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Posts Tagged ‘business’

55 Reasons Why California Is The Worst State In America

December 13th, 2012

Michael Snyder: Why in the world would anyone want to live in the state of California at this point?  The entire state is rapidly becoming a bright, shining example of everything that is wrong with America.  It is so sad to watch our most populated state implode right in front of our eyes.  Read more…

Economy, Government

Why Changes In Tax Law Will Devastate Our Economy

November 20th, 2012

Michael Snyder: If you have a farm or a small business, would you like to pass it on to your children when you die?  Well, unless Congress does something, it is going to become much, Read more…

Economy, Government, Markets

Economy: Hostess Adds To The Massive Tsunami of Post-Election Layoffs

November 18th, 2012

Michael Snyder: Can you hear that sound?  It is the sound of the air being let out of the economy.  Since the election, there has been a massive tsunami of layoffs and business failures.  Read more…

Economy, Government, Markets

Why America Is The Most Materialistic Society In The World?

September 20th, 2012

When it comes to materialism, has any nation ever surpassed what we are seeing in the United States right now?  We define our lives by how much stuff we have, to a large degree our personal and business relationships are defined by how much money we make, and even most of the important Read more…

Economy

A New Risk Indicator To Sidestep Market Downturns: Is It Better Than VIX?

November 14th, 2011

Without question the most popular model to predict market crashes is the VIX, commonly referred to as the “Fear Gauge,” a market index that measures the implied volatility of the S&P 500 index options. Its concept is quite simple, when the uncertainty and fear among Read more…

ETF, OPTIONS, Uncategorized

CANCEL your Weiss subscriptions and I will “pay” you $9,581!

June 12th, 2011

The powerful economic changes we’ve been warning you about have now begun to hit the U.S. economy where it hurts.

So to help make sure you’re completely ready for the huge volatility ahead, I want to change our relationship in a very fundamental way.

To make that possible, I will “pay” you $9,581 to immediately cancel your current Weiss Research subscription, and in a moment I’ll explain exactly how and why.

That’s nearly $10,000 for you.

All you have to do is decide whether you want to accept it or not.

But don’t worry: If you decide to go for it, I’ll still be there for you through thick and thin. So will Mike Larson, Larry Edelson, Nilus Mattive, Sean Brodrick, and everyone else on our team.

In fact, if you cancel your subscriptions right now, you can get ALL of the services and profit opportunities that ALL of our analysts offer for as long as you want, and STILL get the $9,581 IN ADDITION to all our services.

Unbelievable? Perhaps. But it’s true.

You cancel your subscriptions. You get EVERYTHING we publish today — every service, every recommendation, every video or email.

You get them FOREVER.

Plus, you’ll also get ALL the new Weiss publications we introduce in the future.

And on top of everything, you get “paid” $9,581!

Yes, I agree. It IS hard to believe. But it’s a fact. And by the time you finish reading this letter, you’ll know everything you need to know to claim your $9,581.

It’s an opportunity that I am offering exclusively to a small, select group of our subscribers, but only for TEN DAYS. The opportunity expires promptly at midnight, Saturday, June 18th. I have selected this ten-day window right now because of the dramatic events that have just begun to unfold!

Nationwide, housing prices have just made new lows. Unemployment is rising again. We have an obvious downturn in the U.S. economy.

We see a rapid deterioration in U.S. bank finances.

Plus, we are facing landmark budget battles in Washington — and a Congress sworn to block any major new bailouts or stimulus schemes.

I don’t want you to be hurt by the fall-out or miss any of the dramatic opportunities this crisis has already begun to generate.

Plus, there’s another, very practical reason I have limited this offer to a small group of investors and strictly for this ten-day window: Because of the mixed impact this kind of monumental give-away can have on my business.

I’ve been running this company without interruption for 40 years straight, and if you consider the legacy of my father’s companies before me, we have an 80-year Weiss family tradition of guiding investors to safety and wealth building opportunities.  

I’m in great health and have a solid team of successors to keep the business going for decades to come.

So now let me explain the new kind of relationship we can have and how it works:

It’s my Weiss Inner Circle.

My Inner Circle is the most intimate, most elite, and most private group of friends and clients among our entire family of 400,000 readers and subscribers.

The idea is very straightforward: You get every newsletter, every VIP trading service, every rating, every research report, and EVERY PROFIT OPPORTUNITY that ALL of the Weiss divisions currently have to offer.

You get every single Weiss publication we launch in the future. You get them for as long as we publish them — and as long as you want them.

You get all that FOR LIFE — for less than the cost of just ONE YEAR of those services.

You’ll receive our in-depth monthly investment newsletters — the widely acclaimed Safe Money Report, Real Wealth Report, Income Superstars, Crisis Profit Hunter and Asia Stock Alert.

You’ll get our high-end global VIP trading services, including Emerging Market Winners, International ETF Trader, Red-Hot Global Resources, and Crisis Trader.

You’ll be welcomed with open arms to our million-dollar portfolios, which, with this rare exception we’re making for you now, are CLOSED to all new investors!

They include our Million-Dollar Contrarian Portfolio, our Million-Dollar Rapid Growth Portfolio and our Weiss Million-Dollar Ratings Portfolio.

To underscore my confidence in these investment approaches, I have invested $1 million of my own money in each one! And you can not only track what I do with my own money but actually buy or sell BEFORE I do.

You’ll get our fast-paced, ultrahigh-profit-potential options research services, including Resource Windfall Trader, LEAPS Options Alert, and World Currency Trader.

Perhaps most exciting of all, you’ll be among the first to get the new Weiss service we’re getting ready to launch in a few weeks — not to mention all the new ones we introduce in the months to come.

Plus, There’s One Big Extra Bonus
You’ll Receive That No One Else Will.

You see, up until now, whenever our analysts in Asia, Europe, Latin America or right here in the U.S. have come across major profit opportunities in certain, unique small, but innovative companies, I’ve told them NOT to recommend them.

As you might imagine, this has frustrated the hell out of our analysts who find precious little gems they’d love to recommend to their subscribers.

Still, I have drawn a line in the sand on this issue. We simply cannot recommend these investments to thousands of investors. It would make it difficult for investors to get in — or out — at a fair price.

And that’s a shame — because as you know, it’s these smaller companies that can often post some of the most explosive gains!

The great news is, you can have full access to these kinds of recommendations as a member of my Weiss Inner Circle!

Since my Weiss Inner Circle is a very intimate, VIP group, I have given our analysts the green light to recommend these special opportunities exclusively to Weiss Inner Circle members.

This way, savvy investors like you can take advantage of these stellar, extremely high profit potential companies all over the world.

The profits from just this one benefit ALONE could cover the entire cost of membership in my Weiss Inner Circle.

In addition,

You’ll Be Among the Very First to
Get the Brand-New Service We’re
Launching THIS Month!

It’s devoted to an extremely high-powered new investment vehicle.

We’ll give you the opportunity to try it out before virtually everyone else in the world.

And then when we launch it to the general public, it will cost at least $2,500 PER YEAR. But it will be yours FOR LIFE with your membership in my Weiss Inner Circle.

And there’s more.

In recent months, we have inaugurated some incredibly valuable services and offered them FIRST to Weiss Inner Circle members.

For example, members of our Weiss Inner Circle were the first to gain unlimited access to the proprietary research we have on 40,000 companies and investments.

That includes every public company in the U.S., ranging from the smallest upstart to the largest blue chip. Plus, it also includes every exchange traded fund (ETF) and mutual fund.

We also cover nearly every U.S. bank, credit union, and insurance company.

And all of this research is based on the objective ratings we originally developed.

If you want our research on any institution, you can get it instantly. If you want reports on a hundred institutions of your choice, they’re yours.

Or if you want our help to SEARCH through the strongest among THOUSANDS of institutions, that’s also a part of your membership.

Grab our research as often as you like …

Claim as many reports as you like …

There are absolutely NO LIMITATIONS!

The more investments you have, the more banks or insurers you do business with, and the more you use this incredibly timely, accurate resource, the more profitable it could be for you.

Value: Immense and unlimited!

And there’s another very unique benefit to my Weiss Inner Circle — a benefit that flows directly and naturally from our 80-year history. It’s the Weiss Family Program, which I’ll explain to you in just a moment.

But …

Please Don’t Underestimate the
Exclusive Value of This Membership.

I will never send this invitation to the general public.

I am sending this invitation exclusively to our most loyal subscribers, representing only a small fraction of our readers. And we have set aside only a very tiny number of Weiss Inner Circle memberships — enough for only 2% of our loyal subscribers.

So I am asking you not share this invitation with anyone else.

Now, if you know me, you know I devote a lot of my time and heart to helping the average investor. So I’d love to help everyone if I could. But since many of the investments made available to our Inner Circle members are often smaller special opportunities, we MUST strictly limit the number of memberships we make available.

That’s why I’d like you to keep this to yourself and your closest family members only.

Most important, I recommend that you NOT wait until the end of this ten-day window. Membership is first come first served. If all the available memberships are taken BEFORE the last day, we will close the doors sooner.

In other words, the BEST time to collect your $9,581 is right now.

So now let me explain precisely how you can effectively get paid $9,581 — and at the same time cancel your Weiss Research subscriptions.

Remember what I said at the outset: A membership in the Weiss Inner Circle costs LESS than one year of the services that members receive.

You can get a lifetime membership in all our investment newsletters … all our fast-paced ETF and stock trading services … all of our million-dollar portfolios … all of our extreme high-profit-potential options services … PLUS unlimited access to our research on all 40,000 companies based on the ratings we originally developed.

And you get it all for LESS than the DISCOUNTED price of what you’d pay for a single year.

On top of that, you get all the Weiss publications we will launch in the future.

In the first year alone, you’ll immediately save a whopping $9,581! That’s how I “pay” you this money immediately.

If you got only ONE YEAR of our services and nothing more, you’d already have a huge benefit — nearly $10,000.

But that’s just the beginning …

By the second year, you’ll have saved $27,983.

By year five, you will have saved $83,189!

And in year ten, your total savings will add up to a whopping $175,199!

WITHOUT even including the value of the new services we’re going to be adding — typically a few per year.

In this letter, I’m going to tell you about many of the services you will get, including a few that sometimes go for large triple-digit gains.

But before I do, I want to make sure you understand the context.

It’s important to point out that those large triple-digit gains are NOT always possible, and you should NOT go into any of our services with the expectation that they are the norm.

Normally, most investors are thrilled to bank single- and double-digit profits, and so are we.

And typically, it’s only when great events make markets more volatile that it’s possible to make the far larger gains.

The recent huge rises in oil, gold and other commodity prices are good examples. So is the dramatic decline of the U.S. dollar recently. The collapse of major banks in 2008-2009 also provided some unique megaprofit opportunities. And with the U.S. economy now weakening, with a big budget battle looming and major new global money flows on the immediate horizon, we anticipate similar — or bigger — market moving events ahead.

But it’s also important to remember that all investments involve risk of loss. Nobody I know — including our analysts, who I feel are among the best in the world — can win 100% of the time. Losses, even losing streaks, come with the territory.

The good news is that, with expert guidance and prudent risk management, the historic events we’re now seeing in the U.S. economy, the currency markets and in commodities offer us opportunities that other generations of investors could only dream about. With that in mind, let me tell you about the first new service we’re going to be adding THIS MONTH.

It’s by the world’s most consistently successful trader I have known or probably ever will know. And what’s unique about it is that he HAS been a consistent big winner year after year.

I can’t reveal his name right now. But when I do reveal it this month, you’ll probably recognize him instantly since he’s been such a regular guest on CNBC, Fox News, CNN … and because he’s been quoted so often in the most widely respected websites, journals and blogs all over the world.

What many people do NOT know about him is that he’s been making recommendations to a very small, private group of investors who could have used them to make a fortune.

His track record since he began in 2004 through May of this year, which we’ve verified trade by trade, shows a total return — including winners and losers — of 1,133.2% — enough to make you more than 11 times richer!

If you had started with $10,000, you could now have over $120,000. If you had invested $25,000, you could now have over $300,000. And if you had started with $100,000, you’d now have over $1.2 million.

An astonishing 69% of trades were winners — and the AVERAGE return on each winner was 87.4% — nearly a double, while the average loss on losing trades was only 32%.

Of course, past performance is no guaranty of future success because the vehicles he uses and market conditions can change. But I have personally been getting his trading signals; and I’ve seen, in real time, how consistently accurate they’ve been.

That’s important. And it’s why we’ve decided to add a new service he’ll be running to our Weiss Inner Circle this month.

Normally, investors would pay up to $5,000 for his trading signals, and even if we decide to offer a discount for Charter members, they will still pay close to $2,500 — for one year. But as a member of my Weiss Inner Circle, you will get them as part of your lifetime membership.

As a member of my Weiss Inner Circle, you will also get a lifetime membership in Mike Larson’s LEAPS Options Alert.

In most respects, LEAPS options — or simply LEAPS — are just like any other stock option. They’re generally inexpensive. And their purchase offers you virtually unlimited profit potential with your risk on each trade strictly limited to their cost plus a small broker commission.

But LEAPS give you a critical advantage that ordinary options do not: They can give you far more TIME to work in your favor — up to THREE YEARS! While most other options expire in just a few months, you can buy LEAPS right now that won’t expire until 2014!

This makes LEAPS excellent vehicles for two goals that are especially critical today:

  • To serve as “crash insurance,” helping to PROTECT your portfolio against losses; and
  • To GROW your wealth rapidly — especially helpful in declining markets.

Take Phase I of this great debt crisis, for instance: Had you purchased long-term LEAPS on each of the stocks we warned you about well in advance — the very same stocks we NAMED as candidates for failure — you could have banked …

The Contrarian Trade of the Year

June 9th, 2011

The Contrarian Trade of the Year

Warren Buffet has famously advised investors to be greedy when others are fearful. Fear is common in much of the world at present. No place is causing more fear for investors right now than Greece, yet smart investors can potentially double their money when the news improves, as it usually does.

Great fortunes are made by buying when everyone else is selling. Although few remember it now, Russia defaulted on its bonds in 1998. The crisis drove Russian stocks lower by 90% in a year, while interest rates soared to more that 40%. The bottom occurred in October of that year, less than two months after the government officially defaulted on its debt. Shrewd investors were willing to buy Russian stocks at that time, and the market rewarded them with gains of about 5,500% in the decade following the crash.

The trick to crisis investing is to avoid the stocks that will eventually go to zero. Enron is the classic example of a stock that analysts loved all the way down. The rationale is always that if it was a good stock at the higher price, then it must be twice as good after falling by 50%. Sometimes that's true, but at other times, large stock declines signal a looming bankruptcy. Thankfully, technical analysis often offers a way to avoid buying the long-term losers.

Since countries in Europe have been acting like a slow-motion economic train wreck for some time, the bad news is out. The question now is when to buy. Relative strength can help answer this question. This technical measure offers a way to buy stocks large investors think are worth buying.

Studies dating back to the 1960s have shown it's important to look at relative strength in a monthly time frame. When doing that, investors who read the news will probably be surprised to learn that National Bank of Greece (NYSE: NBG) may be worth buying now.

In the middle of the chart below, we see the relative strength. The price of National Bank of Greece is declining, but the price is falling at a slower speed. The trend in the speed of the stock's price changes is actually up in the past six months, which often means the big declines are coming to an end. Technical analysts refer to this as a “bullish momentum divergence.”

At the bottom of the chart, I've included the traditional “moving average convergence divergence,” or MACD (pronounced “mack-dee”) indicator. This indicator flashed a “buy” signal in April when it turned positive, confirming that National Bank of Greece is a “buy” based on momentum. These signals are often early, but they are usually right more often than not. In fact, back-testing shows using just MACD signals to time your buys work 60-70% of the time.

Uncategorized

Apple Products vs. Platform

June 8th, 2011

Apple (AAPL) is an unusual stock for several reasons, not the least of which is the strong retail demand for the stock and a large contingent of customer-zealots who regularly worship at the altar of Steve Jobs.

Throw together the factors mentioned above, Apple’s history of important product announcements at major events and the return of Jobs and his unique talent for unveiling new cutting edge products and you get an interesting confluence of events – and expectations – at Monday’s Apple Worldwide Developers Conference.

These conferences are always abuzz with rumors and speculation about the next big thing that Apple is going to announce which will once again change the technology landscape. When is the next iPad coming? What new features will it include? When will the iPhone 5 be out? What will the next iOS and Mac OS operating systems do? What will be the implications for the devices they run? What is the iCloud and what does it mean?

In the end, those hoping for groundbreaking new products were disappointed. The iPad, iPhone, iPod, MacBook, iMac, Mac Pro, AppleTV, etc. were not on stage. Instead, the hardware devotees had to settle for innovations which were confined to operating systems enhancements and the iCloud – stuff you can’t wait in line for at an Apple store, take home and dazzle your friends and family with.

The irony is that the obsession with hardware misses the big point. New products are critical to Apple’s business, but at best it gets them a first mover advantage that is not guaranteed to endure. The truth is that from a strategic perspective the iCloud is much more important to Apple’s future than any new product, because the iCloud is a platform play that enhances the value of the full range of Apple products and services, including future products and services.

Let me illustrate this with a personal example. I have about a quarter of a century of PC-based computer experience. I probably owned two dozen laptops before I bought my first iPhone. When the iPad 2 came out, however, it was easy for me to expand my stable of Apple products. Now that I am habituated to iTunes and the App Store, it is easier for me to contemplate something like the MacBook. With all of these devices seamlessly sharing data in the background on the iCloud, the data argument for expanding my suite of Apple products becomes that much more compelling. It is a similar story for my wife, who only recently began playing with her first Apple product, the iPad. She has been so completely won over that an iPod will soon follow and then I’m betting an iPhone will be too difficult to ignore. By the time she gets around to replacing her laptop, I’m fairly sure the MacBook Air will win her over – even if she doesn’t even know what it is right now.

I suspect that something similar is in the process of happening across the globe. Many of us who have spent the majority of our careers in a PC-centric corporate environment have often found Apple products to be too much of a compatibility issue to be worth the trouble. They have been relegated to toy status rather than our central computing devices. The iCloud gives Apple a chance to convert those PC cling-ons not only to exciting Apple products and services, but to a iCloud data world that could be a platform revolution. Device-independent data sharing is just around the corner and Microsoft (MSFT), Google (GOOG) and their ilk better have a strong alternative – and soon.

As for AAPL stock, it is down about 3% since Steve Jobs took the stage on Monday. Savvy investors should be thinking more about Brian Arthur’s Increasing Returns and the New World of Business and less about the timing of new product announcements.


[graphic: Bloomberg for iPad]

Disclosure(s):
long AAPL at time of writing



Read more here:
Apple Products vs. Platform

Uncategorized

This Underused Ratio Led me to 4 Bargain Stocks Yielding As High as 7%

June 6th, 2011

This Underused Ratio Led me to 4 Bargain Stocks Yielding As High as 7%

Just because I'm an income investor doesn't mean I don't like a good bargain. However, with the S&P 500 Index up about 22% year-to-date, finding bargain stocks has become more of a challenge.

If you look at price-to-earnings (P/E) multiples, you'll see stocks aren't exactly cheap. The S&P 500 was trading at 15 times earnings at the bottom of the 2009 market collapse, but its valuation has since risen to 24 times earnings. That's a 60% improvement in two years.

Although the P/E ratio is used more than any other single metric to value stocks, there is another often overlooked but equally important metric: price-to-cash flow (P/CF). In fact, cash flow may be a better measure of financial health than earnings, since it provides a more accurate picture of a company's ability to make investments and pay debts. Cash flow is calculated by taking a company's net income and subtracting depreciation and other charges that reduce net income but don't represent cash outlays.

Companies with strong cash flow sometimes look pricey based on the P/E ratio, but are bargains when value is calculated using P/CF. As an income investor, I actually prefer cash flow-based valuations, since low P/CF stocks are usually better able to afford dividend payments (and increases), share repurchases and acquisitions that grow the business. Also, if your preference is for “safe” stocks, then a great place to begin looking is for companies with high cash flow, low P/CF ratios and modest debt.

Here are four picks that look like bargains to me based on their safety, low P/CF ratios and impressive dividend yields.

Uncategorized

US Jobs Report: More than Just a “Bump in the Road”

June 6th, 2011

Last week I was talking about how the euro (EUR) would move past 1.45 if the Jobs Jamboree was disappointing… I guess it was disappointing, because the euro is well into the 1.46 handle this morning! So… For more on the Jobs data from last Friday, here are some thoughts I had right after the number was announced…

The Jobs Jamboree last Friday was very disappointing, not just “disappointing” as I had called for ahead of time. It was so bad that without the McDonald’s hiring of 60,000 workers announced in April, the number would have been negative… But I’ve got an even larger mark against the number of jobs created in May reported by the BLS of 54,000… The BLS added 206,000 jobs in their birth/death model! Oh… But you didn’t hear about any of this on the cable news, did you? Of course not! They wouldn’t know how to investigate a government report if it was right in front of their eyes!

So… Only 54,000 new jobs created in May (and that’s not even really correct!) and at first the currencies didn’t react the way they had recently, with a disappointing jobs jamboree number… But, then the dollar was sent for a ride on the slippery slope, and the currencies got to the business at hand of taking liberties against the dollar… Did you see that guy, Goolsby (the White House Chief Economist, or something like that)? This guy continues to be the flag waver for the economy, when stuff like this gets up and smacks him in the face… Anyway… The guy I’m talking about, said that the Jobs report was a “fluke”…and a measly little bump in the road…

That’s sad, folks… Very sad, because when the government is in denial about an economy, we’re in for a bad run… Growth is slowing… The ISM said so… The leading indicators have said so… The Housing data said so, and the jobs data has said so… I guess it will be “big surprise” to the government officials when Big Ben Bernanke says this fall, that the economy needs more stimulus… They’ll still be in denial, folks… But you don’t have to be!

The thing that you normally see when a country begins to show signs of a double dip (or just a general slowing), is that interest rates will go nowhere for some time… And that’s what we have going on here in the US. Interest rates are not going higher…not now, not tomorrow, next month, or even next quarter. And if I’m right, and in the fourth quarter we see QE3, (although I’m sure the Fed will not call it that) then rates aren’t going higher the rest of this year! That gives the currencies from countries that already enjoy a rate differential to the positive, in their favor, a good bit of attractiveness. Yes… Dress them all up in their red dresses, cause we’re going out on the town!

So, that would be a currency like the Australian dollar (AUD)… that already enjoys a nice wide differential of yields (rates), and is one of the main reasons the Aussie dollar is $1.0750… Like I said the other day, though, I really feel that until the Reserve Bank of Australia (RBA) hikes rates in August, and the Fed implements whatever form of stimulus/QE this fall, the Aussie dollar will probably range trade… But that’s not so bad! Think about it… You have a currency that pays you 300 basis points (3%) more than the dollar or yen (JPY) in deposit rates, and in bond yields, you get more than 200 basis points more in a 10-year Aussie government bond versus a US Treasury 10-year bond… So… For just having funds on deposit, you’re rewarded with greater interest than you can get in the US or Japan…or even in Europe! OK… Where do I sign up? HA!

OK… I’m watching the euro actually lose some ground as I type away with my fat fingers… Seems that a German Finance Minister took it upon himself to make sure that everyone knew that the a second bailout for Greece was not certain, and that right now it’s only “suggestions”…

This guy is simply trying to throw the markets off the scent of a much stronger euro, based on a Greek bailout. I still believe that this will all be put to bed, and the can sufficiently kicked further down the road by the end of this month. The Germans don’t want to see the euro get “ahead of itself” here…

I saw this news this past weekend, while everyone was sleeping… The German newspaper, Die Welt, reported that the plan the Germans have come up with for Greek debt maturing 2012-14, is to have them volunteer to exchange this debt for new 7-year bonds… With all sorts of bells and whistles attached to the bonds to make them attractive…

You all may recall that I made this same suggestion a couple of months ago… To simply exchange present maturing bonds for longer term bonds… The only thing the holder would be out was the interest, but there could be some makeup applied to smooth out the wrinkles here… So, it’s nice to see that these guys took my suggestion!

And then later this week, in the Eurozone, the European Central Bank (ECB) will meet to discuss rates, among other things… The markets will want ECB President, Trichet, to throw them a bone, and I think that this is the meeting that Trichet puts down the tracks for a rate hike next month… Look for the words that usually signal such things from Trichet, like “vigilance” and “maintaining price stability”… If you see those, then the fix is in for a rate hike next month… Of course, ECB officials will do their best to downplay this pending rate hike, for once again they don’t want the euro getting “ahead of itself”…

Talk about a bare data cupboard! That’s what we have here in the US, this week… So, for a week, the markets are going to have to chew on the Jobs Jamboree… YUCH! … That doesn’t taste good! Not until Thursday will we see April’s trade deficit probably widen further… So, any further direction in the currencies this week will have to come from Greek Developments…

The Swiss franc (CHF) just has to be one big pain in the neck for the boys and girls over at the Swiss National Bank (SNB)… The franc is like the Energizer Bunny, and just keeps going on and on, and on, and… Well, you get the picture. The currency has no yield… But it has that “perceived title” of safe haven, which people flock to when there are geopolitical problems… Well, we’ve had more geopolitical problems in the past six months than you can shake a stick at, and the franc goes on, and on, and on…

Speaking of having a pain in the neck from a currency that just won’t behave… The boys and girls in the Brazilian government have thrown everything but the kitchen sink at the Brazilian real (BRL) to keep it from getting stronger, but to no avail… The real is back on the rally tracks and feeling stronger every day!

The Canadian dollar/loonie (CAD) continues to get dragged down by government claims that interest rates aren’t going higher… I find this to be strange, because oil is still around $100, gold is still above $1,500, and commodities, while getting whacked by claims that China would slow down, are still on the rally tracks… I think the markets are growing tired of the babble that the Bank of Canada (BOC) isn’t going to hike rates… We all know that to be a non-truth, that the BOC will hike rates again, probably when the kids go back to school!

Then there was this… Talk about geopolitical problems… This week, our friends (NOT!) over at OPEC will meet… That should be quite interesting! OPEC oil ministers brace for a stormy meeting…

Libya’s conflict likely will produce a fiery and highly politicized meeting when oil ministers of the Organization of Petroleum Exporting Countries gather Wednesday in Vienna, industry sources said. Qatar has openly sided with Libyan rebels, but other OPEC members are reluctant to follow suit because the EU hasn’t granted diplomatic recognition to the opposition government. Oil ministers are divided on whether to comply with requests from Western countries to increase production.

To recap… The Jobs Jamboree was not just disappointing, it was very disappointing, and that was even after some “adjustments” to the numbers… The weak jobs data put further question marks on the economy, and what I’ve said would happen – a call for further stimulus – comes along… That sent the dollar on a ride on the slippery slope, and the euro has traded all the way up to 1.46 this morning.

Chuck Butler
for The Daily Reckoning

US Jobs Report: More than Just a “Bump in the Road” originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
US Jobs Report: More than Just a “Bump in the Road”




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

George Soros Just Spent $455 Million on These Two Stocks

June 3rd, 2011

George Soros Just Spent $455 Million on These Two Stocks

Billionaire investor George Soros and his team of advisors take a “top-down” approach. This means they seek out big, “macro” investing themes, and then work their way down to the best ways to play that theme. Every quarter, they adjust their stakes in a range of companies, either by loading up or pulling back, while also looking to enter a few new positions.

In the most recent quarter, Soros, through his financial services company Soros Fund Management, added two brand new positions to his portfolio. Each could be viewed as a proxy for major themes playing out in the global economy.

Here's why they're worth looking into…

Adecoagro (Nasdaq: AGRO)
This ticker symbol says it all. Adecoagro owns and operates nearly 40 massive farms in Brazil, Argentina and Uruguay, a region known for fertile and productive land. Indeed, agriculture has always been the leading export in Argentina, but it also now holds the top spot in Brazil's export economy. This isn't just a play on soybeans or wheat either. It's also a play on cotton, rice, sugar cane-based ethanol, dairy cows, coffee, sugar and other commodities. This all means Adecoagro's annual results aren't subject to the vagaries of volatile prices for any particular commodity, though it surely helps that just about all the items noted above have seen a surge in price in recent quarters.

For George Soros, his $330 million investment (of roughly 27 million shares) in Adecoagro is the perfect play for the ongoing global demographic changes that are taking place. As the global population continues to rise, the amount of unused arable land continues to shrink. In addition the growing middle classe in many emerging markets are consuming ever more calories on a per-capita basis.

Beyond the demographic appeal of South American agriculture, Soros has likely spotted three other reasons to own this stock. First, operating income appears set to rise nicely in the near-term, from $74 million in 2010 to more than $150 million this year, and to $200 million by 2013, according to one of Brazil's largest banks, Banco Itau. Second, high-quality agricultural land is becoming a scarce commodity as new cities pop up in formerly rural areas of South America and Asia. Soros likely anticipates solid appreciation potential in the land Adecoagro holds. Third, Adecoagro plans to aggressively ramp up its ethanol business. Unlike the U.S. production of corn-based ethanol, which needs the help of government subsidies, Brazil's sugar cane-based approach is considered to be more cost-effective and more environmentally sound. In a world of high oil prices, sugar cane-based ethanol is likely to see rising demand.

Adecoagro pulled off a $12 initial public offering (IPO) in late January, rose higher, but now trades right at the offering price. The main reason for the underwhelming post-IPO action is in the complex nature of the company's business. In effect, investors need to figure out a value for each distinct business group. For example, the ethanol business alone is likely worth about $1 billion, according to Banco Itau. The bank's analysts think shares deserve to trade up to $16 (implying a 30% gain) over the course of this year, and perhaps well higher down the road as the company's growth plans come into focus and its real estate holdings appreciate in value.

Look for Soros to hold this stock as a key long-term position for his eponymous investment fund. For the rest of us, Adecoagro provides a way to get into farming without getting down in the dirt, as I discussed in this article earlier this year. The bottom line is that farmland has been a solid investment for a long time and will likely remain so for many years to come.

Visteon (NYSE: VC)

One of the most stunning consequences of the recent global recession was the absolute implosion of demand for new cars and trucks. Many key auto makers and their key suppliers had been used to operating with lots of debt, so when the downturn hit and sales began to slide, they either had to cut costs drastically, seek government bailouts or file for bankruptcy, as was the case with General Motors (NYSE: GM) and Chrysler in 2009. Visteon, which is an auto-part maker and a Ford Motor (NYSE: F) spin-off, couldn't avoid the maelstrom and sought bankruptcy protection as well.

But that's beginning to look like ancient history now: Visteon went public once again last October (with a much cleaner balance sheet) and saw its shares rise from about $50 to $75 before a recent pullback down to $61. George Soros' firm established a new 2.1-million share position (worth about $125 million), presumably after the stock suffered a 20% drop in just two days in early March, after announcing a year-over-year decline in first-quarter sales and profits.

Commodities, Real Estate, Uncategorized

George Soros Just Spent $455 Million on These Two Stocks

June 3rd, 2011

George Soros Just Spent $455 Million on These Two Stocks

Billionaire investor George Soros and his team of advisors take a “top-down” approach. This means they seek out big, “macro” investing themes, and then work their way down to the best ways to play that theme. Every quarter, they adjust their stakes in a range of companies, either by loading up or pulling back, while also looking to enter a few new positions.

In the most recent quarter, Soros, through his financial services company Soros Fund Management, added two brand new positions to his portfolio. Each could be viewed as a proxy for major themes playing out in the global economy.

Here's why they're worth looking into…

Adecoagro (Nasdaq: AGRO)
This ticker symbol says it all. Adecoagro owns and operates nearly 40 massive farms in Brazil, Argentina and Uruguay, a region known for fertile and productive land. Indeed, agriculture has always been the leading export in Argentina, but it also now holds the top spot in Brazil's export economy. This isn't just a play on soybeans or wheat either. It's also a play on cotton, rice, sugar cane-based ethanol, dairy cows, coffee, sugar and other commodities. This all means Adecoagro's annual results aren't subject to the vagaries of volatile prices for any particular commodity, though it surely helps that just about all the items noted above have seen a surge in price in recent quarters.

For George Soros, his $330 million investment (of roughly 27 million shares) in Adecoagro is the perfect play for the ongoing global demographic changes that are taking place. As the global population continues to rise, the amount of unused arable land continues to shrink. In addition the growing middle classe in many emerging markets are consuming ever more calories on a per-capita basis.

Beyond the demographic appeal of South American agriculture, Soros has likely spotted three other reasons to own this stock. First, operating income appears set to rise nicely in the near-term, from $74 million in 2010 to more than $150 million this year, and to $200 million by 2013, according to one of Brazil's largest banks, Banco Itau. Second, high-quality agricultural land is becoming a scarce commodity as new cities pop up in formerly rural areas of South America and Asia. Soros likely anticipates solid appreciation potential in the land Adecoagro holds. Third, Adecoagro plans to aggressively ramp up its ethanol business. Unlike the U.S. production of corn-based ethanol, which needs the help of government subsidies, Brazil's sugar cane-based approach is considered to be more cost-effective and more environmentally sound. In a world of high oil prices, sugar cane-based ethanol is likely to see rising demand.

Adecoagro pulled off a $12 initial public offering (IPO) in late January, rose higher, but now trades right at the offering price. The main reason for the underwhelming post-IPO action is in the complex nature of the company's business. In effect, investors need to figure out a value for each distinct business group. For example, the ethanol business alone is likely worth about $1 billion, according to Banco Itau. The bank's analysts think shares deserve to trade up to $16 (implying a 30% gain) over the course of this year, and perhaps well higher down the road as the company's growth plans come into focus and its real estate holdings appreciate in value.

Look for Soros to hold this stock as a key long-term position for his eponymous investment fund. For the rest of us, Adecoagro provides a way to get into farming without getting down in the dirt, as I discussed in this article earlier this year. The bottom line is that farmland has been a solid investment for a long time and will likely remain so for many years to come.

Visteon (NYSE: VC)

One of the most stunning consequences of the recent global recession was the absolute implosion of demand for new cars and trucks. Many key auto makers and their key suppliers had been used to operating with lots of debt, so when the downturn hit and sales began to slide, they either had to cut costs drastically, seek government bailouts or file for bankruptcy, as was the case with General Motors (NYSE: GM) and Chrysler in 2009. Visteon, which is an auto-part maker and a Ford Motor (NYSE: F) spin-off, couldn't avoid the maelstrom and sought bankruptcy protection as well.

But that's beginning to look like ancient history now: Visteon went public once again last October (with a much cleaner balance sheet) and saw its shares rise from about $50 to $75 before a recent pullback down to $61. George Soros' firm established a new 2.1-million share position (worth about $125 million), presumably after the stock suffered a 20% drop in just two days in early March, after announcing a year-over-year decline in first-quarter sales and profits.

Commodities, Real Estate, Uncategorized

Economy losing steam! Three moves to make now!

June 3rd, 2011

Mike LarsonI sure hope they have a lot of lipstick in Washington and on Wall Street. Because they’re going to need it to gussy up the latest economic news!

Just over the past several days, we’ve learned that …

* The economy created a pathetic 38,000 jobs in May! That was a massive 78 percent plunge from April and the worst reading since September. It also missed forecasts for a reading of 175,000 by a country mile!

These were the ADP Employer Services figures, and the government’s “official” data always differ somewhat. But ALL the latest numbers tell the same story: The job market is losing steam!

* Manufacturing activity is decelerating fast! The Institute for Supply Management’s benchmark index plunged to 53.5 last month from 60.4 in April. That was the lowest reading in 20 months, and far worse than “experts” were looking for! The service sector index also tanked.

* Home prices are setting fresh lows! The S&P/Case-Shiller Index fell 3.6 percent in March. That year-over-year decline was the worst since November 2009, and it leaves prices in 20 top metropolitan areas at the lowest level in eight years.

Latest report shows home prices continue to fall.

Latest report shows home prices continue to fall.

Meanwhile, April housing starts plunged almost 11 percent and permit issuance dropped 4 percent … pending home sales just tanked 12 percent — far worse than the 1 percent decline economists were expecting … and industrial production ground to a halt in April, confounding economists who were looking for a gain.

Treasury Secretary Timothy Geithner wrote an op-ed back in August 2010 called “Welcome to the Recovery.” Maybe he should have named it “Mission Accomplished” … because his starry-eyed optimism seems every bit as misguided as President Bush’s a few years earlier.

Economy’s Achilles Heel? It Was
“Bought and Paid For” in Washington!

How could the economy possibly be weakening again, when we just officially emerged from recession two years ago?

How could this possibly happen, when the Paul Krugmans of the world promised that if we just borrowed and spent a few gazillion dollars, everything would be peachy?

And how could we be staring down the barrel of a serious slowdown, when Fed officials like Ben Bernanke swore on a stack of bibles that quantitative easing would save the economy?

Because “bought and paid for” recoveries are inherently unstable and self-defeating! If governments and central banks could truly vanquish the business cycle by just printing, borrowing, and spending all they wanted with no consequences, wouldn’t every single one of them have done it before?

The reality is, the economic and political fallout from borrowing and spending so much eventually becomes too much to bear— and you just can’t do it anymore! I believe that’s where we are now …

The Treasury Department is strapped for cash.

The Treasury Department is strapped for cash.

The $14.3 trillion debt ceiling is putting shackles on Congress and the administration. So are global creditors and ratings agencies, who are increasingly punishing nations that think they can run up huge deficits and debt burdens.

Meanwhile, the Fed’s QE programs have wildly inflated commodity prices and jacked up our cost of living. But because the Fed can’t print jobs and boost wages — only fuel speculation by pumping the asset markets full of easy money — we’ve hit a wall. The “real economy” can no longer support these artificially inflated “financial economy” prices.

Immediate Steps to Take!

First, if you haven’t already taken some profits off the table on your long positions, please do so now. This is the time to pare down your risk levels, regardless of what you’re hearing on CNBC.

Second, dump any stocks exposed to the weakest parts of the economy. That would include sectors like banking, construction, and retail.

Until next time,

Mike

Read more here:
Economy losing steam! Three moves to make now!

Commodities, ETF, Mutual Fund, Uncategorized

How Zombies Get Rich and Drive the US Economy

June 1st, 2011

First, let’s look at what Mr. Market is doing to see if he will give us a hint of what is going on. He’s supposed to know everything. And he’s supposed to look ahead and tell us what is coming.

So already, Mr. Smarty-Pants, what’s up? Alas, Mr. Market seems as confused as we are.

Stocks rose yesterday…for no apparent reason. Oil went up a little too. Gold stood still.

Interestingly, bond yields continue to fall. The 10-year note yields only 5 basis points over 3%. Since the government’s own calculation of inflation over the last three months puts it over 5%, this leaves the real yield negative by more than 200 basis points. What are bond buyers thinking? Beats us.

We only know what we’re thinking. And we’re thinking that anyone who buys bonds with a negative yield…while the Fed shows every intention of raising inflation rates further…is a moron.

Of course, he could turn out to be a very clever moron…or a lucky moron. Yields could continue to sink as the Great Correction does its work. The Fed could buy even more bonds – driving prices up (and yields down) further. But count us out. We’re not that clever. Nor that lucky.

Meanwhile, the housing slump has now wiped out 8 years of price increases.

Bloomberg is on the story:

Home prices in 20 US cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.

Other reports today showed consumer confidence unexpectedly declined in May to a six-month low, and business activity in the US cooled more than forecast.

Nineteen of the 20 cities in the index showed a year-over-year decline, led by a 10 percent slump in Minneapolis. The exception was Washington, where values climbed 4.3 percent.

Prices in 12 markets dropped to fresh lows in March from their 2006, 2007 peaks: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Oregon, and Tampa.

Builders are gloomy and project demand will remain depressed into next year, Bill Wheat, chief financial officer of D.R. Horton Inc., told a housing conference in New York on May 11.

“We still see housing demand at very weak levels,” Wheat said. “It could still be a struggle in 2012.”

Did you notice? Only the zombies’ houses are rising in value. Alone among major metropolitan centers, Washington, DC posts real estate gains.

How is that possible? Oh don’t pretend to be so naïve. You know what the zombies are doing. Almost all GDP growth in the past 10 years has come from government spending. And the majority of household income growth since the beginning of the crisis in ‘07 has come from government transfer payments.

The zombies are flourishing, prospering…gorging themselves on the blood of the nation. Your editor sees it first hand. He lives among them. He watches them coming and going. He has learned their zombie language and studied their zombie ways. From a distance, they look like normal people. But up close, you see that they are imposters. Only their lowest-ranking members do any real work – picking up garbage or teaching kindergarten. As you move up the zombie hierarchy you find managers with no real responsibility and intellectuals with no real ideas.

Just read Jeffrey Sachs in yesterday’s Financial Times. Mr. Sachs is a member of the zombie intelligentsia: “The world economy is rife with lawlessness and recklessness,” he laments, “with tax havens and regulation-free zones catering to the avarice of globally mobile capital. [The new head of the IMF] should be given the task of systematically shutting these venues down…”

That’s right – hire more zombie regulators, tax collectors, and enforcers!

Why are zombies so rich? Here’s part of the answer, from The Washington Post:

It’s no secret that members of Congress qualify as political insiders, but a new report strongly suggests that they also may be insiders when it comes to trading stocks.

An extensive study released Wednesday in the journal Business and Politics found that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually, suggesting that lawmakers are taking advantage of inside information to fatten their stock portfolios.

“We find strong evidence that members of the House have some type of non-public information which they use for personal gain,” according to four academics who authored the study, “Abnormal Returns From the Common Stock Investments of Members of the US House of Representatives.”

The professors reviewed more than 16,000 common stock transactions carried out by about 300 House members as revealed in the members’ financial-disclosure forms from 1985 to 2001.

In a 2004 study, the same professors found that US senators also enjoy a “substantial information advantage” over the average investor – and even corporate bigwigs – when it comes to picking stocks. The latest study shows that members of the Senate outperform their House colleagues by an average of 30 points per month.

Despite the GOP’s reputation as the party of the rich, House Republicans fared worse than their Democratic colleagues when it comes to investing, according to the study. The Democratic subsample of lawmakers beat the market by 73 basis points per month, or 9 percent annually, versus 18 basis points per month, or 2 percent annually, for the Republican sample.

Surely, the SEC is on the case! Demanding to see trading records of Members of Congress…probing into when…how…and why…the politicos made their trades, right? Nah… You really were born yesterday, weren’t you, dear reader? Zombies rarely pose a threat to each other. Congress exempted itself from the SEC.

Our old friend Doug Casey adds a comment:

…the SEC, which should really be called the Swindlers Encouragement Commission, [is] telling people it’s making sure everything’s fair, thus luring the lambs to the slaughter. The investment world is full of sharks, and it always will be – all the SEC does is lower the average guy’s defenses, which really does encourage swindlers. Just look at Bernie Madoff, a perfect example. The SEC has never prevented a fraud, to my knowledge. Rather, by making everyone think they’re protected, it makes a fraud much easier to perpetrate. Lambs to the slaughter.

It gets worse: adding insult to injury, the SEC costs business billions of dollars annually – probably scores of billions, if you take all the secondary and trickle-down costs into account: direct fees, legal fees, printing, mailing, and other costs of compliance. They have a direct budget cost of something over a billion dollars per year, but that’s trivial relative to the indirect costs they impose on the economy. They ought to be ashamed, diverting a significant fraction of GDP from productive use into the pockets of parasites, in the name of protecting business and investors, when they do the opposite. The SEC is like a Pied Piper who attracts ravening hordes of rats with his flute instead of getting rid of them – and then charges people tenfold for the “service.”

This is one agency I would abolish, immediately and completely. Not a single one of its functions should even be handed off to other agencies. The SEC serves absolutely no useful purpose whatsoever – just the opposite. It’s not a question of getting it under control, or paring it back. It should be eliminated in toto.

Regards,

Bill Bonner
for The Daily Reckoning

How Zombies Get Rich and Drive the US Economy originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
How Zombies Get Rich and Drive the US Economy




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Real Estate, Uncategorized

3 Foreign Stocks with Buyout Potential

May 27th, 2011

3 Foreign Stocks with Buyout Potential

According to recent figures, U.S. companies hold an astounding $1 trillion in overseas bank accounts. The reason for holding this ungodly amount of money overseas? Because bringing the cash back to the United States would require a rather significant tax hit.

So what are these companies doing with all this cash? Well, up until recently, not a lot. But that's beginning to change and it's one reason why individual investors should pay very close attention to this phenomenon…

First, some background… This $1 trillion is a result of profits earned from overseas subsidiaries of global giants like Microsoft (Nasdaq: MSFT), GE, (NYSE: GE), PepsiCo (NYSE: PEP) and others and were already taxed by a foreign government. Corporations often don't repatriate most of these funds, as it would result in double taxation. Current U.S. tax laws require paying a corporate tax rate as high as 35% — regardless of whether taxes have already been paid in another country. As a result, many companies are choosing to keep the cash outside of the United States, and it's hard to blame them.

In many cases, the cash is almost literally burning a hole in the pockets of global corporate treasury departments and waiting to be spent. As a result, it encourages U.S. companies to invest overseas. Most recently, Microsoft announced it would use $8.5 billion of its estimated $13 billion in overseas cash to purchase Skype, which happens to be based in Luxembourg. The $13 billion in overseas cash amounts to about 26% of Microsoft's $50 billion in total cash.

PepsiCo (NYSE: PEP) is also using international funds to fund the purchase of dairy firm Wimm-Bill-Dann in Russia.

Unless and until the U.S. government announces another tax holiday to allow corporations to bring international funds home, there should be plenty more international merger and acquisition activity. Here are three potential buyout candidates.

1. Qiagen
Business: Biotechnology
Headquarters: Netherlands
Market Cap:

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