China Forecast 2011: Make the Biggest Gains in China's "Gray Market" – Before the Government Finds Out China it's set to see its 10th year in a row of more than 9% growth in 2011. But that estimate is only based on the "official" Chinese numbers. The real growth is in China's "gray market." And […]
December 2010 - Money Morning - Only the News You Can Profit From
Since bottoming out in early July, the stock market has turned in a brilliant performance, giving many investors Christmas stockings bulging with profits. However, it also has left a lot of investors nervous – though not the ones that know how to use options.
Start the conversation
Money Morning publishes exclusive investment reports on gold, silver, and oil… the U.S. economy, the dollar, emerging markets… the tech sector, housing plays, and even trading strategies.
But these reports can't be found on our Web site.
This is the stuff we normally use only for internal discussion – important, timely research and ideas that come directly from our editorial team. (The kind of information you need to stay ahead of the crowd and profit in the global marketplace.)
We've made these premium reports free, but you don't have access to them as part of your standard Money Morning subscription.
State governments are broke, and things are going to get worse before they get better – a whole lot worse.
Look at California. It's facing a $19 billion budget deficit next year and had to raise tuition in the state university system by 32% to try and collect revenue.
Arizona sold off its state capitol, state Supreme Court building and legislative chambers to a group of investors that is now leasing them back.
And take Illinois, which spends twice as much as it collects in taxes and is six months behind on a stack of bills totaling $5 billion. Illinois state employees – including state troopers needing to gas up their patrol cars – are finding some places won't honor their state credit cards. And legislators are getting evicted from offices because the Illinois government failed to pay the rent.
Little wonder the "Prairie State" now has a new nickname: the "Deadbeat State."
Start the conversation
Something is happening internationally that has gone almost unnoticed in the American market – electricity prices in certain regions are increasing… and fast.
The spikes have been particularly noticeable in Australia and the U.K.
Much of Australia has seen rises in power costs of 20% (or more) in less than two years. Prices there are accelerating more than twice as fast as a rising inflation rate and will continue to soar, due to an under-funded electricity infrastructure.
The U.K., along with the rest of Europe, finds itself in the grips of an unusually early and prolonged snow assault carrying frigid temperatures. British consumers are now facing 22-month-high electricity prices, and thousands of homes in northern England and Scotland are facing the serious challenge of losing heat.
On Friday (December 17), the British government announced that it was considering something rarely seen this side of World War II – fuel rationing.
Click here for Kent's take on the situation, plus the advantage he sees for investors…
Technology companies, and tech stocks, started a revival in 2010 and are heading toward an even more profitable 2011. That's because a new age of computing – one that prioritizes mobility and efficiency – has dawned in the computing world.
Indeed, we've entered what researching firm International Data Corporation (IDC) calls a "new era" of computer usage.
Roughly half of all regular Internet users in 2011 will use non-PC devices, according to IDC, which says a trend becomes mainstream when it constitutes more than 15% of the market.
Just as the smaller PCs of the 1980s supplanted the lumbering terminals of the 1960s, PCs are being replaced by a variety of hand-held devices – like Apple Inc.'s (Nasdaq: AAPL) iPhone and iPad and Research in Motion Ltd.'s (Nasdaq: RIMM) Blackberry.
"The PC-centric era is over," IDC said in its annual report, released in November.
The firm predicts 330 million smartphones will be sold worldwide next year along with 42 million media tablets.
After a year of rocky economic recovery and a mixed bag of U.S. data, market strategists are waxing optimistic about the profit prospects in 2011.
"There is still an awful lot of pain out there for sure, but if you get this creeping confidence to accelerate a little bit, it's surprising how fast things can turn," Sandy Lincoln, chief investment strategist at M&I Investment Management, told MarketWatch.
But the Standard & Poor's 500 Index gained 12% this year, the Dow Jones Industrial Average rose 10% and Nasdaq Composite Index climbed 17%. Those who stayed in the game – and made the right plays – netted considerable profits.
While a number of companies are on the verge of hitting the market with exciting new drug products or medical treatments, the biggest 2011 profits for investors in the biotech stocks are more likely to come from mergers and acquisitions (M&A) than research and development (R&D).
That's because mergers and buyouts in the industry have far outpaced the sector's overall growth rate, which in recent years has been sluggish. Indeed, IMS Health, a leading research and analytical firm serving the pharmaceutical and medical industries, projects only a slight increase in worldwide growth in 2011 – 5% to 7% versus a pace of 4% to 5% this year – with a similarly restrained outlook stretching out to 2015.
By contrast, virtually every major player in pharmaceuticals worked at least one M&A deal in 2010. That trend is expected to continue, if not accelerate, in the years ahead as drug companies look to broaden product lines, replace revenues lost to patent expiration and expand into emerging markets, where the industry growth rate is much higher in than in the developed nations.
My parents are in their late 80s and still living life to the fullest. I honestly hope I live as long and am as active as they are today.
When my father was born his life expectancy was about 56 years. Today, he is getting close to twice that age and hardly slowing down. Last summer we took away the keys to his car, so he bought a street legal electric car that does not need a license and rejoined the world.
When I went home last month to visit my mother after she had a surprise triple heart attack, I was shocked at how many medications she was taking. She is recovering thanks to a cocktail of pills that are addressing her medical issues. This is technology that did not exist even 20 years ago.
Apple Inc. (Nasdaq: AAPL) has secretly built a massive server farm in Maiden, North Carolina that should come online any day now, if it hasn't already. The facility is five times larger than Apple's existing data center in Newark, California.
Apple has been typically cagey about the purpose of this data center, which ultimately could cost as much as $1 billion.
"North Carolina is on schedule," Apple Chief Financial Officer Peter Oppenheimer said during the July earnings conference call. "We expect to complete it by the end of the calendar year and begin to use it."
Much of Apple's existing business relies heavily on content delivery already, but building a 505,000 square-foot facility – which ranks it among the largest in the world – hints at far more grandiose plans.