Archives for April 2013

April 2013 - Page 6 of 21 - Money Morning - Only the News You Can Profit From

Jim Rogers Exclusive: It's a "Race to Insanity"

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If you are invested in the lofty stock markets of the United States or Japan, legendary investor Jim Rogers has a message for you …

Euphoric gains always lead to hangover pains – it's just a matter of when.

"This is artificial, as I've [repeatedly] said," Rogers told Money Morning during an exclusive interview Sunday night. "This is the first time in recorded history where nearly all the central banks in all countries are pumping out lots of money, debasing their currencies, printing money. I've never seen this in history, and now we've got everybody – or nearly everybody – doing it."

In a wide-ranging interview from his home in Singapore, Rogers also told us that:

  • The currency-debasing policies of the world's central banks are a "race to insanity" that will likely do maximum damage to the global economy.
  • Inflation is a much-deeper-seated problem than the "official" statistics show, which means that gold, energy and agricultural commodities are must-have holdings.
  • And that Russia is the most intriguing potential investment target on his radar screen right now.

But a substantial portion of our talk focused on the current bubble in stock prices, which Rogers concedes can continue for some time.

Apple Stock is Up After Earnings - But Are Gains Here to Stay?

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Apple stock was up 5% in after-hours trading Tuesday when its earnings report turned out to be better than expected – but, not great.

Everyone was bracing for the worst when Apple Inc. (Nasdaq: AAPL) released second-quarter earnings Tuesday after the close. The big question was just how bad things were going to be.

The answer turned out to be… not so awful. The iPhone maker surprised Wall Street with better than expected numbers, mostly because expectations were so low.

However, as expected, forward guidance was glum.

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Internet Sales Tax Sticks It to the Nation's Little Guys

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A controversial Internet sales tax moving through Congress will mostly benefit big corporations and state governments while hurting thousands of small businesses and consumers.

The Marketplace Fairness Act would essentially end tax-free Internet shopping by forcing online retailers with revenue of $1 million or more to collect sales taxes for the states in which their customers reside.

As it stands, online retailers do not have to collect sales taxes from out-of-state customers unless the retailers have a physical presence in that state, like a store or a warehouse.

Yesterday (Monday), the bill passed a procedural vote in the Senate by a 74-20 margin, which strongly hints at passage in the upper chamber in a vote expected later this week.

While there's more resistance to an Internet sales tax in the House, the bill is known to have bipartisan support there as well. President Barack Obama also has voiced support for the bill.

If it becomes law, the Marketplace Fairness Act will radically change the online shopping landscape.

"It really should be renamed the Internet Tax Collection Act because it is going to make online businesses the tax collectors for the nation," complained Sen.Kelly Ayotte, R-NH, one of the most vocal opponents of the bill.

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Contrarian Alert: Is This "Investing Jinx" Signaling a Stock Market Crash?

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If you're contrarian, then Barron's latest "Big Money" poll and its magazine cover just gave you reasons to be on the lookout for a stock market crash.

The semiannual poll of professional investors found that 74% of money managers are bullish or very bullish about the prospects for U.S. stocks – an all-time high for Big Money, going back more than 20 years.

Barron's drives the point home with its over-the-top cover titled "Dow 16,000!"

But not everyone feels as confident as these polled investors – especially since the issue follows 2013's worst weekly performance for stocks.

"Rule o' Thumb: When the cover of a major financial magazine features a cartoon of a bull leaping through the air on a pogo stick, it's probably about time to cash in the chips," mutual fund owner John Hussman wrote on his Hussman Funds website.

Dr. Kent Moors: How to Invest in Clean Energy

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Due to declining subsidies, clean-energy investments have been on the wane in North America and Western Europe.

But according to Money Morning Global Energy Strategist Dr. Kent Moors, clean energy development is far from dead. Instead, Kent says clean-tech investments are moving eastward to, among other places, China.

"This is going to be a long, drawn-out rollout process. We're seeing the technology itself and the investment interest itself [in clean energy] moving to new areas of the world," said Dr. Moors, appearing Monday on CCTV News.

To see what else Dr. Moors had to say along with the three clean energy exchange-traded funds that he currently recommends, watch the video below.



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Apple Stock Rises Before Earnings, but No One's Expecting Good Numbers

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Apple stock was up nearly 2% by noon today (Tuesday) – but this could be the end of gains for a while depending on what happens this afternoon.

Undeniably the most anticipated earnings report of the season is the Apple earnings report, due out after the close Tuesday. Expectations are for a downright dismal quarter.

Among the issues Apple Inc. (Nasdaq: AAPL) is expected to address include:

  • iPhones: Apple generated some $22.7 billion from the sale of 35 million iPhones in the same quarter a year ago. Investors will want to hear how much competition from other smartphone markers, like Samsung, has chipped away at those numbers.
  • iPads: Apple sold 11.8 million iPads that generated $6.6 billion in sales over the same period a year earlier. With the bevy of new and cheaper tablets now on the market, it is unlikely Apple has been able to maintain those robust sales.
  • Gross Margins: Gross margins peaked at an astounding 47.4% during this quarter last year. Apple's warning last October that margins could drop as low as 38% was the catalyst behind the stock's steep plunge. In January, Apple said profits should come in around 37.5% to 38.5%. These numbers are crucial.
  • Revenue and Profit: Last year, Apple earned $12.30 a share on revenue of $39.2 billion. Estimates are for $10.12 a share on revenue of $42.6 billion. Even the slightest miss could wallop shares.
  • Guidance: Most importantly will be what the company says about future quarters. Analysts expect Apple to guide lower, at least for the next couple of quarters.

Of particular interest will be what Apple plans to do with its hefty $157 billion cash stash. A special or increased dividend and a bigger share buyback could provide a temporary boost to the stock. But any gains are likely to be short lived.

"People have to be patient. The next quarter will be disastrous and the quarter after that stock will only go in one direction and that is down," Trip Chowdhry, co-founder of Global Equities Research told CNBC.

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Check Point's 1Q Earnings: A Mixed Bag - Analyst Blog

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Check Point Software Technologies Ltd. (CHKP) reported first quarter 2013 adjusted earnings of 73 cents per share, which matched the Zacks Consensus Estimate. Revenues Check Point reported revenues of $322.7 million in the first quarter, up 3.1% from $313.1 million in the year-ago period. The quarter revenues were below the Zacks Consensus Estimate of $330.0 […]

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Bull of the Day: Conn's (CONN) - Bull of the Day

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If you've watched the 3-year decline of "big box" appliance and electronics retailer Best Buy (BBY), you may have thought that this is a business model to stay away from. I certainly thought so until I discovered Conn's (CONN), a family-built retailer with over 50 stores in Texas, 6 in Louisiana, and newer footholds in […]

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Jim Rogers Exclusive: Once Gold Bottoms, We're Looking at "A Multi-Year Bull Market"

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Gold soared 650% from August 1999 to August 2011.

But it's down 24% from the $1,885 peak and in recent days has whipsawed gold investors in a way they haven't experienced in 30 years.

The bear market has gold bugs reaching for the Dramamine. But we reached for the telephone instead and dialed Singapore – and legendary investment guru Jim Rogers.

Many of Wall Street's biggest investment banks are calling for additional blood-letting – meaning gold prices have a lot more room to fall. But in his usual contrarian manner, Rogers dismissed the consensus.

Indeed, the former hedge-fund manager and best-selling author believes this is a badly needed – even healthy – price correction.

And that will set the stage for a new bull market in gold – and a run to record prices that are sure to come in an era of cheap-money policies by the world's central banks, Rogers told Money Morning during an exclusive interview.

"Gold was setting us up for some kind of correction," Rogers said in a Sunday night telephone interview from his home. "Gold needed a correction – it still needs a correction – and I hope this is the proper correction which gold needs. Then gold – somewhere along the way – will make a bottom and we can all join in the bull market as [it] goes higher and higher."

And make no mistake: The shiny metal is going higher – much higher.

Stocks to Buy: There's a Huge Opportunity in this Metals Producer

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Our latest report on stocks to buy focuses on a metals-related play that's highly undervalued – and about to introduce a game-changing development to its business.

As base metals and material stocks have sold off in recent weeks, most of the attention has fallen on the shinier metals like gold and silver.

Unnoticed by most traders is the fact that zinc has dropped as well, although not as sharply. Prices of zinc have dropped about 8% in the past month and this is setting up a major buying opportunity in this North American zinc producer.

Although rarely discussed with the same fervor or regularity as its metallic brethren, zinc is actually the fourth most used metal in the world, and will see sharp demand pick up when the economy improves.

Over 12 million tons of the metal is produced annually for a range of uses. Although not as widely discussed as other precious and industrial metals zinc is something we all use every day knowingly or not.

Zinc is part of several alloys including brass, aluminum solder and commercial bronze. Zinc is also the primary metal used in production of the U.S. penny coin and has been since 1982. The metal is used in pigments for paints, a catalyst for rubber production, a fire retardant and a rocket propellant.

Zinc is far more reactive than iron or steel and attracts oxidization so it is often used as a galvanizing agent with these metals. For example, zinc is regularly used in the boating industry to protect propellers and the rudder from oxidization caused by seawater.

All these mean zinc will continue to be important to a variety of industries. That's why we like the long-term potential of a U.S. zinc producer whose shares are trading at a discount.

The following company is making huge moves to be the world's lowest cost zinc producer, which should lead to higher earnings and a much higher stock price