Archives for May 2013

May 2013 - Page 19 of 20 - Money Morning - Only the News You Can Profit From

This Gold Prices Chart Answers a Classic Question

Since gold's bull run began a decade ago, many people have asked me whether the metal was in a bubble, despite the fact that there were many drivers in place for gold.

Here's another comparison – shown in the chart below – that answers this classic question.

Research firm Commerzbank's strategists recently compared the price of gold starting in 2002 to the price of Brent crude oil starting in 1998 and the NASDAQ Composite from 1990.

Buy, Sell or Hold: With 46 Million People on Food Stamps This Is The Stock To Own

With over 46 million Americans on food stamps, price-conscious shoppers have been flocking to the discount stores.

It's a profitable and steady niche in what has become a "food stamp economy."

It's lead by the big-box discounters such as Wal-Mart (NYSE: WMT) on one end and a trio of high-rising "dollar" stores at the other –Family Dollar Stores (NYSE: FDO), Dollar Tree (NASDAQ: DLTR) and Dollar General (NYSE:DG).

Since the start of the financial crisis, all of these discounters have seen their share prices skyrocket as consumers work overtime to stretch each and every dollar.

Chart forDollar General Corporation (DG)

My favorite company in this group is Dollar General Corp., which has seen its share price climb by 129% since its IPO in November 2009.

The question, of course, is whether or not Dollar General still has what it takes to stay in Wall Street's good graces and keep on growing.

Part of that answer depends on what your perception is about the overall state of the U.S. economy. The data is certainly a mixed bag.

But what I can tell you about Dollar General is how it differentiates itself from the competition and how the discounter will be able to hang on to shoppers even when the economy turns.

Here's why I like this company so much…

The Next Wall Street Mega-Scandal Has Arrived

Well, it looks like the major financial institutions can't learn a lesson. They're neck deep in yet another financial scandal of global proportions.

U.S. and international securities regulators investigating manipulation of LIBOR, the world's most important set of benchmark interest rates, have uncovered another price-rigging scheme, this one in the $379 trillion market for interest rate swaps.

$379 Trillion, not Billion. Trillion.

The Commodity Futures Trading Commission (CFTC) has already issued subpoenas to Wall Street's biggest banks and is interviewing a dozen former and current brokers from the Jersey City, NJ, offices of ICAP Plc.

For investors in the big banks, new revelations may put an end to the upward push to the groups' stock prices, whose earnings of late have been helped by reductions in reserves meant as a cushion against future asset hits and litigation expenses.

Lincoln's Earnings Slip on High Expenses - Analyst Blog

Lincoln National Corporation’s (LNC) first-quarter 2013 operating earnings of $1.02 per share lagged the Zacks Consensus Estimate of $1.10, although it breezed past the prior-year quarter’s earnings of 99 cents a share, primarily on lower share count. However, operating net income dipped 2.7% year over year to $285 million. Meanwhile, reported net income, including extraordinary […]

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The 10 Best U.S. Housing Markets 2013

The percentage of Americans optimistic about the U.S. housing market has reached levels not seen since rumblings of the financial crisis began.

A new Rasmussen Reports national survey found 37% of homeowners believe the value of their home will increase in the next year – thehighest since September 2008.

And 58% of Americans believe their homes are worth more now than when they bought them. That's the highest percentage believing this since fall 2011.

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FOMC Meeting Message: Don't Blame Us for Sluggish Economy

The Federal Open Market Committee (FOMC) meeting concluded today (Wednesday) with one clear message to Washington: Thanks for the lousy economy.

Central bank members cited only "moderate" expansion in economic activity and a slow improvement in the stubbornly high unemployment level.

Acknowledging the economy is moving at an unhurried pace, the FOMC members pointed an accusing finger at Capitol Hill.

"Fiscal policy is restraining economic growth," the statement read. That remark was in direct reference to a deadlocked Congress, sequestration and its far-reaching impact.

A spate of fresh economic reports back that sentiment:

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Best Investments 2013: Are TARP Warrants the Way to Play Banks?

Believe it or not, the big bank rescue plan known as the Troubled Asset Relief Program (TARP) actually has created some of the best investments for profiting from a banking recovery.

As you may recall, the federal government gave money to troubled banks in order to shore up balance sheets wounded by falling real estate and mortgage security prices. As part of the program, the government took an equity stake in these institutions in the form of preferred stock and equity warrants.

When the funds were repaid, the securities – including the warrants – were auctioned off to the public.

Equity warrants are a form of derivative security that gives the holder the right to buy a stock at a certain price until the expiration date. This is much like a stock option but warrants are usually issued for a much longer period of time. They are usually traded on the exchange and are priced based on the strike price, current interest rates and length of time until expiration.

Most of the TARP warrants still have a long time to go until they expire. The majority last until about 2018.

And now is looking like a good time to buy in to these warrants.

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Online Gambling: Will Other States Follow Nevada's Lead?

The card sharks out there can rejoice. Online gambling is now legal – in Nevada.

And other states are watching – and waiting to see what happens. It's a good bet some of them will follow Nevada's lead and legalize online gambling.

Online poker playing had been in a deep freeze in the United States since 2011, when the federal government seized the domains and domestic assets of several online casinos – and millions in player bankrolls. The seizures were attributed to violations of the Unlawful Internet Gambling Enforcement Act of 2006. Tax issues, interstate gambling, fraud and money laundering were all at one time or another given as justification for the seizures.

But the game is poised to make a comeback, at least in Nevada and one company is bringing online poker out of the murky, obscure offshore world.

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How to Invest in E-Cigs: The Cigarette of the 21st Century

They look like cigarettes, feel like cigarettes, taste like cigarettes – and, smokers will tell you – satisfy the craving for a smoke.

But electronic cigarettes, or e-cigs, don't have any of the offensive smoke that's so harmful to health. Instead, they feature an odorless vapor in which nicotine is delivered to the user. And they're sometimes allowed in public places where cigarettes are banned.

Studies show e-cigs make smoking healthier for smokers and those around them, while also helping smokers quit.

Plus, e-cigs cost about half as much as regular cigarettes.

Big tobacco continues to place bets that electronic cigarettes can keep the tobacco industry and its annual sales north of $750 billion and growing.

Altria Group Inc. (NYSE: MO), the world's biggest tobacco company and parent company of Philip Morris USA, is the last of the three major U.S. tobacco firms to get into the e-cigs game.

"There is no denying that adult tobacco consumers have shown interest in it," Marty Barrington, Altria's CEO, told investors during an earnings conference call last week.

Thanks to increased health awareness, as well as the introduction of several taxes which have led to the price of packs more than tripling in some cities, cigarette sales began declining over15 years ago and continue to do so, falling 6.2% in the first quarter of 2013.

Even though e-cigs were introduced almost 10 years ago, they are just starting to take off. Sales in the U.S. totaled $500 million in 2012 and are expected to double to $1 billion in 2013.

And a recent study by the Centers for Disease Control and Prevention found that 21% of adults who smoke regular cigarettes had used e-cigs in 2011, up from 10% in 2010.

So, now that e-cigs are growing more popular, what's the best way to invest in them?

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