U.S. gas prices have slipped from their recent peaks of $4.00 and above – is there a profit play here? Indeed, Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business’ “Varney & Co.” to discuss what’s going on with U.S. gas prices. Watch this clip to hear Fitz-Gerald explain what’s driving gas prices. He also shares two stocks investors can buy to profit from this move – if they act fast.
Archives for April 2012
April 2012 - Page 6 of 13 - Money Morning - Only the News You Can Profit From
How To Buy Silver: A Guide To Today's Top Silver Investments
As precious metals go, silver may not have quite the same mystique as gold.
But let's be honest: The "white metal" has its backers, too.
In fact, when Money Morning published its "How to Buy Gold" special report just a few weeks ago, one of the biggest questions that we received in response was: "When can you do the same for silver?"
That's just what we've done here. In this special report, we show you how to buy silver.
Silver: The "Other" Precious Metal
Although gold possesses the greatest allure of precious metals, silver has a longstanding tradition in many cultures – a tradition that in some cases reaches back thousands of years. Nearly 2,500 years ago, for instance, China was the first to use silver as money.
Here in the United States, silver alloys were still present in some of our everyday coins as recently as 40 years ago. Today, however, silver is no longer viewed that much as a monetary metal. But that's because about 40% of silver is used for industrial applications.
The physical silver market is small, with annual demand of slightly less than 900 million ounces.
Since the financial crisis of 2008, silver prices have increased by 300%.
And that's only the beginning. Silver is on the verge of a massive "short squeeze". The last time something like this happened, investors pocketed upwards of 195% in just a few months – but more on that later (Or you can get a sneak peek of our new silver special presentation right now. You can find it here.)
An important metric to understand and watch is the silver-to-gold ratio. It tells you how many ounces of silver it takes to buy one of gold. Historically, that ratio is 16 to 1. On this basis alone, silver should be much higher right now.
But perhaps a more realistic level, at least in the short term, is the ratio of silver-to-gold since the start of this bull market back in 2000. That ratio has been about 50-55 ounces of silver for one of gold. Even this more conservative estimate of silver prices vs. gold provides an excellent opportunity for investors to cash in as gold prices continue to rise.
How to Buy Silver
Like gold, silver investments can be made in a variety of forms. Let's take a look at some of the most popular.
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Agricultural Stocks: Fatten Up Your Portfolio on Food Price Inflation
For most Americans, the cost of food hasn't always been such a big deal.
For the better part of the last 30 years, food supplies were plentiful and the economy provided enough wealth to keep cupboards stocked.
But my how things have changed since the financial meltdown of 2008. Today, food inflation has more people concerned about the cost of groceries — and how they're going to pay for them.
Yet for investors, the same food price inflation dilemma presents an investment opportunity that is ripe for the picking.
With that in mind, agricultural stocks are where to look for the low-hanging fruit as food prices keep heading higher.
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Why Wall Street Can't Escape the Eurozone
Despite all of its best hopes, Wall Street will never escape what's happening in the Eurozone.
The 1 trillion euro ($1.3 trillion) slush fund created to keep the chaos at bay is not big enough. And it never was.
Spanish banks are now up to their proverbial eyeballs in debt and the austerity everybody thinks is working so great in Greece will eventually push Spain over the edge.
Spanish unemployment is already at 23% and climbing while the official Spanish government projections call for an economic contraction of 1.7% this year. Spain appears to be falling into its second recession in three years.
I'm not trying to ruin your day with this. But ignore what is going on in Spain at your own risk.
Or else you could go buy a bridge from the parade of Spanish officials being trotted out to assure the world that the markets somehow have it all wrong.
But the truth is they don't.
EU banks are more vulnerable now than they were at the beginning of this crisis and risks are tremendously concentrated rather than diffused.
You will hear more about this in the weeks to come as the mainstream media begins to focus on what I am sharing with you today.
The Tyranny of Numbers in the Eurozone
Here is the cold hard truth about the Eurozone.
One of the Telltale Signs Behind Risky Stocks
Short-term corporate thinking has been blamed for many of America's economic ills.
With little foresight beyond next year, management sometimes closes down plants and fudges accounting to make this year's earnings look better and boost the stock price.
Often, it is simply because management is excessively rewarded by short-term incentives such as stock options.
While investors might benefit from these shenanigans in the short-run, a new study points out the long-term effects are frequently negative.
A new Harvard Business School study entitled "Short-termism, Investor Clientele and Firm Risk" has shown that short-termism is bad for investors increasing their risks without any corresponding increase in returns.
In other words, risk and the short-term thinking usually go hand in hand.
Breaking Down the Conference Call
The study used a very interesting method to find out which companies are short-term oriented or more risky.
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Election 2012: President Obama Can't Solve High Oil Prices with Trading Regulations
The Obama administration lost its bid to get the Buffett Rule (which would have increased taxes for those earning $1 million or more) passed, so on Tuesday it shifted focus to another battle: Slowing the rise in oil prices.
U.S. President Barack Obama's proposed solution to painfully high prices is to limit speculation in oil markets.
The new bids that the president proposed seek more money ($52 million) for market enforcement and monitoring activities, call for loftier penalties for market manipulation, and require oil traders to put up more of their own cash for transactions.
At a White House press conference Tuesday President Obama said, "None of these will bring gas prices down overnight. But they will prevent market manipulation, and help protect consumers."
The move is in stark contrast with Republicans, who have been lobbying for more domestic drilling to help alleviate the near record-high gas prices. Paying more at the pump takes a bite out of consumer spending and has the potential to stall the slow-going economic recovery.
The maneuver, however, may be focused more on political strategy than consumer interest.
It is extremely doubtful that House Republicans will pass any measure that aims to implement more limits on Wall Street while the GOP looks to reduce regulation of the financial sector.
House Speaker John Boehner, R-OH, called it a political ploy and disparaged President Obama for not using the means already at his disposal to deal with the oil situation.
"The president has all the tools available to him if he believed that the oil market is being manipulated," Boehner said. "Where's his Federal Trade Commission? Where is the SEC? He's got agencies there. So instead of just another political gimmick, why doesn't he put his administration to work to get to the bottom of it?"
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Good News for Investing in Natural Gas: U.S. Government Approves Sabine Pass Plant
That breeze gusting through the streets this morning isn't the sign of a coming storm.
That's a collective sigh of relief coming from those investing in natural gas companies after a torrid first quarter for the sector. Natural gas prices have collapsed below $2 per 1,000 cubic feet for the first time in a decade.
And that's not even adjusted for inflation…
But on Tuesday came the first positive sign in months.
The U.S. government approved the development of the Sabine Pass plant, the first natural gas export facility in the lower 48 states.
CNN Money reports:
"The Federal Energy Regulatory Commission [FERC] voted in favor of Texas-based Cheniere Energy's plan to build a giant natural gas liquefaction and export terminal at Sabine Pass, which straddles the Texas-Louisiana boarder just north of the Gulf of Mexico.
Although environmentalists have threatened to sue to stop the 500-acre, $10 billion project, Cheniere says it plans to start building before July."
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Congress Wastes Time on Buffett Rule, Keystone Pipeline to Beef Up Attack Ads
They are at it again…
With a cynical eye cast toward the November election, members of Congress forced votes on the "Buffett Rule" and the Keystone pipeline knowing both would ultimately fail.
The real purpose for voting on the Buffett Rule and the Keystone pipeline was to embarrass the opposition and produce material for campaign attack ads.
France May be the Domino that Causes the Euro to Collapse
Commentators are wringing their hands again, worried the troubles in Spain could cause the whole euro project to collapse.
As a result, all eyes are now on Spanish 10-year debt yields, which went above 6% last week as the threat of euro-chaos returned.
But it's not Spain the markets should be worried about.
The reality is that Spain is not in too bad a shape and that a rescue would be affordable for the European Central Bank even if it was needed.
The real tottering European domino to worry about is France.
After all, it would be impossible for the remaining solvent members of the EU to bail out France if it began to fall.
The larger reality is that France's fiscal position is considerably worse than Spain's.
The country's debt-to-GDP ratio was 85% at the end of 2011, while Spain's was only 66%. What's more, France's public spending is 56% of GDP, according to the Heritage Foundation, compared to Spain's 45% of GDP.
Spain's current government has also instituted a stiff austerity program, mostly comprised of cuts in public spending, which will reduce its deficit below France's by 2013.
Meanwhile, France's austerity has so far consisted almost entirely of tax increases on the rich -not actual spending cuts.
T
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Microsoft Kinect (NASDAQ: MSFT) is Virtual Goldmine
Not long ago, the future of Microsoft Corp. (NASDAQ: MSFT) was slipping through its grasp.
Then it introduced Kinect.
Today, the tech giant is using Kinect to win big on a breakthrough that will literally touch millions of lives.
It is one of the reasons why Microsoft's stock has gained more than 20% this year.
What is Kinect?
You may recognize it as the best-selling add-on to the Xbox 360 video game. But it's much more than that.
It represents a revolution in how we will communicate with our computers, our TVs, and our smartphones.
For Microsoft, Kinect is literally a game changer. They lead the world in the technology behind it and it promises to be big.
But not just for Microsoft…not by a long shot.
The Promise Behind Microsoft Kinect
The magic behind Kinect is that it responds to body gestures.
And while Kinect did debut to rave reviews, Microsoft executives really didn't understand how Kinect could change the world — and rack up new sales.
But since its introduction in 2010, hackers have found dozens of very cool uses for Kinect– none of which did much for Microsoft's bottom line.
This got the software giant to thinking that maybe they were sitting on a potential gold mine.
That's why Microsoft is now tapping the genius of young entrepreneurs to better monetize the technology behind Kinect.
You know, the type of guys who live and breathe cutting-edge high tech.
In fact, Microsoft recently picked 11 startups to work at its Kinect development offices in suburban Seattle. It's a savvy move.
After all, these guys get out of bed every day looking to create the Next Big Thing.
Already, the program shows great promise. Here are some of the slick high-tech ideas these young turks are already tackling:
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