Archives for June 2013

June 2013 - Page 4 of 16 - Money Morning - Only the News You Can Profit From

Shah Gilani: Why Apple Stock Is Still a Winner

Despite Apple stock recently taking a hit, Money Morning's Capital Wave Strategist Shah Gilani appeared on FOX Business' "Varney & Co." to explain why Apple Inc. (Nasdaq: AAPL
) is still a winner.
He emphasizes the positive impact of Apple's cash flow on Apple stock.

Also, hear Shah's simple explanation of how Apple's bond offering is actually going to be a positive for Apple stock, as he breaks down complicated financial metrics and accounting rules for viewers.

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Potential Candy Crush Saga IPO Looks Sweet

A Candy Crush Saga IPO could be in the offing as its maker King is lining up banks to put together a U.S. initial public offering, according to The Wall Street Journal.

King's game Candy Crush Saga is presently the #1 game on Facebook (Nasdaq: FB) and the 2nd-most popular free game available on Apple Inc.'s (Nasdaq: AAPL) App Store. 

There is a lot of excitement surrounding King's announcement, but also a fair share of wariness.

That's because King's Cinderella story isn't unique. 

Remember the dramatic tale of Zynga Inc. (Nasdaq: ZNGA)?

The online gaming giant made the massively popular Facebook-based FarmVille game and acquired several makers of other hit games. 

In 2011, it priced its IPO at $10 a share, making it the biggest Internet IPO since Google's (Nasdaq: GOOG) back in 2004.  By early 2012, Zynga was worth $11.5 billion.

Indeed, Zynga looked to be going nowhere but up.

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Why Silver Prices Are Down Today - and What's Next

If you're wondering why silver prices are down today (along with most commodities), just look to China.

Silver prices today – along with other commodities – have slumped $0.57, or 2.83%, to $19.55 by midday after tightening credit conditions in China triggered global market sell offs on fears about Chinese economic growth.

The silver price drop follows a rough week for the white metal, which lost 9.07%. Prices managed to claw back over $20 after gaining $0.43 Friday, finishing the volatile week at $20.06.

Since the start of 2013, silver prices have been in a tailspin. The metal has shed nearly 34% year-to-date, making it this year's worst performing commodity.

The precious metal's retreat was pronounced Thursday when silver futures for July delivery slid 8.3% to $19.823 an ounce. In trading after the settlement, silver prices slipped further to $19.56, the lowest level since Sept 3, 2010.

Silver prices today sit a long way off from its 31-year record high of $49.80 an ounce hit in April 2011.

Last week's rout was fueled by comments from Ben Bernanke following Wednesday's FOMC meeting. The Fed chief suggested the U.S. central bank could start tapering its stock and commodity markets supportive stimulus program later this year.

Further weighing on silver were reports out of China showing the Asian nation's economy is facing a slowdown.

Spooked investors fled equities and precious metals in droves.

"Silver is quite speculative, it's quite volatile, so a little less money is going into silver," Tony Coleman, managing director of New Zealand Gold Merchants, one of the country's largest precious metal refiners and bullion dealers, told NZ Business News. "But they [investors] want to have a bit of a play and silver is the one you can really make some money on because of movements in price."

Indeed, that's because of silver's high beta. That means it has wider price swings than other metals in both bull and bear markets. While those wild moves scare some investors, they offer huge gains for those who stick with silver.

While silver often trades in tandem with gold, its movements are often more extreme. That's why precious metal experts like Money Morning's Resource Specialist Peter Krauth like to best describe silver as "gold on steroids."

What's Spooking Investors in the Stock Market Today

The stock market today is down more than 200 points as China fears trigger a global sell off.

In mid-morning trading, the Dow dived 205.75, 1.39%, to 14,593.65. The S&P 500 slumped 25.78, 1.62%, to 1,566.65. The Nasdaq slid 50.78, 1.51%, to 3,306.47. The Dow and S&P are now off some 5% and 6% respectively from their all-time highs reached earlier this year.

Asian markets were clobbered Monday and European markets melted on increasing fears of a liquidity crunch in China. Major Euro indexes, off roughly 10% from their April highs, are officially in bear territory.

Today's moves continue the rollercoaster ride U.S. equities were on last week, with the Dow shedding 560 points, or 3.66%, over Wednesday and Thursday.

The blue-chip benchmark finished at 14,799.40, down 1.8% for the week, its worst week since April 19. The S&P 500 fared worse, slumping 2.1% last week to end at 1,592.43. The Nasdaq ended at 3,357.25, for a weekly loss of 1.9%.

The VIX, or the CBOE Volatility Index, soared 10.2% last week, ending at 19. Wall Street's "fear gauge" has risen four of the past five weeks, ever since Fed Chief Ben Bernanke's first mumblings about a probable winding down of stimulus.

Monday morning, the VIX jumped 2.14, or 11.23%, to 21.04, its highest level of the year.

Markets were goosed Friday after The Wall Street Journal's Fed watcher Jon Hilsenrath wrote that investors may be misreading optimistic messages sent by the Fed Chairman Ben Bernanke as hawkish.

Also, Goldman Sachs (NYSE: GS) analysts said their top recommendation for 2013 is still to buy stocks and sell bonds.

"We continue to expect the index [S&P] will close the year at 1,750, a rise of approximately 10% from today's top level. However, median historical drawdown episodes suggest at some point during the next six-months that the S&P may decline to mid-1,500s before resounding to our year-end target," Goldman's analysts wrote.

Further giving stocks a lift was a bullish statement to CNBC from renowned hedge fund manager David Tepper, founder of Appaloosa Management: "All the concerns in the markets is because the Fed sees the economy stronger in the future. In fact, their forecast shows that they will wait until a lower unemployment rate (closer to 6% than 6.5) to raise interest rates. So they are a bit easier on the front…I obviously thought they should start to taper. [But] the bottom line when the dust settles [is that the] only one place to be [is] stocks."

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Why the Obamacare Law Can't Stop Soaring Healthcare Costs

One of the many promises of the Obamacare law was that it would help reduce out-of-control healthcare costs.

But as we get closer to the full implementation of the Affordable Care Act in January 2014, it's becoming increasingly clear that the law will do little to lower what healthcare providers charge.

Basically, the Obamacare law focuses mostly on who will pay and how they pay – the insurance side of the equation – rather than why costs are so high and rise much faster than the overall inflation rate.

Journalist Steven Brill, who wrote an exhaustive piece on this topic for the March issue of Time magazine, was blunt as he broke the bad news personally last week to the Senate Finance Committee at a hearing to determine if adding transparency to the pricing of healthcare services could help control costs.

"[Transparency] starts the conversation about prices that we didn't have in the debate over Obamacare. It's only a start," Brill said. "Obamacare does nothing about these prices. Nothing to solve the problem – Zero."

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How to Play the New Normal: Spiking Volatility

Strap on your seat belts…and get ready for a ride…a very bumpy ride.

After having assumed US equities would keep chugging higher with little deviation from "up," things are starting to look a bit different.

Have you been watching Japan? It's a cautionary tale that is about to play out in the US, and globally.

Massive monetary easing in Japan since January tanked 10-year JGB (Japanese government bond) prices and the yield on their 10-year bonds doubled. On top of that, Japanese stocks soared 32%, only to see a series of huge one-day drops and a few smaller-bounce upside rallies.

The volatility has been unprecedented.

The question for investors now is: How do you make money now that the Fed has signaled the beginning of the end of quantitative easing that has stimulated global markets higher?

Here's the first thing you need to know.

Buy, Sell or Hold: Is Mosaic (NYSE: MOS) a Fertile Opportunity?

Planet Earth's inhabitants are expanding by 75 million people per year and are expected to reach a population of 9 billion people by 2050.

That's an awful lot of mouths to feed.

Furthermore, the land used for agriculture is not growing at the rapid pace it needs to keep up with this demand for food. Therefore, it is critical that farmers get the most out of their crop lands in order to supply the expanding protein-starved population.

Money Map subscriber, Wim D., suggested a review of fertilizer producer, The Mosaic Company (NYSE: MOS), as a business that will benefit from the ever-increasing global population.

Fertilizers are added to soil in order supply plant nutrients essential to the growth of crops. There are three basic types of fertilizers: nitrogen, phosphorus and potassium (potash).

Mosaic is a dominant player in two of the three. The company is the world's largest producer of phosphate and North America's second largest producer of potash. Its products are essential in the growth of corn, rice and cotton among others.

Best Tech Stocks to Buy Now: Beat George Soros with These Two Plays

Savvy investors such as George Soros continue talking about the best tech stocks to buy now, particularly in mobile technology.

Tech stocks now represent more than 16% of his portfolio. Soros' latest 13f filings reveal an increased stake in Google Inc. (Nasdaq: GOOG) and a new position in QUALCOMM Inc. (Nasdaq: QCOM).

At Money Morning, we are always uncovering new tech stocks to buy, and have spotted some potentially huge winners.

In fact, our investing experts shared in this month's issue of our Money Map Report the best tech stocks to play the hottest trends of 2013.

One of them has gained more than three times what GOOG and QCOM have done in the past three months…

The other one has surged more than 30% so far this year.

And the gains are just starting.

Here's why we're so bullish on these tech plays.

Here's the Secret to Uncover "Hidden" Tech Winners

I'm going to share a secret with you today…

I'm going to tell you about a surprising place to find windfall tech profits.

Wall Street refers to them as "special situations."

You might call them "turnaround plays."

High-potential tech turnarounds don't come along that often, and can be tough to find.

But the payoff can be well-worth the search.

So let me start by showing you four tell-tale signals that can help you find these big-profit stocks.

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Stock Market Today Reverses Painful Two-Day Plunge

A sense of calm appeared to settle over the stock market today – one day after the Dow's worst of the year. The Dow was up nearly 90 points near the close Friday.

Gold prices, pushed below $1,300 an ounce Thursday, its lowest level in some two-and-a-half years, also bounced back Friday.

Equity and commodity markets sold-off Wednesday and Thursday on worries the U.S. Federal Reserve could begin winding down its market supportive stimulus program later this year.

St. Louis Fed President James Bullard, who dissented against the FOMC meeting decision Wednesday, said in a statement Friday the central bank "should have more strongly signaled its willingness to defend its inflation target" and shouldn't have given Fed Chairman Ben Bernanke the authorization to provide an approximate timetable to end easing.

Bernanke's comments are indeed blamed for the stock market's steep two-day drop.

The Dow plunged 354 points, 2.3%, Thursday to close at a seven-week low. Over Wednesday and Thursday, the Dow shed 560 points, the blue chip index's biggest drop since November 2011. The CBOE Market Volatility Index (VIX) soared 23% Thursday, above 20 and a fresh 2013 high.

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