Good Grub Club

The Road House/Eureka Springs
Christmas is behind us fer the good year of 2006. Me and the little lady had a great Christmas with our kids in Texas. We’re back now and the wife says I need ta make plans on startin this new year of ‘07 with a positive look. I takes a look at my jeans and see a few small holes so I says OK I’ll plan on goin’ down to the Doggie shop in Eureka and finding me some new duds so’s I‘ll look real sharp when I takes you to some of these great  places for vittles we got round these parts.  She smiles and winks which is very encourgin to me. I thinks Christmas ain’t over yet! Well nuf of that talk.
I gotta tell ya’ll that if’n ya ain’t been over to the Road House Restaurant on 62 in Eureka ya been a missin out on some good fixins and mighty friendly folk. They got some of the best lunches bout these parts, with home style meat loaf and open face sliced beef sandwiches with both gravy and the best mashed taters. And don’t be fergetin their great big and juicy Angus burgers, with good o-rings or fries.
Now I stopped by tother morn and found somthin I ain’t quite had afore in these parts, but reminded me of my dear old Mom’s cookin when I were a boy and we didn’t have a lot to work with. What it was, is a bunch of fried taters, hash browns, fixed up with  different kinds of chopped meat and cheese and spiced up a bit along with eggs and biscuit. My good Mom used to throw all sorts of things together like that and come up with the best tastin’ fixins I ever had. Now I never knew quite what she had put in there, but whatever it were it hit the spot. Now the folks at the Road House got that same sort a thing goin on and when they serve it up I can almost see dear old Mom with her apron covered with flour and such, standin afore me sayin son don’t ferget to say your thanks.
Ya’ll stop by the Road House and you’ll be saying thanks to ole Herb fer sendin ya their way, I gar-on-tee. Be havin a safe and great New Year now, ya hear.
Herb McSpud

Weekly Stock & Bond Market Update

The Stock Market

Stock prices fell this week, with advances led by the health care sector and declines led by energy shares. The Dow Jones Industrial Average fell 102 points, finishing the week at 12,343. The S&P 500 decreased 17 to end at 1410 while the Nasdaq fell 56 points to close at 2401. The Transportation Index moved lower by 191 while the Utility Index fell by 5. The NYSE average daily trading volume was below average at 1.3 billion shares.

The Economy

The U.S. current account deficit, which measures imports less exports, widened to $225.6 billion in the third quarter, due to high foreign oil imports. The producer price index rose a higher-than-expected 2.0% in November. The core index, which excludes food and energy and is much more closely watched, indicated that despite volatility due to autos, prices at the finished goods level have remained controlled. The Leading Indicators Index for November rose 0.1%, in line with expectations and consistent with moderate real GDP growth. Advanced durable goods orders were released, showing a 1.9% gain driven by orders for commercial aircraft and military equipment. Excluding transportation equipment, orders actually fell 1.1%, sending a signal to the marketplace that economic growth may weaken.
Lastly, the University of Michigan’s consumer confidence fell to 91.7 in December, reflective of rising gasoline prices and the continued limitations imposed on consumers from the housing slowdown.
Next week, economic data is very light. New home sales will be released Wednesday, and Thursday brings weekly jobless claims, consumer confidence, and existing home sales.

The Bond Market

Bond prices fell this week, pushing rates higher, as the end of the year drew near. When investing in fixed income, regardless of where the economy is in the cycle, we believe it is important to own quality investment-grade bonds for the long term.

Data Bank

Economic Growth (GDP) 3rd Qtr ‘06 +2.0% 2nd Qtr ‘06 +2.6%
Inflation (CPI) November 2.0% October 1.3%
Unemployment Rate November 4.5% October 4.4%
S & P 500 Fri. Close 1410 Year-end ‘05 1248
10-Year T-Bonds Fri. Close 4.61% Year-end ‘05 4.39%
Prime Rate Fri. Close 8.25% Year-end ‘05 7.25%

Summary

As the end of the year approaches, we remind investors not to get caught up in the prediction of inflation or interest rates, but rather structure a long-term portfolio that can weather unpredictable economic changes. Despite strong stock performance this year, we still believe valuations are still attractive, and now is a good time to invest.