Eugene Towba 
works in New York City and actually walks down Wall Street! He says that makes him as qualified as anyone to give stock advice. He is a black belt in Tae Kwon Do and promises to use his martial arts skills to help protect you from bad investments.
There I was at home complaining about the price of gas, food, and everything else I could think of. What right do I have? Things seem bad here in NY, economically, but there are plenty of people in the world who would give anything for what I have - and could probably not even imagine a refrigerator full of food (but no Sam Adams Beer)and indoor plumbing. In fact, the way I live, in my modest house with my older car, typing on my obsolete laptop is more lavish than any king or queen could have dreamed 300 years ago!
So what is my point? Be thankful for what you have because there are people starving in India? Absolutely not. Just be happy with you what you have and when things improve, you will be even happier.
This is the basis for the investment thought for today. Technology breakthroughs are allowing people around the world to live better. Cell phones allow rural communities in China to communicate with the outside world without them investing in telephone poles and wires. Solar panels allow people in rural communities to take a hot shower or run a radio without a boiler or a generator.
When we invest, we look to the future and try to understand what is the next step in in the evolution of mankind. Mutual Fund managers look at what earnings are going to be for the next year or longer. They want to know what is the true value of a stock?
Last year I was amazed how one speculation after another caused me to lose money - even "investments" I thought were "no brainers", usually due to some convincing argument in some unsolicited newsletter. Like how could a company that makes fuel from garbage be bad - well maybe it really doesn't(XNL). How can one company that converts waste methane gas to clean diesel fuel not make money (RTK) while another one does (SSL)? Errrr, poor management? How can a company that makes rice bran out of rice husk, the waste product, not be making money when food is so scarce (NTRZ)? I don't know!
It is almost a joke how inventors came up with incredible products that never amounted to anything for them. The television was the brain-child of Philo Farnsworth, but RCA made the money - because Philo did not how to market the darn thing and RCA stole it.
I once invested in a company that had a breathing device that could take the oxygen out of water - allowing divers to complete missions without bulky equipment! They had interest from the military, but nothing became of it - until years later (and I sold it early). They finally sold their technology to Budweiser who used it to line the bottlecaps of their beer bottles. It sucked up the oxygen which enabled the beer to stay fresher, longer. Who would have foresaw that?
I got in on NVEC years ago - they had a product called spintronics, using nano technology and spinning electrons to keep a computer drive up all the time with minimal energy drain and no lost data. Faster and energy efficient, that was what the computer community wanted to hear. But it never went anywhere. The stock hit 60 then plummeted to 15. They are now making money by selling their technology in hearing aids - and the spintronics thing is on the back burner.
Looking towards the future, keep in mind that cell phones become more complex every day and some people replace them as fast as a new one comes out. But there is still a market for the old ones as there are still millions of people in the world who don't need the latest technology but a simple communication device.
Look at CHL in China, VIP in Russia and PNTR in the Middle East. For the past 35 years I did not have a cell phone - now I worry if I leave the house without it!
When I read about $100 a barrel oil in one of Stephen Leeb's Peak Oil books, I got right on it. Since we were running out of oil I jumped into a bunch of stocks. Stephen was right, but I was wrong on every stock pick. It was like betting on the right horse on the wrong track. I would have done much better with an ETF or a fund, letting the professionals do it for me.
We are in the same position now with water - there is a limited amount of clean fresh water on earth, and we are running out. What I use to wash my car, an African village could use for their daily needs (and would probably have someone walk 20 miles for it). Wars are fought over fresh water as it can easily be diverted upstream to irrigate crops. Water is a commodity, like steel, coal or oil, we just are not programed to think that way. But if you are thirsty in NYC, you would not hesitate to pay $2 for a pint of bottled water! Drink from the faucet? Maybe 30 years ago, but not now! I would sooner relinquish my cell phone!
There are some water companies out there, but I would likely pick the wrong one. I will look for a good water fund or ETF in the future.
Looking at some stocks for June, I would focus on some quality stocks that sold off in January (or more recent earnings hits)that have come back strong. Here are a few stocks that are all less than $40 a share:
Tech firm PSEM is forming a cup with handle as is MPWR, a company that makes low heat accessories for electronics (they also are featured in an IBD article this weekend). Both have high IBD ratings. CYBS, which does credit card processing looks good too. AAPL is more expensive, but the value is there. The recovery it has made is a beautiful cup with handle. WIP, the Russian wireless company is working on the right side of the cup. LKQX which is the largest recycler of auto parts and is working on a base on base pattern (they also got a write up in today's IBD).
Some other charts I like are Chinese medical device maker, MR, which just cleared a cup with handle and SCR, a Chinese generic drug maker that just debuted on the IBD 100, working on the right side of a deep base. Check them out, they look like safe investments.
Remember, that if I was so smart, I would be too busy counting my money to write this. Gene.
"That's it and that's all" - Eddie Hicok Collins
Eugenes commentary from 05/30/08
Man who run in front of car get tired. - Confucius
Hog wild! Article on FEED from Forbes:
TAYD – earthquake stock being pumped by Superman
It is likely that the government corruption in China led to poor quality buildings in the province hit by the earthquake. I have a feeling the rebuilding process will present better results. Earthquakes are rare in that region, but, I guess, you never know. I think with the Olympics, China will be under a microscope and rebuilding efforts will be swift and sturdy. I would not be surprised if TAYD ends up with a contract or two just for show!
Solar stocks took a step back on Thursday when Germany said it would withdraw subsidies. The subsidies were used to entice the use of solar energy. With the price of oil so high, I no longer think the market needs enticing and I think the stocks can sustain themselves. It is a temporary setback. SOL & SOLF may pull back more (it has tripled in a short time), but they are a good buy.
Germany is getting so serious about conserving gasoline that it has even considered lowering the speed limit on the Autobahn from infinity to a recordable number. Why those “brilliant” German engineers can’t make a fuel efficient car, I don’t know. The German Smart Car is only fuel efficient because it is the size of a peanut. It has an engine like a lawn mower propelled by two chipmunks. It is all well and good, but I would be concerned for my safety in it. Less huge luxury cars and more efficient models please.
MPWR, a “green” company, is noted in IBD Friday. They make products that reduce heat in electronics. This is one that I have always liked. DLB, the audio company is putting a handle on the cup. They took a major fall a few months ago and they have worked their way back up. They are a quality company, like CRDN and should be considered if you are looking for a long term hold.
Cabot likes a stock I mentioned before, Brazilian frozen food company, SDA. Awesome chart, strong economy, profitable company and a “defensive” stock – one that will not be hurt much if their economy turns. Hey! You have to eat something sometime. - Gene
“That’s it and that’s all” – Eddie Hicok Collins
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