Archives for March 2013

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

What Germany's Energy Problems Can Teach Us About Our Own

Marina and I will soon board a plane for another trip to Europe.

We are off to Frankfurt, where I have meetings on European natural gas import costs; meanwhile, my better half gets to spoil our grandchildren, who live just outside the city.

My responsibility is to address the energy balance problems emerging for the continent. The focus may be on Germany and the rest of Western Europe, but these problems are emerging elsewhere around the world.

With Berlin opting to phase out nuclear power, the continent's largest economy now has a daunting task to assemble an energy mix that meets expected demand.

This started as a political tradeoff, but it is likely to become the major concern in the broader national strategy to stave off recession. A similar tradeoff is developing in the United States.

A much-ballyhooed German venture into solar and wind has hit a brick wall. There is now a played-down move to import additional nuclear-generated power from neighbors, but now the country is doing the unthinkable to meet its energy demands.

This environmentally conscious country, with one of the strongest green political movements in Europe, is now importing more coal than at any point in the past decade.

The options are limited, along with the time to decide on how to implement all of it. That is likely to result in a political tradeoff distasteful to just about every political party and interest group in Germany.

However, the problems do not end there.

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Dividend Stocks Held by Warren Buffett

You know dividend stocks belong in your portfolio, and you know Warren Buffett has made a fortune with this stock picks – so why not marry those ideas when hunting for profits?

Just looking at Buffett's 13F filing for Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) will show you which dividend stocks the famous investor is holding. The 2012 fourth-quarter filing shows that of 41 holdings, 29 are dividend stocks.

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Three Stocks to Buy Now

Money Morning Capital Wave Strategist Shah Gilani just came out with three investments he thinks are good buys right now. One is an oversold stock that Gilani thinks could possibly double in 18 months, another is "unloved" but ready to rebound, and a third will deliver gains as metals prices rise. Take a look at […]

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Forget the Kneejerk Reactions, Oil Prices Are Going Higher

With all of the concern exhibited over Cyprus' problems with banks and China's high-profile billion-dollar solar implosion, the doomsayers are once again predicting an oil price crash.

These guys must really need your money!

Each new geopolitical event is cast as the end of the world as we know it.

The fact is there is nothing on the horizon that will collapse oil prices for one very simple reason.

The prospects for oil prices are increasing, and elevating oil products along with them. Most sections of the U.S. will be testing 2008 gasoline price highs at the pump well before mid-summer.

Yes, we did see a swing down in crude futures during the initial stages of the Cypriot crisis, augmented by some short-lived negative comments on Chinese industrial prospects.

But by last Friday morning, stabilization had occurred and an oversold crude oil futures market began to move back up.

Stocks to Buy: Huge Growth for a Bargain Price

Some of the most exciting stocks to buy are those with impressive growth potential.

Companies that are able to grow earnings for a long period of time can often see their stock prices soar for years, creating tremendous wealth for shareholders. Stocks to Buy: Huge Growth for a Bargain Price

Unfortunately, much of what passes for growth stock investing today is really momentum investing in disguise. Today's growth stock investors all tend to own and trade the same really popular companies that have already experienced significant price appreciation.

While it may be exciting to share cocktail party chatter with friends about the shares of Apple Inc. (Nasdaq: AAPL) or Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR), odds are that the real growth and profit opportunity has passed.

It makes more sense for growth investors to look for stocks of companies that have been growing sales and earnings at a consistently high rate, but are off Wall Street's radar. Companies that have very high rates of institutional ownership and lots of analyst coverage from the major firms are more than likely fully priced. All the growth potential is well defined and everyone already owns the stock.

The big rally moves in growth stocks come when the institutional money discovers the company and intense buying pressure develops as they all pile into the stock, pushing prices dramatically higher.

One such company that fits the bill now is CPI Aerostructures Inc. (NYSEAMEX: CVU).

Do We Really Need the Federal Reserve?

Last week I spent two days speaking to senior government officials and business leaders in Bermuda, which is one of the world's leading international insurance and reinsurance hubs.  The men and women in the room are responsible for hundreds of millions in assets worldwide.

I spoke for over an hour on the implications and opportunities of the financial crisis (I'll have specifics for Money Morning readers next week).

As I was finishing up, I received one of the most provocative questions I've gotten in a long time from the darkness beyond the stage lights: "Does any nation really need a 'Fed'?"

The answer is, unequivocally, "no." Especially if it's modeled after the United States Federal Reserve.

The individual depositors who were the protected class when the Fed was originally formed are little more than cannon fodder today. Instead, the banks the Fed supports have become the protected few.

To be honest, I didn't always think this way. For much of my career, I took the Fed for granted, believing like millions of Americans that it was acting in our country's best interest.

Then I sat down with legendary investor Jim Rogers in Singapore a few years back at the onset of the current financial crisis. During our discussion, he pointed out several things that really made me think about the Fed and its role in not only creating this crisis, but making it worse.

Cyprus Bailout Deal Sets Stage For a Bigger Eurozone Blowup

European Union officials voiced relief following an 11th-hour Cyprus bailout deal, but in truth, they have little to celebrate.

Not only will this deal worsen the economic crisis in Cyprus, but the damage to the trust in the banking system also has created a time bomb set to go off the next time a Eurozone country – or especially its banks – get into trouble.

Early Monday morning, Cyprus agreed to consolidate its two largest banks and inflict heavy losses on uninsured depositors. In exchange, Cyprus gets $13 billion in international loans to prevent the total collapse of the island nation's banking system.

"It is a bad deal, but the extreme scenario we had to contend with was worse," Lefteris Christoforou, vice chairman of the ruling Democratic Rally party, told Reuters.

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Facebook IPO Deal Leaves Wall Street Seeing Red

The U.S. Securities and Exchange Commission on Monday approved Nasdaq's plan to pay $62 million in compensation to brokers for mishandling the Facebook IPO. The Nasdaq missteps during Facebook's (Nasdaq: FB) debut cost Wall Street a collective $500 million and firms have fought to recoup those losses.

The amount was cleared by the SEC after Nasdaq offered to pay more than is allowed under its existing bylaws. As a self-regulatory organization, the Nasdaq enjoys certain legal protections which could have resulted in a significantly smaller settlement.

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4 Stocks to Buy in the Exploding Cybersecurity Market

There's a story out of England I heard recently that's one of the most ironic tales of how developments in technology – cybersecurity, in particular – need to be taken more seriously.

The story started in 2009, when 18-year-old Nicholas Webber was arrested for using fraudulent credit card details to pay for a penthouse suite at the Hilton Hotel in Park Lane, Central London.

When police examined Webber's laptop, they found details of 100,000 stolen credit cards linked to losses totaling 16.2 million pounds ($24.6 million)

Turns out Webber ran the Internet crime forum GhostMarket. The site allowed hackers to meet up virtually, create computer viruses and share stolen IDs and private credit card data.

In 2011 Webber was sentenced to five years in prison. Once in prison Webber was allowed to participate in a computer class.

And earlier this year, he hacked the prison computer system.

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The Best Investments for a Market Sell-Off

With fears of a market sell-off growing, you can survive a downturn if you know the best investments to make now.

For example, one way savvy investors navigate through volatile markets is by buying inverse funds.

Inverse funds enable you to make money when markets fall, while lowering your risk and protecting the value of your investments in the long run by smoothing out volatility.

Here are some of the best investments to make when the market's about to slide.