Archives for June 2013

June 2013 - Page 12 of 16 - Money Morning - Only the News You Can Profit From

The Six Questions that Can Make You Rich (Part Two)

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For some reason, we love the concept of technology, but hate the tech that surrounds us.

We curse our email when it freezes for the slightest second. We damn the cellphone carrier that sends a signal to space and halfway around the earth when we're talking with someone thousands of miles away, but the drops the call.

We dismiss certain innovations because we think they're just another passive fad.

This bias against technology sometimes leads us to miss some of the greatest investment opportunities of a lifetime.

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Another Reason Not to Trust the Big Banks

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When Big Banks say their trading desks posted a profit every single trading day for an entire quarter, it seems hard to believe.

And yet not one but two Big Banks — JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC) — recently reported that they had perfect trading records in the first quarter of 2013.

And most days they weren't squeaking by either. A chart of JPMorgan's daily net revenues from the quarter shows that on most days the profits were quite fat — $50 million or more, with 17 days posting profits of more than $100 million.

Rigged market

Rivals Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) didn't do nearly so well. Goldman had two negative trading days in the quarter, and laggard Morgan Stanley posted losses on eight days.

Brokers from those two firms won't be showing their faces at the country club anytime soon.

Such perfection – and near perfection – would seem remarkable from one Big Bank, much less all of them. I mean, how many investors can come out ahead every single day for 60 days or more?

But just like your parents told you, if something sounds too good to be true, it probably is.

"Don't believe everything you hear about the banks, and don't believe anything they say," said Money Morning Capital Wave Strategist Shah Gilani. "Without actual, let's call it 'honest' transparency, we will never know where the banks are making money when it comes to their 'trading.' "

Gilani would know. He started running his first hedge fund back in 1982 and later worked at investment banks in both London and New York.

"Don't forget, banks are liars," Gilani said. "In the fall of 2008, all their CEOs were telling us publically they were all in great shape. Meanwhile they were taking trillions in handouts to keep from declaring themselves and the financial system dead in the water."

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Drillers Pay Hush Money to Keep Their Fracking Secrets

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Hydraulic fracturing, or fracking, the art of separating oil from rock, has the potential of turning America into the world's top oil and natural gas producer.

But as with any bonanza it has some secrets oil and gas companies want to keep under wraps. And some companies are willing to put some big bucks behind that.

The industry has injected possibly carcinogenic chemical cocktails underground in more than 150,000 of wells during the fracking process.

U.S. companies have driven more than 30 trillion gallons of fracking liquid underground in the past several decades.

But not to worry: the U.S. Environmental Protection Agency is monitoring the situation! It is solely charged with conducting long-term studies of the potential impact of fracking on water.

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Meet the Controversial "Bad Actor" Who Will be in Charge of Your Health Care

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Amid a wash of government scandals, America is vulnerable right now. Actions taken by the IRS have left us feeling utterly degraded by the Obama administration.   

And another Washington scandal we see brewing won't make Americans feel any more comfortable about the power granted in our nation's capital.

You see, there's an unelected official who is known as a bad actor, and she's about to be granted broad, undefined power over the people of this country.

The source of her power: Obamacare.

I'm talking about the U.S. Secretary of Health & Human Services, Kathleen Sebelius, who come 2014 could be in charge of your health care.

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The Six Questions that Can Make You Rich (Part One)

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Do you want to be rich or do you want to be poor?

That is the question that every American must ask.

As we noted last week, investment in technological innovation and global scale has been a key driver of wealth creation for the richest of the rich around the globe. But it also has led to the elimination of many lower income and middle class jobs across the country.

It's an economic phenomenon first explored by the classical economist David Riccardo called "Technological Unemployment," and it's beginning to affect individuals with even six-figure salaried jobs around the world as technology grows ever more sophisticated.

That got our team at Money Morning talking about the best ways to identify radical technology innovation and help readers protect their wealth, restore their confidence as investors, and identify the next breakthrough on the horizon.

By answering "yes" to six questions, one can identify the stocks and technologies on the cusp of being the next breakout, one that will rival the financial booms seen during the dotcom and current mobile tech era.

There are six questions that you can ask yourself when you begin investing in a company for its "next-generation" technology.

Now, this strategy won't guarantee that the innovation will be the next iPhone or America Online (at the time, AOL changed the face of the personal internet and its stock soared to record heights), but it will do something that is remarkably important for the retail investor:

It will significantly raise the probability of success.

And in a game of numbers, that is what we're looking for when it comes to technological innovation.

So, let's ask the first question and learn how to identify the next technology revolution or company poised to take the world by storm.

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Why Income Investors Will Love These Preferred Stocks to Buy Now

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If you're looking for new types of stocks to buy now to ramp up your portfolio yield, have you considered preferred stocks?

Preferred stocks ("preferreds") trade like regular stock but they are more like bonds in that they provide a higher fixed-dividend payment than their common stock counterparts and they generally have less upside potential.

They're called "preferred" because they have higher claim on the assets and earnings of the company.

Preferred stocks are an oft-overlooked option for snagging income in today's yield-challenged markets, but several preferred stocks in industries like banking, real estate and energy can bring stability to a portfolio. And preferred stocks that have been issued recently in this lower rate environment can provide better value.

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How the Stock Market Today is Following Up Friday's Big Rally

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Investors took a breather in the stock market today after driving the Dow Jones Industrial Average 207.5 points higher on Friday.

Just before noon, the Dow Jones Industrial Average was up 1.26, or 0.01%, to 15,249.38. The Standard & Poor's 500 Index added 1.10 to 1,644.48. The Nasdaq tacked on 9.19 to hit 3,478.41

Friday saw the Dow's second-biggest gain of 2013, after investors cheered a "Goldilocks" jobs report: not too hot, not too cold. For the week, the Dow added 132.55 points, or 0.88%.

There was plenty of news to sway the stock market today despite its muted open.

The world's largest credit rating agency Standard & Poor's boosted its credit outlook for the United States to "stable" from "negative" and reduced the threat of further downgrades.

Citing receding fiscal risks, S&P said the chance of a ratings downgrade is now "less than one in three."

"It was a quite shocking event for the markets when the U.S. was downgraded to negative, so to have that rating repaired is meaningful," Lawrence Creaturea, a Rochester, NY-based manager at Federated Investors Inc. told Bloomberg News. "Economic data has been improving gradually and S&P's upgrade is a recognition of that."

Overseas news was mixed.

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Gold Prices Are Bargain for India's Consumers, But Problem for Government

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The last several months have been tough on gold prices, but gold bugs haven't lost their insatiable appetite for the yellow metal. With gold officially in a bear market, demand is surging at today's bargain prices.

Gold demand is especially strong in India, where gold is the investment of choice among consumers. India's gold imports reached 162 tons in May, almost twice the average level.

That's why last week the country – the world's biggest consumer of gold – increased the duty of gold imports for the second time in six months.

The duty was boosted from 6% to 8% on gold ore, and from 5% to 7% on intermediate products
in attempts to decelerate the accelerating gold demand. Bullion prices fell 0.25% to $1,399.36 an ounce following the move.

Gold imports are one of the biggest contributors to India's mushrooming account deficit (which occurs when imports exceed exports). An increasing deficit affects the country's foreign exchange reserves and the value of its currency.

Friday, the ruppe closed below the key 57 mark against the U.S. dollar for the first time in a year. The slide further casts a shadow on India's economy amid pricier imports and heightened inflationary risks.

Policy makers in India have been attempting to reduce its deficit and improve finances as it faces possible rating downgrades. They hope the duty increase will help.

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A Huge LNG Energy Boom Has Begun

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Oh, the law of unintended consequences and the opportunities it brings. 

Thanks to the new standard of Keynesian Abenomics, the Nikkei has blasted 47% higher since November.  The Yen has lost about 25% against the U.S. dollar in the same time.

Buy, Sell or Hold: After a 950% Run, Is Under Armour Overheated?

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When was the last time you sat in the stands at a local high school or grade school ball game? 

If you did, it would be impossible not notice all of the kids decked out in Under Armour Inc. (NYSE: UA) gear.

Based in Baltimore, Md., Under Armour is one of the fastest-growing brands in the country with a 60% share of a $3 billion dollar market.   

A leader in synthetic performance apparel, the company has built its reputation by delivering high-quality, technologically advanced clothing that keep athletes cool, dry and light.

More importantly, it has taken the current vogue generation by storm as something cool, cutting-edge and a must-have for a "serious" athlete.

But is Under Armour just "the latest thing" or "must-have" for your portfolio as well?

Let's take a look….