Todd Schoenberger

Yesterday's DI Afternoon Comment

2006-09-07T08:04:00.000-07:00

You know, if you subscribed to the newsletter, you would get this timely piece the day that it's published!!

Two Weeks to Go! Time to Get Back on the Fed Bandwagon

So far, we’ve had two trading days in September and there has been barely a whisper about U.S. economic policy and the upcoming Fed meeting—until now.

This morning, traders and investors are giving a collective yawn to the news about Intel’s job cuts and Ford’s new CEO appointment as everyone gets ready for the biggest day of the week for economic data.

With only two weeks to go until the next all-important FOMC meeting, every report released by the Government is going to be analyzed in every way as economists and media pundits try to predict what the Fed is going to do next. Will the Committee hike again, continue to pause or simply determine that the one-and-only Greenspan/Bernanke rate cycle is finished.

Diligent Investor Sticks to its Forecast

The Diligent Investor has analyzed all of the economic data released since the August 8th FOMC meeting, and we have determined that the Fed is finished. There are no reasons or justifications for this Committee to tinker with economic policy because the U.S. economy is stable, but vibrant. The Fed has done its job, and it has done it well.

I wouldn’t go as far as giving this Committee a standing ovation for their work, though. Even though they didn’t bow to pressure from the public—or more importantly, Wall Street—to hike more aggressively, they did make a few rookie mistakes along the way.

One key error has been simply talking too much. This group has been quite chatty by doing a number of public speeches about economic policy while not realizing that every noun, verb, adjective and preposition is being monitored by the financial press. Even the Fed Chairman couldn’t escape the public eye when he made some minor comments to one of the most recognized financial journalists of our generation.

Mistakes will be made

But, live and learn. Mistakes will be made as the Fed continues to steer the U.S. economy in what will be some of the most challenging events in our lifetimes. As long as the mistakes are not catastrophic (i.e., stagflation, recession, or do I have to say it—depression), the Fed will keep inflation in check and keep the U.S. economy growing at a 2.5 to 3.0 percent clip.

But, today is today and the data released will determine market reaction. Volume is expected to be at normal levels as traders return from their Labor Day hangovers and get back to the business of living in a capitalist society—making money!

Full Menu of Economic Numbers

First up on the docket is the revised second quarter productivity numbers at 8:30AM EST. Wall Street consensus is figuring a 1.5% improvement, which should not move the needle to alarm Fed members.

Also at 8:30AM will be the release of the closely monitored unit labor costs, which are actually expected to be revised lower. If the number comes in below 4.1%, look for U.S. stock futures to jump on the news.

At 10:00AM, we will have the Institute of Supply Management’s non-manufacturing index. This figure is expected to edge slightly higher to 55% in August from 54.8% in July.

Then, at 2:00PM is the much-anticipated Fed Beige Book, which typically sets the stage for the next FOMC meeting.

And not to be outdone by the flood of economic reports, oil will get into the mix of things when the EIA inventory data is released at 10:30AM. The oil bulls will be running if inventories take a dip.

Stay tuned as the ingredients for another wild day on Wall Street come together.

Until tomorrow,

Todd M. Schoenberger, Editor
Diligent Investor
http://www.diligentinvestor.net/
http://www.dynamicmarketalert.com/

The September 5th DIAC

2006-09-06T11:43:00.000-07:00

Striking Oil! How Chevron’s Discovery will help America and Investors

With oil prices still hovering around the $70 a barrel range and the price for a gallon of unleaded gas averaging $2.75 this week, the United States still remains as vulnerable as ever when it comes to supply disruptions and can’t afford to relax in its pursuit of oil exploration or development of alternative fuels.

Well, fortunately for us, our domestic big oil companies are taking matters into their own hands by searching and exploring for the commodity in an effort to maintaining an adequate supply while keeping with demand. Considering three-quarters of the world’s oil supply is off limits to our big oil companies, finding new pools of crude off of our shores is critically important to their—and our—survival.

Black Gold Gushes in the Gulf

Just announced this morning, Chevron Corp. (NYSE: CVX) has successfully completed what it called “a record setting production test” on a well located about 270 miles southwest of New Orleans in the Gulf of Mexico. Chevron said the well sustained a flow rate of 6,000 barrels of crude a day. Unfortunately, the equipment used is not able to maintain more than 6,000 barrels, but we’ll take what we can get.

Chevron owns 50% of the well, with companies like Devon Energy (NYSE: DVN) and Statoil (NYSE: STO) holding the remaining 50% equity interest. All three companies are estimating the new oil field to hold between 3 billion and as much as 15 billion barrels worth of oil and gas reserves. If 15 billion barrels are found, it would boost oil reserves by 50% in the United States.

Discovery may take Years to Produce

Unfortunately, there will be no immediate impact as a result of this discovery as this crude will not be processed into fuel for at least 3 years. However, it will provide a much needed psychological boost to an American population already on edge regarding Middle East violence which could possibly lead to a severe disruption to global oil supplies.

Now, hopefully our lawmakers on Capitol Hill will realize how important oil-friendly measures like the off-shore drilling act—more formally known as the Deep Ocean Energy Resources Act of 2006—are important to helping America end its relationship with foreign oil. The short session—a mere 19 days long—is important to pushing this measure through and permitting additional exploration off of our domestic shores.

Look for oil to take another trading breather today, especially now that the summer driving season has officially ended, and provide a terrific buying opportunity for investors looking to jump back into the oil bull market. Stocks like Chevron, Devon Energy and Statoil should do well today, but these stocks will do well even without additional oil field discoveries. Simple global demand will continue to drive these and other oil companies higher.

Until tomorrow,

Todd M. Schoenberger, Editor
Diligent Investor
http://www.diligentinvestor.net/
http://www.dynamicmarketalert.com/

The Friday, September 1st DIAC

2006-09-05T13:42:00.000-07:00

Petrodollars! How Oil is making the U.N. Irrelevant to Iran and Putting Pressure on your Portfolio

Facing the prospect of economic sanctions by the United Nations and potential violent force from Western countries, Iran essentially told the U.N. to take a hike as it plans to move forward with its uranium-enrichment program.

Some would say this is a bold move by Tehran, but considering we’re talking about a showdown with the jellyfish United Nations, it is hardly a show of strength. If anything, it sends a message to the world that Iran could care less about potential economic sanctions because it’s making obscene amounts of money from higher crude oil prices.

Oil is the ultimate weapon

As the fourth largest exporter of oil in the world, Iran knows that its ultimate weapon isn’t a nuclear bomb but rather a barrel of oil. If Iran cuts off supplies to the world—even a small percentage of production—it would be catastrophic to the global economy.

Today, the world requires 84 million barrels of oil a day to survive and oil producing countries are only pumping 85 million barrels a day out of the earth. Any slowdown to this production (i.e., hurricane, war, etc.) would immediately cause a spike in oil prices and a collapse of all stock markets around the world.

You can see this reaction here in the United States. With talk about Hurricane Ernesto heading to the Gulf of Mexico, we witnessed oil prices spike and a drop in our domestic stock indices. Fortunately, the storm shifted to the east, thus maintaining oil production in the region and causing oil prices to settle down—and, more importantly, lift our stock markets higher. (Consequently, the S&P 500 hit a three-month high in the days after oil fell below the $70 a barrel level.)

“What to do” meeting on September 7th

Now, the concern regarding oil has shifted to Iran and it’s up to the world’s leaders to solve the riddles of this defiant country. A meeting has been scheduled for September 7th to figure out “what to do.” I wish them luck because if this situation isn’t resolved diplomatically soon, we’re going to have some serious problems with our portfolios as we close out 2006.

Investments will take a hit

Here’s why: After seeing higher oil and gas prices this summer, consumer spending dropped. This is because people have less discretionary income due to the fact that it’s costing $80+ to fill up their SUVs. In August we were somewhat relieved to see prices at the pump recede just a bit (average price per gallon of gas this week is $2.87, was $3.05 in June).

The drop in gas prices certainly helped with consumer spending as the Government just this week said spending increased by 0.8% in July. This uptick in consumer’s opening their wallets is partially attributed to the slight drop in gasoline prices. As a result, stores like Wal-Mart reported higher retail sales for this period. This morning, Starbucks even reported that August same-store sales were up 5%.

$100 a barrel, $4.00 at the pump

Now, let’s consider if Iran shuts off the spigot for exporting oil and tells the world—especially the United States—to go find the commodity somewhere else. Well, we’ll definitely see prices for crude come close to the elusive $100 price and have gas clip $4.00 a gallon in this country. Considering the holiday shopping season is almost here, retailers, for one, will be hit hard and cause a negative ripple effect on consumer staples.

Prices for crude at $100; gas topping $4.00 a gallon; potential for more violent conflicts in the Middle East—these are the ingredients for horrible market conditions and dire results for your portfolio.

Is there a way for investors to make money?

Yes, there is! Look at oil stocks; Companies like ExxonMobil (NYSE: XOM) and ConocoPhillips (NYSE: COP) because a quick solution for the United States to steer clear of further escalating issues with Iran is to get off of foreign oil. And—we’re close.

When the Senate returns from summer recess, they will be continuing the debate regarding off-shore drilling. It’s inevitable that this measure will pass, thus opening the door for companies like XOM and COP to move in and virtually save America from any price hikes due to further antics from Iran.

Regardless, though, it’s important to safeguard your portfolio during these tumultuous times. However, investors looking for some profit seeking moves to take advantage of higher oil prices and off-shore drilling, consider some of the blue-chip oil companies for your portfolio.

Have a safe and enjoyable holiday weekend,

Todd M. Schoenberger, Editor
Diligent Investor

On CNBC this morning, September 5th!!

2006-09-05T03:21:00.000-07:00

I'll be on CNBC this morning starting at 10:45AM EST, Tuesday, September 5th. I'll be a part of a roundtable debate on oil and Iran's influence on the commodity.

Hope you can tune-in.

The 8/30 DIAC

2006-08-31T11:48:00.000-07:00

Fed Minutes Cause Economists to Scratch Their Heads

There were a couple of notable comments from the FOMC’s August 8th minutes that were released yesterday that are leaving many economists scratching their heads and wondering if the Fed’s economic staffers need a refresher course on Economics 101.

After reading the minutes a good half dozen times, I came across the following statement and had to keep going back to it because I thought it may have been a mistake: …housing, energy, policy lags and reduced wealth effects are going to “hold economic growth below potential over the next six quarters.”

The next six quarters will take us into 2008! If that’s the case, then why all the hints and whispers about inflation concerns and another rate hike? It doesn’t add up and, frankly, is quite inconsistent from what I expect from our Fed Governors, and more specifically, Chairman Bernanke.

9 to 1 Signals an End to the Rate Cycle

Let’s get down to business: The Fed is finished with the rate cycle and any mention of a potential hike in rates is pure baloney.

It seems that I’m not alone with this assessment; even the Committee is looking to be in agreement. We were first told that the initial vote to pause rates was “a close one,” but as it turned out the vote was 9 to 1 (Lacker was the only hold-out).

If there are any inflationary concerns for the U.S. economy, they can be attributed to the higher energy prices and after reviewing the current Gross Domestic Product figures, we can be reassured that 1) the Fed has done its job, and 2) the economy has landed and it’s landed softly.

Remember, if you decide to review the Fed’s minutes, closely analyze the actual language used. You’ll read about inflation “risks”, and that’s exactly what they are—just risks, not the “base case”.

History tells us that if the Fed pauses for at least four months, the probability of the next policy change being a rate cut is 100%. The period between a tightening cycle and an easing cycle is, on average, eight months.

Now, further evidence to solidify this argument that the Fed is done: Going back the last 35 years, the FOMC has never had a rate hike when the U.S. GDP figure was less than 3%, and the Q2 print came in at 2.5%.

In other words, the U.S. economy would have to skyrocket within the next couple of months to push our GDP figure higher, and therefore warrant any tightening by the Fed. And, it’s not going to happen.

Remember These Dates

The two dates to circle on your calendar are March 20/21 and May 9. That is when we’ll see a new rate cycle begin—a Bernanke only rate cycle. Look for the Fed to begin cutting rates at one—or maybe both—of these meetings.

Thank you, Chairman Greenspan. Your final rate cycle is in the books. You can now go and relax and enjoy your retirement.

Until tomorrow,

Todd M. Schoenberger, Editor
Diligent Investor
www.DiligentInvestor.net
www.DynamicMarketAlert.com

Yesterday's Diligent Investor Afternoon Comment

2006-08-30T13:05:00.000-07:00

Fed Minutes to be Released; The Most Popular Non-Event of the Day

Dear Reader:

With one week left until the unofficial end of summer, investors would think traders may take some time off to rest up for the usual September massacre in the markets. Trading volume was lower yesterday, but it probably has more to do with this week’s parade of economic data than a final visit to the beach.

Financial headlines have been dominated by the one-year anniversary of Hurricane Katrina and its effects on the Gulf region and the energy markets. Today, that same theme will be discussed on all of the financial channels—at least until 2:00EST.

Topic A Again—The Fed

Yes, folks, it’s time to start talking about the Fed again. This afternoon, the Federal Reserve will release the minutes from the August 8th meeting when Fed policy makers chose to take a breather during the current rate cycle and forego an 18th consecutive rate hike.

Traders and investors and media pundits and economists and pretty much anybody with an interest in U.S. economic policy will be looking closely at the language used by the Fed officials to gauge their concerns over the unpopular I-word: Inflation.

Everybody wants to know if the August 8th pause was just that…a pause or an actual end to the first and only Greenspan/Bernanke rate cycle. At the Diligent Investor, we have been adamant about our position that the Fed is done with this cycle and we can now look forward to an easing cycle to begin in late first quarter or early second quarter of 2007.

The biggest reason for our opinion that the Fed Governors are done is GDP growth. I went back some 35 years and not one time could I find a Fed that hiked rates when the current GDP rate was less than 3 percent. For those keeping score, the second quarter GDP print was 2.5 percent.

Now, the revised Q2 GDP report will be released tomorrow morning and I’m predicting the number to print higher, maybe even 3 percent. Either way, though, this Fed is finished. Inflation is not a concern and any issues with higher-than-comfortable core rates can be attributed to higher energy prices.

Bottom line: Inflation is in check, the Fed has done its job (well) and the country is growing at the targeted rate of 2.5 to 3.0 percent. And, this is the rate the U.S.A. needs to grow just to maintain a level rate of employment. Anything lower, you’ll hear a lot of talk about a recession. Anything higher, you’ll hear about additional interest rate increases.

So, tune-in to your favorite financial channel at 2:00EST and be prepared for a non-event. I predict the word “inflation” to be mentioned 27 times in the minutes (last minutes release had the word mentioned 38 times). As you can see, the trend is looking good, as the Fed policy makers are feeling more and more comfortable about the current state of the U.S. economy.

Until tomorrow,

Todd M. Schoenberger, Editor
Diligent Investor
www.DiligentInvestor.net

On CNBC this afternoon

2006-08-28T08:12:00.000-07:00

Tune into CNBC this afternoon for its "Closing Bell" show. I'm going to be interviewed by Maria Bartiromo and Bob Pisani. They'll be quizzing me on the economics of oil and how Hurricane Katrina affected not just the people in the damaged areas, but also every U.S. consumer.

Be sure to tune-in.

Sweet Action!!

2006-08-25T09:47:00.000-07:00

I won today's Wall Street Journal Newshound contest. Check out the link: (http://wsj.com/Newshound)

I won a t-shirt, but more importantly I get to brag to my co-workers. Fun times!

Check out the DIAC later today for more info: www.DiligentInvestor.net.

Todd

Check out Cavuto on Business this Saturday on Fox at 10:30AM EST!!!!

2006-08-24T10:54:00.000-07:00

My fellow analyst, and sometime sparring partner, S.R. Nunnally, is our resident expert in the alternative energy sector. As much as it's a burr under my saddle, I have to say, you can't argue with the gains she's made.

As the editor of Material Profits, her keen insight into this fledgling sector has sparked some interesting debates. It's no wonder that she's been a frequent guest on numerous talk radio shows, and can boast of repeat appearances on Forbes on Fox, Fox News, and CNBC's Squawk Box.

This Saturday, S.R. Nunnally will be a featured guest on Cavuto on Business. She will ferret out an in-your-face prediction for the oil industry, and take on the interesting topic of which stocks will benefit from a weak hurricane season. I suggest you tune in.

More Issues at Sony

2006-08-24T10:49:00.000-07:00

Just announced about an hour ago, Apple Computer (NASD: APPL) is recalling 1.1 million laptop batteries made by--guess who--Sony. Yep, the same company who supplied batteries for the millions of laptops being recalled by Dell (NASD: DELL). Fabulous news for Sony.

And, the hits keep coming for the Japanese company. Mitsubishi UFJ Securities is downgrading its rating on Sony (NYSE: SNE) today citing possible difficulties in procuring components for its PlayStation 3 game console.

Two questions: How many people are getting fired, eh em...laid-off? And, how many shareholder lawsuits are going to pop-up in the next few weeks?

Stay tuned!!!!

I'll have an article out this afternoon on www.DiligentInvestor.net on the Sony Swoon!!

Information on the Genesis Variable Annuity

2006-08-23T13:05:00.000-07:00

The Genesis No-Load Variable Annuity offers advisors and consumers new investment options managed by ProFund Advisors, LLC. This latest low-cost, trading-friendly no-load variable annuity is issued by Ameritas Life Insurance Corp., the no-load insurance pioneer, and distributed through the Ameritas Direct division. It is a new breed of no-load variable annuity with:

No commission
No sales charge
No withdrawal charge

No policy fee (Gains are taxed as ordinary income and additional penalties may apply to withdrawals prior to age 591/2.) Features for Active Investors The Genesis No-Load Variable Annuity gives cost-conscious advisors and consumers more control and the ability to perform short-term trading within a tax-deferred vehicle with features like:

Convenient unlimited on-line trading
The latest possible cut-off times
Free on-line transfers

"Investors seeking a market timing alternative to mutual fund investing will be attracted to a product like this which will permit active trading and complements all types of investment philosophies including strategic assets allocation, tactical asset allocation, buy-and-hold, sector trading and bond trading," said Todd Schoenberger, managing partner of Genesis Partners, Inc.

Ameritas Direct provides on-line trading capabilities (including group trading) through its web site, www.genesisannuity.com. All fund transfers are controlled by the consumer or advisor through Ameritas Direct's web site. ProFunds VP Investment Options each seek to correlate to a known index, use investment practices considered aggressive and attract active and frequent traders interested in market timing and short-term trading options. These options increase the risks of higher portfolio costs, loss in value, deviations from the benchmark index and having to liquidate investments at an inopportune time.

Higher Limits

Ameritas Direct continues to focus on the investor's needs by raising the maximum premium (without prior approval) on the Genesis No-Load Variable Annuity from $1 million to $5 million for all new accounts. "Previously an initial investment over $1 million would require pre-approval," said Schoenberger. "Now, an initial investment of up to $5 million would not be subject to the pre-approval which provides a more streamlined, investor-friendly account opening process."

New Investment Options
Ameritas Direct recently added two new investment options, ProFunds Dow 30 and ProFunds Short Dow 30. Investors now have access to 22 ProFunds sub-account variable portfolios, which consist of investment options provided by ProFund Advisors LLC, the nation's largest provider of index-based mutual funds.

Variable annuities are long-term investments designed to supplement retirement income. Mortality and expense charges are a competitive 0.90%. Investment options carry their own expenses. Talk To Your ClientsAmeritas Direct makes it easy to talk to your clients about the Genesis No Load Variable Annuity.

You can access content on our Genesis No-Load Variable Annuity website, www.genesisannuity.com, or access this advisor testimonial to add to your website or to supplement your client newsletter. If you have any questions, our salaried professionals are just a phone call away, 800-555-7746, or e-mail us at direct@ameritas.com.

Radio Interview Tonight!!

2006-08-23T12:31:00.000-07:00

If you live in the Los Angeles, CA area, tune in to KLSX-FM 97.1 to the Moe Ansari show between 4:30 and 5:00 pacific time. I'll be discussing how the recent bold moves by Iran will be pushing prices for oil even higher. Hope you can listen.

Bold Moves by Iran Will Push Oil Prices Higher

2006-08-23T11:30:00.000-07:00

I am more convinced than ever that Tehran wants to take over Washington, DC and push its own agenda here in the United States. I’m not sure if that would be such a wise move, though, considering Iran is the fourth largest exporter of oil in the world and the last time I walked on Pennsylvania Avenue, I didn’t notice any drilling rigs in place.

Of course, the lead coming from the water pipes may be perceived as oil, but that’s a story for another time.

Tehran announced that they will hold a press conference at 8:30AM EST to let the world know they have no intentions to stop its country’s uranium-enrichment program.

At 8:30AM EST!?! I guess the Iranian government thinks it’s the Commerce Department.

Schedule is Intentional

Do you know what this is going to do to oil futures trading at the NYMEX? It’s going to push them higher, even though everyone already knows what the Iranians were already going to do.

These actions are further evidence of how clever the Iranians really are. Today’s deadline is self-imposed. As a matter of fact, the U.N. asked for a response by the end of the month. But the end of the month is a Thursday before a long holiday weekend.

No, Iran figures to release this information this week—on a Tuesday—at 8:30AM…New York time! They’re no fools!

Had they waited until next week, the news would have slowly dropped to the back pages as most traders would’ve left for the long final summer weekend in the Hamptons. Tehran carefully chose today because they know the price for a barrel of crude will jump on this news and will follow-through till the end of the week.

Higher Prices Mean More Money for Terrorists

And, what do higher oil prices mean for Iran? Well, it means more revenue for the country that can then pass it on to Islamic extremists groups to fight their “holy” war. An enviable business model.

Forget the comments about potential nuclear bombs or scud missiles heading for the U.S.; the new weapon for the Iranians is oil. Now, Iran is dictating the price for oil and using our media to exploit concerns over supply.

Because of the nonsense coming out of Tehran this morning, oil will spike due to the fear that the Iranians may squeeze supplies. And, considering the world requires 84 million barrels a day to survive—and is only pulling 85 million barrels a day out of the earth—any near-term supply disruptions will cause a spike in the price for a barrel of crude and higher prices at the pump.

Sincerely,

Todd M. Schoenberger, Senior Equities Analyst
The Diligent Investor
www.DiligentInvestor.net

Fox News' Cavuto on Business Video

2006-08-23T11:20:00.000-07:00

To View Todd Schoenberger's appearance on this past Saturday's Cavuto on Business, simply click on the link below:

Video Headline: Bottom Line

Click on the URL below to watch the video:
http://www.foxnews.com/video2/launchPage.html?081906/081906_cof_bottomline&Bottom%20Line&Cost_of_Freedom&Is%20oil%20money%20turning%20America%27s%20enemies%20into%20superpowers%3F&News&-1&Bottom%20Line&Video%20Launch%20Page&Business

Todd M. Schoenberger Bio

2006-08-23T10:57:00.000-07:00

Todd M. Schoenberger began his career in the financial services industry as a Broker with Merrill Lynch & Co. where he specialized in helping individual investors achieve financial independence. After Merrill, Todd joined Legg Mason Wood Walker as an Institutional Trader where he was responsible for managing over US$140Million of cash for several publicly traded technology companies. After the stock market bubble burst, Todd teamed with an institutional mutual fund company named Rydex Funds where he trained financial professionals on the intricacies of using leveraged mutual funds inside sophisticated market-timing strategies. Todd then helped to create AnnuityNetAdvisor.com, an online variable annuity provider specializing in low-cost, investor-friendly insurance products for financial advisors. After ANA.com, Todd decided to test his knowledge and formed his own no-load variable annuity known as the Genesis Variable Annuity (www.GenesisAnnuity.com), which is distributed globally to individual investors and financial professionals.

Todd’s been on a media blitz, appearing on CNBC’s Squawk Box and Kudlow & Co., Fox News Channel's Forbes on FOX and Cavuto on Business, Ringside Politics with Jeff Crouere, Business for Breakfast w/ Wayne Candace, WMAT Investments Advisor Review and Money Matters Financial Network, to name a few.

If you've missed his interviews to date, here's a chance for you to hear him first hand. Todd was recently video taped with his surprising recommendation for a blue-chip stock that is poised to rack up gains. You can receive a free copy of this video by visiting www.americancapitalist.net.

Todd Schoenberger Has A Blog

2006-08-23T10:36:00.000-07:00

Welcome everyone and thank you for reading my personal blog.

I am a financial equities analyst for a financial publisher located in Baltimore, Maryland. Here, I will post my opinions on the world, but many more detailed insights will be available from my financial website: www.DiligentInvestor.net.

I look forward to developing a dialogue, including spirited debates, with the readers on this blog so please remember to log in often.

Until the next post,
Todd M. Schoenberger