Archives for June 2012

June 2012 - Page 12 of 16 - Money Morning - Only the News You Can Profit From

Two Years From Now, You'll Wish You Bought eBay (Nasdaq: EBAY)

June 11, 2012 by William Patalon III

You probably know this longstanding Internet company as an e-commerce pioneer – but most likely view it as one whose high-growth years are in the past.

But tech guru Michael A. Robinson sees this company as the tech sector's top possible turnaround play – a transformation he says that will turn it into a mobile-commerce stock that every investor will want to own.

I'm talking about Internet auctioneer eBay Inc. (Nasdaq: EBAY).

Michael is a recent addition to the Money Map Press team – which means I can now access his insights for Private Briefing. He's an author and former journalist (like me) who's built himself into one of the top tech experts and futurists in the field.

That's not hyperbole. His Radical Technology Profits advisory service celebrated its one-month anniversary last week and he just closed out his first trade with a 132.9% gain.

The fact that he notched an options-magnitude profit on a stock … in only a month … is impressive enough – but to do so against such a lousy market backdrop makes this a pretty remarkable trade.

I've been spending a lot of time with Michael of late, just chatting to get to know him a bit more and to get some ideas for all of you. Earlier this week, he made a comment that so intrigued me that it became a conversation unto itself.

Let me share some of that conversation so that you can see how this guy thinks.

We were talking about tech-stock profit opportunities when Michael told me: "You know, Bill, I wouldn't count eBay out as a big-cap turnaround play. The company generates enormous amounts of cash … something like $1.3 billion in free-cash flow (FCF) … and it has some $3.8 billion in cash on hand with a 19% return on equity."

At the very least, Michael said that eBay shares represent "a more stable, long-term approach to the market."

But there's also an intriguing potential catalyst at work here.

"While most investors would view this as a somewhat unexciting company, the fact is that eBay has strong growth in Europe because of the downturn there.

"Furthermore, it just launched PayPal as a point-of-sale (POS) alternative," Michael told me. "Just a small fraction of the POS market could be worth several hundred million three years from today. eBay is working with VeriFone Systems Inc. (NYSE: PAY) on this, uniting eBay withthe world's largest maker of credit-card terminals."

So what makes eBay a "turnaround" candidate?

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Why Warren Buffett is Loading Up on Tungsten

June 11, 2012 by Don Miller

Warren Buffett is at it again.

Although he says he doesn't want to own gold, the world's most famous investor has taken a shine to what may be the most precious metal of the 21st century – tungsten.

Tungsten – element number 74 on the periodic table — is a super-hard metal used in everything from armor-piercing tank shells to wedding rings.

And the world is running out of it – fast.

That spells opportunity for savvy investors like Warren Buffett.

And it explains why IMC International Metalworking, part of Buffett's Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B) empire, recently invested $80 million in a tungsten mining project in South Korea.
The deal gives Buffett a 25% stake in what used to be the most productive tungsten mine on the planet. IMC has also guaranteed to buy 90%-100% of all the shiny metal from Woulfe Mining Corp.'s (TXSV: WOF) Sangdong Mine.

Sangdong is expected to produce half of the world's non-China tungsten and account for 7% to 10% of total global tungsten production when it reopens in 2013.

While the deal may come as a surprise to some, those in the know understand that Buffett just made another shrewd move to lock up supplies of a critical resource.

Tungsten – A Vital Part of Modern Life

Best known as the filament used in conventional light bulbs, tungsten is among the world's hardest materials.

Its ability to withstand extreme heat – the grey metal is corrosion and fire-proof — makes tungsten irreplaceable in a wide range of applications, including circular electric saws, drill bits for oil and gas exploration, and rocket engine nozzles.

But tungsten is more than just an extremely hard metal. Indeed, modern life virtually revolves around it and, in most cases, there is no substitute.

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How "Shock Therapy" Could Make Us All Smarter

June 11, 2012 by Michael A. Robinson

Mention the term "shock treatment," and just about everyone recoils in horror.

Indeed, the practice of sending electrical currents through the brain has gotten some very bad press over the years.

Now there's a brand-new twist on shock therapy. It offers a much more nuanced, gentler approach than what most people envision.

And new research indicates that it could have a wide range of advantages for millions of patients dealing with the effects of strokes and other damage to the brain. It could also help people manage pain.

Not only that, but – incredibly – shock therapy has now been shown to aid in the learning of new skills.

The U.S. military even hopes to use this new technology to train soldiers.

I'll give you all the details in a moment. But first, a bit of history.

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Why the Wall Street Journal is Dead Wrong about Asteroid Mining

June 10, 2012 by Michael A. Robinson

Asteroid mining hasn't even gotten off the ground yet.

But it's already drawing some bad – and very misguided – press

I wrote to you last month to tell you about a new startup that wants to mine asteroids for resources that could be worth trillions.

Indeed, as I said, just one of these rocks the size of an art museum could be worth $100 billion. (See "'Mining the Sky' for an Abundant Future.")

President Obama Urges Action Amid Recession 2013 Fears

June 8, 2012 by Diane Alter

As fears rise that the country will sink into recession in 2013, U.S. President Barack Obama addressed the nation Friday to discuss the necessary policy moves needed overseas and on the home front to protect economies around the globe.

At the White House press conference Friday, President Obama urged European leaders to act to mend the ailing region's escalating financial crisis. The president implored global finance ministers to infuse capital into fragile banks "as soon as possible."

"These decisions are fundamentally in the hands of Europe's leaders and fortunately they understand the seriousness of the situation and the urgent need to act," President Obama said.

The president also pressed upon Congress to pass measures to toughen the American economy. President Obama said the United States could swiftly feel the ripple effects of a potential recession in Europe, which could send the U.S. economy spiraling downward.

President Obama said steep and abrupt cuts to government spending would only stall the pace of the recovery, and in turn, worsen the government's capability to deal with debt and deficits.

"We've got a couple of sectors in our economy that are still weak," said the president. "Overall, the private sector has been doing a good job of creating jobs. The big challenge we have in our economy right now is state and local government hiring has been going in the wrong direction."

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WWDC 2012: Five Things to Expect from Apple (Nasdaq: AAPL)

June 8, 2012 by David Zeiler

Going by the predictions so far, Apple Inc. (Nasdaq: AAPL) will have plenty to talk about at Monday morning's (June 11) Worldwide Developer Conference (WWDC) keynote.

And this year's edition, the first WWDC without iconic founder and CEO Steve Jobs, figures to be scrutinized even more closely than usual.

WWDC is Apple's annual gathering for those software developers who create apps for its Mac and iOS (iPhone, iPod Touch and iPad) platforms. But the show is also an opportunity for Apple to unveil new features and products, which is why WWDC attracts a great deal of media attention.

Exactly what Apple will unveil at events like this has long sent tech pundits into fits of wild speculation. The company's secretive policies just add to the mania.

Sorting through the cacophony of rumors and speculation, Money Morning has distilled what to expect – and not to expect – from WWDC 2012.

Let's first go over some things Apple almost surely will not be talking about at WWDC 2012.

The Apple TV: If Apple is indeed working on a full-fledged television set, you won't see it at WWDC. In fact, this device may not turn up until early 2013 (and Apple will hold a "special event" when it does).

The iPhone 5: The next generation iPhone is expected in late September-early October, a year after the iPhone 4s debuted. It probably won't even be mentioned in Monday's keynote.

iPad Mini: Rumors about a 7-inch version of the iPad (which sports a 9.7-inch display) have been percolating for months. But such a beast, if it exists at all, won't appear at WWDC.

So what does Apple have up its fashionable sleeve this year? Here are the five most likely candidates:

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Silver Prices: Market Loses $90 Million to Ponzi Scheme

June 8, 2012 by Diane Alter

Silver prices this week dipped after U.S. Federal Reserve Chairman Ben Bernanke failed to confirm that more economic stimulus is on the way. Silver prices hovered below $29 an ounce Friday.

Meanwhile, millions of dollars that would have been invested in physical silver it turns out were instead held in a $90 million Ponzi scheme orchestrated in South Carolina.

The Commodity Futures Trading Commission (CTFC) reported Thursday it charged Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc., both of Easley, S.C., with offering contracts on silver sales, but never actually purchasing any metal.

The CTFC maintains in a filing Thursday in U.S. District Court in South Carolina that Wilson and Atlantic Bullion & Coin violated the Commodity Exchange Act and CFTC regulations by operated a Ponzi scheme dating back over a decade and continuing through Feb. 29 of this year.
Wilson and Atlantic Bullion & Coin fraudulently obtained at least $90.1 million from some 945 investors, the CTFC alleges.

The CFTC received jurisdiction over the entities from Aug. 15, 2011, to Feb. 29. During that time, Wilson and Atlantic Bullion & Co are accused of deceptively obtaining at least $11.53 million from at least 237 investors in 16 states under contracts of sales to buy silver, without buying or delivering the white metal.

According to the CTFC charges, Wilson and Atlantic Bullion issued fake account statements to unknowing investors who believed they had invested in silver.

The CFTC is after compensation for scammed investors, a return of illegal gains, civil monetary penalties, trading and registration bars, and permanent injunctions against further violations of the federal commodities laws if successful in its suit.

Cases like this are why choosing where to buy silver is a decision requiring research – which we've done for you in our special report, "How to Buy Silver."

However you choose to buy physical silver, gold or other precious metals, the most important rule is to deal only with reputable dealers who have proven experience in the business and clearly stated policies and warranties – especially if you're purchasing by phone or online.

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U.S. Dollar Forecast: How to Play A Short-Term Rally and Defend a Long-Term Crash

June 8, 2012 by Larry D. Spears

The U.S. dollar is currently on an upswing – but don't let it fool you.

What we're seeing is only a short-term rally inspired by Europe's travails. In the long-term, the U.S. Federal Reserve's loose monetary policy and the United States' own debt burden will drive the greenback back down.

That's the consensus among experts who follow the global money markets and the leading currencies, including several of Money Morning's own analysts.

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How I Learned to Stop Worrying and Love the Fiscal Cliff

June 8, 2012 by David Zeiler

Taking a header off the "fiscal cliff" might be the best thing that could happen to the United States.

It sounds crazy, given all the dire predictions economists are making about the "Taxmageddon" that will arrive on Jan. 1, 2013.

While true, no one is talking about what would happen to the economy after the fiscal cliff crisis of 2013.

If Congress fails to act and allows all the bad things to happen – the expiration of the Bush-era tax cuts and the payroll tax cut, as well as the enforced spending cuts (sequestration) agreed to in the budget deal last year – the federal budget deficit would start shrinking dramatically.

And the fiscal discipline, while brutal in the short run, would jump-start the economy by early 2014.

It's all in a recent Congressional Budget Office (CBO) report, "Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013."

The CBO ran projections based on two scenarios.

One looks at what would happen if Congress does nothing and lets the country go over the fiscal cliff. The other scenario looks at what would happen if Congress dodges the fiscal cliff by extending most, if not all, of the current policies.

Choosing to take a leap off of the fiscal cliff–as has been widely reported– would slam an already faltering U.S. economy. The CBO report says GDP would shrink by 1.3% in the first half of 2013, pushing the country back into a recession.

On the other hand, extending current policies would push GDP up 5.3% in the first half of 2013.

That may sound great, but a funny thing happens after those first six months.

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