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Company name Alcon, Inc.
Stock ticker ACL
Live stock price [stckqut]ACL[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Fair
EPS growth Good
P/E growth Poor
EBIT growth Good
ANALYSIS
Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $179.23
Target stock price (averages with growth) $216.21
Target stock price (averages with no growth) $180.13
Target stock price (manual assumptions) $145.76

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

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To be honest, I never considered this approach before.

I typically do not like paying fees to fund managers. I am especially skeptical of standard mutual funds when their track record can be worse than the market almost as frequently as above the market.  According to that great champion of individual investors, Motley Fool:

The average actively managed stock mutual fund returns approximately 2% less per year to its shareholders than the stock market returns in general.

Most of my advice is to pick great companies and invest in them with caution, taking profits when the market moves against the company’s stock. I do suggest that a certain portion of your portfolio reside in index funds – I typically tell people to pick their favorite broker and buy a DOW index fund, a S&P index fund, and at least one international index fund.  I rarely care about the brand since we are just trying to match whatever the market is doing.

Crossing Wall Street just did a great post describing a fairly mathematically correct method of creating your own S&P Index fund.  This would allow you to avoid any fees leveraged by the index fund management company.  Not a bad idea.  Note though that not all of these companies are Good Companies (in fact at least one of them is a Poor Company) but that is okay since you are only investing in these companies because they are your own home-grown index fund.

Looking to build a quick-and-easy index fund? Of all the stocks in the Dow, United Technologies [stckqut]UTX[/stckqut] has had the strongest daily correlation with the S&P 500 going back to the beginning of 2005. Each day’s UTX gain or loss has a 69.7% correlation with the S&P 500.

If add in Dupont [stckqut]DD[/stckqut], the correlation jumps to 80.5%. (Note this is average daily change, so it assumes you invest equal amounts each day.)

If you add is Disney [stckqut]DIS[/stckqut], the correlation rises to 85.4%.

Now the extra correlation really is hard to come by. If you add ExxonMobil [stckqut]XOM[/stckqut], the correlation rises to 88.9%.

Still more?

If we add American Express [stckqut]AXP[/stckqut] the daily correlations rises to 90.6%.

Verizon [stckqut]VZ[/stckqut] brings it up to 92.6%.

If you want to go for seven stocks, IBM [stckqut]IBM[/stckqut] will bring you up to 94%.

Now we’re almost out of room. Wal-Mart [stckqut]WMT[/stckqut] will bring our eight stock index fund up to a 95% daily correlation with the S&P 500. This is, of course, an equally weighted fund.

Obviously, you will spend $15-$20 per stock as you buy and eventually sell each stock (I assume you know where to buy or sell a stock for $7-$10). this may make this strategy not work for you depending on the amount that you invest in your “fund” so do the math before you get online with your favorite broker.

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DailyFinance.com has a great article on the new jobs outlook for the US that was reviewed by BloggingStocks.  I think that they only thing that is missing is the acknowledgement that is nearly impossible to get zero unemployment.  In fact, it would probably be bad for the economy to have zero unemployment!

What is the perfect unemployment rate? Ask 10 economists and you will likely get 12 answers.  Most of them will likely say a number between 4-7%. When the country gets below about 4% then entry level jobs become quite expensive and inflation is almost guaranteed to happen. Once you are above 7% then the country starts to feel real pain in that large ticket items are harder to purchase.

We are currently just under 10%, that means we are about 25-30% above our optimum level. While this is not great, it does have a significant advantage for those industries and businesses that rely on a large workforce to create product.

As the unemployment rate drops, pay a bit more attention to stocks of companies that create bigger ticket items (e.g. automobiles, planes, vacations, computers, homes). As long as the unemployment is a bit high, be careful of those big ticket items and look for companies that make low cost items or items of necessity or need a large, cheap workforce (restaurants, grocery, food production).

While I have not reviewed Kroger [stckqut]KR[/stckqut] on this site, it is a good example of a company that will slightly benefit from high unemployment or at least not be hurt as dramatically as others like Ford [stckqut]F[/stckqut]. Kroger recently released a fairly strong quarterly earnings report.

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Company name Agilent Technologies Inc.
Stock ticker A
Live stock price [stckqut]A[/stckqut]
Confident Investor Rating Poor

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable.

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Company name Sirius XM Radio Inc.
Stock ticker SIRI
Live stock price [stckqut]SIRI[/stckqut]
Confident Investor Rating Poor

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable. However, this company is growing at a decent pace and its financial picture is improving. If the company can maintain 12 months of profitability, the stock may be worth owning at some time in the future. At this point in time, there are better companies to invest your hard earned money.