Archives for January 2013

January 2013 - Page 4 of 20 - Money Morning - Only the News You Can Profit From

Why Top Hedge Funds Can't Outperform the Market

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Hedge funds are known as the "smart money" on Wall Street, and in the past, that distinction was justified.

For years, hedge funds successfully managed risk and made well-placed bets, leaving their investors with a return they were happy to pay for.

But recently, hedge funds have underperformed the market, earning a return of just 7.32% in 2012, according to research firm eVestment, compared with last year's S&P 500 return of 13.41%.

Was 2012 just an outlier, or are hedge funds really inferior to a market-based index?

One investing legend thinks it's the latter and has even gambled $1 million on it.

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Are Steep U.S. Spending Cuts Inevitable?

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U.S. Rep. Paul Ryan (R-WI), the chairman of the House Budget Committee, is adamant Republicans will resist any further tax increases – a staunch GOP stance that makes steep spending cuts almost certain.

Ryan, the 2012 vice president nominee, told NBC's "Meet the Press" Sunday that the $1.2 trillion worth of automatic spending cuts will take effect because "Democrats have opposed our efforts to replace those cuts with others."

In the NBC interview, Ryan took aim at President Barack Obama.

"I don't think that the president actually thinks we have a fiscal crisis," Ryan said. "He's been reportedly saying to our leaders that we don't have a spending problem, we have a healthcare problem. That leads me to conclude that he just thinks we ought to have more government-run healthcare and rationing."

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Dividend-Paying Stocks to Buy: High Yield from an Unexpected Sector

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Until recently you rarely if ever heard technology mentioned as a good sector to search for dividend-paying stocks to buy.

Technology companies for decades have eschewed paying dividends to shareholders – to grow, you had to spend money. They plowed their annual profits back into the company, spending on research and development or acquiring smaller tech companies that improved their product offerings.

Only the largest tech companies like International Business Machines Corp. (NYSE: IBM) ever paid meaningful dividends to their shareholders. If a tech stock paid a dividend, investors would take it as a sign that the company had matured and was no longer a growth stock with meaningful opportunities for appreciation.

In fact, a dividend declaration by a technology company could often lead to a sizable stock decline.

But those days have changed.

How Tech Companies Evolved Into Dividend-Paying Stocks

Tech stopped shunning dividends in the 1990s when tech stocks went through a boom phase.

That's because institutional investors have mandates that prevent them from buying anything other than dividend-paying stocks, and they felt they were missing the action in the technology and Internet sector. They began to pressure tech stocks to pay a small dividend so they too could participate in the runaway rally.

Since then we have seen many of the tech giants initiate regular dividend payments to their shareholders. They were never intended to be significant but things have changed dramatically in the last decade.

Today many of these tech giants have seen their stock prices decline as their cash balances increased. They have raised the dividend to the point that tech stocks can now be a meaningful addition to income portfolios – especially for pre-retirement investors looking for income streams that will still be healthy 10 years from now.

Here are a couple examples of some of the best sources of yield in tech.

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Will "Saudi America" Become a Reality?

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U.S. energy independence has been a dream since the oil embargoes of the 1970s. But this vision of a "Saudi America" has always been just a dream.

Investors and non-investors alike started talking in earnest about realizing that dream last November. That was after the International Energy Agency's (IEA) latest World Energy Outlook said that the U.S. would overtake both Saudi Arabia and Russia in oil output by the second half of this decade.

Its forecast calls for the United States to be producing 11.1 million barrels a day in 2020 compared to Saudi Arabia's 10.6 million barrels a day.

The IEA's Outlook went on to say that by 2035 the United States could be almost self-sufficient in energy, and talks about "Saudi America" began to surface.

That talk picked up energy recently after the release of the annual energy outlook from BP PLC (NYSE ADR: BP). BP stated the U.S. would be 99% energy self-sufficient by 2030 and that it would be the top global oil producer this year.

Here's why the IEA and BP are so optimistic.

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Is This Drug the Key to an Alzheimer's Cure?

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It isn't just the lousy outlook for Social Security that has so many of us worrying about our Golden Years.

It's also the reality that one out of every eight people who read this will suffer from the one affliction that Golden Agers fear the most.

I'm talking, of course, about Alzheimer's, a disease that already affects more than five million Americans. And with the aging of the nation's Baby Boomers, the number of Alzheimer's cases is set to quadruple.

It's not just the nightmarish symptoms – and the impact the disease will have on our families – that leave us feeling both fearful and frustrated. It's the inability to fight back that adds a feeling of helplessness to it all.

You see, of the Top 10 causes of death by disease, Alzheimer's is the only one that cannot be cured, treated or slowed down.

But that may be about to change – and a vaccine could soon be at hand …

A research team at Canada's Université Laval has just discovered a way to stimulate the brain's natural defense system to combat Alzheimer's.

This bit of breakthrough research could supercharge the race for the cure.

There's even a way for you to invest – today.

Here's the Surprising Winner of the Currency Wars

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It's war by other means. With the Bank of Japan now buying government bonds and targeting an inflation rate of 2%, a global race to the bottom is on again.

Along with the Fed's commitment to "quantitative easing" and the ECB's promise to buy dodgy Mediterranean economies' bonds, Japan's latest move has sparked new fears of a currency war.

Like any other war, this one won't end well, either.

In fact, this same scenario played out in the 1930s, and the chances of another nasty outcome are quite high.

However, the mathematical reality is that the world's major currencies can't all be catastrophically weak against each other. It's impossible.

But the winner may surprise you. Because as this skirmish unfolds, it is the U.S. Dollar that will likely maintain its value against desperate contenders like the yen, the euro and the pound.

At the moment, those are the currencies that look distinctly unlikely to hold their own against the greater realities.

Here's why, starting with the yen.

These Tech Breakthroughs Are Too Big to Ignore

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Of all the concerts I went to in my younger days, a Ramones performance I attended at the historic Fillmore auditorium more than 20 years ago is the one I remember the best.

I remember it so well because I couldn't hear for three days.

As a musician, the experience gave me an indescribable scare; though I attended more concerts, I'd learned my lesson and promised to never let that happen again.

But others haven't been so lucky.

Two decades later, volume-related hearing loss is one of the few bridges spanning the so-called "digital divide" – the gulf that separates Baby Boomers like me from the smartphone-savvy Millennials that are half our age. For older adults, too much loud music at rock concerts is a common cause. For our younger "Generation Y" counterparts, it's the "ear-bud" headphones that blast music from iPods or other mobile devices.

But the millions of Americans who currently suffer from hearing loss may finally have hope … thanks to new "ear drops."

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What Everyone Absolutely Needs to Know About Money

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I got my start studying economics at UCLA. That started me on a career that's lasted for more than 30 years, trading equities, bonds, commodities, currencies, derivatives, and real estate. It continues to be a great, rewarding career and it's afforded me a wonderful lifestyle.

No one is born with a mastery of these fields. It takes careful study and years of experience before one gets a real grasp of economics, money, and the markets.

But you have a great head start.

We live in the Information Age. There are hundreds of financial and business news outlets. Discount brokerages have opened up everywhere, putting the power directly in the traders' hands. The Internet offers a huge body of knowledge and opinion on investing, markets, and money.

All of this – and more – is available to each of us. But I've been wondering why there aren't more successful investors or traders. Then, in an "Ah-ha!" moment the other day, I realized why: No one teaches you how to "fish" the markets!

You know the old saying… Feed a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.

That's just what I'm going to do. Starting today, and continuing on, I'm going to use our Insights & Indictments space to give vital insights on mastering the markets.

You'll have the benefit of more than 30 years of experience and success in the palm of your hand. You will be the master of your own destiny.

Your first lesson starts with money. Here's what everyone absolutely needs to know about it.

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Cadence Forecasts Ofirmev Sales - Analyst Blog

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Cadence Pharmaceuticals Inc. (CADX) recently announced that it expects preliminary net revenue of Ofirmev (acetaminophen) injection to be approximately $17.1 million for the fourth quarter. The preliminary revenue guidance is above the earlier projection of approximately $15.9 million to $16.4 million issued during the third quarter earnings release. The remaining financial results for 2012 will […]

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Will the Debt Ceiling be Good for Gold and Silver?

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Investors preparing for Washington's budget battle need to know: Will the debt ceiling be good for gold and silver?

Thanks to recent legislation passed in the U.S. House of Representatives Wednesday, the debt ceiling could be extended until May 19. The bill now moves onto the Senate where it is expected to get the green light, then should be signed quickly by U.S. President Barack Obama.

That gives investors time to prepare for what any budget decision – or indecision – out of Washington will do for their investments.

While the bill leaves the government without a long-term budget strategy, investors ought to have a plan in place.

One thing they can plan on is higher silver and gold, and here's why.

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