|Wed, May 15, 2013|
Symptoms Don't Lie
A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools.
When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments.
This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs.
|Tue, May 14, 2013|
Warning: How the Bond Bubble Will Secretly Sabotage Your Retirement
A tool intended to make retirement investing easier may result in many Americans taking an unwitting hit to their portfolios when the bond bubble finally pops.
We're talking about target-date funds, designed to be "set it and forget it"-style retirement vehicles for people who don't want to bother with actively managing a portfolio.
Such funds usually include a combination of stocks and bonds, with the ratio dependent upon the investor's retirement date.
When retirement is 25 years or more in the future, target-date funds typically hold about 90% stocks and only 10% bonds. But as time goes on, target-date funds shift the balance more in favor of bonds, with the intent of reducing exposure to risk and volatility.
By the time retirement is 15 years away, the balance is 75% stocks and 25% bonds. And when that nears to just five years away, bonds generally rise to about 40% of the portfolio.
So as we edge closer and closer to higher interest rates and the negative impact that will have on bonds - the dreaded bond bubble - many workers approaching retirement are slowly adding more and more exposure to it.
What's more, many future retirees may not even know it.
Follow Africa's Richest Man Into One of the Best Profit Opportunities on Earth
Aliko Dangote is the richest man you've never heard of.
The 56-year old native of Kano, Nigeria is a self-made business magnate, with a net worth of more than $16 billion.
With boom times ahead for Africa, Dangote is leading the continent's headlong charge into infrastructure building and resource exploration.
A person of vision and drive, he's well suited for the unfolding boom, and all the opportunity it offers.
As the African Century moves into its second decade, Dangote is still very bullish on Africa-- making - and keeping - most of his fortune there.
15 Obamacare Facts the President Doesn't Want You to Know
From the first rumblings of a new healthcare law, critics have preached that the real Obamacare facts are far worse than the promises.
The real Obamacare facts include higher healthcare costs, diminished treatment quality, hidden taxes and an inflated deficit.
"Obamacare was a political nightmare for Democrats in the 2010 election. In 2014, it's shaping up to be a political tsunami," Brad Dayspring, a communications strategist for the National Republican Senatorial Committee wrote in a recent email to supporters.
Indeed, President Obama's own party is even having second thoughts.
Bear of the Day: Monster Beverage (MNST) – Bear of the Day
Disappointing results and rising regulatory concerns have led to sharp downward estimates revisions, sending this energy drink company to a Zacks Rank # 5 (Strong Sell). About the Company Headquartered in Corona, California, Monster Beverage is a marketer and distributor of energy drinks and alternative beverages. Heath Risk Concerns related to Energy Drinks While the [...]
Sprint Gets a Boost From ISS – Analyst Blog
Sprint Nextel Corp. (S) – the third-largest wireless carrier in the U.S. – gets Institutional Shareholder Services’ (ISS) support for its plan to completely acquire its subsidiary, Clearwire Corporation (CLWR). ISS offers valuable investment decisions and corporate governance solutions to the leading financial institutions and investors. Thus, the support of such an important body will [...]
Natural Gas Companies Attempt to Make Fracking Safer
Hydraulic fracturing, or fracking, is the most important energy industry development in the past few decades, unlocking value for U.S. natural gas companies.
Its extensive use in the United States is completely reshaping the world energy scene.
But there is one question that lingers over the U.S. energy industry: Is fracking safe?
One of those saying fracking is 100% safe is sometimes controversial oil billionaire T. Boone Pickens.
Exclusive Interview: Protecting Yourself from the Worst of Obamacare
Even its staunchest supporters are beginning to worry it's a "train wreck."
But the truth is there's no fixing it now.
In less than five months, on Oct. 1, the Affordable Care Act's insurance exchanges will go live online. Soon for millions of Americans, Obamacare will become a reality.
But are you prepared for the changes Obamacare promises to bring? Or are you still completely in the dark?
If you are anything like the majority of Americans, you likely have no idea about the changes your "new healthcare" will bring.
This issue is so important and misunderstood we had our own Frank Marchant interview one of the country's foremost experts on the Affordable Care Act.
Her name is Betsy McCaughey. And unlike the politicians who put this bill together, she has actually read the entire thing-all 10,000-plus pages.
She is the author of the book: Beating Obamacare: Your Handbook for the New Healthcare Law.
In our exclusive interview below you'll learn:
Of course, there's much more to it than that. In fact, the dangers are likely greater than you realize, so feel free to forward this to anyone you think this information may help.
Also, if you have any questions you'd like Ms. McCaughey to address in a future interview, please leave them in the comments below.
Three Reasons to Buy Gold Stocks Today
A strong stomach and a tremendous amount of patience are required if your invested in gold stocks these days, as miners have been exhibiting their typical volatility pattern.
That's why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500's was just under 15 percent.
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons:
|Mon, May 13, 2013|
Don't Bet Against a Surging U.S. Dollar
In the midst of a brewing currency war, Japan's out-of-control monetary policy has caused the yen to fall to an almost five-year low against the U.S. dollar.
With an economy one-third the size of that of the United States, Japan has committed itself to a fiscal program that's almost double the U.S. Federal Reserve's current $85- billion a month stimulus.
Like any other war, this battle of monetary-easing measures won't end well, but fortunately for Americans, it's looking more and more likely that the dollar will emerge victorious.
"Right now, the U.S. dollar is the 'cleanest dirty shirt in the laundry,' so I'd buy it," said Money Morning Capital Waves Strategist Shah Gilani.
The dollar now stands at 101.93 against the yen, the first time it's broken the 100 mark since 2009, and is up 26.6% in the past six months.
Many experts are now predicting the dollar's climb has just begun and some analysts see the dollar hitting 105 yen this summer and possibly 110 by the end of the year.
"The turn in yen has been dramatic and has proven the importance of momentum when a multi-year cycle turns," Nomura currency expert Jens Nordvig wrote in a note to clients. "A similar dynamic could be in store for the dollar. In the scheme of things, the USD REER [Real Effective Exchange Rates] is still trading close to multi-decade lows. Once the turn is evident, we believe momentum could be powerful."
Here's why the U.S. dollar's run is just beginning.
Silver Prices: The Best is Yet to Come
It's hard not to get a bit nostalgic about silver prices.
I find myself reminiscing about April 2011 when the white metal ended the month at a sterling $48.70 an ounce after hitting an all-time intraday high of $49.51. That record surpassed the previous high of $49.45 set three decades earlier when the Texan Hunt brothers set out to corner the silver market.
Since the 2011 peak, the S&P has roared higher by some 50%, while the value of silver has tumbled 53%. That's not nearly as bad as the drop silver experienced between its Hunt brothers induced high on Jan 1, 1980 through its low on June 21, 1982, when silver fell a devastating 90%.
Those declines are a reminder of just how volatile the metal's price can be. But with great risk comes great reward, and we see record-breaking gains ahead...
Good Stocks to Buy Now as this Sector Begins its Lucrative Recovery
Billionaire investor Wilbur Ross earlier this month once again suggested that the shipping industry is ripe for investment, presenting a handful of good stocks to buy now.
Ross knows how to spot a beaten-down sector and turn its brightest opportunities into mega-profits. This "vulture investor" previously invested in troubled sectors like coal, steel, and auto parts and cashed out years later with enormous gains.
This time, appearing on CNBC, Ross said that shipping companies were the next growth story.
In fact, earlier this year Ross told Bloomberg TV that he plans to invest as much as $2.5 billion in the shipping sector.
Here's why Ross is looking for good stocks to buy now in this beleaguered industry.
Is Linn Energy a "Buy" After Another Bear Attack?
Linn Energy LLC (Nasdaq: LINE) is facing its second bear attack of the year and the catalyst is another Barron's article.
As in the first attack, the publication is again questioning Linn's accounting methods and whether the company can maintain its robust dividend, which now stands at 8.3%.
The recent slam stated "Linn Energy may be the country's most overpriced large energy producer" and went on to say shares "may be worth less than half of their current quote, based on a range of financial measures, including book value, cash flow, and the value of energy reserves."
Barron's initially questioned how Linn accounts for its hedging of gas and oil prices in a Feb. 18 article. While those concerns still remain, Barron's now addresses a concern with Linn's core business, flattening energy production.
In the first quarter, Linn had total energy production averaging 796 million cubic feet per day, below the 800 million cubic feet a day in the fourth quarter of 2012 and up only 1.8% from last year's third-quarter production of 782 million cubic feet.
However, Linn recently announced a deal to acquire oil company Berry Petroleum Co. (NYSE: BRY), which gives Linn a better balance of oil and natural gas reserves.
That deal is expected to close later this year and when it does, Linn expects to raise its quarterly dividend from 72.5 cents to 77 cents. Linn is the eighth-biggest master limited partnership in the U.S., and the largest energy producer structured as an MLP.
Retail investors have flocked to Linn and especially its counterpart, LinnCo LLC (Nasdaq: LNCO), which was created to buy LINE stock and offer investors interested in LINE the tax benefits of an MLP without the extra tax work associated with owning one. Since it started trading last October, LNCO, which pays a 7.5% dividend, had been up 12% before LINE's recent slide.
So after the recent selloff, are high-paying dividend stocks LINE and therefore LNCO "Buys," or stocks to avoid?
Stock Market Today: Starting the Week in the Red
The stock market today (Monday) paused on news that a U.S. Federal Reserve policy shift may not be as far away as people think.
Just before noon, the Dow Jones Industrial Average was lower by 34.22, or 0.23% at 15,084.27. The Standard & Poor's 500 Index was flat at 1,632.97. The Nasdaq eked out a 0.02% gain, or 1.08 points, at 3,438.12.
Last week, equities continued their seemingly unstoppable climb with the Dow and the S&P closing at records several times. The Dow ended the week up 1%, the S&P 1.2%, and the Nasdaq 1.7%.
Now with all three indexes up 15% year-to-date, many investors have turned cautions.
ArcelorMittal Posts 1Q Loss, Reaffirms Outlook – Analyst Blog
Steel bellwether ArcelorMittal (MT) posted a net loss of $0.3 billion or 21 cents per share in the first quarter of 2013 compared with a net income of $92 million or 6 cents per share a year ago. Analysts polled by Zacks were expecting earnings of 7 cents a share on an average for the [...]
Bull of the Day: XL Group PLC (XL) – Bull of the Day
Financials have been strong performers in this latest leg of the recovery, as these once beaten down companies have come back strong over the past six months. Yet while many investors might focus in on big banks for their exposure to this segment, one corner of the financial world has been doing even better; insurance. [...]
Energy Among the Best Investments from Ira Sohn Conference
There was definite energy spin this week at the 18th Ira Sohn Investment Conference at New York's Lincoln Center. In fact, at this an annual gathering of some of the world's influential money managers and investors, energy was applauded as one of the best investments to make now.
Some 3,000 guests paid as much as $100,000 (proceeds benefit pediatric cancer resesarch) to hear what 17 of Wall Street's lucrative members had to say about the stock market. Each had some 15 minutes to share their picks, pans and opinion.
Clearly, energy was a favorite, as Barron's outlined in its Ira Sohn coverage this week.
Here's a roundup of what these money managers consider to be the best investments in the industry.
Buy, Sell or Hold: Is Lennar's Big Move Just a Sign of Another Housing Bubble?
All you have to do is look at a price chart of Lennar Corp (NYSE: LEN) to see the proof that the U.S. housing market is on the mend.
Since January 2012, shares of the Miami, Fl.-based new homebuilder have more than doubled.
In fact, since the industry nearly collapsed six years ago, new-home construction for builders like Lennar is now clearly on an upswing.
According to the March 2013 report from the U.S. Commerce Department, new home construction was on pace for more than one million units for the first time since the gaudy days of June 2008.
Much of this home-buying fervor can be attributed to a few important points:
1. A pent-up demand that has built up over the last six years,
2. Low inventories,
3. And an outrageously low interest rate environment thanks to the Federal Reserve.
The question now is whether or not the "Housing Bubble 2.0" still has legs, making Lennar Corp. a smart new buy with plenty of room to run.
Is Lennar Still a Buy?
Of course, evaluating Lennar on its own merits is a fine exercise in due-diligence.
Three "Abenomics-Proof" Investments
The Japanese Topix Index is up more than 40% this year (and nearly 71% since July 2012) thanks in large part to Prime Minister Shinzo Abe's unlimited stimulus initiative known euphemistically as "Abenomics."
The argument behind this spending is a classic one, at least in economic terms: stimulate the economy to produce higher inflation, weaken the currency and aid the exporters.
But like Fed Chairman Ben Bernake's spending here and Draghi's spending in Europe, it's ultimately going to fail.
Sure the short-term effects are great...a wildly enthusiastic stock market that's trading at the highest levels seen in 4.5 years, a relaxation of risk and fresh strength in export focused companies that are showing stronger results on a devalued Yen. No question, I'll take a bull market any day.
It's the hangover I'm worried about - nobody knows how long this run will last.This is especially problematic because most investors don't have the discipline needed to trade in and, of course, out when the party stops.
|Sat, May 11, 2013|
Top 5 Zacks #1 Ranked Technology Mutual Funds – Best of Funds
More often than not the technology sector is likely to report above par earnings than other sectors as the demand for technology and innovation remains high. However, technology stocks are considered to be more volatile than other sector specific stocks in the short run. In order to minimize this short term volatility almost all tech [...]
Double Your Money in No Time Flat
If you're looking to double your money, the biotech sector is one of the best hunting grounds that you'll find.
So far this year, for instance, the iShares NASDAQ Biotechnology Index (NASDAQ: IBB) - an ETF that's a great proxy for the sector - has zoomed 28.2%, more than double the 13.59% SPDR S&P 500 Index ETF (NYSEArca: SPY). The IBB gained 31% last year.
And a lot of individual biotech stocks have actually doubled, tripled or more - the Holy-Grail type of gains that high-tech investors crave.
But there's a problem.
You see, not all biotech stocks are created equal.
|Fri, May 10, 2013|
These Gas Tax Hikes Will Make Driving A Lot More Expensive
Americans worried about how rising oil prices might affect prices at the pump are about to get blindsided by looming gas tax hikes that almost guarantee higher gasoline prices.
And it's not just state governments looking to shake down American motorists.
Alarmingly, the International Monetary Fund (IMF) has called for the U.S. government to increase the current federal gasoline tax of $0.184 per gallon by a whopping $1.40.
In a March 26 speech, IMF Deputy Director David Lipton said the gas tax hike would pay for social programs around the world as well as to save the environment.
"The time has come for subsidy reform and carbon taxation," Lipton said.
This federal gas tax hike, if imposed, would add $14 to a typical 10-gallon fill-up and hundreds of dollars to the annual cost of driving.
Fortunately for U.S. drivers, few in Washington support the IMF proposal.
"Higher gas prices hit those who can least afford it the most as American families are forced to pay a larger percentage of their income on higher energy prices," Rep. Fred Upton, R-MI, chairman of the House Energy and Commerce Committee, told Fox Business. "Drivers across the country are already struggling to pay up to $4.00 a gallon for gas, and further price increases at the pump could be devastating to low- and middle-class families and disastrous to our economic recovery."
Now if only state legislatures felt the same way...
Distressed Debt Investing Now a Favorite Move for Hedge Funds
Regulators have demanded that banks stop engaging in so much risky behavior - chiefly, distressed debt investing. And the banks have begun to curtail this type of investing.
But this has led to an unprecedented - though not unpredictable - situation: It seems the hedge funds are picking up the slack.
The distressed debt that banks are leaving behind is getting bought up, in a big way, by credit hedge funds. Fully $108 billion worth of distressed debt investments is being picked up by these groups.
Hedge funds are not as big as the large banks, with assets running "only" into the mid-hundreds of billions. But the more moves they make, the bigger they become.
Hedge funds, money-market funds and REITs - engines of shadow-banking - have exploded recently, in terms of capital and headcount. And top talent - for top dollar - has been leaving companies like Deutsche Bank AG (NYSE: DB) and Barclays Plc (NYSE: BCS) for the greener, riskier pastures of BlueCrest Capital Management and Pine River Capital Management.
Hedge funds are less regulated than banks, because they cater to a savvier investor with different goals than someone who has a run-of-the-mill checking, savings or retirement account. Grandma is not opening up a Christmas Club account for you with the likes of Carl Icahn - yet.
This freer atmosphere makes hedge funds the natural place to turn once you begin to rule out banks. They've become "shadow banks," and they've been getting into some pretty interesting areas.
Their investment in bankruptcy claims and distressed debt is of particular note.
If this Works, Facebook Stock Could be the "Buy of the Decade"
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Can Anything Stop These Soaring Southeast Asia ETFs? – ETF News And Commentary
The Association of Southeast Asian Nations, or ASEAN for short, and their economies have had a long tradition of enticing investors from all over the globe. This is because the market is an attractive destination for domestic and foreign investors thanks to solid growth rates, booming populations and generally good governance when compared to other [...]
Has the Great Gold Crash Divorced Bullion from Futures Prices?
In mid-April, a black swan crash-landed on the gold market.
Over just two trading days, gold futures prices shed 13%, falling from $1,575 to $1,375.
That $200 cliff dive was the largest two-day drop in 33 years.
Gold prices already had been in steady consolidation mode for 18 months. But the magnitude and swiftness of this dramatic move were rare...to the point of suspicion.
How did markets react? Unlike almost anyone expected.
What caused such a landslide, and who may be behind it? More importantly, what are the implications for the precious metals markets moving forward?
The conclusions will surprise you -- and help you invest more wisely.
Best Investments 2013: How the Mining Mess Will Send Platinum Soaring
Thanks to the hit gold prices took in mid-April, other precious metals also got caught in the downdraft - but some still look to be among the best investments of 2013.
Take platinum, for example.
It is currently trading at about $1,500 an ounce, well off its 52-week high of $1,734 an ounce. During the height of the selloff last month, it touched a low of $1,381 an ounce.
Investors sold it along with all other precious metals, even though the fundamentals for platinum may be better than ever.
While platinum's long-term outlook is bright, a short-term price catalyst is about to take place, as early as this week.
The world's biggest platinum producer, ANGLO American Platinum (Amplats), could take a significant amount of platinum off the market. The restructuring could cost 14,000 jobs and close two South African mines.
It'll also help drive a supply deficit that will only expand in the years ahead, making platinum one of the best investments to make now before prices soar.
No wonder Sprott Holdings' Rick Rule bought $280 million worth of platinum and palladium earlier this year...
What You Absolutely Need to Know About Money (Part 7)
By the start of the 1960s, banking in America was in a state of flux.
Boundaries were being blurred - especially those separating "commercial banks" and "investment banks" under Depression-era Glass-Steagall parameters. The banking landscape was shifting. In fact, it was about to go volcanic.
The Truman Administration had championed the break-up of bank cartel arrangements, whereby a powerful coterie of commercial-bank bond underwriters controlled how corporations financed debt and who got to distribute bond offerings. Subsequent regulatory changes (requiring bidding for underwriting assignments) broke up the "Gentleman Bankers Code," which had been code for cartel.
A more competitive landscape drove banks to expand. Branch banking spread through shopping malls and onto prime locations on America's Main Streets.
The hunt for deposits was on.
And it got ugly fast...
|Thu, May 09, 2013|
How to Make $2 Million in One Interstate Drive
If you think you're in the wrong line of work, and barely making ends meet, maybe what you should be doing is running cigarettes north along the I-95 corridor, from Virginia to New York.
No, seriously - because some enterprising individuals have a lucrative sideline doing just that.
The Bureau of Alcohol, Tobacco, and Firearms has even put an exact number on just how lucrative.
The ATF says smugglers could make $1,944,000 running just one truckload of cigarettes from a low-tax jurisdiction like Virginia to a high-tax jurisdiction like New York.
In Virginia, tax on a pack of smokes is just 30 cents, compared with a whopping $4.35 per pack in New York. New York City's local tax is even higher, with $11 packs of Parliaments not at all uncommon.
Fully 24% of all cigarettes sold in Virginia are taken out of the Old Dominion to places with a less-favorable tax scheme.
The New Crisis Warning Just Issued to the Federal Reserve
Before the housing market crash, economists warned that record low-interest and mortgage rates were fueling a housing bubble.
Unfortunately, those fears were both overlooked and underestimated.
Now, an advisory council to the U.S. Federal Reserve is warning the Fed that its record $85 billon-a-month stimulus and ultra-low interest rates are fueling new bubbles in student loans and farmland.
"Recent growth in student-loan debt, to nearly $1 trillion, now exceeds credit-card outstandings and has parallels to the housing crisis," according to minutes of the council's Feb. 8 meeting.
These warnings come from the Federal Advisory Council, a panel of 12 bankers chosen by the 12 Federal Reserve banks, which consults with and advises the Fed. Members of the council include the CEOs of Morgan Stanley (NYSE: MS), State Street Corp. (NYSE: SST), BB&T Corp. (NYSE: BBT), Bank of Montreal (NYSE: BMO), Capital One Financial Corp. (NYSE: COF) , U.S. Bancorp (NYSE: USB) and the former CEO of PNC Financial Services (NYSE: PNC).
What's more, the council warned the Fed in September that QE3 and its plan to buy bonds indefinitely would distort bond prices and have a limited impact on the economy and that "uncertain effects" will arise from the eventual unwinding of the balance sheet, including "risks to price and financial stability."
So while Uncle Ben likes to remind us that the Fed will step in and take appropriate fiscal measures when necessary, the central bank's own council believes the Fed's actions are doing more harm than good.
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