It’s been a tough trading or investing year.  So what investments have done relatively well this year?  The names below are either in the Dow Jones, S&P100 or are a group of investments.  The following are within 95% of their 200 day highs:

Abbott Labs
Bonds, Corporate – Short, Mid and Long Term
Home Depot
Altria (Tobacco)
U.S. Treasuries
Wal Mart
Utility Stocks

And the not so well.  The following are more than 20% below their 200 day highs.  Those with an asterisk are down more than 35%:

Blackrock (Investment)
Eastman Kodak*
Emerging Market Index
China, Brazil, Australia, Canada, Latin America Stock Indexes
Goldman Sachs*
Hewlett Packard*
JP Morgan*
European Index
Financials Index
Mining Stock Index

Deficit Commission

Today the “Super Committee,” charged with finding $1.2 trillion in deficit reduction over the next ten years, announced that they had failed to reach an agreement.  This failure triggers a set of automatic cuts to entitlement programs and defense spending starting in January 2013, over a year away and after the 2012 election.

$1.2 trillion dollars over ten years equals $120 billion dollars per year.  While that is a lot of money, it is only 3.3% of this year’s $3.6 trillion dollar budget.  This super committee could not find 3.3% in spending cuts and/or tax increases.  This was a bi-partisan committee, meaning that either side only had to give up less than 2% in spending cuts/revenue increases to come to the center of an agreement. 

Cash strapped cities and states across this nation are having to make hard choices on taxes, education, police, fire safety,  and community outreach programs that are 5%, 10%, 15%, 20% of their budgets.  Many families are having to make similar cuts in their budgets. Yet our elected representatives in Washington can not come together to find 3.3% in annual spending reductions and revenue. 

Let’s be grateful that these men and women in Washington are not working on our local police force, are not repairing our cars or taking care of our kids, are not putting out fires or fixing our plumbing, are not teaching our kids or doing electrical repairs in our homes. Could these elected representatives change a light bulb?

Earnings 2011

Over 80% of S&P500 companies have reported earnings for the 3rd quarter.  80% have beat earnings estimates that were previously lowered, an indication of how well companies are managing the estimates of the analysts who cover them.  In the third quarter of 2009, how many companies beat estimates?  79% (source) – pretty close to this year’s third quarter.

In September of this year, Standard and Poors reported that 2011 earnings estimates for the S&P500 fell below $100 after peaking at about $105 in early August.  2012 earnings estimates have been lowered from $111 to $108.  The S&P index closed about $1250 this past Friday, giving a forward P/E ratio of almost 12, a fairly conservative ratio.  These estimates, however, do not take into account any debt contagion from Europe. In a recent interview Nick Raich, Director of Research at Key Private Bank, projected an estimate of $85 in 2012 if there are no solutions found to the debt crisis in Europe.

Investors Friend has an article summarizing past S&P500 earnings and the difficulty of estimating earnings as there are several versions of earnings – GAAP and operating being two of the most frequently cited.

Yesterday Standard and Poors issued an update of third quarter earnings results.  Pay particular attention to the downward revisions for next year’s earnings in each sector.