Archives for March 2013

March 2013 - Page 14 of 20 - Money Morning - Only the News You Can Profit From

A Beginner's Guide to Buying Physical Silver

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We get deluged with questions here at Private Briefing. And it's no surprise to me that the bulk of them are excellent queries. We answer them in different ways … some by writing back to the subscriber … and some as secondary topics in the daily column.

Many of your questions – like the dozens of requests we recently received about graphene – lead to actual recommendations or even special reports. Other queries will form the basis of "roundup-style" Q&As with our band of experts.

Every once in a while, however, we'll get a question that's so good, or that's so representative of other queries that we're getting, that it deserves a standalone answer.

And that's precisely the kind of question that we recently received about buying physical silver from Andy F.  It was on a topic so popular I decided to share it with our Money Morning readers as well.

Why Bigger Isn't Always Better in the Oil Business

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Forty years ago, British economist E. F. Schumacher wrote that "Small is Beautiful" in a famous book by the same name.

The vision champions market approaches that discount the importance of size to results, a philosophy that contrasted the notion that "Bigger is Better."

In bringing the idea of his teacher (Leopold Kohr) to a broader canvass and a wider audience, Schumacher began a debate that has revolved around the impact of technology and market size ever since.

Just last weekend, the debate renewed.

Again it was an English environment, but the subject matter would have been quite unexpected only a few years ago. This time the occasion was our annual energy consultations at Windsor Castle outside London. The debate focused on both size and profitability of oil companies in the development of new fields.

The key lesson: During expanding times in the oil business, like today, small is not only beautiful.

It is also profitable.

And it can be for you as well if you take the time to learn why…

Stocks to Buy: These Companies Will Profit from Higher Crop Prices

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Farm incomes are expected to climb to an all-time high this year, the U.S. Department of Agriculture predicts.

The expected increase – to a net farm income total of $128.3 billion, up from $112.8 billion in 2012 –
is good news not only for farmers but also for the fertilizer companies, making a few of them good stocks to buy now.

That's because the higher incomes will mean farmers invest more in their farms by expanding production to take advantage of higher prices they receive for grains.

And crop prices are expected to remain high enough this year to support increased fertilizer purchases by North American farmers. The United Nations Food and Agriculture Organization stated in January that food prices would stay at elevated levels due to tight grain stocks globally.

Its senior economist, Abdolreza Abbassian, told Reuters, "Prices are high and will remain high in 2013/2014."

How Social Media Stock Scams Could Put Your Money at Risk

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Social media stock scams – the use of tools like Twitter to spread misinformation to manipulate equities – is one more thing for retail investors to worry about.

A series of incidents over the past several months have put social media stock scams on the radar screens of the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the Federal Bureau of Investigation (FBI).

While securities fraud is an old problem, stock scams conducted via social media are more capable of causing maximum damage because of the rapid speed at which information spreads over social networks.

"Fraudsters are quick to adapt to new technologies to exploit them for unlawful purposes," Robert B. Kaplan, co-chief of the SEC Enforcement Division's Asset Management Unit, told the Financial Times. "Social media is no exception."

And you don't have to act on the misinformation yourself (such as acting on a false stock tip to buy a penny stock in a "pump-and-dump" scheme) to get hurt by the bad guys.

Like any type of securities fraud, social media stock scams can influence the decisions of investors to buy or sell.

But of greater concern is the increasing weight that social media traffic has on automated trading. Many private equity firms and hedge funds now incorporate data from social media streams because news often breaks there first.

"What we're starting to see now is people looking at Twitter to see key information," Charlie Irish, a technology consultant in London who advises financial clients on how to use new trading platforms, told the Huffington Post. "Quite often, you'll see data released on Twitter a few minutes before it hits the mainstream financial press."

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There's More Than One Way for the Fed to End QE

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The market has been looking ahead to the inevitable end of the U.S. Federal Reserve's quantitative easing (QE) program with considerable apprehension.

Most market observers expect the end of the Fed's QE asset-purchasing program to immediately result in a sharp sell-off in bonds and higher interest rates.

This is expected to hit the mortgage-backed securities (MBS) market, where the Fed has been very active, quite hard.

As part of a policy to communicate more openly with the markets, Chairman Ben Bernanke and the Fed have been regularly launching QE exit strategy trial balloons into the market to see how quickly they get shot down.

The latest exit strategy that has been gaining traction is the idea of "tapering" QE asset purchases so that there isn't a sudden halt to supply of money flowing from the Fed into the Treasury and MBS markets. The markets seem to be pretty sanguine about the tapering idea, although there has been no specific suggestion on timing.

Instead, the markets have been concentrating on how the Fed will get rid of all of the assets it has accumulated on its balance sheet during the QE program.

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Will Carl Icahn's Latest Move Push Dell Stock Even Higher?

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In a move that potentially staves off a battle over Dell Inc.'s (Nasdaq: DELL) $24.4 billion proposed deal to go private, activist investor Carl Icahn said today (Monday) he signed a confidentiality agreement with the personal computer giant.

Icahn's firm issued a short statement saying it "looks forward" to reviewing Dell's confidential financial info. The company hopes the move will keep Icahn from speaking out against Dell's planned sale.

In a letter to Dell last week, Icahn warned that Dell's insistence in moving forward with the $24.4 billion, $13.65 a share buyout would result in a costly, lengthy legal battle.

Icahn, who according to CNBC has amassed a 6% stake – or roughly 100 million shares – in Dell, opposes the proposed buyout of the Texas-based company that is being orchestrated by founder Michael Dell and Silver Lake Partners.

"The Going Private Transaction is a related party transaction with the largest shareholder of the company and advantaging existing management as well, and as such it will be a subject to intense judicial review and potential challenges by shareholder and strike suitors," Icahn wrote.

"But you have the opportunity to avoid this situation by following the fair and reasonable path set forth in the letter," Icahn continued.

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Stocks to Buy: Time to Pull the Trigger on These Three Winners

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U.S. gun sales are at an all-time high. Ammo is flying off store shelves as well.

And that bodes well for companies in the firearms industry, putting the three mentioned below on many investors' "stocks to buy" list.

Fact is, demand for guns and ammo over the past few months is breaking all records. Just take a look at statistics compiled by the FBI's National Instant Criminal Background Check System (NICS).

In February, NCIS recorded 2,309,393 background checks – 32% higher than February 2012. December 2012 saw the most background checks in any month in U.S. history, when nearly 2.8 million background checks were performed.

Altogether, the FBI recorded more than 16.8 million background checks for gun purchases in 2012, the highest number since they began publishing the data in 1998.

What's more, the actual number of weapons sold could be even higher because customers can purchase multiple guns for each check, USA Today reports.

In fact, demand is so high, the companies that make these products are having a hard time keeping up.

Dale Raby, manager at Gus's Guns shops in Green Bay, WI, told The New York Times his inventory of guns and ammunition was almost wiped out, especially AR-15 military assault rifles.

"I almost had fistfights over…that type of gun," Raby said.

"If I had 1,000 AR-15s I could sell them in a week," Jack Smith, an independent gun dealer in Des Moines told the Times.

Around the country, many guns are simply out of stock and prices are skyrocketing.

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CBS Touches New High - Analyst Blog

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Shares of CBS Corporation (CBS) reached a new 52-week high of $46.13 on Friday, Mar 8, gaining momentum from the company’s strategic initiatives focused on driving growth through affiliate and subscription deals coupled with the restructuring of CBS Outdoor. This Zacks Rank #2 (Buy) mass media company eventually closed at $46.00, recording a healthy return […]

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Gold Prices: Don't Ignore This Bullish Trend

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Gold prices have been languishing in recent weeks as investors have been drawn into riskier assets such as equities.

New highs in major world stock indices including the Dow Jones Industrials and the Nikkei 225 have investors looking for higher returns.

"Investors are not really looking for safe havens at the moment," Eugen Weinberg, head of Commodities research at Commerzbank, told Reuters. "Gold as inflation protection should get more demand from investors in the second half of the year. Right now, the market participants are looking for more yield and they're finding it in other asset classes like equities."

In fact, the amount of gold held by the SPDR Gold Trust (NYSE: GLD) has been declining since it peaked on Dec. 10, 2012. It was at 1,353.35 metric tons then and now stands at 1,244.86 metric tons as money has flowed out of precious metals and into financial assets.

But not everyone is shunning gold – and you shouldn't, either.

Why Your Financial Future Will Be Built Upon the Chinese Yuan

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If you have any illusions, put them aside now. It's the Yuan's world – the West is just living in it, or borrowing from it as the case may be.

Demand for the Yuan is growing at such a staggering rate that your financial future will be built upon it.

Admittedly, this is a very tough concept for most people to wrap their minds around. It's tough to lose "your" spot at the top and it's even tougher to know you're losing it and not be able to do anything about it because the leaders who are responsible for maintaining that position don't understand the end game.

It's made worse by Washington's insistence that the dollar is still a weapon when large swathes of the world now believe it's a liability. It's exacerbated by Europeans who forget that a sound currency actually requires underlying economic stability. It's threatened by the latest crop of Japanese bankers who seem determined to print money into oblivion.

Sadly, this is not new. The old guard always fights for the status quo when something different or not well understood like the Yuan comes onto the scene.