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How to Invest in India's $10 Billion Defense Sector…

By , Managing Editor, Money Morning -

Here's how the other emerging Asian power can make money for investors

China's desire to dominate the seas of Asia is being challenged by an emerging regional rival - India.

With this shift in the balance of power in Asia, those who know how to invest in India's military and economic rise stand to profit handsomely from a real "ground floor" opportunity.

To continue reading, please click here...

Defense Suppliers Compete for a Piece of India’s Multibillion-Dollar Military Revamp

By , Associate Editor, Money Morning -

The Boeing Co. (NYSE: BA) is in talks with India for a $5.8 billion military aircraft deal as the country triples its defense budget, leading defense suppliers to compete for a piece of the multibillion-dollar action.

India is negotiating with Boeing over the purchase of 10 C-17 Globemaster III aircraft, which would be the largest defense order from India for Boeing, the second-largest U.S. defense contractor. India's Finance Minister Pranab Mukherjee said in February the government would spend $33 billion on defense in the fiscal year starting April 1.

The Asian country's "defense procurement budget is quite huge," Laxman Kumar Behera, a research fellow at the Institute for Defense Studies and Analyses in New Delhi, told Bloomberg. "The U.S. arms industry has become quite interested in the Indian defense market."

Boeing expects to bid for as much as $31 billion of military contracts in the next 10 years as India looks to replace aging Russian-made equipment.

Read More…

Record Breaking Contango Suggests Higher Oil Prices for 2011

By , Managing Editor, Money Morning -

ConocoPhillips (NYSE: COP) is paying $41,000 a day to keep a storage tanker capable of holding 3 million barrels of oil floating in the Gulf of Mexico, according to international ship- and offshore broking firm RS Platou. And the TI Europe is just one of hundreds of oil tankers sitting idle in waters around the world, as energy companies and investment banks await higher prices for crude.

Oil prices have fallen precipitously since the spring, as optimism about "green shoots" of economic growth gave way to fears of a double-dip recession. Prices have fallen more than 12% to $75.81 a barrel, from a high of $86.54 a barrel in April.

Indeed, with the U.S. economy stuck in the mire, the global outlook for oil demand has diminished - at least in the near-term. Longer-term, however, traders expect prices to surge higher next year as growth solidifies. That's why contracts for crude set to be delivered six months from now are worth more than crude at its current prices - an anomaly known as "contango."

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Prosperity Piquing Investor Interest in India

By , Contributing Writer, Money Morning -

In the investment world, there's often so much talk about China in the United States that the tremendous success in India gets short shrift. But business there is booming.

The world's third-fastest growing economy is set to expand by 8.5% this year, the most in the past half-decade. Such rapid growth has compelled the central bank to lift interest rates four times in the past six months.

Compare that with the U.S. Federal Reserve, which has made clear it intends to keep rates low through at least the middle of next year due to limp demand and negligible inflation.

While American consumers are burdened by high levels of debt and joblessness, India's urban middle class and farmers - who have enjoyed a year of ample but not over-abundant rainfall and rising prices - are eager to spend their newfound wealth.

Read More…

Why Investors Need to Pay Attention to These Emerging Markets

By , Contributing Writer, Money Morning -

The U.S. market showed improvement last week, but is still falling short of the continued growth and profit opportunities that emerging markets have to offer.

Stocks inched higher on Wall Street over the past week, taking heart from news of a modest improvement in jobs and a narrowing of the U.S. trade deficit.  Both acted to counter the argument that the U.S. economy is speeding for a cliff in a foreign-badged car.

Bonds finished down slightly, crude oil rose 2.6%, and gold was down slightly.

A tad dull, sure. But the fact that there wasn't a rout after the big gains of the first week of the month, though, has to be considered a win for the bulls. 

And some updates from the corporate world and overseas markets should keep investors cheering this week.

To read why investors have reason to celebrate -- and what opportunities they can't ignore -- click here.

Read More…

Investing in Silver: Three Ways to Profit From the Projected Breakout

By , Global Macro Trends Specialist, Money Morning -

It's the last major commodity to enjoy a true price breakout, and it's already doing so in a foreign currency.

This commodity has yet to break out in U.S. dollar terms, although its breakout in India is a signal that it's time for U.S. investors to make their move.

I'm talking, of course, about silver.

Silver is trading at just under $20 an ounce right now. I think it could hit $50 an ounce by the 2012 presidential election, which would represent a 150% move from here.

Clearly, the "white metal" can be a major profit center for your portfolio during these uncertain times. Let's look at the strategy that I've put together for you to reap that gain.

For a look at the author's detailed silver strategy, please read on...

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Buy, Sell or Hold: Tata Motors Ltd. (NYSE: TTM) Is Kicking Into High Gear

By , Contributing Editor, Money Morning -

I am constantly hunting for profitable opportunities for my Money Map VIP Trader, the Money Map Report and this column in Money Morning.  And I realized months ago that India would be the one major emerging market that would notably accelerate in the second half of the year and into 2011. 

To take advantage of that trend, I recommended a very pro-cyclical play in my trading service, which you can only see by subscribing. But I also kept up my search and was able to find another good opportunity to recommend here. That opportunity is Tata Motors Ltd. (NYSE ADR: TTM).

About a month ago, my colleague and Money Morning Managing Editor Jason Simpkins articulated a view of the Indian economy that clearly details how that country is looking to accelerate growth.  The major headwind for India has been inflation - more specifically, food prices. 

However, India is experiencing a normal monsoon season and will soon see its production of food increase and food prices drop - the recent spike in wheat prices notwithstanding.  This drop in food prices, coupled with renewed fiscal discipline will help bring inflation down from around 10% to about 6% by year end.

Read More…

Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth

By , Contributing Editor, Money Morning -

While advanced economies are still facing high levels of unemployment, more than a billion people in emerging markets are experiencing advancing standards of living.

As these emerging economies - especially China and India -grow, there is a strong trend toward urbanization. People are leaving the countryside for the cities in droves in order to reap the promise of the global economy. This secular process alone places huge demands on the existing infrastructure.

This growth is also boosting manufacturing and energy needs. China has surpassed the United States in both car production and energy consumption. And India's Tata Motors Ltd. (NYSE ADR: TTM) launched the cheapest car in the world, the Nano, which costs roughly $2,500. The critically acclaimed vehicle's mass appeal and affordability is creating additional congestion on India's famously overcrowded streets. Adding more fuel to the global-demand fire, most emerging economies implemented a strong dose of infrastructure spending within their budgets as a result of the global financial crisis of 2008.

The result of all that infrastructure development, urbanization and increased consumer affluence is a myriad of new road, bridge and building construction, additional urban development, and stepped-up production of cars, home appliances and other consumer goods. All of these developments require two key ingredients to become reality: Steel and energy.

Read More…

Gold Will Hit $5,000 an Ounce Long Term … But the Near-Term Profit Prospects Are Even Bigger

By , Executive Editor, Money Morning • @privatebrief -

Longtime commodities guru Peter Krauth touched off a real media buzz earlier this year when he publicly predicted that gold would hit $5,000 an ounce in the next few years - a projection he stands behind.

But here's the irony.

While Krauth's prediction would represent a total return of about 320% over that multi-year span, he says the potential returns on some of the near-term profit plays he's looking at are even bigger.

"These near-term opportunities are significant because the companies that explore and/or produce gold are leveraged to the price of gold," Krauth said in an interview with Money Morning. "So a 10% to 20% rise in gold's price could cause the share prices of some of these firms to gain 20% to 60% - or more - in a matter of months."



To see why gold is set to soar, read on...

The Global Double-Dip Recession: Which Markets to Hold… And Which Ones May Fold

By , Global Investing Specialist, Money Morning -

Last week's stock-market meltdown was a worldwide affair, and was touched off by trader fears of a global "double-dip" recession.

However, the truth is that the odds of a recessionary reprise are high in just a few countries - primarily those that have experienced excessive fiscal and monetary "stimulus," or that have real inflation problems.

The rest of the world is recovering just fine.



To find out which markets to hold - and which ones may fold - please read on...

Money Morning Mid-Year Forecast: India is on the Path to Double-Digit Growth

By , Managing Editor, Money Morning -

If it's able to control inflation and cut its debt, India could well become the world's most appealing investment opportunity.

Europe is choking on debt and scrambling to salvage its beleaguered currency. The United States is saddled by high unemployment and struggling to preserve its wobbly recovery. Even China - which has had to reign in its stimulus to cool its red-hot property market and curb inflation - may have peaked.

Yet India's gross domestic product (GDP) is shooting sharply higher, and many economists think economic growth in the subcontinent is about surge into the double-digits for the first time ever.

Read More…

These Five Inflation Plays Will Provide Protection and Profits

By , Global Investing Specialist, Money Morning -

Inflation hawks have been warning since 2008 that the spurt of U.S. money creation that began at the end of that year would spark a surge in consumer-price inflation.

And yet the consumer price index (CPI) statistics remain quiet - not giving ammunition to the deflationary camp, but making "inflationists" look silly, as well. Now, however, it is becoming obvious that inflation will soon arrive. But this time it is sneaking in through the back door - courtesy of our emerging-market trading partners.

Fortunately, there are some very clear steps that investors can take to protect themselves from this expected inflationary surge.

To learn about five investments that can battle inflation even as they fatten your portfolio, please read on...

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