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Stocks

Execs Keep Selling Their Facebook Stock - Time to Worry?

By , Money Morning - • Print | Email

The market has been buzzing about the fact that three top executives of Facebook have taken their first opportunity to sell some of their stock in the social networking company.

The sales were part of 230 million shares awarded to top executives and employees prior to the IPO that were subject to lockup until last week.

According to Forbes, another 777 million shares awarded to Facebook employees will come off of lockup next week. It is expected that Facebook employees will continue to sell shares for the rest of the year.

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Stock Market Today: Strong Earnings Fuel These Huge Gains

By , Money Morning - • Print | Email

The stock market today is down slightly, but two companies are soaring on great earnings and upgraded forecasts. Along with those two stocks, check out another company that has returned to profitability – but one leading energy company that's sending warning sings. Starbucks Corp. (Nasdaq: SBUX) surges on confidence- The Seattle, WA-based company posted a […]

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How to Know When to Sell Apple Stock (Nasdaq: AAPL)

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

Trying to figure out when to sell Apple stock (Nasdaq: AAPL), particularly given its spectacular performance over the past several years, is a major dilemma.

If you're long on AAPL, you're no doubt trying to sort through a lot of conflicting signals.

With AAPL down about 16% from its high of $702.10 on Sept. 19 amid a wave of negative news, some financial pundits are calling a top and urging Apple investors to sell Apple stock.

Trouble is, they've done this many times before during Apple's long climb. Sometimes it's after AAPL hits a new high, and sometimes (like we're seeing now) it's after the stock dips in reaction to some bad news.

But investors who opted to sell Apple stock in years past lived to regret it.

Back in 2010, for example, when AAPL breached the $300 mark, plenty of bears urged shareholders to rush for the exits.

Any who followed that advice missed out on a 100% gain.

At the same time, Apple stock can't keep rising forever. No company can maintain the sort of exponential growth necessary to fuel the kind of gains Apple has enjoyed over the past few years.

But the big question is when this will happen. Now? Next quarter? Next year? 2015?

And as if that weren't enough to make an Apple investor's head spin, there's the added stress of volatility.

From late November to early April, AAPL soared $270, an astounding 75% increase in just four and a half months. Then it fell $100 in the next five weeks.

With turbulence like that, retail investors easily can get heartburn trying to figure out when to sell Apple stock.

That's why we put together some guidance.

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The Hottest 2013 Natural Gas Story You've Never Heard

By , Contributing Writer, Money Morning - • Print | Email

The story for natural gas companies in 2013 is an improving one.

As Money Morning Global Energy Strategist Dr. Kent Moors explained last month, he believes natural gas prices in the U.S. will come back strong next year.

But the natural gas story is not just an American one.

Ask the average energy executive what region he or she is really excited about today and the answer you will get is one that was not even on many companies' radar a few short years ago – and one of which many investors are unaware.

2013 could be the year when investors become aware of the vast potential of the prolific natural gas fields in this region, potential that will be unlocked when gas from those fields is someday turned into liquefied natural gas (LNG) and sold to the energy-hungry markets of Asia.

I'm talking about the offshore waters of East Africa.

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Why Hurricane Sandy May Not Be All That Stimulating

By , Money Morning - • Print | Email

Invariably, every major disaster comes with the pundits who promise it brings a silver lining.

With a price tag of $50 to $70 billion, some economic forecasters are already rejoicing about the economic "stimulus" that rebuilding from Sandy will bring. If only it were so.

In fact, this paradox is well worn since it involves one of the central conflicts of economics itself. You may recognize it as a battle between Maynard Keynes vs. Frederic Bastiat.

It involves Bastiat's famous "Parable of the Broken Window".

You see, according to Bastiat (1801-50), the glazier who fixes the broken shop window earns money from it, and so he regards the broken window as economically beneficial. However, that's only half of the story.

It doesn't take into account what the shopkeeper might have done with the money he used to pay the glazier to fix the broken window.

As Bastiat points out there is a "hidden cost" within the broken window itself. The broken window made the shopkeeper that much poorer.

What's more, if the glazier secretly paid the boy who broke the window to generate the "new" business, he would be effectively engaging in theft from all the town's shopkeepers.

On a net basis, it's a no win ballgame.

Yet that is the effect of such misguided policies like the "cash for clunkers" scheme of 2009, which paid consumers to junk their still-usable automobiles long before their time.

Likewise, it's found in the same line of argument that somehow World War II rescued the United States from the Great Depression because it fails to properly account for the immense destruction of wealth (admittedly, mostly outside the U.S.) the war caused.

It seems easy enough—unless you're a Keynesian economist.

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Netflix (Nasdaq: NFLX): Is Carl Icahn a Madman or Genius?

By , Money Morning - • Print | Email

Netflix Inc. (Nasdaq: NFLX) shares rallied 11.4% in late trading on Wednesday to close at $79.24 following news that activist investor Carl Icahn made a big move on the stock.

Icahn took a nearly 10% stake in the company through shares and long-term, over-the-counter call options mostly purchased at prices below $60.

In afternoon trading on Thursday, Netflix shares were down slightly, trading just under $79.

That means that Icahn and his partners are sitting on gains of between 30% and 44% on Netflix shares and call options purchased between Sept. 4 and Oct. 25, according to Schedule 13D filed with the U.S. Securities and Exchange Commission (SEC) yesterday.

That alone should put Icahn firmly in the genius category.

What is Carl Icahn's motivation for acquiring his stake in Netflix?

"I believe that there is going to be great consolidation between Netflix and, everybody's read about it, Amazon or Microsoft or Verizon or Google, there are so many possible combinations," Icahn told Bloomberg TV.

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Why the CIA and Amazon Are All Over This Quantum Computing Upstart

By , Defense + Tech Specialist, Money Morning • @Robinson_STI - • Print | Email

The CIA and the world's biggest Web retailer want to see the world of Big Computing turned upside down.

That's why they joined a $30 million investment round in a small supercomputing startup. The firm is taking a radical new approach to how these processors crunch massive amounts of data.

It's a field that is quickly turning its skeptics into true believers. Then again, cutting-edge tech like quantum computing doesn't come along every day.

No doubt, quantum computing is some pretty complex stuff. So, let me simplify it for you. At its root, quantum computing relies on the high-speed action inside atoms as well as particles of light.

The result is speeds so fast it makes your head spin.

We're talking about computers that could perform some functions millions of times faster than anything that's on the market today.

It's no wonder the nation's top spies and Amazon.com (Nasdaq: AMZN) founder Jeff Bezos want to get in on the ground floor. Though they didn't say how much each ponied up, both took part in the most recent round of financing for D Wave Systems.

In-Q-Tel, which invests in high tech that supports the CIA, and Bezos Expeditions join a growing list of D Wave investors. Other blue-chip backers include the Business Development Bank of Canada, Draper Fisher Jurvetson, and Goldman Sachs (NYSE:GS).

D Wave: Quantum Computing's Kingpin

Founded in 1999, D Wave spent its first five years in discovery mode. By that I mean the small firm was focused on coming up with novel ways to make quantum computing work and then get the patents it needed to protect the moat it was building.

That early attention to detail has clearly paid off. Today, D Wave holds 90 U.S. patents and has roughly 100 more pending around the globe.

Here's the thing. D Wave is founding a whole new sector of the computing industry while making sure it maintains a strong first-mover advantage.

After struggling for years, D Wave is now on a roll.

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2013 Bond Market Forecast: Where to Find the Best Yields

By , Money Morning - • Print | Email

The reality for the 2013 bond market in the United States is that interest rates are forecast to remain low throughout the year and continuing until 2015. The Federal Reserve has made this clear – and that is not good news for Treasuries and investment-grade corporate bonds.

In the case of corporate bonds, issuers have been loving the low interest rate environment gifted to them by Ben Bernanke. Issuing commercial paper is cheap these days; again, good for the issuer, not investors.

That means the question becomes why would investors want to own the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: LQD), the largest investment-grade corporate bond ETF? LQD has a trailing 12-month yield of less 3.9%.

By comparison, income investors could grab 70 basis points of added yield by owning individual companies found among LQD's holdings, like the common stock of ConocoPhillips (NYSE: COP) or Verizon Communications Inc. (NYSE: VZ). Also in LQD are shares of AT&T Inc. (NYSE: T), which yield 5.1%.

Of course, higher yields and superior income are available with junk bonds, an asset class that is most easily tapped through ETFs.

However, U.S.-focused junk bond funds come with their own set of issues investors need to consider. Namely, the time to have bought these funds has come and gone. Chasing yield and capital appreciation in high-yield bonds at this point is risky business. Outflows from the corresponding ETFs indicate the smart money is taking their profits and moving on.

Luckily, there are credible alternatives to U.S. corporates and Treasuries for income investors looking to fill out the bond portions of their portfolios.

Finding those alternatives is not hard at all, it is just a matter of leaving the U.S.

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Why Silver Prices in 2013 Will Continue to Perform

By , Contributing Writer, Money Morning - • Print | Email

If asked to name the top performing commodity of the past decade, not many would answer silver because of its notorious volatility.

Yet, according to Lloyds TSB, silver prices have delivered the best gains since 2002.

Lloyds data shows that the shiny metal soared 572% over the past decade, beating gold's rise of 428%, which was second best among commodities.

Lloyds said silver beat gold because "[I]n addition to being perceived as a safe haven investment, high demand for industrial uses has also contributed to the strong rise in the price of silver."

The key question for precious metals investors is whether silver will continue to be a good performer in 2013.

Money Morning's Global Resource Specialist Peter Krauth thinks so. He forecasts that silver prices will hit "north of $60 per ounce" by spring.

If his forecast is on target, it bodes well for both holders of silver bullion and coins as well as for holders of ETFs such as the iShares Silver Trust (NYSE Arca: SLV).

Here are five key factors that show why Krauth's forecast for silver prices in 2013 could be right on the money.

Silver Prices in 2013: New Industrial Uses

One positive for silver has to be the aforementioned industrial uses.

At last month's Denver Gold Forum, the CEO of silver producer Hecla Mining (NYSE: HL) Phil Baker made an interesting observation.

He said there was a parallel to what happened to silver usage at the turn of the 20th century to what is happening today. At that time, photography became a major driver of demand of the silver market.

This time though Baker believes it will not be one industry solely driving demand, but a myriad of new users of silver looking to take advantage of the metal's unique properties (such as electrical conductivity) in the electronics and medical fields among others.

Silver's expanding usage in a large number of industries may help to offset the general weakness in the global economy.

Investment Demand for Silver

Another factor favoring silver prices is the continued investment demand for the precious metal from the average person around the world, due in large part to central bank policies.

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Stock Market Today: Why Post-Sandy Trading Could Be Volatile

By , Money Morning - • Print | Email

The stock market today reopened after having its first two-day weather-related shutdown since 1888. While most of New York is still in clean up and recovery mode following Hurricane Sandy, investors are back in action in what is expected to be a busy remainder to the week.

Here are the latest headlines:

  • Traders try to play catch up– The NYSE's two-day closure resulted in delayed earnings and economic reports, and unluckily came at the end of the month. Investors and especially traders will be trying to make up for the lost time, leading to higher volume due to unfulfilled trades from Monday and Tuesday. Besides the volume, volatility could be high as traders close out their books for the month. Also, for some mutual funds today is the end of their fiscal year, meaning more losses could be taken to offset capital gains. "The two-day delay is really the perfect storm in terms of when it occurred. To happen in the heart of earnings season and just a week before an election is rather unfortunate," Ryan Detrick, senior technical analyst at Schaeffer's Investment Research told Yahoo! Finance. "Had this happened during the boring summer months it wouldn't have mattered as much, but with so much happening currently, the odds of some huge volatility on big volume is very good. Throw in the fact this is the end of the month and the end of the year for some hedge funds, volume today could be in line with what we normally see on expiration Friday once a month as firms close their books on the year."

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