Archives for March 2013

March 2013 - Page 2 of 20 - Money Morning - Only the News You Can Profit From

New ETF Makes Investing in Silver Miners Even Easier

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With silver looking even more alluring than gold lately, it's smart to consider investing in silver miners – and a new ETF gives investors one more option.

The PureFunds ISE Junior Silver ETF (NYSE: SILJ), launched in November, differs from other silver mining ETFs in that it focuses only on junior silver miners.

The PureFunds Junior Silver ETF joins just two other silver mining ETFs, the Global X Silver Miners ETF (NYSE: SIL) and the iShares MSCI Global Silver Miners ETF (NYSE: SLVP).

While silver mining ETFs, like silver mining stocks and gold mining stocks, have not tracked the rise in price of the precious metals themselves – many are down anywhere from 10%-20% year to date – the tide is ready to turn.

Many signs point to increasing silver demand in the months ahead, and in recent weeks more money has started to shift out of gold and into silver. Investing in silver mining ETFs is one way to get out in front of this trend before the rest of the crowd.

"For 2013, I think silver, like gold, will set a new all-time nominal price record, likely reaching as high as $54 an ounce," Money Morning Global Resources Specialist Peter Krauth said in his 2013 silver price forecast.

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Does Investing in Gold Top Your List of "Best Investments"?

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Even though the Dow Jones Industrial Average and Standard & Poor's 500 Index have hit record highs this year, investing in gold remains the top investment pick in CNBC's latest All-America Economic Survey.

The March poll shows the yellow metal is the favored investment choice among 35% of respondents, beating real estate at 27% and stocks at 21%. This is the second year that investing in gold has topped the list of what those surveyed consider the "best investment" to make now.

While survey participants are more optimistic this year than last about the stock market, 21% are uncertain if now is a good time to dabble in stocks, up from 11% in December 2009.

Those who believe the current environment make it a good time to buy stocks jumped from 31% in November to 40%, the highest amount since December 2009.

Moreover, in spite of the improved outlook for stocks, the overall view of the current state of the economy remains bleak. Currently, 60% of those surveyed are pessimistic about the U.S. economy, up from 56% in November.

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Why Britain is Looking to U.S. for 20 Years' Worth of LNG

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With its domestic natural gas reserves nearly depleted, the U.K. is turning to a U.S. company to supply enough liquefied natural gas (LNG) to provide energy to nearly 2 million British homes for 20 years.

The $15.1 billion-plus deal between Houston-based Cheniere Energy Inc. (NYSE: LNG) and Centrica, a British energy firm, marks the first time Britain has ever imported natural gas from the U.S.

The deal has big implications for companies involved in the flourishing U.S. shale gas industry, in which gas is extracted through hydraulic fracturing, or fracking.

You see, fracking has led to an abundance of natural gas and will go a long way toward making the U.S. a net exporter of energy instead of a net importer in the coming years.

That, of course, will be a big boon to natural gas companies that export LNG.

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PVH Beats 4Q Earnings Estimates - Analyst Blog

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PVH Corporation (PVH) has managed to beat expectations yet again. The company reported better-than-expected quarterly results, with adjusted earnings per share for the fourth quarter of fiscal 2012 rising over 34% year over year to $1.60, beating its own guidance range of $1.48–$1.49 and the Zacks Consensus Estimate of $1.50. The upside was primarily driven […]

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Paychex' 3Q Earnings Beat by a Penny - Analyst Blog

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Paychex Inc. (PAYX) reported third-quarter fiscal 2013 earnings of 40 cents per share, beating the Zacks Consensus Estimate by a penny. The quarter’s result was 6.3% above the year-ago level. Revenues Paychex reported third-quarter 2013 revenues of $593.3 million, up 4.2% from $569.5 million in the year-ago quarter. The quarter’s revenues were slightly above the […]

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Retire Early with These 3 Dividend ETFs - Investment Ideas

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If investors want to retire early, they are going to have to lean heavily on dividends. That is because these cash payouts are vital to portfolio growth, and a steady source of income later on as well. In fact, there can really be no denying the importance of dividends to long term stock performance in […]

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In Gold, Not Cyprus, We Trust

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Global investors had to muster the courage to keep calm as news of Cyprus' proposed partial theft of all bank deposits took Wall Street by surprise, closed the country's banks and drove the gold prices higher.

The thoughtless idea was intended to capture a portion of the $31 billion in bank assets held by Russians. According to the Financial Times, Cyprus has developed a "well-earned reputation for being a haven for dirty money from Russia."

Although Cyprus' government came to its senses and blocked the proposed seizure, the damage has been done. To many people around the world, raising income taxes may be one thing, but changing the rules to steal hard-earned savings from all citizens rattles their confidence. What Adrian Ash of BullionVault says is "most amazing" about this situation is that "small savers are no longer sacred."

It's remarkable to see the response from Cypriots, as they protested in the streets, with "NO" stamped on their palms, demanding the government take its hands off their money. It's refreshing to see their pushback to sanity.

How did this tiny island make it into the European Union (EU) in the first place? The Financial Times gave an insightful background:

"Many EU leaders had been deeply reluctant to admit Cyprus into the union in 2004, without a peace settlement that reunified the island. But Greece had threatened to veto the entire enlargement of the EU – blocking Poland, the Czech Republic and the rest – unless Cyprus was admitted. Reluctantly, EU leaders succumbed to this act of blackmail."

Why We Can't Avoid Ben Bernanke's "Monetary Cliff"

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When it comes to the Federal Reserve, an accurate "reading of the tea leaves" means paying attention to all of the fine print.

And while the markets cheered last week's FOMC meeting with yet another rally, a deeper look at Ben Bernanke's press conference left me with a slightly different take.

Sifting through the Fedspeak, it became obvious that the Fed is now lining up a "monetary cliff" that's bigger than the fiscal one we spent the last half of 2012 worrying about.

Let me explain…

Here's Where the Fine Print Gets Interesting

According to the release from last week's meeting, the Fed will continue to purchase $85 billion of Treasury and agency bonds every month. Doing so, Bernanke explained that at some point he does expect to reduce that amount. However, he also explained that the recent string of good unemployment data (five months above 200,000 new jobs) wasn't enough yet for him to make the change.

The Fed also stated that it expects a "considerable period" to elapse between the conclusion of the purchase program and raising rates.

Interestingly, that matched with the intentions of the 19 Federal Open Market Committee members. Only a few expect to raise rates before the end of 2014, compatible with the current Fed outlook.

But here's where the fine print gets really interesting: All but one of the members now expects to raise rates in 2015.

What's more, they said once they start, they won't be shy. In fact, the average opinion would put rates at 1.35% by the end of 2015. It may not seem like much at first glance but that's actually quite a big move from six-plus years at zero. And further on into the future, the consensus long-term goal was for rates to hit 4%.

Of course, with inflation around 2%, my goal for the Fed funds rate would be higher than 4% and a lot higher than 1.35% by the end of 2015. But alas, I'm not the Fed chief.

The point is that with the Fed expecting the economy to grow steadily between now and then, and no immediate sign of even a slackening in bond purchases, the turn by the Fed supertanker in late 2014 and 2015 is going to be pretty abrupt.

In fact, chances are it will cause a big wake, and drown quite a few people who have become used to current policies.

Why the "Death of Peak Oil" Still Won't Mean Cheap Oil

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Today (Wednesday) an analyst from Citigroup became the latest lemming to declare the death of peak oil.

In a report entitled "The End is Nigh," Seth Kleinman says a combination of flattening demand and rising supply will cause oil prices to slide slightly by the end of the decade to $80-$90 a barrel.

But while oil companies have made many large new discoveries over the past few years, including big shale oil finds in North America and Australia as well as deepwater finds in the Gulf of Mexico, that doesn't mean oil prices will fall.

In fact, according to Money Morning Global Energy Strategist Dr. Kent Moors, it's far more likely that oil prices will continue to rise over the next decade.

Moors points out what most other analysts seem to be missing – that all of the new oil finds present many challenges that will add to the cost of extraction.

"None of this new volume is light, sweet crude," Moors said. "The average wellhead costs continue to go up, and that moves its way downstream to processing, wholesale, and retail."

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