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Martin Hutchinson

Article Index

Investing in Peru – South America's Hidden Gem

By , Global Investing Specialist, Money Morning -

When investing in the emerging markets, you need to cast your net beyond the obvious candidates. Granted, China, Brazil and India have emerged to become very attractive investment stories (I don't trust Russia, the fourth and final "BRIC" economy).

But everyone else has heard of them, too, which is why their markets have been bid up very high in the past year. Their prospects remain excellent, but you're paying a lot for them.

From time to time, however, a country that has been off investors' radar screens has a few good years, and begins to creep onto them. In such countries, risk may be high, but values at least remain reasonable.

That's why it might be worth investing in Peru.



To find out why Peru may be worth a look right now, please read on...

With Inflation Accelerating Around the World, Will the United States be Next?

By , Managing Editor, Money Morning -

Inflation is now thoroughly entrenched in India's economy, and some analysts fear that the United States could suffer the same fate if adjustments to monetary policy aren't made soon.

India's wholesale price index-based inflation rate in February accelerated to 9.89% from a year earlier. That was the fastest pace in 16 months, blowing past the Reserve Bank of India's (RBI) estimate for an 8.5% inflation rate at the end of March.

Soaring food prices were the primary driver of inflation. An index measuring wholesale prices of lentils, rice, vegetables and other food articles compiled by the commerce ministry rose 16.3% in the week ended March 6 from a year earlier after a 17.81% gain the previous week.

Read More…

With this Bear-Market Insurance, You Can Keep Riding the Bull

By , Global Investing Specialist, Money Morning -

During the last few weeks, the U.S. stock market has recovered from its mid-February swoon and clawed its way to a new high for the year - returning share prices to levels not seen since late 2008.

At this point, based on consideration of its change in value since the money supply inflation began in early 1995, stocks appear to be substantially overvalued, perhaps by as much as 40% to 50%.

However, if our experiences of the late 1990s taught us anything, it's that the stock market can remain overvalued for years - meaning investors who opt out of the market completely risk getting left behind.

Still, given the soaring run-up we've seen since the stock market's March 9, 2009 nadir, I thought this would be an excellent time to review the ways nervous investors can protect themselves - even as they remain invested. That's just good, sound risk management.

And there is a way to achieve both goals - with a type of bear-market "insurance' that's fairly easy to use.

To find out about “bear-market insurance,” please read on…

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European Bailout Fund Proposal … Just Another Bad Idea

By , Global Investing Specialist, Money Morning -

Has bailout mania finally reached Europe?

The 16 nations that make up the Eurozone are seriously exploring the creation of a "European Monetary Fund," a bailout fund that would help euro-member countries that can't pay their debts.

This has the potential to be a pretty good idea. If structured correctly, the EMF could provide the discipline and stability that the euro needs.

However, I'm not holding my breath: Given the EU's track record, the EMF bailout plan will most likely evolve into yet another slush fund for politicians - as well as a drag on the European economy.

History proves Europe's bailout-fund proposal is unworkable. Read on to see why...

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Six Ways to Profit as Brazil's Economy Takes Off

By , Global Investing Specialist, Money Morning -

In many ways, Brazil offers some of the best prospects among emerging markets and deserves to be a core holding in any international portfolio.

Brazil's economy had only a shallow recession and is now recovering nicely. Its market has been one of the best performing since Dec. 31, 2008, and both inflation and the budget deficit remain under control.

Yet one can be only moderately bullish - and I'll explain why.



To find out how to profit from Brazil's bullish prospects, read on...

How to Profit from the Next Spike in Oil Prices

By , Global Investing Specialist, Money Morning -

Earlier this week, British company Desire PLC (Pink Sheets: DSPMF) began drilling in an offshore block of the Falkland Islands. Immediately, Argentina President Cristina Fernandez de Kirchner let loose with a howl of rage, and the Summit of Latin American and Caribbean Unity issued a protest against the British company's drilling operations.

Argentina's claim to the Falklands had remained dormant since the war 28 years ago, yet the moment the drill bit touched seabed the years rolled away. This showed yet again that oil remains salient to international politics and the world economy in a way shared by no other commodity. So how should investors play it?

For the best ways to profit from rising oil prices, read on...

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Home Depot and Lowe's Laying the Foundation for Recovery with Little Help From the Housing Market

By , Managing Editor, Money Morning -

The housing market that was at the epicenter of the financial crisis has yet to approach a full-fledged recovery, but that hasn't stopped the nation's two biggest home-improvement retailers from rebuilding.

The Home Depot Inc. (NYSE: HD) and Lowe's Cos. Inc. (NYSE: LOW) both topped analysts estimates in the fourth-quarter, as more Americans undertook "do it yourself" projects and edged back into purchases of big-ticket items.

Home Depot's total revenue for the quarter ended Jan. 31 fell to $14.57 billion, but net income swung to a gain $342 million, or 20 cents a share, from a year-earlier loss of loss of $54 million, or 3 cents a share.

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The Essential Eight: The Only Economic Indicators Investors Need to Know

By , Contributing Writer, Money Morning -

Housing starts. PPI. Same-store sales. Weekly jobless claims. Philly Fed. Lagging indicators. Core CPI. Industrial production.

When it comes to economic indicators, the list is almost endless. One economic indicator follows another, filling an entire calendar - weekly, monthly, quarterly, annually. But on the specific day an indicator is announced, it seems to be the biggest deal going: Commentators comment, pundits pontificate, analysts and economics analyze, predict and forecast, and financial markets around the world react - often violently.

The next day brings a new batch of indicator reports. Yesterday is forgotten as the frenetic cycle plays itself out all over again.

Given this pattern, it's not surprising that the economic-indicator game seems confusing - and perhaps even pointless. In the eyes of many investors, the only thing these indicators seem to "indicate" about the economy is that it can be highly confusing and extremely difficult to predict.

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As Greece's Woes Demonstrate, the Fuse Has Been Lit on the Global Debt Bomb

By , Global Investing Specialist, Money Morning -

The big story in the international markets so far in the New Year has been the increasing shakiness of a number of countries' government bonds, with Greece right now being the most troubled of all.

Since U.S. investors tend to avoid foreign government bonds, many will dismiss this as an irrelevant development.

That's a mistake. The reality is that the international implications of this bond-market problem are serious for the world's stock markets, as well as for the global economy as a whole.

The fuse has been lit on a global debt bomb. And Greece has quickly become a poster child for the explosion that's all but certain to occur.

To find out all about the "Global Debt Bomb," read on...

Looking For a Bright Spot? Productivity Growth May be America's Secret Weapon

By , Global Investing Specialist, Money Morning -

The U.S. employment picture isn't pretty. At 10%, the unemployment rate is at its highest level in nearly three decades, and it's expected to move higher. American employers cut 4.2 million jobs last year, and nearly 15.3 million people are unemployed.

Those bemoaning the increase in U.S. joblessness are right to do so. But they should also remember that unemployment is a direct result of the U.S. economy's greatest strengths - its ability to grow productivity even in a recession.

The Conference Board publishes a Total Economy Database, which gives productivity growth figures - nearly 50 years' worth, in some cases - for most of the world's major economies. The results for 2009 were just released. And the Conference Board's conclusion jumps right off the page at you: The U.S. economy is nowhere near as bad off as many pessimists believe.

In the U.S. economy's bid to rebound in this post-financial-crisis world, productivity growth may be this country's secret weapon.

How can productivity fuel the rebound? Read on...

Fed Gambles on Low Inflation and a Stable Housing Market

By , Managing Editor, Money Morning -

The so-called "exit strategy" has yet to enter the picture.

U.S. Federal Reserve policymakers yesterday (Wednesday) announced that the benchmark Federal Funds rate would remain in its record-low range of 0.00% to 0.25% for an "extended period." And policymakers also said that the nation's central bank would continue with its plan to wind down its purchases of agency debt and mortgage-backed securities.

The term "exit strategy" is a financial euphemism for boosting interest rates. By keeping short-term interest rates at what many experts say are artificially low levels, the Fed is betting that inflation will remain subdued in the short and medium-term and that the beleaguered U.S. housing market will be able to stage its recovery without crutches.

Read More…

Disastrous December Collapse Exposes False Start to Housing Market Rebound

By , Managing Editor, Money Morning -

Reports of a rebound in the U.S. housing market have proven premature - just as we warned.

Home sales surged 28% from September to November, giving hope to prognosticators who declared the housing crisis over. But as Money Morning Contributing Editor Martin Hutchinson pointed out in a Dec. 31 article, sales plunged sharply the month after the government's new homebuyers tax credit was originally set to expire.

Existing home sales plunged 17% to a 5.45 million annual rate in December, taking the wind out of a housing market that was just beginning to show signs of life. The decline in December sales was the biggest since the National Association of Realtors (NAR) began keeping records in 1968.

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Why the Gold Bubble Will Peak at $2,000 in 2010

By , Global Investing Specialist, Money Morning -

Gold surged over 60% in 2009, hitting new highs practically every week. But, we haven't seen anything yet. This is just the beginning of one of the biggest gold rallies in history. Find out why gold will easily hit $2,000 this year in this report.

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How to Empower Shareholders and Improve Corporate Management in Two Easy Steps

By , Global Investing Specialist, Money Morning -

I wrote last week that Wall Street bonuses should be cut back by the shareholders, not by the government.

Well, a reader wrote back correctly to remind me that the majority of shareholders are institutions that would not want to antagonize major corporations that gave out fund management mandates for their pension funds and 401(k)s by agitating against top management bonuses.

Good point. Very good point. And it highlights a central flaw in today's capitalism. It's far too controlled by corporate management. And it's time something was done about it.

Let me explain...

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