Archives for February 2012

February 2012 - Page 11 of 11 - Money Morning - Only the News You Can Profit From

LNG Stocks Are Set to Take Off

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As I have discussed over the last two years, liquefied natural gas (LNG) is going to be a complete game-changer.

And along the way, a small group of LNG stocks will become the main focus for investors.

Remember, the LNG process cools natural gas to a liquid form, allowing it to be shipped over long distances. Upon arrival, the liquefied gas is returned its original state before being injected into pipeline for delivery to foreign consumers.

Already, the construction of LNG receiving terminals in Asia and Europe is accelerating.

Here's why.

The European and Asian markets have the biggest need for imports. These markets have a need to meet rising demand and restrain the prices commanded by long-term pipeline-delivered gas.

Luckily, LNG can do both.

Traditionally, natural gas has only been able to develop regional "spot" markets. These are locations where the availability of volume provides an opportunity for traders to execute a price for a quick sale (usually within 72 hours).

This is because the availability of product depends upon the development of import pipelines, which are multi-year, capital-intensive projects.

LNG, on the other hand, can be delivered to a terminal, so it can provide an immediate increase in available local supply.

To the extent that the LNG trade can be sustained, new spot markets are immediately formed around the hubs that develop at the intersection of terminal and delivery pipelines.

And now Qatar – one of the world's largest producers of conventional gas (that is, from freestanding gas fields) – has banked on LNG being the wave of the future.

Qatar has become the first country to commit all of its production to the LNG trade.

And that is a huge vote of confidence for this market.

Considering the number of new tankers involved, this single decision jolted the global shipbuilding industry into one of the most significant increases in business ever recorded.

The Qatari decision was just the first step…

A Global Boost for LNG Stocks

New export terminals are being built by other major gas producers – Russia, North Africa, and Canada. Our neighbors to the north have clearly signaled where the U.S. will be moving next.

A project is moving forward at Kitimat, British Columbia, on the North Pacific coast. It is scheduled for completion in 2014.

Developers originally intended this project to be an LNG receiving facility. But by the time the construction began, the intended flow of gas had changed by 180 degrees.

Today, this facility will be 100% committed to exporting LNG.

And the reason is the same one that is prompting so much U.S. discussion…

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NYSE: FB vs. Nasdaq: FB, And the Other Big Facebook IPO Questions

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Investors were on high alert today (Wednesday) for a Facebook IPO, which has rumored to reserve both NYSE: FB and Nasdaq: FB as possible ticker symbols.

A New York Post article reported the two listing companies were in "hot debate" for Facebook.

"Facebook won't significantly change the listing revenues for these companies but there could be a real halo effect wherein other companies decided to list with whichever wins Facebook," Larry Tabb, founder of capital markets advisory firm Tabb Group, told The Post.

Besides the ticker, the biggest questions on investors' minds include:

How much does Facebook want to raise? The latest rumors say the filing will set a preliminary goal of $5 billion, which can be raised if enough investor interest is shown.

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The Safe, Sure Road to a Golden Retirement

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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.

Buy Timber Stocks and Watch Your Money Grow on Trees

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Chances are you've never considered timber stocks in your investing strategy.

But if that's the case, then you've been missing out.

Timber is a long-term investment that can reward your portfolio in good times, and protect it in bad.

In fact, investing in timber has proven to be more profitable – and less risky – than any other asset class for almost 100 years. Investing in timber stacks up well against stocks, bonds, oil and other commodities-even gold.

Here's why…

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High-Frequency Trading Could Cause Another Flash Crash

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The threat of another flash crash caused by high-frequency trading is as great as ever.

And the next flash crash could be much worse than the one that shocked investors in May 2010.

Although the Securities and Exchange Commission (SEC) has taken some steps to prevent another flash crash caused by high-frequency trading (HFT), some experts question whether the additional disclosure and "circuit-breakers" designed to prevent big, sudden price moves will make a difference.

"Those things won't prevent another flash crash – they can't," said Money Morning Capital Waves Strategist Shah Gilani. "All they will do is soften the move."

The real issue, Gilani said, lies with the computers that execute the trades – thousands of them in milliseconds.

HFT has changed the nature of the stock market since these trades now account for between 60% and 70% of the transactions on the U.S. stock exchanges.

"You can't stop a flash crash unless you stop the computers from doing what they're programmed to do. And that's not being addressed," Gilani said. "The SEC is looking at keeping the ship from sinking, not stopping it from hitting icebergs."

HFT's heavy volume and high speed made it the prime suspect in the flash crash of 2010, when the Dow Jones Industrial Average plunged more than 600 points in five minutes, before recovering almost as quickly.

Mini Flash Crashes

Since then, the frequent occurrence of mini flash crashes – when a single stock or exchange-traded fund experiences a steep and rapid drop in price that quickly reverses – have served as nagging reminders of the vulnerability of the system to such events.

"It's like seeing cracks in a dam," James J. Angel, professor at the McDonough School of Business atGeorgetown University told The New York Times. "One day, I don't know when, there will be another earthquake."

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