Increased dividend to $0.27 from $0.25 for shareholders of record on 12/31.

As usual, the easiest way to make it back is to get on the horses that are leaders. What I did with 59 days left is figure out which companies were going to have the best quarters (e.g., Apple (AAPL), Google (GOOG), JPMorgan Chase (JPM), Goldman Sachs (GS), Salesforce.com (CRM)) and which ones had already had the great quarters (e.g., Nike (NKE) and General Mills (GIS)), and I would buy gigantic positions in deep-in-the-money calls dated January. That way, I had the exposure I needed.

Nike (NKE) has gone nowhere fast the past four months, but its Sept. 29 earnings report could help it catch up. Analysts expect revenue to slip as retailers keep inventory tight, but hesitant investors are eagerly awaiting signs that margin pressures have peaked. Nike owns half the sneaker market, but still managed to enlarge its footprint in the recessionary tumult. It has almost no debt, has $3.5 billion -- or 12% of its market cap -- in cash, and reaps 60% of its sales from the faster-growing overseas market. While analysts see profits for the rest of the market rebounding heftily, they've penciled in just $3.51 a share for Nike in 2010, versus $3.81 in 2009. That could prove conservative. And traders eventually turn back to quality after they tire of the mad chase of riskier beta. Barclays analyst Robert Drbul thinks this quarter could mark the bottom in gross margins: "Historically, this is a rewarding time to own the shares of Nike."

Buy under 50

That means you can make a lot more money on the oil-user side: retail like Kohls (KSS), J.C. Penney's (JCP) and Macy's (M); restaurants like Brinker (EAT) and Darden (DRI); apparel like Jones (JNY), VF Corp. (VFC) and Nike (NKE); as well as anything that goes into Best Buy (BBY).

Foreman likes to hang on to stocks as long as the companies remain solid businesses, an approach that ties in well with the fund's historic approach. Current positions include Nike (NKE), first added to the portfolio back in 1986. "We've owned it since basketball shoes became a 'must own' item for consumers," Foreman says.

4.3

"Meanwhile people have decided that the shopping season is back with an amazing move in Target (TGT) -- maybe people are happy that the Pershing plan is not happening! Also VF Corp. (VFC) and Nike (NKE), the two most beaten up in the group just on fire.
So much lack of safety." ("Saftey Last," 6-1-09)

Sell - Price 53.14 on May 12
by Sterne Agee & Leach

We're lowering our '09 and '10 E-EPS to $3.76 and $3.20, from $3.87 and $3.47 [driven by]...inventory build, foreign-exchange, end-market weakness, elimination of share-repurchases for next 2Qs and more severe margin pressure....We think it's likely that [sales, general and administrative spending] will come down substantially in the next 2Qs, but will resume growth in '10 second half as Nike positions itself for the Euro Cup and continues to combat Adidas and local brands in China. Target: 43. Market cap: $29.5 billion.

Strong brand solid earnings.

Nike