Archives for November 2009

November 2009 - Page 9 of 10 - Money Morning - Only the News You Can Profit From

Buffett Bets on Bright U.S. Economic Future With Burlington Acquisition

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Warren Buffett believes in the United States' economic future, and yesterday (Tuesday) he put his money where his mouth is.

Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) acquired railroad Burlington Northern Santa Fe Corp. (NYSE: BNI) in a deal valued at $44 billion, the largest in Berkshire's history.

Berkshire, which already owns 22.6% of the company, will pay $100 per share in cash and stock for the remainder of Burlington's business. The offer values Burlington stock at a 31.5% premium to its Monday close. The deal, expected to close in the first quarter of next year, includes $10 billion in Burlington debt.

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Investment News Briefs

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Stanley Works Nails Black & Decker Deal; Credit Suisse Triples AIG Earnings Forecast; BofA to Pay Back $20 Billion in TARP Funds; RIM Shares Hit by New Phones; Pending Contracts on Existing Homes Jump; Obama Warns of More Job Losses; New Merck Drug Denied By FDA; Pay Czar Hopes Other TARP Banks Follow His Lead on Cuts

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Five Ways to Ride the Commodities Bull

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The commodities bull has already run a long way and the "pundits" are saying the boom is over. Don't believe it for a minute. As long as central banks keep interest rates low, the commodities boom will continue. Read this report for five ways to make money on skyrocketing commodities prices.

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Hot Stocks: Google's Drive for Dominance Extends Into the Burgeoning Smartphone Market

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Google Inc. (Nasdaq: GOOG) was founded in 1996 and went on to become the undisputed king of Internet search and advertising. Ten years later, it brought its ubiquitous search engine to mobile phones with the launch of Google Mobile.

And now, with the proliferation of smartphones, Google is pursuing a broader range of mobile initiatives that will make it a leader in mobile software and take its advertising business into territory that so far has been uncharted.

Google's original business model, as it applies to its trademark search engine, was to give away a product and have it funnel users to its targeted ads. Last year, the company built on that model by giving away its operating system (OS), Android, to any wireless handset maker that would have it.

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Bondholders the Big Winners as CIT Files for Bankruptcy

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CIT Group Inc. (NYSE: CIT) on Sunday filed for Chapter 11 bankruptcy protection. CIT's filing is the fifth largest bankruptcy in U.S. history, behind Lehman Brothers Holdings Inc. (OTC: LEHMQ), Washington Mutual Inc. (OTC: WAMUQ), WorldCom Inc., and General Motors Corp.

But unlike Lehman Bros. and Washington Mutual, which were completely broken apart and branches of their businesses sold off, CIT expects to wipe out $10 billion in unsecured debt and emerge from its bankruptcy with its core business intact.

"None of CIT's operating subsidiaries, including CIT bank, will be
included in the filings," the company said in a statement. "As a result, all operating entities are expected to continue normal operations during the pendency cases."

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Continued Corruption on Wall Street is Sapping Investor Confidence on Main Street

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A couple of days ago, I caught an episode of the American Experience on my local PBS station that covered 1929 stock market crash. The episode in question had premiered in 1990, and featured first-hand accounts – as well as interviews – with historian Robert Sobel and economist John Kenneth Galbraith. It has an interview with Patricia Livermore, daughter-in-law of trading great Jesse L. Livermore and the subject of the annotated version of "Reminiscences of a Stock Operator" that I just completed. (Publication date is Jan. 10).

Ford Reports $997 Million Profit as Manufacturing Heats Up

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Ford Motor Co. (NYSE: F), the only major U.S. automaker to avoid bankruptcy in 2009, said yesterday (Monday) that an aggressive cost-cutting campaign, improved earnings at its financing arm and market-share gains in North America resulted in a $997 million third-quarter profit – its first operating profit since early 2008.

Ford has now been profitable for two consecutive quarters, a first for Chief Executive Officer Alan Mulally, who kept Ford out of bankruptcy as General Motors Co. (OTC: MTLQQ) and Chrysler Group LLC reorganized under Chapter 11 protection earlier this year.

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Gambling on Casino Stocks: Where Should Investors Place Their Bets?

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Casino stocks lost big last month as weak earnings and new gambling restrictions in Macao drove investors away from the highly cyclical sector. But the future may not be as bleak as many investors fear, which means casinos could be building towards a big payout.

Shares of both Wynn Resorts Ltd. (Nasdaq: WYNN) and MGM Mirage (NYSE: MGM) are down more than 20% this month, while Las Vegas Sands Corp. (NYSE: LVS) stock has tumbled 15%.

"Casino stocks were so badly beaten during the crisis last year, they were probably only second to banking stocks," Lawrence Ho, who owns Macao's City of Dreams casino, told MarketWatch. "They were so beaten that even after the run they've had this year they're nowhere near the valuations they were at in 2007 or early 2008."

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A Year After the Crisis, the Global Economy is Firing on All Cylinders

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What a difference 12 months can make.

Just one year after every national economy on earth was in deep trouble, a powerful global rebound is underway. In fact, the global upswing is a lot stronger than most investors realize.

So don't let a few days' decline here and there cause you to lose sight of one of the most important investing trends investors will find today.

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Buy, Sell or Hold: Hold On to the TS&W/Claymore Tax-Advantaged Balanced Fund and Look for More Buying Opportunities

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On June 29, I recommended buying the TS&W/Claymore Tax-Advantaged Balanced Fund (NYSE: TYW). The fund is up about 15% since that recommendation and there's been a distribution of about 2% of the initial investment. Not bad for sitting in bonds and equities of global mega-caps that pay high dividends.

Since this is a close-ended balanced mutual fund that pays a very attractive yield, the fund can invest between 50% to 60% in municipal bonds and between 40% to 50% in global equities. It also can trade at a premium or a discount to net asset value.

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