Easy Money Investing

Editor’s Note: Welcome to James Altucher’s “Barron’s Roundup.” Each weekend, Altucher presents Stockpickr portfolios related to articles in the latest issue of Barron’s.

The http://stockpickr.com/members/port/Barron-s-Summary-2-19-07/ portfolio is a list of all the stocks that received bullish or bearish mentions in Barron’s this weekend. Stocks on the bullish side include WebEx Communications (WEBX) and Sotheby’s (BID) , while there was a negative article about cold remedy maker Adams Respiratory Therapeutics (ARXT) .

The cover story was on activist hedge fund http://stockpickr.com/members/port/Relational-Investors-LLC/. We’ve updated Relational’s Stockpickr portfolio to reflect information in the article. Relational has logged an average annual gain of 18.76% since its inception in 1996. From the interview: “First, Relational establishes a “toehold” stake in a target of around $100 million or so. Then Whitworth contacts the company, requesting a meeting with management and directors to present Relational’s list of proposals to boost shareholder returns.”

Barron’s writes about http://stockpickr.com/members/port/Barron-s-The-Video-Revolution/ and the stocks that will benefit, including Google (GOOG) and surprises like Autobytel (ABTL) .

Bill Alpert has an article on the generic drug industry and the http://stockpickr.com/members/port/Barron-s-Biotech-Clones/: generics that are on the rise.

For the first time, European regulations are allowing the creation of real estate investment trusts focused on European properties. Here are the http://stockpickr.com/members/port/Barron-s-European-REITs/ that stand to benefit from the rise in the continent’s property values.

Barron’s featured interview was with David Herro, the fund manager of http://stockpickr.com/members/port/Oakmark-International-I-OAKIX/. Herro said he believes that the best international value is found in “old and busted growth-blue-chips.” He believes these companies have fallen out of favor thanks to the current excitement with small cap stocks, but since they have earnings growth but trade at prices similar to where they were trading years ago, they represent good value.

The latest http://stockpickr.com/members/port/Barron-s-Activist-Stocks-2-19-07/: the stocks that have large investors clamoring for change. Among them is Lear (LEA) , where Pzena Investment Management is opposing a proposed buyout by Carl Icahn.

We provide additional color on the recent http://stockpickr.com/members/today/Insider-Purchases-2-19-07-Barrons/ listed in Barron’s, including who is buying and who the other large shareholders are in each position.

1 What would best describe your stance heading into the coming week of trading?

Bullish
Bearish
Neutral

2 Which of these sectors do you think is set to move up in the coming week?

3 Which of these sectors do you think is set to move down in the coming week?

Income trust investors are holdinga protest rally on Parliament Hill Wednesday afternoon to mark the first anniversary of what they call the “Halloween night massacre.”

It wasone year ago that Finance Minister Jim Flahertystunned the investment communityby announcing the Conservative government would bring in a tax on income trusts by 2011 reversingacampaign pledge made months earlier to leave them untaxed.

The wrath of the hundreds of thousands of investors who had poured billions of dollarsinto these trusts was immediate and it wasn’t hard to see why.

Income trusts had fast become a favourite place for many investors to put their money especially seniors.

Most trusts paid distributions that were far higher than what they could earn with GICs or dividend-paying stocks.

On Tuesday, a Chicago couple filed a claim under NAFTA, seeking $6.5 million in damages.

“Based on Stephen Harper’s very public promise, thousands of individuals and grandparents like us invested our hard earned money in income trusts and energy trusts,” Marvin Gottlieb said.

The value ofincome trusts tumbled hard in the wake of Flaherty’s announcement.

Within two weeks of the Halloween announcement, the income trust sectorlost about $35 billion of its market value, according to industry figures. Partial recovery

A year later, the sectorhas partiallyrecovered.

The TSX income trust index is still down 10 per cent from where it stood just before Flaherty’s announcement.

The energy trust index isdown 16 per cent, even though oil prices have surged to record highs in the last year.

Monthly distributions have helped to mitigate total losses, but it’s clear many investors are still smarting.

A few business trusts, like the Aeroplan Income Fund, havemanaged sizable gainsin the past year.

But for most trust investors, the only big gainshave come from takeover offers for their trusts and the often juicy premiums attached tothem.

More than 40 trusts have been acquiredsince the Halloween announcement.

Trust investors havespent much of the last year protesting the trust decision in a variety of ways.

Through countless news conferences, petitions and online forums, they have vented at what they see as a betrayal. Flaherty stands firm

Despite all the pleas from investors andvigorous lobbying from the industry, Flaherty stood by hisdecision.

Income trusts would eventually face the same taxesas corporations do. Only eligible real estate investment trusts would be exempt.

Flaherty said the “tax leakage” from so many companies converting to trust statuswas threatening the economy.

The Canadian Association of Income Trust Investors has always disputed the “tax leakage” claim that trust conversions were robbing the treasury of half a billion dollars in tax revenue a year.

It wants the finance department to show how it arrived at its tax loss conclusion.

“To date, all we’ve gotten is 18 pages of blacked-out documents to justify what we consider basically to be an eviction notice from our landlord who says we aren’t paying our monthly taxes, when in fact, we are,”Brent Fullard, CEO of the trust investors group, told CBC News.

The association also says its early prediction that the weakening of the trust sector would lead to many of them being swallowed up by foreign interests has proven correct.

No newincome trusts have been created in the last year,but more than 200 still survive. By 2011, however, it’s widely expected thatmany willconvert to corporate status.

WASHINGTON (AP) - Orders to U.S. factories for big-ticket manufactured goods rose in March at the fastest clip in three months, helped by the biggest jump in orders by businesses to expand and modernize in 2 1/2 years.

The Commerce Department reported Wednesday that demand for durable goods rose 3.4 percent last month compared with February. That was significantly better than the 2.5 percent increase that had been expected.

Much of the strength last month came from a 37.6 percent surge in demand for commercial aircraft. However, orders for business capital goods excluding aircraft also posted a strong gain of 4.7 percent.

That was the best showing for this closely watched category of business investment since a 7.9 percent rise in September 2004. The rebound came after two consecutive monthly declines had increased worries that troubles in housing and auto manufacturing were beginning to cause other businesses to grow more pessimistic about the future.

The 3.4 percent rise in total orders pushed demand for durable goods up to $214.9 billion in March following a 2.4 percent increase in February, which was previously reported as a weaker 1.7 percent rise.

Manufacturing has endured a slowdown in recent months, reflecting troubles in the housing industry, which have cut demand for construction equipment, and weakness in autos, where U.S. car makers are struggling to reduce an overhang of unsold cars.

The manufacturing weakness mirrors weakness in the overall economy, where growth has been depressed for the past year.

Many economists believe the economy slowed to an annual growth rate of just 1.8 percent in the first three months of this year, which would be the weakest showing since the end of 2005 when the country was struggling to cope with the devastation from Hurricane Katrina. The government will release its first look at growth in the gross domestic product for the January-March period on Friday.

The strength in aircraft orders pushed overall demand for transportation goods up by 8 percent in March. Orders for new cars and trucks rose by 3.3 percent, the best showing since December, and a sign that automakers are beginning to get control of their inventory levels.

Orders for computers dropped by 4.2 percent last month but demand for communications equipment shot up 12.3 percent and orders for primary metals such as steel were up 2.5 percent, rebounding from a 3.7 percent drop in February.

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