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GMO's Jeremy Grantham, the longtime bear who in late 2008 and early 2009 said stocks had become cheap for the first time in more than two decades, is sounding gloomy again. In his latest quarterly letter, released last week, Grantham says he thinks U.S. stocks have blown past fair value and are now "very overpriced".

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But Grantham says one particular area of the market is still offering good buys: U.S. high-quality large-caps. And he's not alone. BusinessWeek reported this week that two other fund managers with excellent long-term track records -- Thomas Perkins and Donald Yacktman -- are finding bargains in similar areas. Perkins, whose Mid Cap Value fund has beaten 94% of its peers in the past decade, says large-caps "have gotten so cheap that they should outperform for the next several years"; Yacktman, whose fund has beaten 99% of funds in its category over the past three, five, and ten years, according to Morningstar, has big positions in high-quality blue chips like Coca-Cola (KO) and Pfizer (PFE).

 

While my Guru Strategies -- each of which is based on the approach of a different investing great -- are currently finding value in a number of different areas of the market, Grantham's, Perkins', and Yacktman's comments got me wondering which large-caps these models might be highest on. And, right now, according to my models, one stock may clearly be the best of the large-cap bunch.

 

Now we know why Wall Street lobbyists are out in force in the fight against financial regulatory reform.

 

The New York Times is reporting that new rules with respect to trading of derivative securities would cost banks billions.

 

Of course this issue boils down to big dollars. For too long Wall Street firms have operated in a shadow environment whereby the rules were fast and loose. As a result of market inefficiency with respect to complex financial derivatives, big bucks were made.

 

• Citigroup is one of the five worst stocks on the market now

 

To the extent regulations are passed those profits could evaporate, hurting the biggest banks of the world. But that pain will benefit the smaller banks that I will mention below.

 

Trying to figure out where the stock market -- or, actually, stock markets, since global markets aren't closely correlated right now -- is headed from here? 

This drama has all the right elements: A whistle-blowing lawyer. Possible lies to Congress. Hundreds of millions of dollars quietly pocketed.

Pass the popcorn! Oh, wait. The case of the salary of former Lehman exec Richard Fuld is just a drop in the bucket. There are countless scandals now involving Wall Street bosses, their ridiculous salaries, the investor money they lost and how it all helped the economy implode.

Will the case of Dick Fuld's missing money get any traction? It all centers around the claim that Fuld, the boss at Lehman as the corporate ship was sinking, lied to lawmakers about the salary he was bringing home. 

By Don Dion, TheStreet

 

Given Warren Buffett's knack for making money, it's no wonder that the ears of investors around the globe perk up when he opens his mouth -- but what Buffett says doesn't always coincide with what he does.

 

During recent months, Buffett has diverged from his teachings several times. 

 

At the end of 2009, Buffett expressed his disapproval for Kraft Foods' (KFT) stock-heavy bid for Cadbury.

 

That green Starbucks (SBUX) mermaid has long been a staple of cityscapes, airports and strip malls -- but if executives at the coffee company have their way, the logo will become just as prevalent on the shelves of your local grocery store.

Starbucks is making a concerted push into the staples retail marketplace -- starting with a new summer strategy that includes new ice cream flavors. (Check out the complete Starbucks summer menu here!)

Though some stores already carry the company’s coffee beans, this is just the beginning of an ambitious line of products across the next year or two that will put the company’s name on a variety of other foods consumers crave.

 

We want badly to relate the end of a recession to hiring, but unfortunately for the millions of people who are unemployed, it doesn't work that way.

 

That disconnect is particularly problematic in this recession, with a proximate cause of a total shutdown of the credit markets. Many companies, in order to assure that they had access to the credit markets, had to fire people to show they had the cash flow necessary to get loans.

 

You can't expect companies, even within a year after firing people, to bring them back on. In fact, the only companies I have seen take that action are companies that furloughed people specifically to bring them back when things got better, a policy that was not widespread.

 

Plenty of investors still believe the U.S. economy is still just one shock away from another crash. But a hard look at the data shows that point of view simply doesn't hold water.

Look at the latest bullish housing market data for March -- including stronger permits and sales. Or check out the host of stocks raising dividends now that they're cash-rich once more. The list goes on.

If you're still turning up your nose at talk of the recovery, there's probably little that can be done to change your mind. But if anything will convince even the bearish bear that things aren't so bad, it's a set of charts showing strength in nearly all of the major economic indicators. Take a look:

 

So was that good news or bad news that Potash of Saskatchewan (POT) announced Wednesday?

For the first quarter of 2010, the company reported earnings of $1.47 a share and revenue of $1.71 billion. Both numbers beat Wall Street projections of $1.32 per share for earnings and $1.48 billion for revenue.

Clearly good news. But then the report gets confusing.

 

There might be a chance that the Securities and Exchange Commission's case against Goldman Sachs (GS) could head to a settlement.

That's the conclusion of Bloomberg BusinessWeek, which parses some of Goldman's recent statements and sees the company signaling for a deal.

Case in point: Arthur Levitt, a former SEC chairman who is now an adviser to Goldman. "This is a suit which I think should be settled promptly, not just for Goldman Sachs, not just for the industry, but for the economy as a whole," he told Bloomberg TV.  

By Andrea Tse, TheStreet

 

Ford (F) stock tumbled 2.4% on Wednesday as mixed forecasts about the company's upcoming quarters emerged -- despite the company's strong first-quarter results.

 

The reaction has hardly surprised Ford equity analysts.

 

"Ford has had a strong run over past year, so it's not surprising that people have locked in profits," Standard & Poor's analyst Efraim Levy says. "The question is, what will you do for me next?" Craig-Hallum Capital analyst Steve Dyer says "it's natural that people would begin to question how much upside is left."

 

People hang on every word Steve Jobs says. So when the Apple(AAPL) chief executive writes a long letter bashing another company's product -- well, it's the talk of the tech world.

That happened Thursday, when Jobs released 1,671 words about the Flash software system from Adobe (ADBE). Adobe shares dropped a couple of percentage points in response but were recovering at midday, while Apple shares were up slightly.

The letter may have been a defensive move in part, since Apple has taken a lot of heat for banning Flash from iPhones and its new iPad tablet. Flash is so pervasive online -- it's been the go-to platform for videos, advertising and games -- that banning it was a pretty shocking step (and, in the short term at least, one that hurts the experience of Apple users). 

By Peter Morici, TheStreet

 

On Friday, the Commerce Department will report its first-quarter gross domestic product estimate. Economists are forecasting a 3.5% increase, further confirming the end of the recession and that the recovery is moderate and disappointing.

 

Unemployment will hang above 8% or 9% well into 2011, and most workers will continue to face a tough job market and declining living standards.

 

This recovery is decidedly anti-middle class. Wages won’t keep up with rising prices, health care premiums and taxes. A good deal of the gains, so far, are going to Wall Street and the medical and intellectual property industries.

 

Seattle coffee icon Starbucks (SBUX) has made a comeback in 2010 after consumers fled during the Great Recession. In order to keep the profits percolating, SBUX is looking to roll out a fresh new menu of Frappuccinos and iced coffee for the hot summer months.

Among the new options are nonfat milk and sugar-free toppings that will keep the calorie count down. Currently a grande Caramel Frappuccino (the flavor that made the cool drink such a success) has 380 calories. The light version will have 160.

But perhaps most interesting of all is Starbucks’ push to offer exotic new flavors, bottled drinks to go and even ice cream as a way to up-size its sales this summer.