13 BUYS

BUMPY MARKET
FOR A

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W
hile most investors fret over whether or not we are

s i n k i n g i n t o a d o u b l e d i p re c e s s i o n , t h e e d i t o r s o f

Forbes’ favorite and most successful investment advisories are

still managing to find investments that they think will reward

investors in any market.

In this special report you will find 13 picks ranging from blue-

chip dividend yield stocks to global exchange-traded funds,

gold mining shares, and high octane technology stocks. Some

o f o u r e x p e r t c o n t r i b u t o r s i n c l u d e R i ch a rd M o ro n e y o f D o w

Theory Forecasts, Jim Lowell of Forbes ET F Advisor, Marilyn

Cohen of Forbes Tax Advantaged Investor and Curtis Hesler of

Professional Timing Service.

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 Guru: Jack Adamo
Newsletter: Insiders Plus
Recommendations: Physical Swiss Gold Shares (nyse: SGOL), Compania de Minas
Buenaventura (nyse: BVN)

As the first chart below shows,

in the last 10 years while the
S&P 500 lost a third of its value
and the U.S. Dollar (the green
line) lost 36%, gold rose 500%.
Until recently, the dollar and
gold moved inversely. But since
late 2009, gold has risen regard-
less of the dollar's direction. It is
now a hedge against all currency
weakness and financial doubt.
This is a bull market, and there
is no sign of parabolic rise
symptomatic of a bubble. Own
the metal via exchange-traded
funds Physical Swiss Gold Shares
and the miners via Compania de
Minas Buenaventura. Expect a
short correction in December.

Source for charts: Yahoo Finance

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 Guru: Charles Carlson
Newsletter: DRIP Investor
Recommendation: Abbott Laboratories (nyse: ABT)

I like Abbott Labs because it's a solid growth story in the health care sector. Drug giants are scrambling to find new
growth channels to replace older medications approaching patent cliffs. Abbott Labs has turned to branded generic
drugs and emerging markets, including India, where the firm will have a 7% market share in that country’s pharma-
ceutical industry upon completion of its $3.7 billion acquisition of Piramal Healthcare’s drug business. Wall Street
sees Abbott’s per-share profits growing faster than those of most peers over the next five years. Yet the price for
Abbott’s long-term growth (as measured by price/earnings-to-growth ratio) looks inexpensive compared to its peer
group. Abbott's yield of more than 3.5% offers special appeal, and attractive dividend growth over the next five years
is likely. The stock is really in what I think is the sweet spot for this market—high quality, dividend payers.

Don't go into the market alone. Forbes offers more

than 40 investment newsletter advisory services that
provide detailed model portfolios and focus on asset
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CLICK HERE to learn more.

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 Guru: Marilyn Cohen
Newsletter: Forbes Tax Advantaged Investor
Recommendation: Ford (nyse: F)

Sometimes an obvious investment is obviously right. That's the case with Ford. With CEO Alan Mulally in Ford's dri-
ver's seat, the company continues to be the turnaround story of the decade. Ford is doing everything right. From de-
sign, mileage, options and technology, Ford cars and bonds are a buy. The latest and greatest feature is Ford's Sync sys-
tem. From iTunes tagging, traffic, directions and information, Google maps—anything Gen-Xers amd Gen-Yers could
technologically want—Ford has it.
Buy Ford Motor Credit 7% due October 1, 2013 (CUSIP: 345397TZ6). This $3 billion issue and issuer is the credit
arm of the auto company. These non-callable bonds are offered around $105, which is a 5.21% yield to maturity.
Finding the bonds is no problem. Brokers such as Morgan Stanley, Wells Fargo, Pershing, Interactive Brokers and
Fidelity traffic in Ford bonds.
If you are already loaded with financial bonds in your portfolio and can't use the Ford Motor Credit then buy the
Ford Motor Company bonds, 6.50% due August 1, 2018 (CUSIP: 345370BX7). This $360 million non-callable issue
is trading around $100 for a 6.50% yield to maturity. Yes both issues are junk but junk with a good story, excellent
management team, and way out in front of its competition.
Be sure to check where the bonds last traded on www.investinginbonds.com before you buy. Afterall you wouldn't
purchase a Ford automobile without shopping and knowing the price before you buy. You shouldn't buy the bonds
without knowing where they last traded either.

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 Guru: Curtis Hesler
Newsletter: Professional Timing Service
Recommendation: Goldcorp (nyse: GG)

Our forte at Professional Timing Service includes stock and market timing as well as investment selection. Neverthe-
less, I am occasionally asked what I would personally buy—today, right now or even tomorrow—with little regard to
price. Without timing and price, investment success becomes more difficult, but I do have an answer that I am par-
ticularly confident in—Goldcorp.
As I write this, it is trading at about $43.70, but it is a $90.00 stock down the road. The reasons are two. First, gold
will easily surpass the upside target I set in 2000 of $1,600. In fact, as the world's geopolitical circumstances continue
to evolve and government's fiscal policies run off track here and abroad, we will find that $1,600 will be woefully short
of the mark. The second reason is that Goldcorp is simply the very best gold miner on the planet.

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 Guru: Jim Lowell
Newsletters: Forbes ETF Advisor, Fidelity Investor
Recommendation: iShares JPMorgan USD Emerging Markets Bond (nyse: EMB)

My pick for the next 12 months relates to the Labor theme—for many days to come. I like the iShares JPMorgan USD
Emerging Markets Bond. The exchange-traded fund seeks investment results that correspond to the price and yield
performance of the JPMorgan EMBI Global Core Index, which is made up of bonds from 26 different emerging mar-
ket countries. The top five country representations are Russia (7%), Philippines (5%), Turkey (4%), Lebanon (3%)
and Brazil (3%).
I view this ETF as a hedge against correlated emerging market equity risks. For investors with a 5-year or more
horizon I recommend an equal weighting of about 5% in EMB and the iShares Emerging Market (EEM) or Van-
guard Emerging Market (VWO) stock ETFs. The diversification offers a way to help salve any specific sell-off while the
yield offers a way to stem some of the flood if panic selling in the equity markets ensues or lackluster interest contin-
ues. That's a negative imprint of this positive snapshot: long-term, the growth of emerging markets and the debt
needed to finance that growth are two rails on which our ETF's financial engine can run.

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 Guru: Rudy Martin
Newsletters: Latin Stock Investing
Recommendation: TAM (nyse: TAM)

My pick for hot stock of the year is TAM S.A., a stock I had avoided for a long time due to its weak competitive posi-
tion. But I recently changed my mind. Just a few weeks ago, this Brazilian company announced a merger with Chile's
LAN Airlines (LFL). The combined entity LATAM Airlines Group will rank as the largest airline in Latin America, and
among the top-15 carriers worldwide based on revenue and passengers. The proposed deal enhances the financial
flexibility of the combined entity. As part of the deal, TAM shareholders will be offered 0.90 shares of LATAM for
each share of TAM. The two companies signed a non-binding understanding and hope to complete a definitive agree-
ment in the next 2-3 months and closing by mid-2011. The first part I like about this is that it creates an opportunity
to buy LFL at a discount through TAM, if you are willing to hold the stock.
Beyond the valuation discount, this investing idea wins with a triple-play of the following:
 Positive business environment: The IMF predicts that Chile will lead Latin America's economic growth in 2011
with an expansion of 6% next year. As incomes in the region increase, so too has demand for travel. In July passenger
revenues for all the carriers in the region grew 14% and the freight traffic IATA statistics rose an even larger 25% over
the prior year. In five years, there will be more people in the urban areas of Latin America than in Europe. That rep-
resents a huge travel market opportunity.
 Synergies: The combined company, LATAM Airlines, could see as much as $400 million per year in combined
"synergies," based on more growth in cargo and passenger revenue, and cost savings.
 Capital flexibility: This is a stock deal that means cash will be spent on much-needed route expansion and fleet
upgrades, value drivers to drawing customers away from the competition. In July LFL signed a memorandum of un-
derstanding to purchase 50 new planes from Airbus.
On top of this, investors could also see some benefit from a likely appreciation in the Brazilian and Chilean cur-
rencies relative to the U.S. dollar. While U.S. airlines are hurt by a weak economy and consumer, in Latin American the
ultimate pro-cyclical, pro-consumer stock with real upside potential is now TAM.

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 Guru: Richard Moroney
Newsletters: Dow Theory Forecasts, Upside
Recommendation: DirecTV (nasdaq: DTV)

Shares of DirecTV have held up well amid the market's recent pullback, helped by news that the satellite-television
company extended its robust operating momentum in the June quarter. DirecTV grew profits 50% to $0.60 per share,
meeting the consensus estimate, while operating profit margins rose to 18.2% from 14.4%. Earnings excluded $160
million of Class A common stock given to former Chairman John Malone as compensation for relinquishing his Class
B shares with super-voting privileges. Revenue rose 12% to $5.85 billion, lifted by a 26% surge at the Latin America
unit (15% of sales in the quarter).
DirecTV topped expectations with 100,000 net subscriber additions in the U.S. The company also added 415,000
subscribers in Latin America, more than triple the rate of the year-ago quarter, driven by interest in the World Cup.
In the U.S., average revenue per user increased 6% to $87.90. DirecTV has posted double-digit profit and sales growth
in three consecutive quarters. Wall Street sees DirecTV growing profits 64% in 2010 and another 32% in 2011. Di-
recTV, which has already bought back nearly $2.2 billion in stock this year, announced in August an additional $2 bil-
lion share-repurchase program. DirecTV is a Dow Theory Forecasts' Focus List Buy and a Long-Term Buy.

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 Guru: Gordon Pape
Newsletter: The Canada Report
Recommendation: Agnico-Eagle Mines (nyse: AEM)

Gold is once again proving to be a safe haven for investors during turbulent markets. In late 2008, bullion was trad-
ing in the $700 an ounce range; since then it has gained about 75%. Quality gold stocks have gone along for the ride,
among them Toronto-based Agnico-Eagle. Even if bullion stalls at the current level, AEM should continue to do well
over the next year. The company is expected to double its production from 500,000 ounces in 2009 to more than one
million in 2010. In 2011, Agnico-Eagle expects to add more output from mines in northern Canada, Mexico and
Finland. Average cost of production this year is projected at $399 per ounce.
This is one of Canada's major gold miners with trailing 12-month revenue of more than $1 billion to June 30 and
profit of $153.7 million. I recommended Agnico-Eagle in the June issue of The Canada Report at $60.27. It was
recently trading at $65.86.

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 Guru: John Reese
Newsletter: Validea Hot List
Recommendation: Western Digital (nyse: WDC)

The battle between Hewlett-Packard and Dell over 3Par demonstrates that technology firms are willing to pay huge
premiums for acquisitions. The combination of cash flush balance sheets and lack luster growth will likely lead to
more takeovers down the road—but investing solely on takeover potential is not a long-term winning formula for
most investors. So for my top pick for the next twelve months, I've selected Western Digital, a fundamentally sound
firm in the computer storage and device industry and one that obtains 100% scores from top performing quantita-
tive screens I run based on Peter Lynch and Ken Fisher (on Validea.com I run 12 computerized guru strategies based
on my interpretation of these individuals’ stock selection approaches).
My Lynch approach considers WDC a "fast-grower"—Lynch's favorite type of investment—thanks to its 38% long-
term earnings per share growth rate. (I use an average of the three-, four-, and five-year EPS figures to determine a
long-term rate.) To find growth stocks selling on the cheap, Lynch famously used the P/E/Growth ratio, which divides
a stock's price/earnings ratio by its historic growth rate. The model I base on Lynch's writings looks for stocks with
PEGs below 1.0 (and preferably below 0.5), and the P/E/Growth ratio for WDC is a very low 0.11. The firm's low
debt/equity ratio and net cash/price ratio of 41.97% also helps the stock score highly according to this methodology.
The second strategy that gives Western Digital a 100% rating is the P/S Investor model based on the well-known
money manager and columnist, Ken Fisher. WDC sports a 0.58 price-to-sales ratio, which comes in well under the
Fisher-based model's 0.75 upper limit for this category of stocks. That's an indication that the stock is a tremendous
value at its current price.
Another reason my Fisher-based model likes WDC: The firm has 8.5% long-term debt, showing the kind of con-
servative financing that Fisher sought in a stock. In addition, the firm has been growing at a 35.8% inflation-adjusted
long-term rate, more than doubling this model's minimum, and its net profit margins have averaged a strong 10.4%
over the past three years (more than double the model's 5% profit margin requirement).

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 Guru: Kelley Wright
Newsletter: Investment Quality Trends
Recommendation: Baxter International (nyse: BAX)

Baxter International is a solid company with good fundamentals, a long history of uninterrupted dividends and div-
idend increases, and currently offers exceptionally good historic value.
Founded in 1931 and based in Deerfield, Illinois, Baxter International, through its subsidiaries, develops, manu-
factures and markets products for people with chronic and acute medical conditions. The company markets its prod-
ucts to hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors offices, clinical and medical re-
search laboratories and patients at home under physician supervision.
In the first quarter of 2010, Baxter recorded a charge of $588 million in connection with an infusion pump recall.
From April 23 to July 2, 2010, the stock declined from a price of $60 to $40 per share. Closing recently at $43, the cash
dividend of $1.16 provides a current dividend-yield of 2.70%; within 10% of its historically repetitive area of high div-
idend-yield of 3.0%. As such, the stock offers excellent value with tremendous upside capital appreciation potential.
IQ Trends Private Client holds shares of BAX in separately managed accounts and in its Select Blue-Chip FOLIO.

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