Archives for August 2012

August 2012 - Page 15 of 20 - Money Morning - Only the News You Can Profit From

Buffett Sells 3 American "Darlings"

They've generated billions for investors over the decades. But according to Warren Buffett's latest moves, the party is winding down for three of America's best-known – and widely held – cash cows. According to the most recent filings, Berkshire Hathaway (BRK-A) is trimming its positions in Johnson & Johnson (JNJ), Procter & Gamble (PG), and […]

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Good Company, Bad Time to Buy

If you were forced to buy either Priceline.com Inc. (Nasdaq: PCLN), which sank more than 100 points yesterday (Wednesday), or McDonald's Corp. (NSYE: MCD) which reported its July same-store sales were the worst in almost 10 years, what would you do?

Money Morning's Chief Investment Strategist Keith Fitz-Gerald appeared on Fox Business' "Varney & Co." on Thursday to answer that question.

The global and European economic uncertainties have a severe negative impact on both companies' recent earnings and future outlooks. Although both are good companies, they're not both good "Buys" right now.

Watch the entire accompanying video to get Keith's full analysis on which company will rebound in a few weeks, and which one to avoid for longer.

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2012 London Olympics: Economic Benefits Not What You Think

With the whole world eagerly focused on the 2012 London Olympics, it's easy to think of this year's games as one big fundraising event for the city – but it's far from the case.

Like any host city, London expected a three-week surge in visitors to draw record revenue for the region and its vendors.

But the 2012 London Olympics, like global sporting events before, will disappoint.

Instead of luring money to the city, it actually drives out the usual spenders and decreases tourism, drastically reducing revenue for local businesses. That means host cities hardly ever recoup the costs it takes to prepare for holding the Olympic Games.

Just look at Montreal.

Montreal, which hosted the 1976 Olympics, is the best example of the negative economic side effects of the Olympics.

The city's mayor infamously said "the Olympics can no more lose money than a man can have a baby."

He couldn't have been more wrong.

Mismanagement and unexpected costs left the city's citizens with a $1.5 billion debt that took three decades to erase. The final payment on the debt was made in 2006.

"The government wants to say that not only are we going to have a good time with this event, but it's also going to make us rich," Stefan Szymanski, professor of sports management at the University of Michigan, told CNN. "And that's just not true."

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Nelnet Profit Moves Ahead - Analyst Blog

Student lender, Nelnet Inc. (NNI), reported second-quarter 2012 earnings per share of $1.13, well ahead of the prior-year quarter’s earnings of 98 cents per share. The company experienced a growth in its top line mainly aided by its fee-based revenue business. Yet, a rise in expenses partially marred the benefit. On a GAAP basis, its […]

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Winning the Race for Resources

The world watched in awe as American swimmer Michael Phelps became the most decorated Olympian of all time.

I've read he's been training in the pool for an average of 6 hours a day, 6 days per week, which equates to about 30,000 hours since age 13 and about 10,000 calories burned during a training day. It's inspiring to see the incredible results of his tremendous sacrifice and commitment.

Investing in global markets requires the same sort of stamina, especially at times like this week, when the month's reading on the manufacturing industry was not encouraging. The J.P. Morgan Global Manufacturing PMI of 48.4 for July was the lowest since June 2009.

However, I believe there are encouraging pockets of strength to energize and inspire investors.

For example, we're coming up on the anniversary of the first stimulus move that kicked off the global easing cycle.

On August 31, 2011, Brazil unexpectedly cut rates by 50 basis points, and since then, ISI says 228 stimulative monetary and fiscal policy moves have been initiated across several countries, including the Philippines, China, France, and Colombia.

In June and July alone, there were nearly 70 moves-the most since the world began this massive easing.

Generally, by the time central banks make a fiscal or monetary easing move, economic deterioration has already occurred.

Even with these moves, it still takes several months for the stimulative measures to take effect and work their way through.

China Makes Its Move

But while the world wades in the shallow end of the pool waiting for the economy to warm up, Asia has taken a deep dive into the energy space as they've recently announced acquisitions of Canadian resources companies.

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This Tiny Startup Has Scored "Microchip Medicine" Breakthrough

A tiny startup has received FDA approval to sell a novel new drug-tracking sensor that could literally save your life one day.

It's a "pill" as big as a grain of sand and it could also mean huge profits for Big Pharma companies in the not-too-distant future.

You see, each year millions of American s throw away tons of unused drugs. What happens is they start feeling better and just stop taking their meds. Eventually those pills get tossed in the trash can.

No one seems to know the full dollar value of all those unused drugs but many experts say this waste costs Big Pharma millions in profits in lost refills.

Not only that, but doctors around the world worry about the rise of drug-resistant bacteria which also stems from patients not taking their full regimen of antibiotics.

It's why doctors always tell their patients to take all their antibiotics even after they feel better. Otherwise, the few germs that manage to survive become more powerful and thwart the effects of stronger drugs taken at larger doses.

Enter a tiny new startup called Proteus Digital Health Inc. The company has developed a new electronic sensor that could transform the way millions of Americans manage their drug intake.

The move puts Proteus front and center in the hot new field of "microchip medicine."

Experts call it that because patients either swallow a microchip that releases doses into the bloodstream or ingest a small medical monitor like the one Proteus makes.

Proteus has the backing of a dozen firms. They include:

  1. Novartis AG (NYSE: NVS), one of the world's biggest drug makers.
  2. Medtronic Inc. (NYSE: MDT), a big-cap medical device firm.
  3. Kaiser Permanente Ventures, the venture arm of the large HMO.
  4. On Semiconductor (NASDAQ: ONNN), a mid-cap maker of chips and other devices.

No doubt, Proteus has some great technology behind it. Here's how it works.

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Mobile Wallet Technology Just Perked up With Starbucks Deal (Nasdaq: SBUX)

For the mobile payment movement, today's (Wednesday) Starbucks Corp. (Nasdaq: SBUX) deal could be the first of many as mobile wallet technology begins to take hold.

Starbucks announced it is pouring some big bucks ($25 million) into the mobile payments start-up Square.

Starting this fall, Square will process all credit and debit card transactions at Starbucks stores scattered across the United States.

According to Starbucks CEO Howard Shultz, the partnership with Square represents a "breakthrough deal for the marketplace."

"Anyone who is going to break the mobile payments barrier in the U.S. has to overcome the resistance to try anything new when everything we have works really, really well, even cash, which is very convenient. But if a big merchant jumping into some mobile payment solution signals to other merchants that there is an opportunity here, that might change the psychology for other merchants," Bill Maurer, director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine, told The New York Times.

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CFTC’s Chilton Assures Silver Price Manipulation Probe Not Over

A report Monday that the Commodities Futures Trading Commission (CFTC) would drop its four-year-old probe on silver price manipulation may have been premature.

According to The Financial Times, the CFTC was supposedly unable to find enough evidence to support the claims after reviewing 100,000 pages of documents and interviews.
But Bloomberg News reported today (Wednesday) that CFTC Commissioner Bart Chilton said silver price manipulation did occur, and he's intent to find it.

"I continue to believe, consistent with my previous statements and information from the public, that there have been devious efforts related to moving the price of silver," Chilton wrote to Bloomberg. "There have also been silver and gold market anomalies outside of the silver investigate window that have raised, and continue to raise, market concerns."

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H&E Equipment Services - Aggressive Growth

Earnings estimates for H&E Equipment Services Inc. (HEES) have moved higher in the past week after the provider of integrated equipment services announced upbeat second quarter 2012 results and debt restructuring initiatives. With an average earnings surprise of 135.0% over the past four quarters and with shares nearing their 52-week high, this Zacks #1 Rank […]

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Stock Market Today: Why the Three-Day Rally is Losing Steam

After three days of gains that put the major U.S. indexes at their highest levels since May the stock market today opened slightly lower. Concerns over global productivity, the Eurozone debt crisis, and a comment by Federal Reserve Bank of Dallas President Richard Fisher have choked the short rally.

Fisher stated that adequate economic stimulus is in place and that global central banks may not have the capacity to undertake additional stimulus measures.

In the U.S., nonfarm productivity grew faster than expected during the second quarter, but still at a slow 1.6% annual rate. Economists had expected on average to see a 1.3% rate. The Labor Department also revised numbers from earlier this year and 2011 that showed productivity was better than originally thought.

Overseas, Standard & Poor's Rating Services on Tuesday lowered Greece's long-term credit outlook from "stable" to "negative." The rating agency said that Greece will need further aid from international lenders and needs to implement harsher austerity measures.

The outlook drop means Greece's credit rating, which remained at the junk status CCC, could be lowered in the near future if Greece does not receive additional funding.

England's central bank issued its quarterly inflation report Wednesday and it was not optimistic. The Bank of England cut its prediction for GDP growth this year from 0.8% to 0.0%. The bank also lowered its forecast for economic growth over the next two years from 2.6% to 2%.

"The economy will continue to face headwinds over the forecast period, from the fiscal consolidation and tight credit conditions at home, as well as from the difficulties in the euro area and a broader slowing in the world economy," Bank of England governor Sir Mervyn King said in a statement.

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