Bayer AG's (BAYRY) earnings per share during the third quarter of 2012 came in at EUR1.68 (approx $1.50) compared to EUR1.12 (approx. $1.58) in the year-ago period. The company recorded an 11.5% (5.5% on an adjusted basis) growth in revenues to 9,665 million. Growth was witnessed across all major divisions at Bayer. Bayer continues to […]
Archives for November 2012
November 2012 - Page 18 of 20 - Money Morning - Only the News You Can Profit From
The Real Energy Opportunity After Hurricane Sandy Is Logistics
Since the storm last week, I've seen a recurring, disturbing bit of advice surface on those cable news investment shows.
The pundits are hard at work prognosticating on what is likely to spike in the aftermath of Hurricane Sandy. They are peddling a belief that this natural disaster will produce shortages – and that those shortages can be exploited for a short-term windfall.
But this is a mistake.
In fact, this is one of the most persistent errors made by investors during such a period.
In the medium-term, however, there is sometimes a consequence of a hurricane or other disaster that translates into genuine opportunity. There is certainly one this time. And I'll talk about how to position for that in a moment.
First, we need to explore what you as an investor should not do right now…
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The Secret Return to the "Gold Standard"
Although it happened more than 40 years ago, many Americans still rue the day back in 1971 when U.S. President Richard M. Nixon effectively took this country off the so-called "gold standard."
Under a true gold standard, paper notes are "convertible" into pre-determined, fixed quantities of the "yellow metal."
What actually happened back in 1971 was that President Nixon – facing huge budget and trade deficits, and a plunging dollar – enacted a series of economic moves, including the unilateral cancellation of the direct convertibility of the U.S. dollar into gold.
By slamming the "gold window" shut, Nixon also brought down the curtain on the existing Bretton Woods system of global financial exchange.
The fallout was immediate, creating a situation that financial historians still refer to as the "Nixon Shock."
Proponents of the gold standard say the real damage is still being wrought: That decision four decades ago led directly to the uncertainty, volatility and irresponsibility that we see in the U.S. economy and global financial markets today.
Whether you agree or not is a topic for another time.
But what I'm here to tell you today is that the world's central banks have quietly – almost secretly – returned the world to a new version of the gold standard.
Back in 2010, the world's central banks became net buyers of gold for the first time since 1988. Buying ramped last year and net purchases exceeded 455 metric tons (tonnes). That was the largest net purchase since 1964.
But the world's central bankers will handily eclipse the 2011 totals here in 2012: They will purchase a projected 493 metric tons this year as they expand reserves to diversify away from the U.S. dollar and protect their countries' economies against inflation, Thomson Reuters GFMS said.
And GFMS said you can expect central banks "to remain a significant gold buyer for some time to come."
Real Asset Returns Editor Peter Krauth told me he completely agrees with that assessment.
As Peter explained: "You can see their thinking, Bill … you can see them saying: "We have enough of all these fiat currencies in our bank reserves – now we want something that's going to counter those holdings, that's a valuable asset and that has all the right fundamentals in place.' And that asset is gold."
We're seeing the results of this "new gold standard" in the marketplace…
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Q&A With Shah: Now Is a Time to Come Together
We've got some really good Q&A today, thanks to some really good comments and questions from you folks.
But before we dive in, I want to say something about the storm that hit the U.S. this week.
Personally, I was lucky: Hurricane Sandy only brushed by my home in the Northeast.
But there are so many individuals, families, and businesses that weren't so lucky. They are dealing with everything from serious inconveniences to horrific tragedies.
My heart and prayers go out to all of you who are trying to recover from this truly devastating storm. I especially feel for those of you who lost family members, friends, partners in life, and your beloved pets.
I've had a glimpse of the devastation you're feeling. My girlfriend's amazing mother, sister, family members, and many, many dear friends live in Breezy Point and in the Rockaways. I was just there for her brother Johnny's wedding.
The home on the beach I stayed in is flattened. Her mother's house is a wreck. And many, if not most, of their other family members' and friends' homes burned to the ground, were flattened, or drifted out to sea.
Between the loss of lives and the horrific devastation, there's nothing much left of this once beautiful community where everyone knows everyone else and no-one locks their doors.
Breezy and the Rockaways will rebuild. That's what New Yorkers do.
They fight for their neighbors, their communities, their city, their state, and America. Their citizens will come together as neighbors and friends to help each other.
Because that's what Americans do. This is who we are.
In the meantime, I send my sincerest regards and deepest sympathies to those of you suffering tragic losses.
Okay. Now let's get started with your comments on "Big Bank Protectionism."
Q: What happened to our antitrust laws? ~ Ron
A: Good question, Ron. They are there to be used when competition is deemed to be in the public's best interest. In the case of big banks, "too big to fail" is what's in the public's interest – at least, if you go by what politicians are doing, as opposed to what they are saying. Get it? They're all for big banks because those monsters pay them monster amounts of hush money to leave them alone.
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Proof It's Not Too Early to Invest in 3D Printing
You continue to post thoughtful, intelligent comments and questions in response to my Era of Radical Change columns. Thank you.
This tells me we have a very savvy, active, and well-informed set of readers. I'm always eager to see what you bring to the discussion. Without your help and input, this column wouldn't be so successful (or nearly as fun to write).
Of course, the sheer volume of comments I get makes it impossible for me to address them all individually along the way. But I promise to keep doing my best.
With that in mind, let's tackle some of your latest queries…
Starting with a really interesting comment about 3D printing stocks.
Q: My background in materials strength and stress-strain analysis tells me we must expect a development period of some five to ten years until 3D-printing can become a real breakthrough in terms of manufacturing of mechanical parts. I would be cautious about investing heavily now in the hope of short or mid-term profits. ~ Al G.
A: Al, I can't compete with your knowledge of materials, and I won't even try.
But I do want to point out that we may be talking about two different aspects of 3D printing.
Clearly, there is a growing market for small businesses and consumers. These are lower-priced, entry-level printers. The cheapest mass market machine from a major company costs about $1,300. As Al points out, that's not going to give you solid, working metal parts that you might want to use in a car or a plane or for a lathe in a machine shop, for that matter.
However, many big companies are buying much more robust, expensive printers and putting them to good use throughout their supply chains. One publicly traded company for your radar screen is Stratasys Inc. (NasdaqGS:SSYS).
This firm is going after more of the upper end of the market – big outfits that can work this tech into their manufacturing lineups.
As regards investing, you should always be careful. But I don't think it's too early to make money from 3D printing stocks.
And here's proof…
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BMC's 2Q EPS Beats by a Penny - Analyst Blog
BMC Software Inc. (BMC) reported fiscal second quarter 2013 earnings per share of 71 cents, inching past the Zacks Consensus Estimate of 70 cents. Revenue Total revenue in the reported quarter was $548.2 million, down 1.5% from $556.7 million in the year-ago quarter. The company registered a massive growth in ESM wins during the quarter […]
Why Chevron (NYSE: CVX) Q3 Earnings Slumped
Chevron Corp. (NYSE: CVX) reported third quarter earnings today (Friday) that reflected the effect of lower oil and natural gas prices – but those prices will change in the aftermath of Hurricane Sandy.
Chevron's Q3 earnings showed revenue of $56 billion compared to $61 billion in the third quarter of 2011. Net earnings fell to $5.3 billion ($2.69 per fully diluted share) compared to $7.8 billion ($3.92 per fully diluted share) over the same period. Revenue and earnings both came in below average analyst expectations.
Chevron management blamed the decline on lower crude oil and natural gas prices in the U.S., lower international crude oil prices and on lower production due to depletion, planned maintenance and weather-related shut-ins.
Chevron (NYSE: CVX) Earnings
Lower prices were the biggest factors on Chevron's Q3 earnings.
"This quarter's earnings were solid, but off from their near record level of a year ago," said Chairman and CEO John Watson. "Crude oil prices were down and we had a heavy period of planned oil field maintenance which temporarily reduced oil and gas production in several locations. Foreign currency movements also hurt our results this quarter, while they benefited the year-ago period."
Chevron's international upstream operations reported an average crude oil price of $98 per barrel in the third quarter of 2012 compared to $103 per barrel a year earlier. Natural gas prices rose from $5.50 per thousand cubic feet in the third quarter of 2011 to $6.03 per thousand cubic feet this year.
Downstream operations were affected by lower volume due, in part, to a fire at Chevron's San Francisco area refinery, and lower marketing margins on refined products.
Share prices for most major oil companies are weaker in New York Friday, partly in reaction to Chevron's earnings miss and partly due to a 2% decline in the price of crude oil on NYMEX.
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Investing in Silver Wheaton (NYSE: SLW)? Here's What to Watch on Monday
With earnings season in full swing, on Monday Nov. 5 silver mining company Silver Wheaton Corp. (NYSE: SLW) will announce its third-quarter earnings before the bell.
After its second-quarter record-breaking results, what can those investing in Silver Wheaton expect?
Luckily, this quarter should be another good one.
Silver Wheaton's second-quarter earnings posted revenue of $201.4 millionfrom silver equivalent sales of 6.9 million ounces-a record for the company–and a 3% rise from $194.8 millionin the previous year. This came from a 36% increase in the number of silver equivalent ounces sold while silver production increased 10%.
The company increased its quarterly dividend to $0.10, which now has a 1.0% yield.
In its earnings release, Randy Smallwood, President and Chief Executive Officer ofSilver Wheaton, said, "For the second quarter in a row, we achieved record silver sales and revenues, putting us on track for our best year ever."
For the third quarter, sales and earnings will probably rise 25% and 29% respectively in 2012, reported MSN.
Here's what's behind SLW's money making.
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Stock Market Today: Strong Earnings Fuel These Huge Gains
The stock market today is down slightly, but two companies are soaring on great earnings and upgraded forecasts. Along with those two stocks, check out another company that has returned to profitability – but one leading energy company that's sending warning sings. Starbucks Corp. (Nasdaq: SBUX) surges on confidence- The Seattle, WA-based company posted a […]
How to Know When to Sell Apple Stock (Nasdaq: AAPL)
Trying to figure out when to sell Apple stock (Nasdaq: AAPL), particularly given its spectacular performance over the past several years, is a major dilemma.
If you're long on AAPL, you're no doubt trying to sort through a lot of conflicting signals.
With AAPL down about 16% from its high of $702.10 on Sept. 19 amid a wave of negative news, some financial pundits are calling a top and urging Apple investors to sell Apple stock.
Trouble is, they've done this many times before during Apple's long climb. Sometimes it's after AAPL hits a new high, and sometimes (like we're seeing now) it's after the stock dips in reaction to some bad news.
But investors who opted to sell Apple stock in years past lived to regret it.
Back in 2010, for example, when AAPL breached the $300 mark, plenty of bears urged shareholders to rush for the exits.
Any who followed that advice missed out on a 100% gain.
At the same time, Apple stock can't keep rising forever. No company can maintain the sort of exponential growth necessary to fuel the kind of gains Apple has enjoyed over the past few years.
But the big question is when this will happen. Now? Next quarter? Next year? 2015?
And as if that weren't enough to make an Apple investor's head spin, there's the added stress of volatility.
From late November to early April, AAPL soared $270, an astounding 75% increase in just four and a half months. Then it fell $100 in the next five weeks.
With turbulence like that, retail investors easily can get heartburn trying to figure out when to sell Apple stock.
That's why we put together some guidance.
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