While the talking heads on CNBC were going ga-ga about the Mighty Dow hitting six-year highs, it's up only 11.4% since we signaled the beginning of the uptrend on October 21, 2005. The iShares MSCI Brazil, (EWZ), soared 44.94%, iShares MSCI Korea, (EWY), rocketed 36.89%, and the iShares S&P Latin Am, (ILF), exploded 36.52% over the same time period. Stock markets around the world have out-performed the U.S. market by a wide margin. So how does one get in on the action? This question is like asking who's buried in Grant's tomb. Use ETFs, of course.

I first wrote about ETFs on September 9, 2000. Back then, we had only 67 ETFs in our database, but they were increasing in popularity. Today we have 228 ETFs in our database and are adding more regularly. We accumulate them in an Industry Group called Market(Baskets). So they are easy to find and use. It is important to know that we do not attempt to assess ETFs for Value or Safety, but we do track their performance with our Relative Timing indicator, RT. We also give Buy, Sell, Hold ratings on each ETF. We demonstrated how one might manage a portfolio of ETFs in last week's "Strategy of the Week," which you may see by visiting the VectorVest University.

ETFs are portfolios or baskets of stocks, having something in common, which are traded just like common stocks on the American and New York stock exchanges. Many of them have options. The theme or common factor identifying an ETF is usually obvious from its name, and range from countries, to businesses, to commodities and to mimicking indexes. They offer the benefits of trading select mutual funds at less cost and more convenience. And they provide investors with an excellent way of diversifying their portfolios, reducing risk and entering hot markets or market sectors that they otherwise would not. I particularly like to invest Around The World With ETFs.

MICROSOFT'S MISERIES.
Bill Gates and his buddies were at the right place at the right time in the 80's and they did the right things. They were fabulously successful. This success allowed them to write the rules and dominate their industry. Like several other great American companies, they were sued by the U.S. government for having monopolistic powers. Although they ultimately settled this and many other lawsuits, they were never the same.

Clearly, Microsoft needs better management. I'm not talking only about their inability to get quality products to market on budget and on schedule, I'm also thinking about their financial management. In 2004, they chose to issue a cash dividend of $3.00 per share. Total cost was about $32,000,000,000. As I predicted, the cash dividend did nothing to raise the price of the stock.

I would have preferred that they spend the money buying back their own stock and institute a regular program of buybacks. Although they have over 10 billion shares outstanding and they say they need to spend more money to fight Google and Yahoo!, they still generate billions of dollars of cash each month. By now, they could have reduced the number of outstanding shares by as much as twenty percent. It seems to me that its stock price would not be languishing at $24 per share had they driven their earnings per share up by an additional 20 percent.

Now they have another $50 to $60 billion in cash. They should use it to drive up the price of their stock. Otherwise, their shareholders will continue to suffer from Microsoft's Miseries.