Archives for March 2013

March 2013 - Page 18 of 20 - Money Morning - Only the News You Can Profit From

How to Become a Graphene "Wildcatter"

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You've got a rare opportunity to be a high-tech "wildcatter" – thanks to a new miracle material that is destined to revolutionize just about any industry you can think of.

Medicine and biotechnology … electronics … energy … computers … they'll each be revolutionized by this new substance.

For instance:

Doctors will soon use it to create implants that will end brain disease…

Technologists will use it to take the power of 1,000 mainframe computers and hardwire it into your smartphone …

And biotechnologists will use this very same substance to work as "synthetic blood."

I'm talking, of course, about graphene – a substance that I like to refer to as the "miracle material" of the 21st century.

You see, I've been following this exotic new substance for some time now and am struck by the high level of interest you readers have in this unique form of graphite (which, of course, is the stuff that's in the tip of your pencil).

And these days, I get more comments and questions about graphene than I do on any other high-tech topic that I cover.

So today I'm going to tell you about two brand-new breakthroughs that will hasten graphene's arrival as a commercially viable substance.

And I'm also going to show you how graphene can put profits right into your pocket.

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Why Junior Miners Are Struggling to Survive

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Junior miners, small mining companies still in the exploration or early production stages of mine development, are having an increasingly hard time raising sufficient funds to get their mines into production.

With companies quickly burning through their limited capital, Bloomberg News estimates that on average, junior mining companies have only 5.7 months worth of cash on their balance sheets, down 25% from last year. Unless smaller mining companies can raise more capital, they will be unable to fund ongoing exploration projects and will have to cease operations.

Mitchell Krebs, chief executive officer of Coeur d'Alene, told Bloomberg, "You will see a lot of companies hit the wall in 2013."

That makes them tempting targets for some of the bigger, well-financed mining companies such as Coeur d'Alene Mines Corp (NYSE: CDE).

If a junior miner sitting on a strong claim gets shut out of the capital markets, a well-funded buyer can acquire the company and its claim for a song.

"Everyone seems to be running away from it now and looking at selling off assets," Newmont Mining (NYSE: NEM) CEO Gary Goldberg said in a Bloomberg interview Feb. 25. "That's the time to look in the opposite direction from the herd to see what opportunities might be out there."

Stocks to Buy Now: Cash in on Dividend Growth in this Energy Subsector

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Income investors looking for stocks to buy in the energy space have had several prominent choices over the years.

Integrated names such as Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), for example, have lengthy dividend increase streaks, though neither fit into the high-yield category.

Royalty trusts and master limited partnerships (MLPs), two asset classes abundant in the energy sector, have surged in popularity in recent years mostly due to their large payouts and high yields. MLPs have also proven popular with conservative investors due to the predictable, prosaic nature of the oil and gas transportation business that leads to a steady stream of rising dividends.

But broadly speaking, the oil services subsector has been left out of the energy dividend conversation.

Oil services investors have had only a couple options within the sector when looking for dividend stocks to buy.

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What Bankrupt Athletes Wish They Knew About Financial Windfalls

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Few among us haven't dreamed of sudden riches – the financial windfall of a big legal settlement, an unexpected inheritance, a winning lottery ticket, or, for the young and athletically gifted, a lucrative contract with a major professional sports franchise.

But it turns out that few are prepared for a financial windfall when it comes their way.

Nowhere is this more obvious than with big sports stars.

Despite the proliferation of multimillion-dollar contracts, an astonishing number of professional athletes are forced to declare bankruptcy within a few years of hanging up their jerseys.

In the National Football League, for example, where the average salary is $1.9 million, 78% of former players are in bankruptcy within five years of retirement. That figure is 60% for former National Basketball Association players, who earn an average of $5.5 million a year as players.

How can people so generously compensated go broke so quickly?

Part of it has to do with youth, but many of the mistakes athletes make with the financial windfall of a professional sports salary also are made by regular people who suddenly come into large sums of money.

There's a lot we all can learn from their mistakes. When it comes to financial windfalls, it's best to know what to expect ahead of time so you can put the money to work for you instead of squandering it.

"Every single day, people come into large sums of money, whether it's a thousand dollars or a million, and without proper planning, funds quickly disappear," writes Jim Wang in U.S. News and World Report. "Just look at the horrible stories you often hear of lottery winners, and you'll have enough evidence that everyone needs a little preparation, even if you don't expect to get a windfall."

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The Scary Reality of the Student Loan Bubble in 5 Charts

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The explosion of the student loan bubble could lead to the next financial crisis in the United States, says a new federal report -which highlights the growing problem in these alarming new charts.

As of 2012, about $1 trillion was tied up in student loans – more than the total amount of credit card debt in the nation, the report by the Federal Reserve Bank of New York said.

The majority of the student loans are backed by the federal government, which means the public bears most of the risk associated with student loans.

And those loans are looking riskier by the day.

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Gold and Silver Prices Boosted by These Global Moves

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Gold and silver prices both marched toward their largest gains in more than a week Tuesday joining the uplifting mood on Wall Street. As the Dow Jones Industrial Average reveled in a historic rally that took the benchmark to a record high, commodities also soared. 

Gold prices settled Tuesday's trading session up $2.50, or 0.2%, at $1,574.90 an ounce, supported by stimulus chatter and a weaker dollar. The safe haven metal had reached as high as $1,585.80 an ounce intraday, on course for its biggest leap since Feb. 26.

Year-to-date, gold has dipped 5.7%. The commodity logged its fifth consecutive month of declines in February, marking its longest stretch of declines since 1997.

Silver prices rose 1.7% to $28.97 in early trading, their biggest gain in more than a week. The white metal ended the day at $28.81.

While silver's slip since January has been more modest than gold's, it's well below the $34.89 it traded at during the same period a year ago.

But loose monetary policies worldwide, geopolitical uncertainties, rising oil prices and renewed fears of inflation should support, if not boost, both gold and silver prices in the months ahead.

Aggressive Global Stimulus Here to Stay

Driving gold and silver prices higher Tuesday were comments from Federal Reserve Vice Chairman Janet Yellen.

At the National Association for Business Economics conference Monday, the Federal Open Market Committee's (FOMC) Yellen defended the bank's $85 billion a month of bond purchases.

"At this stage, I do not see any (risks) that would cause me to advocate a curtailment of our purchase program," Yellen said.   

Yellen's sentiments mirror that of Fed Chief Ben Bernanke, who thinks continued stimulus will be good for the U.S. economy. Acknowledging there are risks from the Fed's aggressive efforts to stoke the anemic U.S. economy, Yellen added there are also risks from not being aggressive enough.

This news from overseas is also bullish for gold and silver prices…

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Sequestration Is a Gift - Not an Apocalypse

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Everybody sing along…

It's a happy day… Oh happy days. It's a happy day…Oh happy days. When sequestration rules it drives the tears away… Oh happy days!

Apocalypse!

Armageddon!

Those are the words President Obama used to describe what would result from sequestration.

Please, don't make me laugh. The sequester will not only not ruin America, it will in fact start the process of fixing what Congress can't – no, make that won't – fix.

What's the upside?

Our magnificent Founding Fathers were all together in the creation of the United States, but it didn't mean they all loved each other or that they all had the same views about government. They sure didn't. But, those differences were acknowledged and incorporated into the Constitution and sanctified – for the people – in the Bill of Rights.

That's divided government folks. This ain't socialism, though sometimes it feels like it.

And it's that nagging feeling that a slimy, slithering strain of socialism is snaking its way into mainstream politics that keeps me up at night, in case we, the people, are overrun by "them" – the usurpers of republican democracy.

Thank goodness that divided government gave us sequestration.

So, Congress can't get along. That's nothing new. The question is who gets to pander to their constituents. That's nothing new. We have sequestration. So, what? That's nothing new.

We need to cut crap out of the budget – A lot of crap. I'm sorry if that word bothers you… but I'm not allowed to use stronger language. Don't hate me because I'm fed up. You should be, too. Maybe you don't use strong language. Maybe you don't use colloquialisms (you're better then me, I grant you that, for sure) but I'm willing to bet that you're just as mad as I am.

The Republicans want to protect the rich and their tax loopholes – including carried interest. I get that, and I vehemently disagree (and believe me, folks, I enjoy carried interest). The Democrats want us all to share the cost of running a social welfare state to pander to their voting constituents. I get that, and I vehemently disagree.

So, they can't agree on tax increases (oh, wait, wait don't tell me… they did agree on $600 billion in tax increases in January, remember?) and they definitely can't agree on spending cuts. Why are spending cuts so hard? Because, silly, spending is the bread and butter that Congress feeds to their voting constituents – and campaign-backing cronies. Duh!

Sorry, I got carried away. Forget all that stuff. I just had to get it off my chest.

This is really about sequestration and how good it will be for the country.

We need to cut wasteful spending, period. What better way to do it that to take spending cuts out of the hands of Congress and put the task squarely in the hands of the departments and programs that are wasting the money in the first place? They should be tasked with making cuts and laying off unproductive people who do unproductive things. This is great!

The Budget Control Act, passed in August 2011, basically said, "Hey, if this Super Committee we put together can't cut $1.2 trillion from the federal budget over the next ten years (they were shooting for $1.5 trillion, go figure) then, by this law, sequestration will go into place to the tune of $1.2 trillion between January 2013 and October 2121."

Pretty simple, but no one figured we'd get here. Me, personally? I was praying we would.

Here's a brilliant, simple play-by-play I found from Brustein & Manasevit, PLLC, Attorneys at Law:

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Stock Market Today: With Dow at Record High, Will the Climb Last?

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The Dow Jones Industrial Average was at a record high after nearly six years, as the stock market today (Tuesday) rallied enough to push the index up nearly 70 points at the open.

Just minutes after the opening bell, the Dow sailed passed its all-time high of 14,165 hit on Oct. 9, 2007. Less than a half-hour into the trading session the Dow roared higher by triple digits propelling benchmark to yet another record.

By 1 p.m. the Dow was up 146.99, or 1.04%, at 14,274.81. The Standard & Poor's 500 Index added 17.32 or 1.14%, to 1,542.52, leaving it in striking distance if its record close of 1,565 hit in 2007. The Nasdaq climbed 43.39 or 1.37% to 3,225.42.

Money has poured into stocks over the last several months as individuals have begun to feel more comfortable about the health of the economy – but can it last?

"The question is, can the Dow maintain these levels? The market is interested in risk-that's why the Dow is higher, why the riskier currencies are higher," Matthew Lifson, currency trader at Cambridge Mercantile Group in Princeton told Reuters.

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