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Author: Mike Celeste Editor: Tony Ponzo September Circulation:

Stat Sheet Week Ending September 12th 2009

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+164.0+1.7%+829.0+9.4%
S&P+29.0+2.9%+140.0+15.5%
NAS+62.0+3.1%+504.0+32.0%

Highlight of this past week: The Indicators holding on to its 81% win rate for the year and the
Momentum Strategy moves to a 346% profit margin for 2009.

In this Issue---
Options---
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The current splitter UTHR is on our Big Dipper list, and we wanted to write naked Puts around the Dipper price to create some income. But the stock moved with the market to the upside and we missed it. On the other hand, it is nice to see the splitter move up. It has been a long time since we have even had a stock that is splitting.

Momentum Plays---
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It was a boring week in the Momentum Strategy with only one play. But that play was a SPY Put and it was a winner. Further, year to date, the strategy is sitting on a 346.43% profit margin which we are very pleased about. Past Results There are a number of factors contributing to the slow action, all of which are to be expected for this time of year. Earning season is basically over for the quarter and we will not see much action until the new season begins. That will start next month with a lot of action starting about the second or third week of the month. There will still be a few earnings plays between now but not many. Also, with a lot of traders out for the end of summer vacations, the volume in the market is light and that causes a lack of action. We should have better action starting in by the time October gets here. As usual, we'll play it day by day.

Indicators---
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We had a rather mixed week on this play, with a win, a loss, and a no play. It was good that there were 3 potential plays, but the markets were back to playing games with us--looking like they were going to go down, only to turn around and go up. Some team members made profitable plays on Friday, when we went with a "no play" because of the market action. Congrats to those members who made those successful plays.

The Economy, The Markets & Commentary---
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The President gave a speech on healthcare to a joint session of Congress this week and it was nice to see emotion coming into the picture. President Obama, instead of a mild, measured tone of voice, went out and became forceful in his presentation. He even called some politically prominent politicians liars in what they have been saying. I thought it was a great speech, but the problem is getting a great speech put into great action. He did say that there were formidable points to overcome and it wouldn't be easy, but it is doable and it is in the character of this nation to get it done--and he stressed the morality of it, also. He said he would not sign anything that raised the deficit, and that is hard to get across, as other programs, like Medicare, Medicaid, etc., were said to be in the same position, only to find that when applied, the cost did surpass the estimates. One point that is difficult to overcome is the fact that the United States is the ONLY industrialized nation that does not have a universal health plan. To me, that is a major, major statement. We have probably the finest doctors and the finest equipment anywhere, but not everyone can get to use it. He is against illegal immigrants getting the program; he is for protecting the seniors in Medicare, and he is for options, along with listening to all sorts of suggestions---short of defeating the program. He even commended Republican ideas, like John McCain's. The other thing that he pointed out that I liked was comparing mandatory health insurance to auto insurance. Most states have mandatory requirements for auto insurance and it doesn't seem like auto insurance is quite as important as health insurance. In other words, more lives are at stake with health than with autos. Yes, there are plenty of auto injuries, but mostly the insurance is paid for auto damage. The middle class is being destroyed, as we keep saying, and you are better off if you are poor than middle class when it comes to health care. The middle class has assets, but medical costs are destroying those assets. Poor people get care, but they don't have any assets to lose. Yes, comparing health insurance to auto insurance is a good comparison. None of us want to be hit by a driver that doesn't have insurance, and we don't want to be hit with no ability to afford health insurance. Auto insurance also sees rates vary by the area a person lives in, which is a battle, as most people want to pay insurance based on their own record. If you have speeding tickets or accidents, your insurance cost goes up. The health plan proposed wants to give insurance to everyone, no matter if there is a pre-existing condition or not. Just like in auto insurance, the health insurance rate, which the President didn't discuss, could be higher for those that have pre-existing conditions that are threatening. At least it would be available. I know this to be a fact, as long ago, I worked for insurance companies that sold health insurance. If you had a pre-exiting condition, you could get insurance, but at a higher rate than the standard rate. If you had several heart attacks in your history, that's when you were denied insurance. These are some of the things that weren't discussed the other night, and that's why the President said there were obstacles to overcome. The time has come for us to come up with a more affordable health insurance available to all Americans but at the same time we have to do this without driving the government or all of us broke -that's the real challenge. Tort reform is a major consideration that is being discussed, and that applies to malpractice suits. That's a sore point for me, as I have been involved in investigations that concerned those types of cases. Frivolous lawsuits are always mentioned. That makes me boil, as we don't need legislation on that--judges have the power to throw out and dismiss true frivolous lawsuits--and they do. Anyone can bring suit against someone else in our legal system. That doesn't mean that you will get a trial, it can be dismissed, and often is. True, the defense has to pay legal fees for getting to the point it is dismissed, but that is a small cost when compared to what it would be if it went to trial. Again, I am speaking from experience. A long time ago I had a small company and was sued, but it really involved another company that had a similar name to mine. The plaintiff released a claim against us when it was pointed out (or I could have countersued), but it did cost me about $2,000 to get to that point. That would be at least 1/10 the cost of having to go to trial, so I was happy. Malpractice limitations already in force in our state was supposed to lower the cost of health care, but it didn't. Would it have gone up even more so if we didn't have it, I don't know. Limiting liability for one group and not another, tho, doesn't seem quite fair to me. Ask some of the victims what they think.

There was a wonderful interview on C-Span the other night, where the author of a terrific book, "The Healing of America" answered all these questions that have been floating around about universal health care. The author went around the world to see how other countries handled universal health care. He even lived in some of these countries and used the health coverage. I would recommend reading the book, as it describes how other countries solved the problem, and are having people live longer than in the US and how infant mortality is less than in the US, and for far less cost than in the US. One cost saving, for example, was the fact that the government buys all medication, and by being the only one, can negotiate with the private pharmaceutical makers for a much lower price that the method used here in the US, with hundreds of thousands of different purchasers buying the medicine, and then reselling it to the patients. He pointed out that the same pill, made in the same factory, was sold for 20 cents in England and $1.20 in the US. Another way the cost is kept down is that there is more money spent on marketing than on research, so that if marketing is not a consideration, since the government buys all the medicine, more can go into research and still leave a lot less overall cost.

His main point was that it doesn't seem the US wants to benefit from how other countries do it, that we have an ego that prevents us from doing that. By the way, he said he is now using the Advantage plan in the US, and says that is not fair, but he is going to continue to use it as long as he can--in other words, he is getting far more out of it than it costs him. You can see comments in the news about this program and suggestions that it be done away with because of the high cost.

There is so much difference in how other countries set up their systems that it would appear that we can't come close to duplicating the savings that other countries receive. However, reform with the result of any savings is better than seeing medical costs double or triple the cost of living raises that we have been hit with. If you multiply the difference in medical costs from cost of living, at some point you will have all money being spent on health--and that's a mathematical fact.

It was pointed out that there is a Harvard professor, right here in the US, that has been hired by other countries to set up universal health care. Imagine that--one person right here, that has enough credibility to set up the whole system for whole countries.---And--he did it, and it has been successful everywhere he was involved. --And--we don't use him for ourselves.

Of course this is just my opinion on the healthcare speech the President gave and there will be a lot more details to come- and we'll have to see what devil is in those details.

A note on the markets--which continue on, whether we have a health plan or not. This week I have to take back my thoughts of the markets needing to see actual improvements instead of less bad. We had 5 more straight up days going into Friday, when we saw a small loss. The pendulum definitely has not stopped swinging in the direction of up. As we have been told before, don't fight the momentum. Also, when more people believe the market is going to go in one direction, that is when it will go the other way. Many have been calling for a correction, and have been calling for it for a while. The longer in time we go, the more "experts" believe there will be a correction. Yep, we continue to defy the "experts" and continue to see the market go up. Granted, there are those that call for higher prices, but they are getting fewer in numbers.

We have been cautious in our investments when it comes to making plays looking for down moves, and it has paid off by seeing losses avoided. We can't say it enough--it is good not to lose. Not as good as making a profit, but better than taking losses, which would have happened. We are in extraordinary times with the current market and we just have to go with the flow, going in and out quickly, taking small profits if we have to, and avoiding losses if we can.

Stay tuned, these are exciting times...............................

Today's Thought---
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Give a person a fish and you feed them for a day; teach a person to use the Internet and they won't bother you for weeks.


Mike

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