Archives for June 2013

June 2013 - Page 8 of 16 - Money Morning - Only the News You Can Profit From

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

Last week, we explored the three technical questions central to successfully investing in technological innovation.

This week, we focus on three practical questions that can make the average investor a lot of money in the early waves of innovation. All of these questions word together for one purpose.

By answering "yes" to all six questions, you can dramatically increase the probability of a successful technology investment and return on your shares. And best of all, you can identify the winning companies that are poised to profit in the few key sectors that we've identified.

Our fourth question for technology investing is very simple:

Can this technology harness the power of other innovations to maximize its performance and sales?

When exploring this question, it's important to understand how a new technology reaches its full potential. To maximize its potential, a technology must first have the capacity to fulfill what we identified in our first three questions. It must accelerate the speed and transfer of physical goods and trade. It must expedite the flow of information and capital, and provide more "bang for your buck."

But this fourth question requires that the new technology integrate with other technologies that already exist, and make it possible to harness emerging innovations in a high-tech world. This is how we take an existing success and identify just which company is going to lead to a major global breakthrough.

And there's one primary example that can provide the greatest lesson in the recent digital revolution.

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Obama Sells Us Down the River Again

After all the excesses and fiascoes the financial community (and country) has undergone – and continues to undergo – you would think that Washington would be more than motivated to keep the foxes out of the hen house.

Especially when it comes to Wall Street's love of building derivatives that fall just shy of being illegal, but certainly self-serving. You would think that this populist-sounding president would be keeping his regulatory Cerberus, which guards the Securities and Exchange Commission (stocks and bonds) and the Commodities Futures Trading Commission (futures, derivatives, options), hungry, alert and only well-fed on investor injustice.

Well, the fact is, not so much. Seems Wall Street has thrown a juicy steak over the fence of the CFTC… again.

As proof of the Washington axiom that no good regulator goes unpunished, President Obama appears set to nominate an inexperienced Senate aide to replace current CFTC Chairman Gary Gensler.

Even though President Obama nominated Gensler, whose term isn't up until year-end, rumors are flying that Amanda Renteria, the former chief of staff to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich, will be nominated as the next head of the regulatory agency that oversees the $630 trillion derivatives markets.

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How to Invest in Platinum in 2013

Anyone following how to invest in platinum this year has noticed the importance of South Africa to this metal's price.

That's because most of the world's platinum supplies come from South Africa. The country produces nearly 70% of the world's platinum and is home to 80% of the world's reserves.

Both Johnson Matthey's Platinum 2013 report and Thomson Reuters GFMS' Platinum and Palladium Survey 2013, released in May, point to South Africa as a growing problem for the global platinum market.

Continued labor unrest in South Africa has created a supply/demand scenario favorable for investing in platinum. While global platinum demand is steady to rising slightly, the labor situation in South Africa is beginning to put a crimp into supplies.

That's why exchange-traded products such as the ETFS Physical Platinum Shares (NYSEArca: PPLT) have received the largest investor inflows in eight months.

But it's not too late to learn how to invest in platinum to bank these profits in 2013, as June looks to make the situation even worse…

Are the "Special Few" Manipulating Oil Prices?

Last week, a firestorm hit the markets.

In a shocking announcement it was discovered that a "special list" of users had been paying a fee to Thomson Reuters to receive the University of Michigan Consumer Sentiment Index figures two seconds early.

And while most market analysts were aware that there are several tiers of service available for these figures, only a select few knew a higher payment could get them the figure before it is released.

Two seconds. It may not seem like much but it's enough to trigger a massive spike in computerized transactions before the market even knows what the figure is–let alone the average investor.

So what difference does a such a brief leg up to a "special few" mean anyway?…

Quite a bit given what we know about today's computer-generated mega trading programs that make big profits on fractional changes in price.

The massive volume of these transactions destabilize trading environments, cause instantaneous volatility spikes, and drive a range of results having nothing to do with fundamentals or actual conditions.

Not to mention how it all flies in the face of the idea free exchange markets are justified on the outmoded assumption that there is equal access and availability of information.

Now there are possibly even more serious questions emerging and they involve a matter directly relevant to you.

We are learning the same manipulation may be occurring in the energy sector.

Farm Bill 2013: Corporate Welfare on Steroids

If you're like most Americans, you probably think the primary purpose of the Farm Bill up for congressional authorization this year is to help farmers.

Of course, when it comes to the ways of Washington, nothing is ever that simple.

The 2013 edition of the Farm Bill, which is the main federal legislation for setting U.S. food policy, passed the Senate last week and now moves on to the House.

First crafted during the Great Depression to help struggling farmers, the Farm Bill is renewed and modified every five years. Congress was supposed to renew it last year, but instead merely extended it in deference to the 2012 election.

This year's Farm Bill calls for spending of $955 billion over 10 years and is 1,150 pages long.

And yes, some of that nearly $1 trillion does go to programs that help farmers. But not much of it.

Nearly 80% goes to fund the food stamp program, otherwise known by the more politically correct name of "Supplemental Nutrition Assistance Program" (SNAP) it was given in 2008.

Yet what's most appalling about Farm Bill 2013 is how much it benefits dozens of large U.S. corporations, such as Wal-Mart Stores, Inc. (NYSE: WMT), Monsanto Co. (NYSE: MON), Kraft Foods Group Inc. (Nasdaq: KRFT) and Tyson Foods Inc. (NYSE: TSN).

Back in 2008, $173.5 million was spent on lobbying that year's farm bill, most of it by corporations eager to ensure that their subsidy gravy train wouldn't get derailed.

It was the second-most lobbying money ever spent on any U.S. legislation, falling short only of the $250 million spent on Dodd-Frank.

That kind of money buys top-of-the-line lobbying power.

"On the [2008] Farm Bill, special interests hired an army of well-connected lobbyists to press their case with Congress, including 45 former members of Congress, [and] at least 461 former congressional and executive branch staffers (including 86 that worked for former agriculture committee members or the U.S. Department of Agriculture)," noted a report on Farm Bill lobbying by Food & Water Watch.

It's little wonder that Farm Bills are chock full of corporate welfare.

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Keith Fitz-Gerald: "Big Buying Opportunities" Created By This Week's Fed Meeting

All eyes are on this week's Fed meeting, set to be accompanied by a Bernanke news conference as well as updated economic projections for 2013-2015.

In the accompanying video, CNBC World asks Money Morning Chief Investment Strategist Keith Fitz-Gerald to weigh in on investment opportunities that may arise out of the Fed's actions.

Check it out for Keith's foretelling predictions on the "big buying opportunities" that you won't want to miss out on.

Keith also discusses how healthcare investments might be affected by the implementation of Obamacare.

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The Best Shipping Stocks to Buy Now as the Sector Delivers High Yield, Gains

With the market logging record gains since the start of the year, it's hard to find good stocks to buy now that are still a bargain. Harder still is finding cheap equities with attractive yields and big upside potential.

But Money Morning Global Investing Specialist Martin Hutchinson found a sector that's in a spectacular uptrend.

As he explained to our Money Morning readers in late May, "If you're in the right stocks, you're going to see big growth and solid dividends for years to come."

The sector hitting Hutchinson's radar now is shipping stocks.

The shipping industry has indeed taken it on the chin since reaching its record high in May 2008. But the sector is headed higher, a trajectory that brings with it some very attractive profit opportunities.

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Stock Market Today Reflects Strong Reliance on FOMC Meeting

The stock market today opened on an optimistic note as worries abate about the Fed indicating an end to quantitative easing after this week's Federal Open Market Committee (FOMC) meeting.

Shortly after the opening bell, the Dow Jones Industrial Average surged 172.02, or 1.14%, at 15,242.20. The Standard & Poor's 500 Index soared 16.43, or 1.01%, at 1,643.16. The Nasdaq jumped 40.11, or 1.17%, at 3,463.67.

The stock market fell sharply Friday, logging its third weekly loss in the past four weeks. Investors were jittery ahead of this week's Fed meeting. The Dow experienced its fourth straight triple-digit move, ending a volatile week down 1.2%.

The S&P, one day after enjoying its best session since Jan. 2, gave back 9.63 points, or 0.6%. For the week, the S&P retreated 1% and the Nasdaq lost 21.81, or 0.6%.

"Markets are more fragile now, whereas they had been bulletproof by the bulls for the last six months," Joe Saluzzi, co-manager of trading at Themis Trading told CNBC. "Unfortunately, the only thing that everyone cares about is what the Fed's doing and that's troubling, when we should be looking at economic data, fundamentals and corporate profits…There are still warning signs being flagged right now and people are getting concerned.

Monday, investors appeared to be betting the Fed will stand pat.

The Fourth Branch of Government is Killing Our Competitiveness

The United States claims a position as a world leader in many fields. And in a few of those fields, it still is. We like to think of ourselves as leaders in business, the free market, the entrepreneurial spirit. But the country is falling further and further behind in key competitive areas, giving up a lot of ground in the past 10 to 13 years.

The numbers are not encouraging, and as a consequence no one pays much attention to them. Don't look to party politics, though. The decline has continued through Republican and Democratic administrations and Congresses alike.

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Stocks to Buy: Three Solid Tech Picks for Under $5 a Share

When considering stocks to buy, sometimes cheaper (and smaller) is better.

Popular tech behemoths like Google, Inc. (NYSE: GOOG) and Apple, Inc. (Nasdaq: AAPL) now trade for hundreds of dollars a share, making them impractical stocks to buy for small investors.

Most retail investors are better off taking a pass on those splashy household names and looking for stocks to buy that go for more modest prices – stocks that trade for less than five bucks a share.

Stocks trading for $5 or less often are considered riskier, but offer more upside than their bigger, pricier brethren.

That's because stocks of small companies are less liquid and more volatile relative to the rest of the market.  Typically, their prices tend to be move in bigger chunks, making for bigger gains (or losses).

Simply put, these stocks can provide more bang for your buck.

Here's what you need to know…