Today's Market
by Dr Invest

Man shall not live by bread alone! So what will we do now that we no longer have Hostess Twinkies. It really isn't the Twinkies I'm mad about, it is the mind set that people think they are owed more and more by the corporation that pays them. The old saying is: "Don't kill the cow who gives you milk."

Corporations live by a bottom line. They account for their profits, they subtract their costs to produce a product, and they count their profit. Now if if costs rise so much that profits no longer exist and they are going into debt to keep the corporation viable, they have no choice but to close the business. The Texas based company, Hostess will be closing their doors because union negotiations killed the cow who gave the milk.  When Hostess finally came to an agreement with the union, their investors agreed that the corporation could not continue with a negative balance and wisely closed the doors.

The result of the union's efforts is 18,500 employees immediately being laid off and a 85 year old company closing it's doors. Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.

Now this is a major bakery in the U.S. The union simply dismisses the problem as the corporation just wanting to make more money, while those they represent face the on-going tragedy of paying their bills without jobs. It is this attitude that "we are gonna get our fair share" regardless of the financial decline, that is killing business in the U.S. and is a primary reason that businesses are moving their companies abroad. The average median annual salary in India, $736; the average median annual salary in the Philippines, $1032. And these people would be glad to have a job making hostess Twinkies all day... and night too!

Lest I sound too calloused, I know that people need to be paid in a fair and equitable way, but you can't expect a business to deliver health care, retirement benefits, and remarkable salaries during a season in which all business are struggling to remain in business.

MY STOCK  POSITIONS

Though I am not happy with my WMT bombshell, I am looking for further investments in stocks before the end of the year. There are some opportunities with the dollar stores.. GD, FDO, TGT.

WMT was a drag, but should be seen as a buying opportunity. Setting a STOP-BUY at .50 to $1 above the closing price will capture the buying opportunity when WMT is seen as oversold. You can look at my chart above to see how WMT ruined my bond gains. The season is not over yet and we will try to recapture some of our losses.

Today was a bit dicey, but with new alliances between Obama and the Republicans, we should see a positive market on Monday.

(Note: the above information is for entertainment purposes only and not to be used as investment advice.)