Archives for 2012

December 2012 - Page 4 of 185 - Money Morning - Only the News You Can Profit From

Japanese Stocks Are Up, But Don't Fall for the Trap

Japanese stocks hit a new 2012 high today (Wednesday) and the yen weakened to a 20-month low against the U.S. dollar as Shinzo Abe was installed as Japan's 96th prime minister.

Abe, who served as prime minister in 2006-2007 but stepped down due to health issues, has vowed to pursue aggressive monetary easing to end deflation and get the Japanese economy growing again.

But the long-term implications of Abe's policies aren't as rosy as the short-term stocks boost.

"The hope is that Abe's promises of fresh stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan's global muscle," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force –don't fall for it."

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Fiscal Cliff Deal Talks on Hold

U.S. President Barack Obama will cut his Hawaiian Christmas vacation short and return to the White House tomorrow (Thursday) to continue fiscal cliff deal negotiations.

Just five days remain for Democrats and Republicans to hammer out some kind of deal before the U.S. economy gets walloped with some $600 billion in tax increases and spending cuts at the federal level.

It's unclear if the parties can reach a fiscal cliff deal before the New Year, although they've shown little hope they can agree.

Republican House Speaker John Boehner on Friday put the burden on the president and the Democrat-controlled Senate to make the next move after they rejected his big concession on tax rates. Boehner agreed to extend tax rates on incomes under $400,000 (reduced from his previous threshold of $1,000,000) in exchange for steep spending cuts to reduce the swollen federal deficit.

"I don't want taxes to go up; Republicans don't want taxes to go up. But we only run the House. Democrats continue to run Washington," a frustrated Boehner said in a press conference Friday after he failed to rally support for his "Plan B," which never even made it to a vote among his own party.

While both sides have reduced expectations for an all-or-nothing deal, the two parties are still miles apart. Lawmakers are already prepping for the blame game should the New Year come without resolution.

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Culp - Value

Culp Inc. (CFI) has been moving higher since reporting solid fiscal second quarter results last month, which included an earnings surprise of nearly 50%. In addition, this Zacks #1 Rank (Strong Buy) mattress fabrics company has a compelling valuation, including a price-to-sales (P/S) ratio of just 0.66 and a price-to-book (P/B) multiple as low as […]

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The Hilarious Comedy Behind John Boehner's "Plan B"

I am laughing right now, really.

I am laughing because of what happened last week. I am laughing that House Speaker John Boehner's "Plan B" for the Fiscal Cliff wasn't even voted on.

Why not? I can't imagine – it had all the right stuff.

According to Mr. Bonehead's website, "The bill focuses on stopping waste, fraud, and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies."

And that was just the trash talk about cutting wasteful spending in the bill. He also wanted a tax cut for Americans making under a million dollars a year. I'm for that!

So what's making me laugh, when on the surface the bill seems to make some sense?

It's what you can't see (because most of it is hidden, or if it's there it's buried) that's funny. In fact, two things in the bill are so funny that they almost brought me to tears.

Let's go have a laugh together.

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Why Japan's "Lost Decades" Are Headed to America in 2016

It's only been a little more than a week since Shinzo Abe won election as Japan's latest Prime Minister in a landslide-election victory and the pundits are already lining up telling investors to "buy Japan" because it's "dirt cheap."

The hope is that Abe's promises of fresh stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan's global muscle.

As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force – don't fall for it.

I've heard this mantra eight times since Japan's market collapsed in 1990 – each time a new stimulus plan was launched – and six times since 2006 as each of the six former "newly elected" Prime Ministers came to power.

The bottom line: The Nikkei is still down 73.89% from its December 29, 1989 peak. That means it's going to have to rebound a staggering 283% just to break even.

Now here's the thing. What's happening in Japan is not "someone else's" problem. Nor is it something you should gloss over.

In fact, the pain Japan continues to suffer should scare the hell out of you.

And here's why …

The so-called "Lost Decade" that's now more than 20 years long in Japan is a portrait of precisely what's to come for us here in the United States.

Perhaps not for a few years yet, but it will happen just as we have already followed in Japan's footsteps with a "lost decade" of our own.

The parallels are staggering.

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Disney Buys Lucasfilm - Analyst Blog

The Walt Disney Company (DIS) announced the closure of the acquisition of Lucasfilm Ltd. LLC. for approximately $4.06 billion. The move was in line with the company’s core strategies, which include deploying capital towards enhancing the portfolio of its globally recognized brands in order to drive long-term growth. Disney made a cash payment of approximately […]

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The Blackstone Group LP - Value

Earnings momentum for The Blackstone Group LP (BX) has been rising since this asset management company reported solid third quarter results in mid October, which included a positive surprise of 31.0%. This Zacks #1 Rank (Strong Buy) has beaten quarterly earnings estimates in three of the last four quarters with an average beat of 18.1%. […]

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Continental Closes Bakken Purchase - Analyst Blog

Leading Bakken oil producer Continental Resources Inc. (CLR) completed the purchase of various producing and undeveloped assets in the play from Samson Resources Corp., a unit of private equity giant Kohlberg Kravis Roberts & Co. (KKR) . The acquired properties – worth $649.3 million – consist of 119,218 net acres, mainly in Williams and Divide […]

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Stock Market Today Fades Along with Chances of Fiscal Cliff Deal

The stock market today tumbled after chances of a fiscal cliff deal looked unlikely.

The stage was set Thursday night when a vote on Republican House Speaker John Boehner's Plan B, a fiscal cliff compromise to be presented to U.S. President Barack Obama, never even made it to vote among fellow Republicans. When word came of the setback, all major overnight future indexes sharply dropped.

When markets opened Friday, the slide continued. Shortly after noon, the Dow Jones Industrial Average slumped 176 points, the Standard & Poor's 500 Index dropped 20 points and the Nasdaq was lower by 43.

Investors appear to be bracing for the worst with just 10 days left before America falls over the cliff, with a deal is nowhere in sight.

Stocks on the Move Today

Shares of Research in Motion (Nasdaq: RIMM) rang lower Friday, sinking almost 20% in mid-afternoon trading.

RIM reported third-quarter earnings after the close Thursday that showed the BlackBerry maker swung to profitability, but lost about one million subscribers in the quarter. It marked the first time membership has fallen. The real test, analysts say, comes next quarter following the much anticipated release of the company's new Smartphone, the BlackBerry 10.

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Dividend-Paying Stocks: Some of the Best Bets for 2013

Investors who shy away from dividend-paying stocks next year because of higher taxes will miss some of the best income sources of 2013.

Plus, there's a good chance many investors will miss the biggest dividend tax hit.

U.S. President Barack Obama, who earlier had suggested raising the dividend tax on those earning $250,000 or more, now says he wants to increase the tax on those earning $400,000 or more. Republicans have suggested raising the dividend tax on those earning $1 million or more.

Many investors wouldn't be affected by either proposal: Among Americans who receive qualified dividends – those taxed as capital gains, not regular income – 48% make less than $250,000 a year.

And there are some stocks that will be relatively immune to the fiscal cliff tax effects.

For those who will keep their money in dividends, we've highlighted some of the best picks among dividend-paying stocks for 2013, as well as some you'll want to avoid.

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