Archives for September 2012

September 2012 - Page 17 of 19 - Money Morning - Only the News You Can Profit From

Why the U.S. Drought is Hitting Harder Than Most People Realize

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This is an important update on the U.S. drought of 2012 and its impact on food prices, water availability, energy, and even U.S. GDP.

Even though the mainstream media seems to have lost some interest in the drought, all of us should continue to be aware of it since its ramifications are far-reaching.

As we discussed in this report, it's all connected to a larger pattern of exponential growth that is simply no longer sustainable. At stake is nothing less than the traditional American way of life.

This monumental drought has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River.

All this and there's also a strong chance that today's drought will negatively impact next year's Winter wheat harvest, unless a lot of rain starts falling soon.Hurricane Isaac certainly helped, but didn't go far enough.

Further, there will be a definite impact to U.S. GDP, which could add to pressures (excuses?) that the Fed may use to justify additional quantitative easing (QE) measures (otherwise known as 'printing more money').

Here's an in-depth look at why the U.S. Drought of 2012 is far from over…

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Investing in Silver: Double Down on the White Metal's Gains

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Gold remains the favorite of precious metals investors, but silver is now a strong number two…with a bullet.

That means you should consider investing in silver now before it goes even higher.

In case you haven't noticed, after wallowing around in the mid-20s for months, silver prices have shot back over $30 an ounce.

And thanks to wildly bullish technical and fundamental indicators, silver could soon retest its 2011 high, or even blow through it.

If that happens, silver's run-up will hand investors a fortune, so here's how you can cash in.

Turnaround in Silver/Gold Ratio

Historically, the price of silver per ounce has usually been equal to around 1/16th of an ounce of gold,meaning it took 16 ounces of silver to equal the value of a single ounce of gold.

But over the past decade, gold has taken off, trading as high as 60-70 times the price of silver.

That is, until last year. As silver prices rose to nearly $50 an ounce, the ratio fell to 30-1.

But as prices for the white metal settled near $27, the ratio has skyrocketed back up.

Right now, you get 55 times more silver for your money than gold.

But it would still have to triple in price to even sniff where it should be in relation to gold.
And there are signs that this is just what's going to happen.

Strong Signals for Silver Price Rally

From a technical viewpoint, the rally in silver may be just beginning.

You see, the silver futures markets are in what's known as "backwardization."

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QE3 Risks: Why this Harvard Economist Fears More Stimulus

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High U.S. unemployment and slowing economic growth have stoked hopes of a third round of quantitative easing, or QE3, from the U.S. Federal Reserve. Fed Chairman Ben Bernanke hinted that more was on the way – although failed to indicate when – in a speech Friday at the Jackson Hole, WY, economic symposium.

Bernanke repeated the Fed's recent stance that current economic conditions are still "obviously far from satisfactory" and more help would be coming "as needed."

Interest rates remain near zero, but the Fed maintains that it still has plenty of ammo in its arsenal to boost the economy. The Fed apparently doesn't want to do too little now while the economy faces high unemployment and some inflationary pressure.

On the other hand, doing too much could – if Fed policies interfere with Congress' ability to act down the road -lead to a backlash against the Fed's power.

And the farther the Fed goes with monetary stimulus measures, the deeper that problem becomes.

That's why Harvard economist Martin Feldstein is afraid of QE3. He thinks adding to the billions of dollars already committed to quantitative easing programs will hurt us more than it helps.

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What Drove Facebook (Nasdaq: FB) Shares to a New Low

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Since Facebook Inc.'s (Nasdaq: FB) debut as a public company at $38 a share on May 18, and the stock's peak at $45 on the same day, shares have tumbled nearly 50%.

Facebook stock hit a fresh low yesterday (Tuesday), with shares reaching $17.55 before closing at $17.73.

The slump came after a trio of brokerage firms slashed their price targets for Facebook shares. The firms cited the wave of expiring lockup periods that will flood the market with close to 1.7 billion shares over the next several months.

The first lockup period expired Aug. 16, freeing a first batch of some 268 million shares. In mid-October, 192 million more shares will be let loose, and on Nov. 14 a whopping 1.2 billion shares will be free to sell.

The total is more than four times the number of shares floating on exchanges before the lockup periods began expiring.

"It's like a train coming around the corner toward shareholders, so they better get out of the way," Francis Gaskin, president of research firm IPOdesktop told the Los Angeles Times right before the end of the first lockup.

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CPB Beats, Provides FY13 Outlook - Analyst Blog

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High-quality foods and simple meals manufacturer, Campbell Soup Company (CPB) recently reported fourth-quarter and fiscal 2012 financial results and provided fiscal 2013 outlook. Quarterly adjusted earnings per share came in at 41 cents and surpassed the Zacks Consensus Estimate of 38 cents. However, the quarter’s results witnessed a decline of 5% from 43 cents reported […]

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Chunghwa Reports Mixed 2Q - Analyst Blog

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Chunghwa Telecom Co. Ltd. (CHT) declared mixed financial results for the second quarter of 2012. Quarterly total revenue was approximately $1,826.2 million, remaining flat year over year. Second-quarter GAAP net income was approximately $379.8 million, down by a whopping 15.2% year over year.  Net earnings per ADR were 49 cents, down 5.8% year over year. […]

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Pinnacle Financial Partners Inc. - Aggressive Growth

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Pinnacle Financial Partners Inc. (PNFP) has gained nearly 70% over the last year, primarily driven by its strong earnings trend. This regional bank has surprised on the Zacks Consensus Estimate in 7 of the last 8 quarters, with an average beat of 66.6%. Strong fundamentals helped this Zacks #1 Rank (Strong Buy) to reach its […]

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The Future Belongs to Apple's iPad

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The Apple iPad is more than just a great tablet; it's the single most important computing device released in more than 25 years.

In fact, you'd have to go back to the introduction in 1984 of the Macintosh personal computer to find a machine as game-changing as this one.

Of course, back then, the Mac grabbed only a small share of the huge PC market. But what it did do was establish Apple Inc. (NASDAQ:AAPL) as the sector's clear technical leader. It also gave birth to desktop publishing.

This time around, however, Apple has turned the tables on its rivals in two ways…

  • First, it came up with a breakthrough approach and the ideal screen size. At nearly 10 inches diagonal – very close to the size of a piece of paper – this format feels natural to most users.
  • Second, it's a runaway success, boasting 70% of the market share.

That leaves tech investors like us with two choices: Learn what this all means, or get left in the dust.

You see, the PC industry is going into a long decline. It's already started. Ditto for newspapers, magazines, music distribution, and lots of other physical products that will get transformed into software.

So says Michael Saylor, author of the hot new book "The Mobile Wave: How Mobile Intelligence Will Change Everything." As I told you yesterday, I tracked Saylor down to talk about how mobile computing fit into the Era of Radical Change. (You can read the first of my three-part series here.)

His is hardly an academic view. See, Saylor also serves as the CEO of MicroStrategy Inc. (NASDAQ:MSTR), a leader in business intelligence.

He believes five billion people will use iPads or a comparable device within a decade. That's roughly 75% of the population of Earth. No doubt, he admitted to me, that's a bold prediction. He added this:

"It's a prediction upon which you can make a lot of money if you're an investor. Because if I'm right, then you will have beaten the crowds to that conclusion. And the reason I believe that is – we've reached an inflection point, where it's now cheaper to learn to read on a tablet than it is to learn to read on paper. And I think that's a very, very meaningful thing."

Naturally, I wanted to know just what investors need to do to make money off this trend, so I could share the information with you.

Saylor answered by sharing four key facts every investor needs to know about this market-dominating device.

Here they are…

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You Can't Beat the Juicy Yields Offered By These Global Giants

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Dividend investors have something of a problem if they'd like to invest internationally: there are actually very few foreign companies that pay really juicy dividends.

What's more, few of those have fully listed ADRs, so their shares can be very thinly traded.

That leaves income investors in a bit of a quandary since that's where the majority of the growth is found.

Even still, dividend-seeking investors would be wise to invest at least some of their money in fast-growing emerging markets and businesses outside the United States.

After all, the U.S. economy is mature, burdened with budget and debt problems, and subject to fierce competition from a lot of countries with much cheaper labor costs. It's also where we live, and the economy from which we derive our earnings.

It's simple risk-balancing, if nothing else.

However, all is not lost. There are a few global giants that will reward you with high-paying dividends, and today I'd like to highlight three of the best of them.

Three Ways to Bank Big Yields Internationally

Of the major international companies with fat dividends, the following seem to be the most attractive:

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