Monday, August 20, 2007

Record-High Drug Company Marketing; Skyrocketing Pain Medication Use

Before I get to my commentary on the U.S. obsession with pain medication, I wanted to tell my loyal readers about the jam session I had at my house on Saturday. Johnny B.'s Jam-bo Rama was a great success. About eight of my buds came over, and we jammed past 1 a.m.

We jammed the blues, played some songs by Dave Matthews, Tom Petty, Springsteen, Leon Russell, Weezer, Stone Temple Pilots and may other artists. As soon as I get some photos, I'll post them here for you to see.

Now, let's get to my commentary.

This morning, a story about the trend in pain-medication prescriptions in the United States caught my eye. The story cites a study conducted by the Associated Press and finds that between 1997 and 2005 the sale of five major prescription painkillers rose 88%.

The painkillers are: codeine, morphine, oxycodone, hydrocodone a meperidine.

The story cites three main reasons for the increase. First, an aging population. As the population ages, so does the need for pain medications. Makes sense.

The second reason is record marketing spending by pharmaceutical companies. Markeing spending rose to nearly $30 billion in 2005 from $11 billion in 1997. That's a 172% increase! Makes sick sense because the motivation is profit, not well-being.

The third reason is the change in the medical field's change in pain management philosophy. Many doctors now see pain management as important in recovering from an illness or injury. That makes sense, but there are doctors out there who overprescribe for various reasons.

Sure, pain medication can be a good thing when it is prescribed responsibly to patients that really need it. But there's a lot of abuse, and the drug companies have a lot to do with it. They make the drugs, and they market the hell out of them.

Have you ever been to the doctor's office when the sexy pharmaceutical rep comes in with her suitcase full of samples? I have. And I am sure the sweet-talking rep makes a great pitch and gives plenty of incentives to prescribe the latest medications to patients.

It's no wonder emergency room visits due to painkiller abuse have risen more than 160% since 1995.

There have been some high-profile arrests of doctors who overprescribe pain medications, but when are the drug companies going to be called onto the carpet for their reckless promotion of these pain medications? Ha.

Don't count on that happening anytime soon, especially when profit margins remain three to four times higher than other Fortune 500 companies.

Friday, August 10, 2007

I Have No Sympathy For The Mortgage Devils

Stocks continue to slump today as the panic mounts about the subprime mortgage implosion and worries about credit tightening send more investors scrambling for the exits.

As I write this, the Dow is down 147 points, the S&P is down 13, and the Nasdaq is down 46. It looks like the chickens are coming home to roost after the greed-driven mortgage market dished out billions upon billions of dollars to anyone who breathed.

What were they thinking? And who's going to pay to clean up the mess?

This correction was bound to come and it will eventually go. In the meantime, I wouldn't be surprised to see the Dow to eventually settle down to the 12,000 mark. That would be more realistic in my view.

Well, it's Friday, and I really don't feel like babbling on about the markets. I'd rather think about what I am going to do with my son this weekend. I'm taking him to a birthday party tomorrow, and I have some movies coming in from Netflix that we'll surely check out.

I'll definitely get some good practice time in on guitar. In fact, tomorrow night, I am inviting some buddies over to my place for Johnny B.'s Jam-Bo-F-in-Rama. It's a jam session I have from time to time. I'm sure it will be fun, and the face melting may be severe. Hahaha

Today's Daily Dose features The Ramones. They rock. Enjoy.

Thursday, August 9, 2007

Why's It Taking So Long To Make An Electric Car?

I've spent most of my day working on some urgent research requests from the big wigs. They're working on some promotional material, and it seems like they're getting their bowels in an uproar to get it out.

But that's done, and I am sure another urgent request will soon hit my mailbox. I have plenty of writing to do for the next issue of the newsletter I write for, but I want to post to the blog before I do anything else.

Today's Daily Dose features Patti Smith. She rocks. I hope you like the videos on here. My favorite tune of hers is Because the Night. Wow. That song kicks some serious ass!

Now to some market commentary:

General Motors' global product chief Bob Lutz said today that his company will begin road testing the Chevy Volt plug-in hybrid next spring. He added that GM is on track to produce the Volt by late 2010. That definitely rocks.

The major problem faced by producers of electric/hybrid cars include the high cost of the batteries and designing batteries that hold a charge long enough to be of use in a vehicle. I'm sure they'll work it out eventually, especially as long as oil prices remain near record highs.

I understand that the world economy is run by oil and that the cost of oil makes it cheaper to use as a fuel. What's shameful is we had the technological prowess and wherewithal to send men to the moon and back nearly 40 years ago, and we still do not have a viable electric car.


That's all I have for today. I need to write some other articles.

Have a rockin' day!

Wednesday, August 8, 2007

A Socially Responsible Fund To Consider ...

Today, I am going to write about a socially responsible fund you might want to consider parking some of your cash in. I think it's a cool way to potentially make some money without generating much negative karma.

But before I get to that, I want to point out today's Daily Dose. Today's featured artist is Bruce Springsteen. I remember the first time I listened to one of his albums ... it was at my home in Maine, and I borrowed my sister's copy of Darkness on the Edge of Town.

I was moved by the passion in his voice. He means what he sings. There's no faking it. He rocks. He's one of my heroes. I'm working on his song The River and plan on giving it a go at an open mic within the next couple of weeks. I'll let you know how it goes.

Now, let's get stockin'!

While trolling around my Bloomberg terminal this morning, looking for something interesting to write about, I stumbled upon the Valic II Socially Responsible Fund (VCSRX).

With all the greed and corporate irresponsibility out there, I sometimes grow weary of writing about some of the companies and trading vehicles. But when I found this fund, I had a better feeling and decided to introduce it to my readers.

The VCSRX, incorporated in the United States, is an open-ended fund that invests 80% of its net assets in companies that do not invest in nuclear energy, military weapons, alcohol, tobacco or gambling. I think that rocks!

Some of the companies in the top 10 holdings of the fund include Citigroup, Inc., Microsoft Corp., Bank of America Corp. and JPMorgan Chase Co. Sure, we could draw a philosophical line tieing these companies to less-than-altruistic intentions. But at least they are NOT directly involved in blowing people up, rotting people's livers, destroying people's lungs, and filling people with the false hope of quick wealth.

I'm not suggesting you buy into this fund. I just wanted to point it out for your consideration.

Have a rockin' day!

Tuesday, August 7, 2007

The Market Bounces Back Above Key Support

Before I get down to some commentary on the S&P 500, I'd like to go over some of the enhancements I made to Stocks That Rock!

I added some additional features today:

The Daily Dose gives you a feed of music videos from specific artists that I choose. Today's featured band is The Clash. Once dubbed "The only band that matters," the Clash has been a major influence on many rockers of today.

If you have any requests for specific bands you would like to see on The Daily Dose, let me know.

I also added a video feed called School of Stock. The School of Stock provides some videos on investing basics. You might find them helpful. Again, if you have any comments or requests in this area, send me a note and I'll see what I can do.

Finally, I added a news feed on Music Industry News. I may change the subject of the feed from time to time.

OK, now let's get to the markets. I chose to take a look at a daily chart of the S&P 500 today. Take a look at the following chart, and I'll give you my take on what's happening:

As you can see in the chart, the S&P climbed 36.63 points yesterday and closed above key support around 1,461. This is a good sign of strength in the market, and it took the doom-and-gloomers by surprise.

Whether the correction is over or not is impossible to say, but the market looks like it could build a nice base of support here.

The best advice I could give right now is to hold onto your positions and remember to always stick to disciplined sell stops. As the market rises, bump the sell stops higher accordingly and try to lock in gains.

As for buying, I would hold off right now and wait for the market to settle down and confirm that the correction is over.

Have a rockin' day.

Monday, August 6, 2007

There's No Need To Fear, The U.S. Economy Hasn't Been Eaten By The Bear

Here we go for another week. I hope you had a great weekend. I did. Not only did I get to spend time with my son (we went to the movies to see Underdog), but I also got to play lots of guitar.

On Friday night, I plugged in my Les Paul and practiced Head On by the Jesus and Mary Chain. I love that song; the Pixies do a great cover version. I also worked on Bruce Springsteen's The River, another great song.

Now it's back to the grind, and I am here at my desk trying to make sense of what's going on in the markets.

Here's what I think:

There are a lot of “Chicken Little” pundits claiming the U.S. economy is on the verge of catastrophe and that other major world economies are the best place to park your investment cash. What a crock!

They start by pointing to the mortgage meltdown that’s created a credit crunch that’s sending ripples throughout the markets. They also like to cite the lame performance of the U.S. dollar against other major world currencies.

I could go on and on about the fundamental problems in the U.S. economy and make a convincing argument that the sky of falling: massive debt, huge foreign trade imbalance, government spending gone wild.

The market is jittery and it should be. But it’s not the end of the world, and I am not putting nails in the U.S. economy’s coffin. What’s going on now is part of a natural correction in the market that probably won’t last too long.

Just take a look at the following weekly chart of the S&P 500. If you look at the chart and try to clear your head of all the rubbish you hear and read, the market uptrend remains intact. In fact, the S&P could lose another 73 points before I would start to worry.

I’m not saying it’s time to start buying up stocks or selling everything irrationally. What I am saying is it’s premature to be calling the beginning of a bear market, and it’s even more premature to claim that foreign markets are impervious to what happens in the U.S. markets.

Rock on!

Friday, August 3, 2007

Here’s a Company that Rocks!
Kaman Corporation (KAMN)

Kaman Corp. (KAMN) is well known for its industrial technologies segment that distributes power transmission, motion control, material handling and electrical components and for its core business as a military helicopter manufacturer.

But this company also rocks as the largest independent U.S. distributor of musical instruments and accessories by offering more than 20,000 products for music professionals and aficionados.

Charles Kaman, the company’s founder, grew up with two passions: aircraft and guitars. What’s there not to like about this guy? In the 1930s, he competed in model airplane contests and became an adept guitarist. He even turned down an invitation to join the Tommy Dorsey band.

The rest is history. Kaman worked at United Aircraft, which was run by Igor Sikorsky. After United rejected some of his revolutionary design ideas, he pulled a rock ‘n’ roll move and set up his own company (in 1945) that built record-setting helicopter designs.

Sure rock ‘n’ roll hadn’t been born yet, but this guy rocked before rock.

Fast-forwarding to 1966, Kaman founded Ovation Instruments, which is well known for its use of composite materials and the “roundback” acoustic design.

On a financial level, KAMN’s stock has returned 57% so far this year and more than 94% in the past 12 months thanks to growing sales ($320 million in the second quarter). In the second quarter, the company raked in $10.1 million in profits, or 40 cents a share.

The aerospace segment grew sales by 31.5% to $97.8 million while the industrial distribution segment generated 2.4% growth to $176.6 million.

While sales in the music segment dipped a mere 1% to $47.6 million due to seasonal softness and overall market weakness, the fastest-growing segment in the company’s sales is the music distribution business.

At the end of 2006, KAMN’s music distribution sales saw an average two-year growth rate of 15.53%. This is good news for a company that rocks. What’s even better is KAMN is diversified into aerospace and industrial products. Diversity is good. When one segment softens, the others can pick up the slack and take care of shareholders.

Bottom line: KAMN rocks!