"I am taking a look this week at The Motley Fool's and David Gardner's Rule Breakers part of the book, "Rule Breakers. Rule Makers, The Foolish Guide to Picking Stocks"

Dow Jones Industrial Average 13029.26 (UP) Week ending 04-20-2012

(Photograph by Deb Wilson) 

We have a place nearby called "Harvest Books" where you can pick up some of the finest financial books ever written for $2.00 each. So last week I picked up a copy of The Motley Fool's Rule Breakers, Rule Makers, The Foolish Guide to Picking Stocks by David and Tom Gardner. Oops, I started reading and I was supposed to read there other two books first, Oh well.

I took a particular interest, (and I can't believe that I had not read this book up to this time, because it is really great original thinking), in David Gardner's section on Rule Breakers.

In Chapter 8, David summarizes the Rule Breakers and gives a continuous lesson in William Shakespeare's "Henry" historical plays. David will be glad to learn that we own 1 of 500 signed leather bound copies of "The Annotated Shakespeare" , signed by A.L. Rouse. We love books and love investing, what can I say. 

"Catherine of Valois was the daughter of King Charles VI of France when her husband essentially won her in battle. King Henry V, Shakespeare’s famed ‘King Hal,’ insisted on the long-discussed marriage after his victory at the Battle of Agincourt, and he was even more urgent once he saw how pretty the young French princess was."

So here are David Gardner's tenants:

"A Rule Breaker must be the Top Dog and first-mover in an important, emerging industry."

"It must possess sustainable advantage gained through business momentum,patent protection,visionaries, or inept competitors"

"The Rule Breakers stock will have demonstrated past price appreciation equivalent to relative strength performance of 90 or greater"

The stronger it's consumer appeal, the better it will attract customers,habituate them, profit off of them, and protect it's business"

and last , "You must find documented proof that it is grossly overvalued, according to the financial media"

David mentions three stocks in his book that hold true to his tenants, Apple, Amazon, and Starbucks which all have performed well. Here is my list going by his tenants and my fundamentals view.

Qualcomm (Symbol QCOM). The impregnable fortress of chips-sets and patent lawyers. Facing up against Qualcomm is like trying to cross the bridge that Lancelot, of Arthurian Legends is defending. A very difficult task. They have a strangle hold on the Smartphone chip business . Hy-Fi™, HSPA+ Advanced & LTE Advanced,   mirasol® Displays,  Vuforia™ Augmented Reality are just a few of their current concepts. Don't mess with Qualcomm!       

            Chipotle Mexican Grill (Symbol CMG).  What is the secret sauce at Chipolte?  Food with Integrity. Chipotle tenant " It means serving the very best sustainably raised food possible with an eye to great taste, great nutrition and great value. It means that we support and sustain family farmers who respect the land and the animals in their care." But the real secret is their unique employee development program that makes them better than everyone else. Not since Charles Tandy of Radio Shack said to his managers, "Whatever % of profit you make to sales revenue, I will pay you that % of the profit", has their been such a dynamic employee development program. Other managers take note.


Priceline.com (Symbol PCLN) . This one is a CFO's dream. The perfect combination of high revenues and earnings without investing a large amount of capital. It is the "perfect-storm" of capitalism, a virtual profit creation machine. The Negotiator has it all over the competition.

Union Pacific Corp. (Symbol , UNP) . You have tons of Coal and LNG energy products that will need to be moved to the west coast to ship off to Pan-Asia countries, (since we refuse to use it here!).  The way it will get their is on the Union Pacific Railroad on hopper and tanker cars unless you want to run a pipeline through YellowStone Park. Yogi and Boo Boo would not like that. Not to mention the thousands of miles of dark fibre that they have in the ground running next to their track right of ways for future communications connections. Talk about looking ahead!

Ebay Inc. (Symbol EBAY)  and Verifone Systems Inc. (Symbol PAY).  These two, (Ebay with Paypal) are the pay with your credit card via your Smartphone guys. They currently have this business monopolized. It's good to be King!

LIONS GATE ENTERTAINMENT (LGF) - This one is my Rule Breaker baby pick. LGF reminds of the early days of Gulf & Western's -  Paramount Pictures Company. They are building a powerhouse library of media content and are breaking the rules along the way with such ground breaking hits as "Madmen", "Hunger Games", "Margin Call", "Crash" , and "Safe". This one does not fit all the criteria yet, but is heading in that direction.

Well, sorry to write a novel here, but there was a lot of material to cover.  There are also allot more of these companies like Schlumberger and Allergan that could have been added here.

Adios Amigo,

Freewilly

"Simmer Down Now" We have all been intoxicated in the last 6 months with these momentum stocks with good fundamentals. It is time to "Simmer down Now", and look at some quality dividend stocks to balance your portfolio"

Dow Jones Industrial Average  12,850 (Down) Week Ending 04-13-2012

Nadine from Burger Castle in the SNL (Saturday Night Live) skit offers some sound financial advice. She says "Simmer down now"."Simmer Down Now Skit on SNL" .  Some of you will go off now on a YouTube tangent into oblivion , never to be seen again. To those folks we say another SNL line, (Ba-Bye!).

 It is time to do a little balancing of the ecology of your portfolio and add a little green. You should probably have 15 -20% of your investments in high yielding dividend stocks. Not so exciting, but very effective.

So today I will present a few good dividend stocks , their trading symbol and their annual dividend yield. The first place we look is as at Natural Gas Pipeline Master limited partnerships.

Here are a few names: Kinder Morgan Energy Partners LP , symbol KMP, 5.65% ,(and a Jim Cramer favorite), Boardwalk Pipeline Partners L.P. , symbol BWP, 7.97%, (and a Freewilly favorite) and Mesa Royalty Trust, symbol MTR, 8.07%,  (and a Boone Pickens favorite).  

Another place to find some high dividends is with container ships which require allot of capital and ocean oil rig drillers.  Two I like are Box Ships, symbol TEU, 13.94% and  SeaDrill LTD. symbol SDRL, 8.63%.    

   

Simmer done now! No Lululemon (symbol LULU) here. You can also look to the bank preferred stocks and financial instruments.

Wells Fargo & Co , symbol WFC'J ,  6.77%,  JPMorgan Fixed-to-Floating Rate Security, symbol  JPM-PZ,  7.6% variable,   Morgan Stanley Capital Trust III 6.25% Capital Secs, symbol MWR, 6.44% dividend yield.   I will also throw in here cash cow Verizon Communications Inc., symbol VZ,  5.37% dividend.

Donna Summer , Queen of Disco

Jester Fries? Simmer, simmer down now. Castle Kids meal with no figurine? Simmer down now. The Queen of Disco's name in the phone book?  Summer, Donna. Stretch it out now, please.

  

I am always being asked about "Small ball" stocks with low prices, and a little more speculative so that folks can buy more shares. These stocks are like a nice juicy Burger Castle cheeseburger with fries, they can taste really good but then make your stomach hurt really bad!

But alas, I will give you a five pack:   Standard Pacific (symbol SPF) a housing stock doing business in Texas, Arizona, and California. Telular Inc. (symbol WRLS) in the wireless security business. Tenet Healthcare (symbol THC) in the hospital business and just won a settlement.             My two favorites though in this area are, Alcatel Lucent , symbol ALU, owner of Bell Labs and Clearwire Corp. Class A, symbol CLWR , owner of lots of up and running 4G, LTE and Wimax network infrastructure and service.

Freewilly would like to thank Cheri Oteri and the whole SNL team, and special guest Toby McGuire for such  timeless comedy material.

Make Simmer down now! , and buy some dividend stocks!!!

Freewilly



" Samuel Adams (Boston Beer Company Inc., symbol SAM) is the crown jewel of the Mid-Cap Beverage stocks. So why don't you own it?

Dow Jones Industrial Average 13060.14 (Down)  Week ending 04-06-2012

Samuel Adams helped start a Revolution. His cousin John Adams, the Esquire and future President of the United States stated that " Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."  


Well the facts and evidence in this case show the numbers on this stock to be indisputable and are very good. First of all there are only 13,741 shares of the stock outstanding as of 12/31/2011.

Boston Beer Company Inc. (Symbol SAM, $103.38) is projecting $4.18 per share for 2012 and for 2013,  $4.72 cents per share. How about if we start with the first fact: 5 year earnings growth of 42.84%.
"Abigail call my stock broker!"  . How about a Return on Equity of 37.68%.  Nothing but the facts. 

 We should also mention here that the 3 Year Total Return on the stock is 330.75%.  SAM had annual revenues last year of $513 million so there is lot's of room for growth in this name. So this story is just beginning.

In honor of the French giving us a hand and assisting in our Revolution for Independence, I added La Bourse De Paris , the CAC-40,  to my side column of stock exchanges. This is also known in modern times as Euronext Paris.

Battle of Lexington

So in Conclusion, the Opinion for our case summary is that you would be a darn fool if you didn't put a little SAM into your portfolio. So put some Eggs into your Easter basket portfolio and search no further. Monday morning  go buy some SAM.  I recommend 25-30 shares in your IRA account.


The Defense rest.


Freewilly