Archives for November 2010

November 2010 - Page 4 of 9 - Money Morning - Only the News You Can Profit From

Buy, Sell or Hold Special Report: How Retail Investors Should Play the GM IPO

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If you are one of the millions of retail investors who found themselves totally out of luck on the General Motors Co. (NYSE: GM) initial public stock offering, don't fret.

Although the GM IPO is over, the profit opportunity has just begun.

The incredibly oversubscribed GM IPO may well have been the biggest stock offering in global history. But I believe that this stock has plenty of room to run.

In fact, I believe this is a stock that you'll want to buy in the aftermarket – provided that you follow some very strict guidelines for share prices and timing.

Let me explain…

To hear the best strategy for buying GM shares in the aftermarket, please read on...

Question of the Week: U.S. Consumers Squeezed by Inflation, Worry About Middle Class Pinch

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The U.S. Federal Reserve has made one thing very clear: It views deflation as public enemy No. 1, and it will do everything in its power to keep that ruinous downward spiral in prices from taking hold.

But is the U.S. central bank focused on the wrong threat? And if that's the case, are U.S. policymakers setting the stage for a consumer-crippling inflation spike?

While the Fed has announced more quantitative easing to pump more money into the U.S. economy – hoping that would encourage lending and spending – a cadre of cash-strapped consumers is worried the stimulus measures will actually ignite long-term inflation.

There is a precedent: The current policy is similar to one taken in 2003 – 2004, when the Fed kept rates near a record low and inflation rose faster than initially predicted.

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Chile: The One Emerging Market That Investors Can't Afford to Ignore in 2011

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When I review each of the world's emerging markets in order to decide which ones to buy in 2011, I start with two questions:

  • Is the market cheap?
  • And has it under-performed over the past year?

If the answer is "yes" for both those questions, that market is much more likely to get my vote.

But with every rule, there are also exceptions. As we will see.

To discover the one market you can't afford to ignore in the New Year, please read on...

In China, Record Hairy Crab Prices Point to Continued Strong Economic Growth Next Year

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BEIJING, People's Republic of China – While other investors are busy rounding up all sorts of economic data, tea leaves and fortune cookies in an attempt to figure out China's economic situation next year, I'm heading out the door once again to take a look at
hairy crab prices.

Because of the timing of this trip, I'm a bit late in the season – but not enough that I won't be able to get a good reading on this surprisingly accurate indicator of China's economic health.

The delicious little morsels come into season each fall, and are regarded as a delicacy – not to mention as an important indicator of this Asian giant's wealth and prosperity. People flock to various restaurants to eat them. The tiny little guys are given as gifts to business partners, family members and others. Live hairy crabs are even being sold in vending machines in such big Chinese cities as Shanghai.

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We Want to Hear From You: Are You a Follow-the-Leader Investor?

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If you're looking to navigate the global markets with the lowest losses and the richest gains, education and research can be two of an investor's best tools – but a peak inside the financial minds of billionaires doesn't hurt, either.

Those looking for another weapon to add to their investment arsenal this week had a chance to see where the market's biggest hitters have been hunting for profits – and where they have scored the biggest gains.

This week marked the third-quarter disclosure of the biggest U.S. investors' holdings, allowing an infrequent glimpse into the stock decisions of some of the most successful money managers.

Warren Buffett, John Paulson and George Soros were some of the big-name investors who made a Form 13F disclosure filing, which the U.S. Securities and Exchange Commission requires of money managers with holdings in excess of $100 million. Forms are due within 45 days of a quarter's end, with current reports covering the quarter that ended Sept. 30.

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LNG Is the Future of Energy – And North America is the "New Saudi Arabia"

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Sometimes the most important impact on a raw material commodity comes less from its actual extraction and more from how product is introduced into new markets.

Indeed, that is becoming the next major development in North American natural gas. The expansion in liquefied natural gas (LNG) exports may well hold the key to turning a glut into advancing profit.

To find out more about the looming profit opportunities in LNG, read on...

Irish Bailout Threatens to Reignite Euro Debt Crisis

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Ireland's reeling banking system, and the government's reluctance to accept outside help, is threatening to reignite the European debt crisis that nearly led to the demise of the European Union (EU) and its currency last spring.

EU officials are trying to persuade Irish officials to shore up the country's devastated banking sector with a possible $100 billion (73.5 billion euros) aid package as Irish policymakers continue to insist that the financially troubled nation doesn't require a bailout.

Just six months after EU governments established a $1.02 trillion (750 billion euros) rescue fund with the International Monetary Fund (IMF) to backstop Greece and other troubled members of the 16-nation euro currency area, cracks are once again emerging in the group's financial infrastructure.

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Hot Stocks: Caterpillar Moves Into Mining with $8.6 Billion Bid for Bucyrus

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Caterpillar Inc. (NYSE: CAT), the world's leading manufacturer of construction equipment, yesterday (Monday) said it would pay $8.6 billion for Bucyrus International Inc. (Nasdaq: BUCY) – a maker of large-scale surface and underground mining machinery.

Caterpillar said in a statement the deal would allow the company to continue its expansion into mining and gain from the "robust long-term outlook for commodities." The company is betting that emerging markets' growth will "push demand" for coal and "everything that comes out of the ground."

Caterpillar will pay $7.6 billion for Bucyrus and assume another $1 billion of its debt. The deal values Bucyrus at $92 a share, which is a 32% premium to the company's Nov. 12 closing price of $69.92.

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Buy, Sell or Hold: VAALCO Energy Inc. (NYSE: EGY) Will Capitalize on Higher Oil Prices and a Lower Dollar

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A commodity bull market is happening everywhere you look lately. While the dollar is dying, you cannot say the same about the stock prices of companies with internationally based commodities production.

The reality that the U.S. Federal Reserve will be monetizing all of the government's funding needs for at least the next year has put the market on edge. The U.S. dollar's status as a reserve currency is in question.

Investors are using this opportunity to shift their holdings towards U.S. companies with strong overseas revenue streams. And there is one such company in the oil sector that has been overlooked by mainstream investors: VAALCO Energy Inc. (NYSE: EGY).

VAALCO is a great example of a U.S.-based company that – through its operations off the coast of Africa – will profit from higher oil prices and the dollar's long-term drop in value.

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