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Investment News Briefs- Money Morning - Only the News You Can Profit From.

  • Investing in Cotton: With Prices at a New Record, Here's the Move Investors Should Make Now

  • Netflix Inc. (Nasdaq: NFLX): The Red Envelope Gets the Green Light From Investors

    Netflix Inc. (Nasdaq: NFLX) stock is up more than 300% over the past year, making it a surprise leader in the technology sector and a media darling. And while it may be overvalued, it should continue to perform well throughout the year.

    I've long respected Netflix's business model. In fact, I've been a customer for several years now. However, the company's stock has suddenly become very controversial, as many analysts and fund managers think it overpriced and overhyped.

    That case is certainly there to be made, considering Netflix has a Price/Earnings (P/E) ratio of about 72.5 – compared to 19 for Apple Inc. (Nasdaq: AAPL).

    But here's the deal: Netflix reported a blow-out fourth quarter after the market closed last Wednesday.

  • Hot Stocks: Steve Jobs Health Concerns No Reason to Bail on Apple Inc. (Nasdaq: AAPL)

    Apple Inc. (Nasdaq: AAPL) stock is set to plunge today (Tuesday) due to growing concerns about Chief Executive Officer Steve Jobs' health. But rather than retreat from the tech heavyweight, investors might be better served to load up as the stock pulls back.

    No doubt, Steve Jobs represents the soul of Apple. He guides the company's general direction – driving its innovation and expanding its global profile. But even without Jobs, Apple is a strong fundamental company with a stockpile of cash, a rock solid product line and mainstream brand.

    Jobs, a 55-year old cancer survivor, said yesterday (Monday) that he would take a medical leave of absence to focus on his health.

  • 2011 Manufacturing Outlook: Slow, but Steady Growth Could Win Profits for Investors

    It's often said that a little bit goes a long way, and that will certainly be the case for U.S. manufacturing growth in 2011. Although most projections still call for slower improvement in the sector than in 2010, the estimates have been characterized as "less bad" than originally expected -and that could translate into increased profit prospects for investors.

    The market gave evidence of that just last Tuesday (Jan. 4) when the major indexes shrugged off other concerns and moved nicely higher in response to a larger-than-expected 0.7% rise in November factory orders, which had been forecast to fall by 0.1% according to a Thomson-Reuters survey of economists. Orders excluding the volatile transportation sector also posted their biggest gain in eight months.

    Analysts characterized the numbers as "pointing to underlying strength in manufacturing." That bodes well for the greater economy, since U.S. manufacturers employ nearly 12 million people, or 9% of America's work force, and add $1.6 trillion annually to the U.S. economy, roughly 11% of gross domestic product (GDP).

  • Bond Investing: Inflation, Interest Rate Risk Weaken Corporate Bonds and TIPS

    To cushion the recession's financial blow and safeguard against shaky global markets, investors over the past few years retreated from stocks and poured billions of dollars into bonds.

    From January 2008 through June 2010, outflows from equity funds totaled $232 billion, while inflows to bond funds hit a staggering $559 billion, according to the Investment Company Institute (ICI).

    But as 2010's bull market continued climbing, and the U.S. Federal Reserve maintained its loose monetary policy, bonds' safe haven status faded in the second half of the year. Now analysts are warning investors to escape the investment in 2011, as inflation and interest rates are likely to rise and the bond market is headed for a downturn.

    But as 2010's bull market continued climbing, and the U.S. Federal Reserve maintained its loose monetary policy, bonds' safe haven status faded in the second half of the year. Now analysts are warning investors to escape the investment in 2011, as inflation and interest rates are likely to rise and the bond market is headed for a downturn.

  • Three New Year's Resolutions That Will Bolster Your Investment Portfolio in 2011

    If everyone kept their New Year's resolutions, most of America would be thin, fit and rich.

    That's because the three most popular resolutions tend to involve dieting, working out and improving the family finances.

    Most of those promises tend to fall by the wayside before each New Year gets too far along.

    But 2011 can be different – at least in terms of your finances … that is, if you embrace the three easy-to-follow resolutions that I'm about to reveal.

    In fact, if you follow these, your investing future will be much, much richer.

    For the three New Year's resolutions that will make you financially fit this year, please read on…

  • Goldman Sachs (NYSE: GS) $450 Million Investment Fuels Facebook IPO Speculation

    Goldman Sachs Group Inc. (NYSE: GS) invested $450 million in Facebook, valuing the popular social networking site at $50 billion and heightening speculation on whether or not Facebook will go public this year.

    The deal, announced in a report in The New York Times Sunday night, makes Facebook worth more than Internet-related companies like eBay Inc. (Nasdaq: EBAY), Yahoo! Inc. (Nasdaq: YHOO) and Time Warner Inc. (NYSE: TWX). It'll give the company a competitive edge in the tech arena and allow it to pursue more acquisitions.

    Digital Sky Technologies, a Russian investment firm that has already put about half a billion dollars into Facebook, also invested an additional $50 million in the deal. Goldman has the right to sell up to $75 million of its stake to Digital Sky. Digital Sky started its involvement in the social networker in 2009 with a $200 million investment and now has about a 10% stake through stock purchases from Facebook employees.

    The deal highlights the booming popularity of social media sites like Facebook, Twitter and Groupon – all of which are gaining increased attention from investors. Facebook jumped ahead of Google Inc. (Nasdaq: GOOG) as the most-visited Web site in 2010, according to Internet research firm Experian Hitwise.

  • FCC's Net Neutrality Plan Disappoints Comcast Corp. (Nasdaq: CMCSA), Netflix Inc. (Nasdaq: NFLX)

    The Federal Communications Commission on Tuesday approved its net neutrality proposal, aiming to protect the free flow of information over the Internet and limit the power of Internet service providers (ISPs) to act as Web gatekeepers.

    Net neutrality means providers like Comcast Corp. (Nasdaq: CMCSA) must treat all Internet content equally and cannot interfere with legal Web traffic. It also prohibits "unreasonable discrimination," meaning ISPs can't deliver Amazon.com Inc. (Nasdaq: AMZN) faster than eBay Inc. (Nasdaq: EBAY), or block bandwidth-straining Netflix Inc. (Nasdaq: NFLX).

    The rules also require ISPs to provide customers with more information on download speeds and usage limits, and give the FCC power to reject "paid priority" agreements where a content provider like Google Inc. (Nasdaq: GOOG) would pay Comcast more for faster delivery.

    "We must take action to protect consumers against price hikes and closed access to the Internet – and our proposed framework is designed to do just that: to guard against these risks while recognizing the legitimate needs and interests of broadband providers," FCC Chairman Julius Genachowski wrote in a blog posting earlier this month.

  • Warren Buffett Emphasizes Investment Risk Management With Successor Pick Todd Combs

    Warren Buffett's announcement Monday that a little-known hedge fund manager, Todd Combs, will help oversee his $100 billion investment portfolio at Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) surprised investors and highlighted Buffett's emphasis on risk management for investment success.

    Adding 39-year-old Combs to the Berkshire team makes him a top contender to take over Buffett's investment management duties whenever the Oracle of Omaha leaves his company.

    "He is a 100% fit for our culture," said Buffett. "I can define the culture while I am here, but we want a culture that is so embedded that it doesn't get tested when the founder of it isn't around. Todd is perfect in that respect."

  • Defensive Investing: Covered Calls Increase Cash Flow, Up Protection

    Once you get beyond buying puts or calls for purely speculative purposes, no other options strategy is more popular than selling covered calls – and with good reason: Few investment techniques offer more potential benefits with such a low level of risk.

    Considered the most conservative of all option plays, this strategy – which basically involves selling (or "writing") one call option for each 100 shares of a stock you own – can be employed for one or more of five distinct purposes:

    1. To generate a stream of additional income – over and above dividend payments – from individual stocks in your equity portfolio.
    2. To generate a stream of income from stocks you own that pay no dividends.
    3. To reduce the effective cost basis of longer-term stock holdings by bringing in option premiums, thus recovering some of the original purchase price.
    4. To provide a limited hedge against potential losses in portfolio value as a result of overall market pullbacks or cyclical downturns in the prices of specific stocks.
    5. As an income-producing substitute for a "limit-sell order" – intended to liquidate a stock position when a specific profit target is achieved.