In a post on August 8^th, I advocated purchasing Schering Plough (SGP) and I spelled out my reasoning. In that post, I explained investor concerns of Vytorin. At that time, the ENHANCE panel found that Vytorin, a combination of Merck’s (MRK) Zocor and Schering’s Zetia, worked no better than Zocor alone at removing plaque from arteries. This information had the effect of reducing the market share of Vytorin from ~12% to about ~9.0%.

As if to add insult to injury, this week The New England Journal of Medicine contained three articles which came to the conclusion that patients taking Vytorin have an increased probability of cancer death. I will summarize the articles and try to forecast their impact on my predictions for SGP.

Diageo's (DEO) stock has struggled along with the overall market this year.

The concerns surrounding the stock (strong GBP, weak consumer, and rising input costs) should have been eased after last week’s conference call. If anything, Diageo’s H2 earnings reaffirmed the long case for investors.

MLP Defined

A MLP is a master limited partnership. MLPs are publicly traded limited partnerships and operate in the natural resource, financial services, and real estate industries. MLPs have a significant tax advantage over other public companies; MLPs are not subject to the double taxation of public corporations. Instead they pass through the income, meaning owners of MLPs are personally responsible for paying taxes on their individual unit of the MLP's income, gains, losses, and deductions.

Ultimately the performance of a stock will follow the underlying fundamentals of a firm. Stocks that are rising quickly usually represent firms which are executing well and have strong profit growth. On the other hand, stocks that are falling usually represent firms that are failing to grow earnings or whose fundamentals are declining.

Stocks which outperform the broad market have a few things in common:

In a perfect world the value of standardized futures on deliverable assets is determined via arbitrage argument, or FP = SP*(1+RF)^t.

But a unique opportunity arises in the pricing of futures that can not be arbitraged. In this scenario there is only one force setting the price: unbiased expectation of the future price of the asset. This is the case in VIX futures (CBOE Volatility Index Futures).

In the early part of this decade we learned, ironically enough, earnings don’t represent real money. When a company says it earned a dollar per share last quarter, it doesn’t always mean it has that dollar to spend on dividends, share repurchases, debt repayment, or re-invest in firm’s operations.

As we all know that a dollar of earnings is comprised of assumed non-cash earnings called “accruals.” These accruals are not bad or negative for a firm, but they can be red flags in identifying a changing operational environment or potential management manipulation. I will give a few red flags that you should be aware of:

In a previous post, I spelled out why I am buying healthcare stocks for an Obama presidency. In that post, I promised to provide three stocks that would benefit from this fact. The first stock was Aetna (AET) and now I will discus the second stock in this series, Schering-Plough Corporation (SGP).

Schering-Plough (SGP)

In a previous post I spelled out why I am buying healthcare stocks for an Obama presidency. In that post I promised to provide three stocks that would benefit from this fact. The first is Aetna Inc.

Aetna (AET)

If you own any healthcare stocks, especially HMOs, you have felt the unease of investors this year. In an election year, especially one in which universal healthcare has been a key position; these stocks have taken a tumble. Because of this idealism, some healthcare names have seen their share prices beaten down to historic levels, catching the attention of value investors’. I illuminate why this is the buying opportunity of the decade.

Universal Healthcare

Yes, it looks like option traders are betting on a jump in EMC Corp. (EMC) shares during the next two weeks. Aggressive call-buyers traded over 113,000 of the $15-strike calls, three times the open interest, pushing the contract up 72 cents, or up 380%.

The contracts closed at 89 cents, meaning the EMC shares would need to surpass $15.89 for the call buyers to be profitable. One can only hypothesize the motivation, but the WSJ’s Tennile Tracy quoted rumors that Cisco Systems (CSCO) might make an offer for EMC, or that EMC possibly will divests its 85% stake in VMware (VMW).

Many of us including myself have decided to raise cash during these volatile markets. I have put together a few pointers for the best cash management:

• Spread your money around
  • It's safe to put up to $100,000 in a single FDIC-insured bank account. To protect yourself, spread your cash around several institutions, not all of which need be banks. Many people learned his the hard way from the collapse of IndyMac.

• Use short term CDs
  • Keep CD maturities short so you can roll it over at a better rate, when the Federal Reserve raises short term interest rates. These rates are likely to start heading higher by year's end as the Fed is now becoming increasingly concerned about rising inflation and the falling dollar.

• Use an online bank as these FDIC insured accounts still pay above average CD and savings rates.

Using these tips I have searched for the best yielding short term CDs and savings rates, which are shown below.

As a shareholder of Enterprise Products (EPD), I can’t say that I was excited by the stock’s reaction to is earnings release last week, but after looking beyond the surface EPD presents a compelling buying opportunity for the medium-long term investor seeking a safe yield.

Earnings

Turn on CNBC and you will see market commentators, traders, and analysts calling the current oil and natural gas pullback a “correction”. Sure it is a correction, but financial stocks started out as a “correction” just under a year ago, and let us not overlook the “correction” in technology stocks 7 years ago.

At 20.08 million barrels per day, total U.S. demand for crude oil is the lowest in five years. Also, the decline in gasoline demand over the past two quarters was the first significant decline in 17 years. It is clear that demand for energy is declining in the United States. This demand decline will not stop in the United States.