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The Money Map Advantage
Friday, August 9, 2005
By Horacio Marquez
#8
** CERN: A Jump on Inevitable Demographic Trends
First, a note before my recommendation: I am enthusiastic about global market developments in Germany and Japan. Germany is preparing for a triumph of Andrea Merkel, the market-friendly Christian Democrat candidate, and Japan for an easy win for Junichiro Koizumi, who would rubber-stamp plans for privatization of its postal service.
Can we envision the magnitude of a potential flat tax in Germany, and public sector and corporate restructuring in Japan? Over-regulated and stagnant Germany and Japan are finally moving toward open-market structural reforms.
Restructuring should reinvigorate their economies and bring life to what looked like two basket-case systems. I can hardly wait, nor can the markets. The XETRA and the Nikkei keep chugging along, which will also propel our Austrian-Eastern Europe play – iShares MSCI Austria Index (AMEX: EWO). So be prepared for some hot German and Japanese picks coming up very soon, as I complete their Money Maps .
In the meantime, UBS and Citigroup downgraded our Tenaris (NYSE: TS) buy in the last couple of days, creating some limited downward pressure – just as steel prices firm up and oil drilling explodes to exploit more oil fields at these prices. The UBS downgrade proved to be a buying opportunity, as I believe this morning’s Citi downgrade is as well. However, Tenaris was up this morning in pre-market activity, prior to the Citi downgrade, as it consolidates recent gains and prepares for the next strong step-up.
Now for the recommendation : A recent pull-back has created a reasonable entry point for Cerner Corp (NasdaqNM: CERN). This is important, since the market has become very picky with entry points lately. The company is poised to jump up soon, benefiting from the aging of the massive baby-boomer generation, which demands health care. And a critical aspect of healthcare is the software and hardware that hospitals and other providers use. Cerner is a company well diversified in software and hardware sales, maintenance and support, and the hosting of applications.
What makes it compelling is the strong continued growth in expenditures in this area, huge gross margins, accelerating profits , and the dominant position of Cerner.
**Action to Take***
Buy Cerner (NasdaqNM: CERN) at $82.71 or better. And place a 25% sell stop on your purchase price for protection. See the graph below for a sell stop approximation. For the aggressive investors, buy the October $85 calls (CQNJQ) at no more than $2.70.
Also note : I am changing the stop-setting mechanism to keep my very good friends in Wall Street from taking advantage of us. They can do this by hitting our sell stops at an illiquid moment in the market, using our stops to cover their shorts. By giving you a range, we will keep them guessing some more. I’ll probably lose some Wall Street subscriptions, but you should make more money. For accountability purposes, I am setting my stop at 25% below the purchase price, but trade by your own stop.
Enjoy and profit,
Horacio Marquez
P.S. I am looking with anticipation to my trip to China – Hong Kong, Beijing, Shanghai, and Hangzhou, November 8 to 20. I see it as my tire-kicking trip because I have a long list of micro and macro questions for a number of companies. Questions that will help fine-tune the Money Map models, and capitalize on the country’s explosive potential for profits.
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or e-mail: viptrader@oxfordclub.com , or contact Pillar One Advisor Greg Galloway at 800.438.3040 or 407.667.4729.
Stock
Current Price
Comments
Cerner Corp (NasdaqNM: CERN)
New
Buy at $82.71 or better. And place a 25% sell stop on your purchase price for protection.
TENARIS (NYSE: TS)
$118.54
BUY. Sell stop is $95.
ISHARE MSCI AUSTRIA (AMEX: EWO)
$27.55
BUY. Sell stop is $20.90.
Copyright – 2005 Mount Vernon Publishing. Mount Vernon Publishing does not act as an investment advisor or advocate the purchase or sale of any security or investment. Mount Vernon Publishing expressly forbids its writers from having a financial interest in any security recommended to its readers. All of our employees and agents must wait 24 hours after an Internet publication prior to following an initial recommendation. And for hard-copy-only publications, 72 hours after the publication is mailed. Investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Mount Vernon Publishing provides its members with unique opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department and editors who contribute to recommendations are proud of the reputation Mount Vernon Publishing has built since its inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommendations and analysis presented to members is for the exclusive use of members. Copying or disseminating any information published by Mount Vernon Publishing, electronic or otherwise is strictly prohibited. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time.
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