that 20%, ITW doesn’t waste time and effort on dud products. One of ITW’s winners, Paslode cordless nail guns, eliminates the need for air hoses and electrical cords. Construction moves a lot faster when workers aren’t tripping over hoses and chasing around blown gaskets.



7. Polaris (NYSE: PII): Polaris’s new breed of utility vehicles will come in handy if you live on a farm or large property. You can plow snow, tow up to 1,750 lbs, or just tool around. Polaris is one of my shareholder yield standouts, and it pays 6% annually. My long-term-trend chart shows Polaris trading at a wide discount to trend. Buy shares of Polaris and check out one of their all-terrain utility vehicles.



8. United Technologies (NYSE: UTX): UTX is at the forefront of developing new products and technologies to improve energy efficiency. Imagine a home that is energy self-sufficient and CO2 neutral. UTX is researching the use of fuel cells that could power our homes, create clean drinking water, and generate electricity. My chart on UTX shows the company is a relative-strength powerhouse. Buy.



9. Pepsi Bottling Group (NYSE: PBG): "We sell soda" is Pepsi Bottling’s mission statement. PBG’s Press director must be napping. The mission statement should be "We sell soda and water and energy drinks and any other partially digestible beverage we can fit in a plastic bottle." The company’s dreadful mission statement signals buy. The management team is too busy running a company to worry about a silly ad campaign. Catchy mission statements are for promotional CEOs and performance-chasing mutual fund managers. I look for clumsy mission statements and understaffed PR departments. PBG fits the bill, and the stock offers a margin of safety, as demonstrated by my long-term trend chart.



10. Alliance Resource Partners (NASDAQ: ARLP): If you’re a longtime subscriber, you know I have been a longtime proponent of coal. Coal is cheap and abundant, and the infrastructure required to produce, transport, and burn coal is already in place. The U.S. relies on coal to generate over 50% of our electricity. Do not worry about legislation being bounced around Washington to curb CO2 emissions. Any bill that gets passed will include provisions to ensure the viability of the U.S. coal industry because coal is so important to the health of our economy. My year-to-year rate-of-change chart on ARLP shows that momentum in the stock has bottomed and is now regaining ground quickly. Add to your position in this Illinois Basin coal miner.



What’s Up & What’s Down

U.S. stocks are up year-to-date, but international and natural resource stocks are the real standouts. Real estate continues to lag the market as concerns build that sub-prime defaults will spill over into commercial real estate. Borrowing costs are increasing, which is driving cap rates up and real estate values down. Growth stocks are beating value stocks year-to-date. After trailing value stocks for seven consecutive years, a little giveback is expected. Stick with your value stocks while growth stocks take their 15 minutes. Value stocks outperform growth stocks over long periods. Dividends, patience, and compound interest are the keys to building wealth. Searching for the next Microsoft is the pseudo-sophisticated man’s version of the lottery. A passive approach to zeros-investing is the wrong approach. American Century Target Maturities 2025 is getting slammed year-to-date. I continue to recommend the short end of the yield curve, with maturities under five years. Ideally, you want a position maturing each year. As interest rates rise, you can roll maturing positions into higher-yielding positions, which will increase your entire portfolio yield.

Overall, you have had, as, of course, I have had, yet another super year. Among my most strongly advised holdings for you have been Vanguard Precious Metals & Mining, T. Rowe Price New Era, iShares Australia, and iShares Singapore. All are up over 20% YTD. These gains cannot be extended to the hereafter, but you have scored so big in recent years that the breather, when it comes, will be no big deal. In my own case, I will add to all on any sharp pullbacks. Fidelity Canada is also up nearly 20% YTD. And this fund is a great target for new money. I’ll be adding regularly to my Vanguard Wellesley and all my Dodge & Cox positions as should you. Third Avenue International Value is closed, at least temporarily, to those who missed the boat. My own position is huge, and I hope you are in the same camp. I’ll be adding regularly to this position and offer the same sage advice for you. And don’t forget gold.

 

	2005 % Change	2006 % Change	2007 YTD % Change
Dow Jones 30 Ind.	1.7	19	8.9
Dow Jones 15 Ut.	25.1	16.6	8.9
Dow Jones Trans.	11.6	9.8	13.2
S&P 500 Index	4.3	15.1	6.8
NASDAQ Comp.	2.2	10.3	8.3
Value Line	2	11	8.1
Dodge & Cox Bal.	6.6	13.9	5.3
Holland Balanced	1.8	11.6	3.4
Vanguard Bal. Index	4.7	11	4.8
Wellesley Income	3.5	11.3	2.5
Wellington	6.8	15	5.8
Dow Diamonds Trust, Series 1	2.5	18.9	8.8
Mutual Shares (Z-Shares)	10.4	18.4	9.3
Vanguard 500 Index	4.8	15.6	7.1
Vanguard Growth Index	5.1	9	8.1
Vanguard Value Index	7.1	22.2	6.8
Vanguard Equity Income	4.4	20.6	6.5
Third Ave. Value	16.5	14.7	7.7
Third Avenue Small-Cap Value	11.1	11.4	8.8
Dodge & Cox International	16.8	28	11.3
Fidelity Canada Fund	27.9	15	19.9
iShares Australia	16.7	30.8	21.2
iShares Hong Kong	7.3	29.3	7.3
iShares Singapore	14.3	45.8	21.4
iShares Switzerland	13	30	4.7
T. Rowe Price Japan	40	-5.7	-2.4
T. Rowe Price Em Eur & Mediterranean	59	34.7	7.7
iShares Sweden	10.3	43.7	11.8
iShares Malaysia	-0.6	36.4	28.8
Third Avenue International	18	17.1	9.9
Fidelity International Real Estate	14.9	42.9	-2.4
T. Rowe Price Real Estate	14.5	36.8	-5.6
Third Ave. Real Estate Value	14.4	30.2	2.2
Vanguard REIT Index	11.9	35.1	-5.9
American Century Global Gold	28.9	26.8	-7.3
iShares Goldman Sachs Natural Resources	36	16.4	18
PIMCO Commodity Real Return	20.5	-3	1.8
streetTracks Gold Shares	17.8	22	2.2
T. Rowe Price New Era	29.9	17	21.5
Jennison Natural Resources	54.6	21.7	20.8
Vanguard Precious Metals & Mining	43.8	34.3	23.3
Amer. Century 2025 (US Treasury STRIPS)	14.2	-1.6	-5.2
Dodge & Cox Income	2	5.3	1
PIMCO All Asset	6.5	5.3	2.8
Vanguard GNMA	3.3	4.3	0.3
Vanguard High-Yield Corp.	2.8	8.2	1.8

"Junk-Mart" will open 1,000 "financial centers" over the next two years. Junk-Mart’s traffic has been down every month this year. The ludicrous strategy to lure high-end shoppers is perhaps already on the rocks. And just what are these money centers? Looks like the dregs of the demographic galaxy featuring debit cards, check cashing, money transfers, and bill paying. Junk-Mart is aiming at the 70 million people without a traditional banking relationship. Sounds like just the crowd to jockey with Mrs. High End, doesn’t it? No thanks. I’ll go with American Express (NYSE: AXP) and its new black card service for Bank of America and Citigroup high rollers. B of A’s Accolades black card is for customers who have more than $100,000 invested or saved with B of A. Buy AXP. AXP fits perfectly with my Luxury Goods Supercycle (LGS) theme.

Here & There

The platinum-loaded Vanguard Precious Metals & Mining is up over 23% YTD, versus 34% and 43% the prior two years. Your breathtaking gains are historic. Auto emissions are far and away the world’s #1 air quality concern, and platinum and palladium are a must for catalytic converters. More on these metals next month. My chart #25 on World Currency Reserves/Liquidity is compelling. Over the last three decades, reserves/liquidity have compounded at nearly a 12% rate of growth. In the mid-1970s, if every dollar of reserves were to be backed by gold, the metal would have had to trade at $200/ounce. Today, the number is over $6,000/ounce and gaining ground at a rate of more than $650/ounce per year. In monetary terms, we live in a world of brutish inflation. I like streetTRACKS gold shares as your best gold hedge. And in the same venue, I like the Swiss franc and Swiss-denominated stocks and bonds. On the equities front, I’ve added Manitowoc (NYSE: MTW). You can’t build cities (China, India, Saudi Arabia, and Dubai) and offshore oil platforms without cranes. Manitowoc is the dominator. Also on the international front, Johnson & Johnson is cheap. The number of middle- and upper-class folk in China and India will double by 2012. And Johnson & Johnson (NYSE: JNJ) is just getting rolling on this front. Buy J&J. HSBC (NYSE: HBC) offers a 4.5% yield, has a strong balance sheet, and is a global powerhouse with a massive footprint in the Far East. Buy HSBC. Sturm, Ruger (NYSE: RGR) is now nearly $16/share. The bride is close to wedding day. Stay around for the big event. I’m adding Epoch Global Equity Shareholder Yield Fund to the MML. You’ll need $100,000 to avoid the 12b-1 scab. The fund concentrates on dividends, share buybacks, and pay down of debt. What’s cheap around the globe? Russia, despite its boorish KGBish leader, coal, water, palladium, the yen, and Japanese stocks head my list. I’ll be writing about all in upcoming issues. Make it a good month.

Warm regards,


Richard C. Young

P.S. Did you know that Iran’s economy is in chaos due to gasoline rationing? Gas stations are ablaze, and mutinous Iranians line up for miles at the non-blazers. A nonpartisan U.S. House panel has proposed legislation intended to punish any company that provides Iran with gasoline. And are you aware that China already imports nearly 50% of its oil? Almost 90% of China’s rivers are highly polluted, a full third of Chinese breathe polluted air, and drinking water is unsafe for human consumption. Nice. In the Far East, Singapore, Malaysia, Australia, New Zealand, Thailand (95% Buddhist), and Vietnam all have much more appeal to me. Colombia is interesting for travel and investment. The Economist reports that international labor organizations consider Colombia the most dangerous country in the world for trade unions.

P.P.S. My 2008-based Big Idea includes the desirability of remote places. I like both the continued progress of the VLJ market as well as the potential for municipal wi-fi networks ideal for small or remote communities. Super-cheap wireless Internet access can be achieved by adding mini wi-fi antennas to town square lamp posts. In coming issues, I will be updating you on wi-fi and great small towns and remote places.

P.P.P.S. Go to YoungResearch.com for info on our new aggressive Distressed Securities & Takeovers Candidates (DSTC) report, as well as an update to my Key West Insider and a special feature on great-sounding and nostalgia-packed high-fidelity systems, records, and CDs, as well as sources for purchasing.




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Tags: American Express, balance, bear, Boeing, citigroup, coca-Cola, Epoch, ETN, euro, ExxonMobil, Fidelity Nordic, general electric, harley-davidson, Honda, HSBC, illinois tool works, inference reading, johnson & johnson, Laurent, Manitowoc, Norilsk, Pespsi Bottling, Polaris, Precious Metals & Mining, Russian, sugar, Switzerland, T. Rowe Price, United technologies, Villchur, Wellesley, Wellington, yen