Investment
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The 2012 IPO Calendar: How to Spot the Winners
You might find yourself eyeing the 2012 IPO calendar with a bit more scrutiny after the Facebook (Nasdaq: FB) fiasco.
Although Facebook has been nabbing the most attention for disappointing its investors, it's hardly the first IPO to do so. It's all part of the fickle IPO process.
In fact, about 40% of the IPOs to hit the market over the past 12 months have seen their share prices fall below their IPO prices.
Facebook isn't the only factor to blame -- U.S. unemployment is up, the Eurozone debt crisis is sapping bullish spirit, and the upcoming U.S. presidential elections in November are adding to market uncertainty.
But avoiding IPOs altogether could also be a huge mistake.
Just ask those who bought the Google (Nasdsaq: GOOG) initial public offering. The Google IPO priced at $85, started trading at $100, and now trades around $560.
So how can you put yourself in the 60% group and earn a profit in the process?
With the right research and guidance, you can spot winners just like Google.
Do Your IPO Research
Investing in IPOs is like buying and selling any asset: due diligence is required.
An IPO, like a credit-default swap or subprime mortgage, is the ideal financial instrument for a limited set of circumstances. It is up to the individual or the institution to determine if the IPO they are considering is suitable for a long-term investment or a short-term flip.
If it qualifies as just a short-term flips, that is enough to tell you not to buy.
Whatever the investment objective, however, information is readily available for the necessary and needed due diligence.
For example, on March 17, 2011 Michael J. De La Merced wrote an article in The New York Times about the IPO of FriendFinder Networks (NYSE: FFN).
In his Timespiece,"FriendFinder Braves Choppy Market with IPO, Again," De La Merced did an excellent job of detailing his concerns with the stock, ranging from the disposition of the proceeds of the IPO to the accounting at the company to the number of times it had attempted to go public before and had to withdraw the offering.
FriendFinder Network IPO priced at $10 a share last year; it's now selling for around $1.15.
Other times an IPO can be hurt by factors having nothing to do with the financials of the company or the overall economic situation.
Take the Carlyle Group (Nasdaq: CG), a Washington, DC-based private equity group, which went public in May. Until Election Day in November, private equity groups will be vilified by the Obama Administration, unions and others due to Republican presidential candidate Mitt Romney's work with Bain Capital.
There is no way that can aid the share price of Carlyle Group. Now trading around $21 a share, Carlye Group has slipped from its IPO high of $22.45.
To continue reading please click here... -
Two Stocks to Buy in Uncertain Times
Europe’s debt problems are hitting a breaking point, U.S. economic growth is slowing and the Dow is down about 7% in the past month – so investors want to know what to do. Money Morning Capital Waves Strategist Shah Gilani is doing just that – sharing the stocks he thinks will provide safety in these uncertain times. He joined Fox Business’ “Varney & Co.” Tuesday morning to share with host Stuart Varney two investments he has recommended to his Capital Wave Forecast subscribers. One is a solid pharmaceutical company with blockbuster drugs barreling down the pipeline and 4.8% dividend yield. The other is an alternative utility-based investment with 5.8% dividend yield. Watch this clip to learn more.
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The Safe, Sure Road to a Golden Retirement
It has been called the "royal road to riches."
Starting with just $10,000 and a small monthly contribution, any investor can use this method to create their own golden parachute - a million-dollar retirement portfolio.
All you need is time.
Time. That is something nobody seems to have anymore - or really appreciate.
But at 48 years old, I understand how 30 years can slip by in an instant. It may seem like forever, but it's not.
Instead, today it's all about the fast money. In the market, out of the market... this stock, that stock. Nobody has the patience to ride out the rough spots anymore.
However, there is one thing that never changes in the investment world: When you buy solid companies and reinvest the dividends you can build true wealth.
The best part is you'll never have to rely on Social Security to fund your golden years.
Of course, seasoned income investors have known this for years. That's why the truly rich don't spend their days glued to the financial news.
In this style of investing, less truly is more.
Because the biggest factor behind this well-worn strategy is time itself and time never fails.
The Most Powerful Investment Strategy of All-Time
The secret to this approach is in the compounding effect that Albert Einstein once called "the most powerful force on earth."
It's the safe, sure road. And anybody who tries it can become a millionaire if they are smart enough to stick with it.
In fact, this force is so powerful that I think the government is deliberately keeping it from you.
I say that because if the masses actually knew the income this compounding approach could deliver, they would immediately demand an end to Social Security as we know it.
Why is that? you ask. To continue reading, please click here....
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Better Than Brazil: How to Invest in a Colombian Safe Haven
What's an investor to do?...
The Eurozone is about to collapse. The United States is struggling out of the deepest recession since World War II. And the IMF forecasts global growth will drop from 5% in 2011 to 2.6% in 2012.
How about investing in a safe haven far away from all of these troubles - one where you can actually watch your money grow?
I have found one in Colombia. Let me tell you why.
It is because Colombia is no longer a place controlled by drug kingpins or ripped apart by civil war. Colombia is a country on the comeback.
This revival began in 2002 when former president Alvaro Uribe decided to take on both the leftist guerillas and the drug barons. Since then, his successor Jose Santos has followed up on those policies, and they have worked.
In 2011, Colombia's homicides dropped by 5% to 14,746 and its murder rate dropped to 33 per 100,000 of population.
Admittedly, that's still five times the U.S. level, but these things are relative - it's half the level it was just four years ago.
Foreign investors have noticed, and last year, foreign investment in Colombia was up 56% to $14.8 billion.
Colombia Beats Brazil
In fact, according to the World Bank's "Doing Business" survey, Colombia ranked 42 out of 183 countries.
That was near the top spot in Latin America and far above Brazil's appalling rank of 126. Only Chile was higher with a rank of 39.
Stock market investors have noticed this, too - in the second half of 2011 Colombia had $4.9 billion of initial public offerings, the most in Latin America - and yes, again ahead of Brazil!
On the macroeconomic side, Colombia is sound, with public debt at just 45% of gross domestic product (GDP), a modest budget deficit, inflation just over 3% and the central bank base rate at 4.75% -- no Ben Bernanke nonsense of zero interest rates!
Colombia has also gotten a boost by a surge in oil production, with exploration now possible in areas that had been "no go" for foreign investors for decades.
In November 2011, oil production was 920,000 barrels/day, up 17.5% from the previous year. Oil and minerals were responsible for 82% of Colombia's 2011 foreign investment, so the potential for investors is immense.
However, the real reason why Colombia is so attractive [To continue reading, please click here...]
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Question of the Week: Readers Respond to Money Morning's Investment Toolkit Query
Success in the business world is most often achieved by those with a competitive edge.
That's why, here at Money Morning, helping readers find that edge for their investment toolkit is Job One. In the past week alone, we've introduced readers to two little-followed indicators that have big proven payoffs. The first was the Baltic Dry Index, a shipping index that provides a panoramic view of the global economy. And the second was the "Gold Spike Indicator," which helps gold investors time their purchases.
Shrewdly used, either (or both) of these indicators have the potential to provide investors with that sought-after competitive edge.
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We Want to Hear From You: What's in Your Investment Toolkit?
Success in the business world is most often achieved by those with a competitive edge.
That's why, here at Money Morning, helping readers find that edge for their investment toolkit is Job One. In the past week alone, we've introduced readers to two little-followed indicators that have big proven payoffs. The first was the Baltic Dry Index, a shipping index that provides a panoramic view of the global economy. And the second was the "Gold Spike Indicator," which helps gold investors time their purchases.
Shrewdly used, either (or both) of these indicators have the potential to provide investors with that sought-after competitive edge.
Take the Baltic Dry Index. As Money Morning Guest Columnist Jack Barnes explained, "the Baltic Dry Index has [historically] shown itself to be the EKG of future industrial demand. And, right now, the BDI is screaming "Danger, Will Robinson!" to any investor who will read it and heed it as a true leading indicator."
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Taipan Daily: Investment Lessons – Letting Go, Diversification and Risk Taking
Every once in a while, it pays to go back to school. Even investors who've been around the block a time or two need a refresher in some time-tested lessons. That especially goes for us editors here at Taipan Publishing Group. We analyze and sift through so much information to get to an investment opportunity [...]
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Top Profit Plays for a Defensive-Investing Portfolio
Prussian military theorist Carl von Clausewitz once said that "the best defense is a good offense." Although that bit of wisdom has been used everywhere from the battlefield to the gridiron, it could just as easily be deployed as part of a "defensive investing" strategy.
And in today's markets - whipsawed by worries emanating from virtually every major market around the globe - a defensive-investing plan needs to include protective stops, inverse funds, high-yielding dividend shares, "sin stocks, and investments in oil and other value-storing commodities," Keith Fitz-Gerald, the best-selling author who is Money Morning's chief investment strategist, said in an interview this week.
With the world markets in flux, Fitz-Gerald sat down with Money Morning Executive Editor William Patalon III to talk about defensive-investing strategies. What follows is the full text of that interview.
For the full text of the interview, please read on... -
The 50-40-10 Investment Strategy Pays Off in Profits, Protection & Potential
What's more important: Having an investment strategy that performs strongly when the overall market is up, or having an investment strategy that guards against downside risk when the overall market is trending down, while keeping you in the hunt for inflation-beating, long-term profits?
Before you answer, consider the following:
- If you invested $1,000 in the Standard & Poor's 500 Index in 1950, it would have grown to $613,013 by December 2007.
- If you had tried to "time" the market and missed the 30 best months in that 57-year period, the value of your initial $1,000 investment would have risen to just $35,404 - a difference of $577,609.
- But if you tried to time the market and missed the 30 worst months in that time, your $1,000 would have grown to $9,509,094!
